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Combining Basic Income with a Jobs Guarantee, feat. Alyssa Battistoni

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The Basic Income Podcast
The Basic Income Podcast
Combining Basic Income with a Jobs Guarantee, feat. Alyssa Battistoni
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Basic income and jobs guarantee are often juxtaposed as two policies that are mutually exclusive, politically or policy-wise. Alyssa Battistoni, writing for In These Times, suggests that both are worth fighting for, and that the two policies could work in concert. Battistoni, a PhD student at Yale in Political Theory and editorial board member of Jacobin, spoke with Jim on how these two policies might work together.

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Episode Transcript

Owen: Hello, and welcome to the Basic Income podcast. I’m Owen Poindexter.

Jim: And I’m Jim Pugh. Many of you have probably heard a lot recently about the idea of a job guarantee: a proposal where, rather than just giving people cash, the government would actually provide them with some sort of decent job that gives them a good wage and good benefits. There’s been more discussion about that from some Democratic candidates running for office, and the idea does seem to be picking up some steam.

Owen: Jim had a conversation with Alyssa Battistoni, a PhD student at Yale and contributor to Dissent, n+1, and Jacobin, on the idea that a jobs guarantee and a basic income are not necessarily mutually oppositional. Here’s Jim’s conversation with Alyssa Battistoni.

Jim: Alyssa, thanks for joining us on the podcast.

Alyssa: Thanks for having me.

Jim: There’s been an increasingly heated debate over the last few years between the ideas of universal basic income — providing everyone with unconditional cash at a level sufficient to bring them above the poverty line — and the idea of a job guarantee program, which would aim to provide a job with a living wage and decent benefits to any person in the country who wanted one. People generally seem to view these as two competing proposals for how to guarantee economic security to everyone.

You recently wrote a piece for In These Times that propose a combination of the two might actually be the best of both worlds. Can you walk us through your thinking there around the hybrid proposal?

Alyssa: Sure. As you say, the job guarantee/basic income debate has become a very contentious debate on the left, and these are rival ideas of how to solve the problem of unemployment, particularly after 2008 and the rise in unemployment that resulted. There are sometimes phrases: “full employment” as the job guarantee proposal or “full unemployment” being the UBI where people say, “There’s not work to do, we would we just make jobs?”

It’s always seemed to me that these are proposals that are trying to address the same problem essentially and that there are a lot of things that could be more complimentary, it doesn’t have to be completely opposed. I think there are a few ways to think about that. In the In These Times debate, there was one proposal for, one set of authors making a case for the job guarantee then another author making a case for basic income.

The case for basic income in that instance, this is Matt Bruenig arguing that UBI is a good thing. His version of the UBI is not intended as an income replacement or to be at the level of a full– to basically provide a full income to everybody. That’s premised on a more claim– the UBI is like a claim to public resources.

Obviously, the most famous example of this is the Alaska Permanent Fund, which always comes up in UBI debates. Matt Bruenig says everyone should have a claim to national resources of whatever kind. The most prominent examples are typically oil, gas, and mineral resources.

That’s actually something that I have a complaint with because I come to this from the prospect of thinking about environmental issues, climate change and wanting to use political economy and economic programs to address climate change. Thinking, I don’t want us to build a new set of universal social benefits on the back of fossil fuel. That seems like a bad idea to me.

But you could certainly imagine a version that was almost going the other direction, that I was trying to tax resource depletion or make other kinds of claims to public resources that aren’t necessarily extractive industries, up to and including things like– there’s been some proposals to do a version of that for the rents coming out of patents and things like government subsidies and so on. That would just be a more of everyone gets the money as a claim to public resources and you could pair that with some jobs program.

I also frankly think that you could just have a much more robust UBI that is actually an income replacement. If people really also wanted to work– job guarantee people say, “Well, people want to work, and we need to create jobs because everyone wants a job, and it’s good for people’s well-being.” I’m like, “Okay, if people want to work they can go get a job on top of their basic income.” That seems technically complementary possible.

The obvious problem is money: where these come from, how you do both. That is really the problem with certainly doing both UBI and job guarantee or with doing either comes in is the problem of politics and power and where we’re actually going to get those things for these both potentially quite radical transformative programs, how we can actually realize is a big question.

Jim: Yes. Definitely. I’m curious, what reactions have you gotten to your piece and to your proposal? Have you heard from both basic income and job guarantee proponents on how they feel about it?

Alyssa: On my argument that these can be complementary, I was pleasantly surprised, honestly, to mostly have people say they appreciated a perspective that was not as firmly in one camp or the other, that you can have some version that recognizes some of the complementarity. Part of that is also that neither is going to solve all the problems. For a while, there’s been UBI as the utopia that will fix all these problems, like Rutger Bregman’s book last year, Utopia For Realists, has this account of how a UBI will fix tons of problems from depression to climate change and so on. You see the same thing from the job guarantee folks a lot. It’s going to solve income inequality and racial disparity and all these things.

Both of them have the potential to make inroads and certainly policies matter, but frankly, I don’t think either of them is likely to just wipe away all the problems of contemporary American life and so we should take that into account. Certainly, the job guarantee idea is in ascendance on the policy left right now, and there’s been some proposals put out recently.

