Biden’s Covid-19 Plan: A Road Towards Universal Basic Income?

20 February 2021

Has Covid-19 made an Andrew Yang out of Joe Biden? During the 2020 Democratic primary, Yang’s promise of a monthly $1,000 “Freedom Dividend”—a form of Universal Basic Income (or UBI)—was not enough to carry the entrepreneur to the White House. But President Biden’s plan to fight the coronavirus and its economic fallout includes yet another round of direct payments, the third in only a year. Covid checks have become so popular even among Republicans that Donald Trump tried to pressure the Senate into increasing the payouts to $2,000 in his final days in office.


Is UBI close to becoming a reality in America?


The checks in Biden’s plan, like the two previous payments, resemble UBI, though they are different in a few key ways. The payments may plant the seeds for UBI as a realistic measure in the future, but Biden himself is doing his best to steer the discourse away from such a possibility. As long as the debate is open, it’s worth wondering whether UBI is really the panacea some advocates make it out to be.


What is UBI?


The idea of a Universal Basic Income has been championed by Leftists as well as Silicon Valley moguls and neoliberal economists. It’s hardly surprising that each camp has a different conception of what, exactly, a UBI would look like. From the many different possibilities (helpfully outlined in this article by Alyssa Battistoni), four main UBI proposals emerge.


Neoliberal UBI. Some neoliberal economists, following Milton Friedman, have seen UBI as a way to phase out the welfare state. For Friedman and his followers, UBI should replace discrete state services with cash to be spent in the private market. Such a plan to end the social state was proposed, and nearly passed, during the Nixon administration. Contemporary advocates of a neoliberal UBI typically support smaller regular payments, not enough to live on without supplemental income.


Silicon Valley UBI. Drawing on findings that long-term cash grants can increase participation in the workforce, some Silicon Valley figures see UBI as the perfect way to unleash everyone’s inner entrepreneur. UBI would increase  access to capital and soften the risk of a failed business. Other tech leaders see UBI as a way to make the gig economy viable by supplementing the low salaries of “independent contractor” workers. Automation features prominently in Silicon Valley proposals for UBI. Andrew Yang, for example, argues that technology will inevitably displace many workers, who will have to fall back on the gig economy—and a limited UBI—for income. Since UBI would supplement, rather than replace gig work, Silicon Valley UBI enthusiasts such as Elon Musk—like the neoliberals—do not support payments that would provide enough money to live on without at least a part-time job.


Left-utopian UBI. Like the Silicon Valley UBI enthusiasts, some scholars on the Left imagine a world where all or most work is automated. But rather than universal gig employment, they call for a UBI that is substantial enough to cover all expenses required to live a good life. The title of Aaron Bastani’s Fully Automated Luxury Communism is representative: this is a world where leisure time has entirely replaced work and everyone can spend their days enjoying modern comforts.


Left-non-utopian UBI. Some Leftists imagine a UBI that would provide for all of life’s necessities, even before the Automated Age takes over. These scholars see UBI as a way to increase labor’s power relative to capital, by allowing people to refuse dangerous, degrading, or insufficiently remunerated jobs. In theory, greater selectivity about what jobs people take would tighten the labor market, forcing higher wages and reducing economic inequality. Better bargaining power would hopefully eliminate the dynamics that force underprivileged people to work in the most undesirable industries. It might also allow people to turn down what David Graeber calls “bullshit jobs”—that is, well-compensated but ultimately meaningless white-collar positions. And finally, a generous UBI might reduce work hours and allow people to engage in artistic expression, interpersonal relationships, childrearing, or political action.


Are the Covid-19 checks anything like UBI?


Thanks to both the Trump and Biden administrations, many Americans are set to receive a third round of mass direct cash payments. But are these checks anything like the plans for UBI coming from either side of the political spectrum? There are reasons to be skeptical.


The Biden plan is hardly a Trojan horse for the neoliberal deconstruction of the welfare state. The checks are part of a sweeping rescue package—currently pegged at $1.9 trillion. But the stimulus bill is not a prototype for Left UBI, either (utopian or otherwise). The sums aren’t big enough, and they certainly aren’t regular enough to live on.


But there other, more fundamental differences between Biden’s plan and UBI. The direct payments aren’t actually universal. In Biden’s plan, for example, the wealthier get less and the wealthiest get nothing. That isn’t necessarily a good thing, since universality increases political buy-in. But cash handouts to the wealthy can be a tough pill to swallow in a political context where means-testing is the norm. Biden’s proposal has faced plenty of criticism for being overly generous towards wealthier citizens.


The direct payments might be “basic” if people use them to cover necessities like food and rent, but they aren’t “income” in the most meaningful sense of the word, because they’re designed as a one-time measure to address a historic crisis, not a routine benefit. While Americans might be happy to receive three checks rather than one, the payments fall short of the regularity we typically associate with “income.”


Nevertheless, checks do feel a bit like UBI. The United States government is sending cash directly to large segments of the American population. This has only happened on five separate occasions since the 1970s. Suddenly, it has happened three times in the same year. Moreover, there is bipartisan support for the checks—with political consequences for budget hawks. Even Mitt Romney made news recently by proposing his own version of direct payments, this time for families with children. This near political unanimity may be due to the widespread popularity the checks have enjoyed among the general population. More than 80 percent of likely voters said they wanted additional payments when polled in December. And three quarters of respondents said that checks should be prioritized in any future stimulus bill. Is the political climate shifting in a direction that would be more favorable to UBI proposals in the future?


Biden, for his part, seems to be doing everything in his power to minimize that possibility. He has been very careful to frame his Covid-19 plan as the response to a “crisis of deep human suffering.” And he has dubbed his proposal the “American Rescue Plan,” implying a finite problem with a finite solution. Today’s Democratic leadership likely seeks to avoid creating the expectation of permanent cash payments, painting the checks as an exceptional measure justified only by the gravity of our present situation.


Universal Basic Income in America?


Maybe the President’s reluctance to embrace UBI isn’t that bad. Left UBI advocates hope that regular cash transfers will allow citizens to refuse degrading, dangerous, or poorly remunerated jobs. This may be true. But a fair distribution of better jobs isn’t exactly guaranteed by UBI. Without concerted efforts to reduce inequality, UBI might just increase competition for the best jobs, magnifying the impact of existing privilege.


Moreover, if basic necessities are provided through the market, UBI may only preserve the evil effects of the neoliberal system on our politics and culture—as described by scholars such as Wendy Brown.


The rapid political realignment surrounding direct payments has certainly been one of the pandemic’s unforeseen consequences. Whether this will lead to more radical welfare—UBI or otherwise—may depend on whether we look past the Biden administration’s rhetoric of “emergency.” Welfare activists can point out that the pandemic represents a change in degree, not in kind, from the norm. The coronavirus only makes visible the oppression that existed before: an unfair distribution of the most degrading and dangerous work.


Photo Credit: The White House, President of the United States Joe Biden, via Wikimedia Commons, Public Domain.


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