Tech ISSUE
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Photo by Gage Skidmore / Wikimedia Commons
Just the Basics
EUGENE TECH FIRM DEVELOPS A UBI CALCULATOR by Will Kennedy
I
n the days of COVID-19, UBI, or universal basic
income, is having a moment.
Tech mogul Andrew Yang made his UBI plan,
called The Freedom Dividend, a central plank of
his now-ended 2020 presidential aspirations. Since
abandoning his presidential bid, Yang launched
Humanity Forward, a new nonprofit to help keep
his UBI vision alive, among other initiatives.
With the economic impact of the coronavirus now
predicted to range from catastrophic to cataclysmic,
UBI-like initiatives are popping up from the House of
Representatives, Sen. Bernie Sanders and even President
Donald Trump.
When the time comes for real legislation on UBI, voters
could compare and contrast proposals with a new free
web app called the UBI Calculator, developed, in part, by
Eugene tech firm Twenty Ideas.
Economic and political issues are nothing new for
Twenty Ideas CEO Mike Biglan. Before his career in tech,
Biglan studied economics at the University of Chicago.
He also served on the city of Eugene budget committee
from 2005 to 2008.
“I’m an experimentalist,” he says. “We need to be
trying lots of different things,” and UBI should be taken
seriously, he says.
UBI is really just a new name for an old idea. In the
1960s, Martin Luther King Jr.’s Poor People’s Campaign
included a UBI-like proposal, and Mike Kuhn, assistant
professor of economics at the University of Oregon, points
to the “negative income tax” plans of the 1970s as another
early example of the concept. Under a negative income
tax plan, a progressive tax code would feature positive
rates for high earners but then extend to the negative
domain for low earners.
Don’t bring in enough income? The government would
E U G E N E W E E K LY . C O M
cut you a check instead of the other way around. And believe
it or not, this idea was supported by many Republican
politicians of the era. With most modern UBI plans — and
there are many — the government would give lump sums
of money to every citizen, regardless of need, and often
at the expense of other social welfare funding. Instead of
targeting aid to high-need individuals, the plans say, just
cut a check to everyone and be done with it: clean, efficient,
less bureaucratic, and in some sense, more egalitarian.
Sample from ubicalculator.com
That’s the idea, anyway.
Twenty Ideas’ UBI calculator presents a clear picture
of how differing UBI proposals might impact the daily life
of an average citizen, controlling for size of household and
annual income. It explains how each program is paid for
with data provided by individual politicians and economists,
while also addressing common concerns about UBI like
cost, risk of inflation, the tax burden on the middle class
and disincentivizing the labor force from working at all.
“There are a lot of people out there talking about their
plans,” Biglan says, with different parameters and a lot of
nuance. The UBI calculator puts all that together in one
place, with full transparency. Yang’s Freedom Dividend is
available for scrutiny on the platform, among many others.
But Prof. Kuhn cautions that fully addressing theoreti-
cal concern about UBI is difficult because there’s never
been a large-scale implementation of such a program.
“The biggest concern is if individuals are going to
reduce their labor supply in response to the universal
basic income,” he says. Recent research suggests that’s
a very legitimate theoretical concern. Empirical studies
tell a different story. “There’s a response there,” Kuhn
says, “but it’s not as strong as the conservative economic
theory approach might tell you.”
Another common concern about UBI is inflation — or
prices being driven up by the injection of “free money”
into the economy. Here, too, data is lacking, Kuhn says.
What does concern Kuhn about UBI is what such a
program might crowd out in terms of other forms of social
welfare spending.
“In the UBI way, the effectiveness per dollar is not
as high as reinvesting in some of our existing welfare
programs,” he says.
Kuhn says we take programs like food stamps (aka
SNAP benefits), disability and unemployment insurance
for granted.
“There are a lot of real successful stories,” he says,
especially when those programs are adequately funded.
But that’s not very sexy, Kuhn points out. “They’re existing
programs, and people want something new.”
What’s for certain, Kuhn continues, is that UBI could
be an effective way to mitigate the disruptive effects of
tech and trade on the job market.
“Disruption from tech, just like trade, for example,
creates winners and losers,” he says. “There are a lot
of consequences for not compensating those losers
adequately.”
It’s important to note, here, that one-time payouts,
like the $1,200 many Americans are expecting as part
of the Senate’s recently passed $2.2 trillion coronavirus
stimulus package, aren’t exactly a UBI. That money is
more along the lines of a tax kicker, which isn’t uncom-
mon. For payments from the government to citizens to
be truly considered an exercise in UBI, they should repeat
over time, Kuhn explains.
Could we see an election in the near future with
presidential candidates from both Republican and
Democratc parties run on their version of a UBI plan,
using something like the UBI calculator as a tool to reach
their constituency?
Kuhn says it’s possible.
“Today’s Republican Party is concerned with miti-
gating the consequences of who loses from trade, and
mitigating the consequences of who loses from tech,”
he says. “There are different angles that a potential
populist-style Republican could take and bring a plan
along with them, and certainly there are a handful of
Democrats that could run on it as well,” he says.
Biglan agrees. “The interesting thing about UBI is it
seems to have a very broad range of support across the
aisle,” he says.
UBI gives people the liberty to make their own choices,
which is appealing to a more Libertarian mindset, while
on the flipside, UBI, “creates a safety net base for huge
numbers of people that are just completely left out and
really struggling,” Biglan says. ■
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