People have been amenable to particularly the environmental and climate critique of potentially– you have to be very careful what kinds of jobs you are creating and not just do a job creation and “any job is a good job” sense, which job guarantee is not necessarily saying, but the kind of language around just “jobs are good” can be the message. That, I think, is not a good message to be putting out. People recognize that they’re important points on both sides if you really make that case. I hope that we can do that.

Jim: Yes. I can certainly understand the appeal. If there are a lot of people out there who feel strongly that, “I don’t just want financial support. I need, I want to have a job. I want to have meaning, and I don’t have a path the one right now.” Then that certainly seems attractive from the perspective of a job guarantee because you are then guaranteeing it.

One concern I have—this actually is something that’s been raised by Matt Bruenig, and I’m curious if you have thoughts here. I do get the sense that there often are a conflation of two different programs in job guarantee discussions, at least, if not proposals: one being setting up the federal government as the Employer of Last Resort for anyone who can’t find a job, at least a job they like, in the private sector could always look to the government for work. Effectively a public option for jobs, and that’s where guarantee aspect of the program comes from.

The second being a large public works program, which if we’re talking about repairing crumbling infrastructure, tackling big projects that move us towards a green economy, generally important work that isn’t actually being handled through the private market today. So a new WPA, effectively. I think those both seem like really interesting proposals, but they also seem different because the Employer of Last Resort—inherently, if you have a guarantee, you can’t have a litmus test on experience or skills. Whereas if you want to take on big infrastructure, you probably do want people who have a lot of experience and skills if we’re actually going to do that right. I don’t know, is that something you’ve thought about? Do you have thoughts on that distinction?

Alyssa: Totally agree that that is an important distinction to make, and I also agree that that sometimes it’s conflated in discussions around job guarantee where it’s jobs programs that– it seems often there is an idea of a major jobs program that would also function as a job guarantee but also going above and beyond a job guarantee in many ways. Frankly, I have this feeling that there is a lot of work that doesn’t need to be done. We should figure out ways to move out of that and diminish work overall and let people have time for other things.

I also recognize that there’s a lot of work that we should be doing. I think actually quite a lot of that is, there’s both short-term jobs program, like short- to medium- term, like you said, infrastructural projects and things like that where you would want people who were committed to a project for the duration of the project. I also think there’s some very long-term jobs we might want to secure or work we want to make sure was done that the government was creating basically permanent jobs in or permanent work in, like a lot of the care proposals.

There’s been more recent job guarantee proposals: [the proposal] from Stephanie Kelton and Paulina Tcherneva has been very emphatic on care for people, planet, and communities, which I am totally on board with as modes of work. I think it’s very important to be supporting that work and giving decent jobs with decent wages and all that in that work.

I also think that that should be very long-term, not a tailored to cycles of the business cycle or job creation and unemployment or whatever. I want to just be like, “Okay, we’re just making a bunch of jobs, and they’re just going to be that and actually jobs that are good enough to crowd out a lot of private employment.”

I imagine there’s ways to design a job guarantee that has some overlap with a broader jobs program that could function together, but I do think sometimes the job guarantee has become the New Deal / WPA type thing, and I agree they seem like distinctive things, and I also would like to make sure that we– I think sometimes the job guarantee, in the less transformative versions of it, functions as a backstop to private sector job creation, and it’s one that does give people and workers more security certainly, more ability to demand higher wages and better jobs and so on. This doesn’t really control what kinds of jobs or seem to care what jobs are being created in the private sector.

If you think, as I do, that a lot of private sector jobs we don’t want to encourage, or we would like to replace private sector work with things that we think need doing like care for people and planet like that. It would be good to crowd out private sector employment in some respects. I think sometimes the job guarantee proposals I’ve seen or just like different ones have more or less of “This will stimulate private sector growth and employment and just be a place for people to hide out for a while while the private sector creates more jobs, and then they can get whatever job the private sector has created” versus “We have an economic and social agenda that we’ll try to– we’ll try to merge an economic and social agenda through the job guarantee.” I’m more favorable to that, but it’s certainly a more demanding proposal and one that I think goes beyond that base level.

Jim: Right, it does seem as though– while all of us are clearly thinking far beyond what is politically possible today, we do have our own internal thresholds, or it’s like, “Whoa, okay, no, that’s too big of an idea. Can’t have that combination or can’t have that particular approach.” I feel like there’s some interesting arguments that arise as a result of those different perspectives.

That was certainly also something that came up when I had my conversation with Jared Bernstein last year about his thinking on job guarantee is that he at times– and he recognized this during the conversation, but said, “We’re suspending political disbelief, but only to a point.” Where that leaves us is always interesting to see.

Alyssa: Yes, and it’s hard, because I think it’s important to have distant horizon utopian type ideas that are what we’re working towards and also some more pragmatic short-term view of how to get there. It’s one of the things that has been tricky in getting UBI off the ground, it seems to me, it feels like the left version of it feels so utopian, people can’t imagine how you would make it happen in the short term. it’s rethinking so much about work and production and how we expect that to function that it’s an easier sell politically in many ways to be like “Well, you get a job, and you contribute to society, and you get your good wage” and stuff like that.

I think there are ways to do that that are not totally just reinvesting in the dignity of work and work as the means to all social welfare that I think would be important to try to integrate into the job guarantee rhetoric. I also took the point that it’s hard to totally transform where people think about work and income very fast. That’s fair.

