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Universal basic income is only the first step towards an equitable economy

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Hand holding two Canadian twenty dollar bills. Image credit: Michelle Spollen/Unsplash

Artists have always lived in a gig economy, paid only after they've completed their work. That's why most artists hold day jobs, perhaps supplemented by occasional grants. So it's logical that, in Canada, artists are leading the call for a universal basic income (UBI), a reliable monthly stipend which they can top off with the proceeds from their work.

In the U.S., previous governments have rejected anything that resembled the UBI concept for ideological reasons, claiming that any kind of government support amounts to  "socialism." That's why the U.S. remained the only industrialized country in the world without universal health care, until president Obama's regime.

President Joe Biden has not only expanded Medicare, his America Rescue Plan is the first to convert the annual tax deduction for minor dependents into monthly support for families with children (like Canada's baby bonus) -- direct payments of up to $300 per child, per month. In contrast to "the former guy," this president also focused on pandemic aid to ordinary citizens, rather than corporations. He persuaded Congress to send households food, access to medical care and $1,400 each.

In barely six months since the 2020 elections, Joe Biden has become more popular -- rising nearly 10 points in the polls, from 51 to 59 per cent approval ratings.  Although Andrew Yang lost his bid for the Democratic presidential candidacy, his platform of a UBI continues to gain popular support, under Biden. In August 2020, for the first time in the U.S., public opinion polls show that the majority of the U.S. voting public favors a UBI.

On the other hand, some U.S. BIPOC communities have held back from the UBI campaign, or even reparations for slavery. They are calling for safeguards against a damaging trade-off. "I would rather have universal services than a million-dollar cheque in my mailbox," as Jamil Smith of Rolling Stone Magazine said on Real Time with Bill Maher. His comment makes sense, considering that U.S. health-care insurance is tied to employment, and that U.S. hospitals charge an average of more than $2,600 a day.

Moreover, most large U.S. cities remain deeply segregated because of archaic housing and zoning bylaws. Economic segregation (richest to poorest) is actually increasing, according to a 2012 Pew Research report.

Urban BIPOC communities have been squeezed into areas with fewer and poorer quality schools, medical care, and other services. Unsafe drinking water is a problem across the U.S. While rural areas are most vulnerable, water has caused serious health problems in urban regions such as Flint, Michigan or New York City. "[Forty-four] million people in the U.S. are served by water systems that recently had Safe Drinking Water Act violations," says the US Water Alliance.

Another important impetus for the UBI is that most workers' wages have stagnated since the 1980s. U.S. Senator Elizabeth Warren and others have charted how, for the last 40 years, the top one per cent of earners have collected all the increased revenue from automation and increased productivity. Starting with Ronald Reagan's presidency, gobalization and anti-union campaigns have actually driven down shop-floor workers' wages.

"From 2009 to 2015 [in the U.S.]," says a 2018 Economic Policy Institute report, "the incomes of the top one per cent grew faster than the incomes of the bottom 99 per cent in 43 states and the District of Columbia. The top one per cent captured half or more of all income growth in nine states. In 2015, a family in the top one per cent nationally received, on average, 26.3 times as much income as a family in the bottom 99 per cent....

"Overall in the U.S., the top one per cent took home 22.03 per cent of all income in 2015. That share was just 1.9 percentage points below the 1928 peak of 23.9 per cent....[right before the 1929 stock market crash]."

According to Inequality.org, "Income disparities are so pronounced that America's top 10 per cent now average more than nine times as much income as the bottom 90 per cent, according to data analyzed by UC Berkeley economist Emmanuel Saez.

"Americans in the top one per cent... average over 39 times more income than the bottom 90 per cent.... [stunningly] the divide between the nation's top 0.1 per cent and everyone else... [comes to] over 196 times the income of the bottom 90 per cent."

A 2020 Pew Research report explains:

"The rise in economic inequality in the U.S. is tied to several factors... [including] technological change, globalization, the decline of unions and the eroding value of the minimum wage. Whatever the causes, the uninterrupted increase in inequality since 1980 has caused concern among members of the public, researchers, policymakers and politicians."

Economic inequality has increased globally, said the Conference Board of Canada in 2010. In Canada, the portion going to the richest 20 per cent jumped from 36.5 to 39.1 per cent of total incomes. "The pie chart shows that the richest income group ... has by far the largest share of Canada's economic pie -- with 39.2 per cent of total national income."

A Chartered Professional Accountants of Canada (CPAC) report found that income inequality is highest in Canada's major cities. Over decades, the Canadian Centre for Policy Alternatives has reported regularly that: "Persistent inequality along racial, gender lines [is] largely unchanged..."

U.S. President Joe Biden has declared consistently that, "Unions were the making of the middle class." Most historians agree with that analysis. Conversely, an Economic Policy Institute report sums up the current situation:

"The basic facts about inequality in the United States -- that for most of the last 40 years, pay has stagnated for all but the highest paid workers and inequality has risen dramatically -- are widely understood. What is less well-known is the role the decline of unionization has played in those trends. The share of workers covered by a collective bargaining agreement dropped from 27 per cent to 11.6 per cent between 1979 and 2019, meaning the union coverage rate is now less than half where it was 40 years ago.

"Research shows that this de-unionization accounts for a sizable share of the growth in inequality over that period -- around 13-20 per cent for women and 33-37 per cent for men. Applying these shares to annual earnings data reveals that working people are now losing on the order of $200 billion per year as a result of the erosion of union coverage over the last four decades -- with that money being redistributed upward, to the rich...."

Theoretically, a UBI could be the sword that slashes the knot of gender and racial inequality, financially and socially. Theoretically, with UBI, women could hold out for equal pay, and BIPOC folks would have resources to live in safe, convenient neighbourhoods. Workers would be emboldened to organize unions, because they could survive for a while without a job. Families could buy their own health-care insurance or education requirements, even without employment.

Handled poorly, though, UBI could become nothing more than another subsidy for employers, who could continue to divide the workforce into more and more gig workers. The richest families would still have access to better quality education, as well as the old boys' network. Conservative organizations would still try to restrict access to health services like contraception, abortion, and gender alignment. And nothing in any UBI proposal that I've seen, addresses the most urgent issue of our time -- the climate crisis.

UBI could offer powerful leverage for disempowered communities to work towards real, meaningful equality. We could all pursue our passions, artistic or political, with some sense of security. But by itself, UBI is not enough. Let's make sure that any proposals that progressives put forward include the whole package: security, equality, sustainability, quality health care and quality education for all.

Award-winning author and journalist Penney Kome has published six non-fiction books and hundreds of periodical articles, as well as writing a national column for 12 years and a local column in Calgary for four years. She was editor of Straightgoods.com from 2004-2013.

Image credit: Michelle Spollen/Unsplash

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