Jim: Right. With basic income, you’re not just talking policy change, you’re talking culture change.

Alyssa: Yes. Which I think needs to happen, but I also get that it will take a while and so figuring out ways to continue to not cede the ground of social rights and universal benefits and so on, while also recognizing that there is a long way to go to get– if anything, it sometimes seems like things that we’re retrenched since things like welfare reform and so on have demonized recipients of benefits as undeserving and so on.

Jim: On that note, you wrote explicitly in your article about the hybrid proposal that one of the main thing was that attracted you to basic income was that idea of separating livelihood from jobs. When I’ve talked to other basic income advocates, my strong sense is that is a powerful underlying driver for much of the support of the policy.

I think that maybe why there’s been such a strong negative response from many in the basic income space to the idea of the job guarantee program, because they do see that going in the opposite direction, and if folks — and I include myself in this as well — would like to see that conception of deservedness be decoupled from having paid jobs and that job guarantee is moving away from that, then that’s obviously a reason to not be supportive of the policy.

Then my question is, for the hybrid policy, let’s say that we could make this happen. I’m curious to get your thoughts in that scenario, do you think there would be then a natural shift towards separating deservedness from work or from paid jobs if that was an option for people or might we end up just entrenching these two camps of thought and we’d have the Sharks and Jets ongoing?

Alyssa: Yes. I definitely worry that the latter will happen, because it’s more politically palatable in the short term to do a kind of like “you get income if you do a job” thing, which people say everyone needs to do work, like it says in the piece. If the idea is everyone needs to contribute to society then that would be more like a mandatory work requirement program.

If you have a trust fund, you also have to get off your butt and go take care of the elderly or whatever, but it’s not that. It is explicitly to access livelihoods, you get a job and so that I do worry about. One of the things that I’ve been thinking is that there are certainly ways to structure for a job guarantee and basic income that oriented in different directions in terms of what vision of society it is holding up and aiming to achieve.

I do think that there are ways to try to use a job guarantee to put forth a different idea about what we think work is, how much work people should have to do, in a way that might be able to have a conception of work that’s more limited, that’s more widely distributed. I do think that that will be a political challenge.

Even if you have it like you have a reasonably, a lower reduced-hour work week or something and a high wage for reduced hours and increased leisure time and all of these things that have historically been part of Left approaches to work. You can have all of those things, but still, at the end of the day, to get access to these things and you have to have a job.

I still think that is a thing that we should try to– but that’s just going to be part of the job guarantee, so I do think that it’s very important to also be defending certainly what remains of welfare provision in the country, but I think also trying to advance that and to think about ways that we can increase access to unconditional benefits or even like semi-conditional benefits, like the child allowance is often discussed as a good kind of UBI adjacent policy. Obviously not everyone has a child and will unconditionally receive the child allowance, but just things that are increased social benefits.

One thing I mentioned in the piece that I also think is an interesting idea and have actually heard discussed very little in the US is the idea of universal basic services, which is people having access to public housing, free public transportation, and food stamps. A lot of the things that you actually need to live that you would have freely available.

I think it always can be helpful in solving some of the problems of the basic income, which are if you get X amount of money and then the private sector hikes up the cost of healthcare, housing so much that you can’t afford those things. This is one of the ongoing debates. If you just do in-kind service or good provision, people can still have the basics that they need to live whether or not it’s called income. Then that also seems compatible with a job guarantee. At the same time, it’s like– I still feel like at the end of the day, there are a lot of ways to try to make them more– to recognize that there are– to have a job guarantee that’s not just like “work is the greatest good of society.”

At the end of the day, I still think it’s crucial to insist that you shouldn’t have to have a job to be able to live and to have an income that you can live on, and all of that, and that your access to a livelihood. An economic mode that is premised on a lot of people not having access to a livelihood, that shouldn’t be at the basis of whether you’re able to live a decent life. I think it’s very important for the Left to insist on that, especially if we’re going for the job guarantee.

Jim: Your note on Universal Basic Services brings up an interesting point, which is beyond the question of deservedness, whether you have a job or not, one of the other, I would say, strong underlying drivers in the basic income space is the idea of choice. A lot of this, I think, has been certainly at least fueled by some of the research around unconditional cash that’s been done by GiveDirectly on others in developing nations.

Different people view it even more through a pragmatic lens or more through a moral lens, but it is often better to give people support in a way where they decide for themselves how they use that support. Hence the preference for cash over the services. Because with cash, yes, you are subscribing then to a capitalist market, but that provides a way for people then to choose for themselves, “Do I spend this on food? Do I spend this on rent? Do I spend this taking my kids to Disneyland?” That has a substantial value in itself. I’m curious what your thoughts are about that?

Alyssa: I’m sympathetic to that in some ways. I’m also suspicious of it in that I like both. I think a lot of the critique of certain aspects of the welfare state that come from the Left and from welfare recipients are around the paternalism of the welfare state and the 60’s and so on, where single mothers are being given a hard time by bureaucrats who are telling them how they should take care of their children and treating them like they don’t know what to do.

There certainly is a lot of that. I think actually, one of the reasons to make access to certain benefits more universal, coming with less terms attached is to minimize the degree to which you have people having to jump through hoops to get access to the things they need.

I guess my concern with the framework of choice is less that people shouldn’t be able to choose things. It’s more a couple of things. One is just the way that I think choice has become so– I think the framework of consumer choice comes very strongly out of a lot of neoliberal policy thinkers. This is the free-to-choose as Milton Friedman’s classic idea. It just frames the greatest decision-making power you have is as a consumer in the market and that is where your choice really lies.

I’m a little wary of just creating a program that’s like, “Okay. Well, that’s our paradigmatic value is.” Everyone has the freedom to choose in this sense that that means you get dollars to spend in the market. I do think that there are ways to be free to choose things about your life that if you have access to a set of things including housing, I don’t think that means that housing says you have to live in X place or Y place.

Hopefully, there’s ways to both choice into access to public goods and services, like free public transportation. You can choose where you go. There are many ways to think about choice that aren’t just like, “Here’s a dollar. Where are you going to spend it?” I do think the concern about what happens when people have a basic income and the price of goods is too high for you to choose those things.

Choice in the marketplace depends on how much money you have and how much money other people have to spend on things. I think that especially housing markets and healthcare seem like the most problematic for that. it can be so extreme if your choices are between two extremely expensive health care plans.

This is getting into the more like basic income as a replacement for all welfare state provision, but which is advanced under the banner of choice. It’s like, “Well, people can choose how they spend their money. If they don’t want to buy a health insurance, why should they have to?” Then you’re like, “What happens when people choose not to but they have cancer?” I think I would like to step back from that as the paradigmatic framework for how we think about how we choose things and what that means or what kinds of action that entails.

Jim: I do think your example with health care is a good point because most basic income advocates I know favor a single-payer solution on that. They don’t view healthcare as something that should fall under the auspices of what would be covered in the basic income, specifically because price is so variable that you’ve effectively eliminated choice on the supply side. From my perspective, a pure solution in either direction is very problematic. The question is, where do you draw the line as to what the market actually can handle versus what society should be providing directly.

I think this is a good segue into talking about– you mentioned in your recent piece that you’ve grown more wary of UBI, as you mentioned earlier in the conversation as well, as it’s gained prominence, in particular, due to who the visible champions are and some of the details of the policies being proposed. That touches back to your piece last year, The False Promise of Universal Basic Income, where you were cautioning those on the Left about supporting the policy. I thought you raised some really important points in that piece. Would you be able to just generally walk through your thinking around that?

Alyssa: Sure. Yes, this is a piece slightly misleadingly titled, because it’s more like “some warnings about potential basic income” rather than like “it’s a false promise totally.” However, I am more skeptical. I’d written a previous piece arguing for a UBI as a way to break the growth-job cycle and environmental climate proposal. I was like, “Okay, there’s been all this stuff coming out about basic income. I should see where the debate’s going” and so on.

As I was following the debate as it went on, I got more and more nervous that some of the rhetoric I was hearing, and particularly coming out of—not just rhetoric, but the policy ideas people are putting forward. I think particularly seeing how popular it was amongst Silicon Valley venture capitalist types, gave me real pause. One of the things that UBI people always bring up is that it has supporters on the left and right and there’s these different ideological trajectories. Maybe that makes it potential– you have this potential “big tent” of UBI supporters or something.

I don’t think the fact that there are people in the right who have supported a basic income idea disqualifies it at all. There are very distinctive versions. I was like, “What is going on here?” The more I came to think reading, for example, Andy Stern’s recent book, Raising The Floor on basic income, that it was being proposed basically as– for some people, it is a techno-futurist solution to automation, and there will only be a few gig economy jobs and then what are we going to do with all these masses of unemployed. There are these different competing anxieties about “Will the masses come for us wealthy venture capitalists? We should throw them some UBI to keep them calm.”

That is not I what I’m looking for in the UBI. There’s an idea of UBI as a way to basically have a baseline for the very low wages of the gig economy. You could be an Uber driver and make whatever crappy wages — they’re not even technically wages because they aren’t technically employees. You can make whatever you make on a ride, but the government will backstop that basically. It seemed like a public subsidy to shitty paying private sector jobs, which I think is also not whatever I want UBI to do.

Things that are along these lines, that are positing that basic income as a way to stave off a more egalitarian political economic framework and to deal with the problems of automation. That made me concerned and the thing that I came to think a bit about UBI is that the idea of it as you sometimes see in, for example, in Rutger Bregman’s book, that presents that was rational post-ideological idea that’s solution oriented or it just makes sense as a policy proposal and it doesn’t have an ideological valence, sometimes seems like the good thing about it, but I came to think it was not the good thing about it.

I think that there are a lot of ideological components built into different conceptions of the UBI, and it’s really important to articulate those. My version is actually very different from this other one, and it’s not just the same because we both think a basic income is good. Andy Stern has this imagined debate between Charles Murray and Martin Luther King, Jr., which I found baffling, kind of offensive, that they actually agreed on more than they disagreed on because they thought a basic income was good.

No, I just don’t think that’s true. I think people who are coming at this from the left. I really don’t want to say because there’s a few– because there are people want version of the basic income that I don’t like, this poisons the thing, in the same way that I don’t think that whatever Republicans trying to attach work requirements to food stamps should disqualify job guarantee proposals, which are not trying to do that, even though they both potentially have this work-oriented mode of accessing benefits.

But I think it’s important to be aware of that, to make clear distinctions. I wrote this piece saying, “Here are the things that concern me about the basic income.” I think in this more recent piece, I’m trying to remind the people who are firmly in the job guarantee camp to also be aware of those same things, because I don’t think that job guarantee proposals are workfare, but as people on the Right are calling for workfare, i.e. requiring work to access welfare and other kinds of benefits, that will be something that seeps into that debate whether people on the Left like it or not.

I think we just need to be aware of who are the people who will try to get in on the proposals we’re putting forth, how they will transform from the ideas we come up with and the ideal version – “this is all the good things about it, and this is how it could work.” Those things will change through the political process and particularly when…

Jim: The sausage gets made?

Alyssa: Yes, the sausage is not pretty as it gets made, but also we are not powerful enough like the people who have a Left UBI or Left jobs guarantee to just implement the one we want right now. Right-wing Republicans are very much in power right now, and it is going to be very hard to achieve the utopian vision of either of our policies. I think it’s important to remember how that might shift as things go through the political wringer.

Owen: That was Jim Pugh and Alyssa Battistoni on The Basic Income Podcast.

What I found interesting and insightful about that was that both basic income and jobs guarantee– they are aspirational proposals, and some of the detail can get left out sometimes. I think with both there is the small version and the big version, I’ll call them, where with jobs guarantee there’s, as you described it, there is the Job of Last Resort, where if you can’t find something else, you would still have this, and then there is the idea that you would be able to have a good, middle-class job through a jobs guarantee program.

Those are very different proposals. With basic income, you might see something with a few hundred dollars, maybe up to a thousand, or a true income replacement of $30,000, $50,000 a year or something like that. I think for jobs guarantees, those are very different proposals. For basic income, it is the same idea just more. Maybe people will disagree on that, but I found it instructive just to think through that.

Jim: Yes, I think that’s right. I think you see these different ideas out there, and depending the details you have it, it does make a really big difference. I think that– and this is certainly not true for every job guarantee advocate, you do hear people out there who are very specific in the version that they’re pushing. But there is sometimes this general conflation, and people wrap this up into some big general idea of a policy and then talk about what things that maybe some form of a job guarantee could potentially solve, but it all gets muddled into one.

I think that it does a disservice, I would say, to the idea of a job guarantee because it doesn’t allow you to really understand, “Alright, what are we talking about here? How does this connect to our core values?” It becomes hard to really have a good discussion on that in that case.

Owen: Yes, I think you can get away with it, when it’s a very far off thing, but now it’s being proposed by Democratic candidates for the House and State offices. Yes, I think it’s time to pick a path if you’re one of those people.

Jim: That’s not to say that we need every detail answered, because you can obviously make the same critique with basic income. There is a lot of specific questions that if someone were to say, “Ok, go. What is your national policy?” We wouldn’t have necessarily specific answers to. But I do think particularly the difference between Employer of Last Resort and just the general public works program, it’s not that those are details, those are really different policies. I really would like to see people make that distinction when they do talk about this.

Owen: One other question I would throw in there for a jobs guarantee people is, is this a program that works anywhere, where you live? Do the jobs come to you essentially? Or is there a difference between maybe a more robust public works thing that you might have to travel to and the guaranteed jobs is where you are? I think there are different ways to structure that and potentially some different good ideas in there, but that is a question that always comes to my mind.

Jim: Yes, I feel like most proposals I’ve seen have talked about local jobs, so that seems to be the thrust. But I think that’s also a good follow-up point, which is, if you are considering bigger infrastructure projects, that does likely require more people to move, so yet another reason why it doesn’t fit cleanly into an Employer of Last Resort model.

All that said, I think it’s important to say I personally agree with Alyssa. I don’t think that job guarantee and basic income have to be oppositional. I think that you could absolutely imagine a hybrid proposal where you provide a job to people who want them but then everyone is getting basic income, and there’s nothing wrong with that. If people actually like these jobs and want to take them, okay, they can do that. If not, they have basic income and can figure out their own path.

Owen: Yes, I feel like part of the opposition between these two ideas is the sense that we only have room for one big idea and that they address similar problems. But absolutely on a policy level, I’m just imagining how things would play out, there’s no reason these can’t fit together in the same world.

Jim: Just thinking politically, if you are a supporter of basic income, I think that there is very good reason not to come out hard against job guarantee or at least insist upon leaning into that in debates. because if we are talking about people who are in the general bucket of “thinking outside the box on how we actually guaranteed economic security for everyone,” there is going to be a good chunk of folks who maybe they were first introduced to the job guarantee, that’s what they are used to and so that’s what they advocate for. They could potentially be very open to basic income, but if it’s presented in a way that actually starts with their values, not as, “your idea is terrible, this is better” and so it becomes — it could really galvanize people into these two camps an unproductive way, I think.

Owen: Alright, that’ll do it for this episode of the Basic Income Podcast. Thank you to our producer, Erick Davidson. We are back, so we’ll have more episodes in your feed soon, and we’ll talk to you next week.

Comparing Basic Income and a Federal Jobs Guarantee, feat. Jared Bernstein (Rebroadcast)

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The Basic Income Podcast
The Basic Income Podcast
Comparing Basic Income and a Federal Jobs Guarantee, feat. Jared Bernstein (Rebroadcast)
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Jim continues the discussion started on the Intelligence Squared debate over basic income with Jared Bernstein, who argued against the basic income. Bernstein explains various concerns he has with the concept, focusing on existing social programs, and a similarly radical proposal: a jobs guarantee. Bernstein is a Senior Fellow at the Center on Budget and Policy Priorities and served as Chief Economist and Economic Adviser to Vice President Joseph Biden from 2009-2011.

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Episode Transcript

Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.

Jim: And I’m Jim Pugh.

Owen: In every episode we’ve done, whether we’re talking to an artist, a politician, an activist, everyone has been a supporter of the basic income. But this week, we actually have a dissenter.

Jim: A couple months back, there was a debate on basic income that was organized by Intelligence Squared. It put Andy Stern and Charles Murray arguing for basic income up against Jared Bernstein and Jason Furman argument against it. Most of the debate focused on the pros and cons of universal basic income, but one thing that popped up was Jared Bernstein mentioned that he was actually a fan of a jobs guarantee program, which would be another ambitious plan that falls pretty far outside of the scope of the legislation that has been considered in the US, also aimed at providing economic security, but looking different than something like an unconditional basic income.

Owen: Jim sat down with Jared Bernstein and discussed their feelings on the basic income and the jobs guarantee and a bunch of other topics. From my listening, I found that Jared Bernstein has a lot of the same goals and a lot of the same perspectives as people in the basic income movement but comes at them from something of a different angle and different experience and that comes out in the conversation. Without further ado, this is Jim Pugh and Jared Bernstein on the Basic Income Podcast.

Jim: I am here with Jared Bernstein, a Senior Fellow at the Center for Budget and Policy Priorities. Jared, thank you for joining us.

Jared: Thanks for inviting me.

Jim: Many of our listeners may have seen the basic income debate that was held by Intelligence Squared back in March between Andy Stern and Charles Murray arguing for a basic income as the social safety net of the future, and then you and Jason Furman arguing against that idea. One of the things you mentioned there was the idea of a jobs guarantee program in the US. I’m just curious, can you tell us a little bit more about how you think a program like that might work?

Jared: Well, sure. Let me start by saying a little bit about why I think we need it. As we speak, the unemployment rate is quite low nationally. It’s 4.4% and most economists, and I’m someone who thinks about the questions of full employment a lot, will tell you that’s full employment. That’s certainly what the Federal Reserve would say. In fact, we know that there are pockets of weak labor demand where even at a low national unemployment rate, there are parts of the country where people can’t find enough work. I’ve observed that even at full employment, sometimes, the labor demand is insufficient.

You need to think about a program to fill that gap. The way I think of it is we all agree or at least the economics community agrees that when credit markets freeze up, you need a lender of last resort, and that’s the federal reserve. Well, when the job market fails to provide adequate opportunities for all of commerce, I think you need a job creator of last resort. There’s a couple of different ways to do that which I can get into in a minute. I just wanted to give you that motivation first.

Jim: I know, I’m based out in the Bay Area, and particularly around here, there’s a lot of new companies that are basing their approach to work very much on a task-based model. Not seeing it as full employment but rather seeing it as smaller sets of work that people will take on in that “gig economy.” I’m curious to hear is that something that you feel connects here? Is that something entirely separate?

Jared: It’s definitely a connection. There’s definitely a connection there, but I think it’s separate in the sense that what I’m talking about are places where there’s just not enough work for people who want and need it. Now, in the case of the gig economy, there may be not enough steady work or work of a structure that people want. If somebody wants a steady job where they know their hours, the flexibility of the gig economy or maybe even the insecurity therein just doesn’t appeal to them, that’s a job quality issue or structural employment issue.

I’m talking about something that’s different than that. Think of the Rust Belt, you’ve certainly heard about that in the context of the Trump story, but also there are neighborhoods and urban areas that are like job deserts. There’s not enough jobs there for folks who want them.

I can think of two ways to deal with that. The first is a real direct job creation program by the federal government, where the federal government creates gainful employment for people. I do think not just in terms of job quantity but job quality, so these jobs have to be adequately remunerative, and the other is a subsidized model where the government subsidizes employers to hire workers, sometimes to the tune of 80% or 90%, that is the government would pick up 80% or 90% of the wage for some fixed amount of time. I know a lot more about the second one because we did something like that during the Recovery Act when I was working for the Obama Administration.

But those are the two broad models, one where the government directly creates jobs, almost in the spirit of the New Deal, and the other is more of a subsidized employment model.

Jim: If we were to pursue a jobs guarantee program, do you have any sense what sort of timeline this would be on? Is this something that we’re talking about, with the big caveat that who knows what will be happening with the federal government over the next few years, but is this something that seems achievable in the relatively short-term or is this more of a longer term, something 10 -20 plus years from now?

Jared: With a rational, functional government, at least the subsidized employment idea could would be ramped up quickly and interestingly, this is not very well known, there are a number of programs like that in place already. The VISTA Jobs Program, there’s a number of youth employment programs. These are all very small programs, but again, during the Recovery Act, so in 2009, we quickly ramped up a subsidized employment program, it was under the aegis of TANF Program, Temporary Assistance for Needy Families, and there was something like maybe under $2 billion I think I have that right, that was assigned to a program where in states — it was actually more of a kind of flow of resources than a program, but basically we said to states, you can use this money, which we’re ramping up for TANF, because we’re in this really deep recession, you can use this money to subsidize employment for low-wage people who are facing labor market barriers. They can’t get into the job market.

You have to be careful not to displace somebody else, so an employer can’t say, “oh, well, by the way, you’re fired, but Ricky, you’re hired.” So you have to be careful to avoid this. There are ways in which you have to craft this thing to make it most effective, but we found that during the Recovery Act, this program created over 250,000 jobs in a bunch of different states, subsidizing employment, again, often to the tune of 70, 80, 90% sometimes for three months, six months, maybe a year and after the subsidized employment ended, as it’s a time-limited program, a number of those workers were able to stay on in the labor market. It looked like in some cases the program helped them get over a labor market barrier that was blocking them.

Jim: During the Intelligence Squared Debate, you raised several concerns about universal basic income as a policy to pursue. For those who weren’t able to watch the debate, could you share with us what your main concerns on that front are?

Jared: Yes. I would say my main concern comes from the proposal by Charles Murray who is one of my opponents in that debate. So he was on the other side, and he’s arguing for a form of UBI that I am absolutely sure would significantly worsen and deepen poverty and economic insecurity.

What Murray wants to do and I’m not telling tales out of school here, because I’ve debated him numerous times on this. Sometimes it’s not fair to argue with somebody who’s not there to defend themselves, but Charles knows exactly where I’m coming from here. He wants to essentially take all of the resources that we’re devoting to both the safety net and to some of our social insurance programs, Social Security, Medicare, and giving them up per capita across the whole population, so make it a universal basic income paid for by aggregating all the resources we’re currently spending on the safety net and social welfare program, and social insurance programs.

Obviously the arithmetic is quite simple because you’re going to be really seriously diluting the resources that are already targeted and pretty well targeted, I argued in that debate, at folks in the bottom half, bottom third of the income scale. So if you take resources that are well-focused, well-targeted and as I argued that night, having their intended effect and pretty effective and you give them to 320

million people, the population of the US, you’re very much going to dilute the program. That’s probably my main objection to at least that version of the plan.

Jim: I do think that something that’s become more apparent within the space of people advocating for basic income in recent months is that there are two quite different views on what the policy could be. What you just described, the repeal and replace model, tends to be favored much more by Libertarians…

Jared: That’s a phrase we hear a lot these days.

Jim: [chuckles] …often with the idea of having something radically simpler being one of the main things that attracts people to that version of it.

On the flip side, you have a more progressive view, which is more to support and strengthen model, of something that would be providing basic income and perhaps replacing some programs that exist today that seem fully redundant if people are receiving a basic level of cash every month, but done with the intention of making sure that people are not being left worse off than they were previously. I’d be curious to hear your perspective on that vision of the policy.

Jared: Well, there are aspects of that vision that I like and share. As I said that night, mostly focused on some of the work of Andy Stern, who I’m sure is known to your audience — he was the other “opponent.” I can’t really think of Andy as an opponent because he’s fighting for social justice for as long as I’ve known him and that’s been many decades — is a version that says, “let’s build off of what we have.” And there are many ways in which I’m supportive of that.

However, while I think it’s perfectly legitimate to suspend political disbelief when you have these debates — even the jobs debate we had earlier about guaranteed or subsidized employment, as I said, this congress isn’t going to do that. I’m always happy to suspend disbelief. I think there’s a question of just how far out of the box do you want to go. One of the things that worries me is that if you start opening up this opportunity to take resources from one program and give them to a bunch of people. There is a U, in UBI. In other words, there’s a universal aspect to it. This dilution problem I think is a real one unless you’re really talking about adding significant new resources.

Well, we’re in a climate where that’s really tough to do and one of the things that I recognize, I recently wrote about this in a piece called UBI and I, is that many of the programs that I think are well-targeted and working pretty well — not perfectly by a long shot, and I suspect you and I can have a good conversation about how to improve some of the safety net programs that are existent — but they’re underfunded.

Before I would think about building on top of what we have, I probably want to get the Earned Income Tax Credit to be a lot more robust. I’d want the child tax credit to be a lot more robust and to start, instead of at dollar 3,000 of earnings, to start at zero and perhaps be fully refundable and not conditional on work. There’s a child allowance idea that I’ve been getting more interested that shares some characteristics with UBI, but it’s just targeted at kids.

There’s ways in which I’d want food stamps to be, SNAP to be, maybe expand benefits particularly in the downturn which is something that worked in the recession, and I could go on. I very, very much want to see a quality preschool program in place. I think we just really hurt the potential of a lot of kids who really need a quality opportunity when it comes to preschool.

There’s a bunch of stuff I’d rather put in place before I start thinking about building on top of what we have in the spirit of UBI. Again, I’m always worried about the dilution problem. I do think that U in the UBI is something that gives me pause sometimes.

Jim: One thing I’d be curious about is, it does seem that there is, at least to some degree, a chicken and egg issue around how big of or how radical of a policy you propose versus what’s realistic today. I think that’s something that, as basic income has become, at least to some degree, more of a mainstream idea over the last couple of years, people who support it are thinking about, well, what are the stepping stone policies that move us in that direction?

I think some of what you just mentioned, actually, are policies that are discussed there, something like a child allowance. Programs that are providing unconditional cash in different scenarios. So I don’t know, and I realize that this is in some degrees conflating two worlds here, the economic side and the political marketing side, but if you have any thoughts around, do you think maybe that fighting for something that’s radical, basic income, might actually make some of these policy that you were discussing possibly easier if we’re shifting the debate window?

Jared: Yes. I think that’s a good point. One has to be very careful to not negotiate with yourself and not say, “oh, I don’t like super progressive idea X because it’s too progressive. I like some other idea because that’s half as progressive or half as ambitious.” Because if you realize that you’re already starting on a very tough battlefield, Negotiation 101 suggest that you should start from a very ambitious place. What you’re saying resonates with me.

I think one of the problems that UBI has this — some of my friends are Libertarians, so this sounds worse than it than I mean it – this kind of infection from the Libertarian side. There are those who are just gunning for what they call the welfare state. There are people in this debate, this UBI debate who view it as a vehicle by which they can undermine social insurance, by which they can undermine the safety net.

Read Charles Murray, literally on page three he says, “The safety net is a horrible failure. It is imploding. It’s crashing in on itself, and before it explodes or implodes, or whatever the words there, we have to do something different.” Well, that’s all completely wrong. I think that not to say that these programs are perfect, but if you go back to my wrap during the Intelligence Squared Debate, I tried to provide pretty nuanced analysis of the way in which these programs are having their intended effect, working very well in terms of staving off probation that is faced by many low income people, but also having some very positive long term effects.

Medicaid, food stamps, Earned Income Credit. We now have people who were exposed to these programs as children, and we follow them over their life cycle. We can look at their outcomes as adults and we see earnings advantages, better health outcomes, better educational outcomes. These programs aren’t just consumption, they’re also investment.

Every time I say this, I’ve been careful to say that they’re far from perfect. I’m not saying that there’s not work to be done there, but I do think one of the challenges — while I take your point about the importance of being ambitious and not being, not self-negotiating because of political constraints — I also think you’ve got to be mindful of these dark forces in this debate.

Jim: Going back to the jobs guarantee idea: one aspect of basic income that appeals to a lot of advocates is opening up new types of opportunity for work. The ones that come up most often, I would say, are entrepreneurship — giving people a runway to be able to pursue a new idea for business — but also recognition of unpaid labor, particularly care giving work that happens at home. Is that something that if you were to pursue a jobs guarantee program, you might be missing that gain?

Jared: I think those are legitimate concerns. I must say that the UBI programs that I’ve seen articulated — I think it’s important not to talk in the abstract, but look at the programs that Andy Stern or Charles Murray is writing down there — they don’t look to me like they really afford people all the resources they would need to explore much in terms of entrepreneurship.

For that I think you just need much more liquid credit markets and the ability of people to access those markets. Perhaps they need a backstop, a loan guarantee if they don’t have the wealth or the resources or the networks to collateralize the loans they need. I probably approach that more through credit markets than through a UBI.

In terms of the work things: one of the things I don’t know that I have mentioned is I’m pretty sensitive to two aspects of this debate. One is that, the US approach to anti-poverty policy has consistently become more and more oriented towards work. Now again, this is a trend that you could decide to accept in your policy taking or push back on.

But there are many aspects of that trend that makes sense to me. I started out about 150 years ago in this business as a social worker in New York City and ever since then, and since then I’ve recognized that a lot of people particularly low income people raising kids really want to have a good, secure, high quality remunerative jobs.

The problem that many of them face is sometimes inadequate skills, but just as often, inadequate demand for labor. One of the things that really sticks in my craw in this debate is this conservative mantra that all you have to do to get a good job is to want a good job. The only thing it’s holding you back is you’re lazy, or you’re dependent on welfare programs. The demand side of the labor market, the opportunities and availability of good jobs, that’s something that I’ve been very sensitive to, the insufficient numbers of throughout my work. That motivates me in that space.

Jim: It seems like on one hand, we have some people who may not currently have access to a job who really want one, but on the other hand, there may be people who are interested in entrepreneurship or engaging in labor that isn’t paid in today’s economy. Could there be some hybrid model that actually can combine a jobs guarantee and a negative income tax in order to be serving both of those populations?

Jared: There could be, but I think one of the things you’ll run into there is the income constraint that Jason Furman and I focused on at the Intelligence Square Debate. Again, I recognize that it’s a little squirrely to keep raising these political hurdles where you want to. I think that the job guarantee is more in sync — I’d say I know this — with anti-poverty policy, which is becoming more and more work oriented.

In that sense, while everything is a hugely heavy political lift, it’s less of a heavy political lift than a UBI. At least a UBI that’s not done in the Libertarian or Murray sense, which just undermines stuff we’re doing already. I think in a way you’re saying, the hybrid services “well, let’s do both.” If we had unlimited resources, I’d say, “yes, let’s do both and a bunch more too.” But in a world with constrained resources I’ve at least set my sights on a job guarantee, which I think is actually a pretty already ambitious and progressive program.

Perhaps, as in the child allowance case, which I view as not conditioned on work, and as you and I agreed earlier, that is certainly a step in the direction I think you want to take things. There may be other ways to go about that, maybe other ways to get at conditioning income not on work, but I’d say before I was too interested in a hybrid, a UBI attached to a job guarantee, I’d work on the job.

Jim: Alright, Jared, this has been great. Really appreciate you taking the time to chat. Anything else you’d like to add?

Jared: No. I think we’ve covered a lot of ground.

Jim: Great. Alright. Well, thank you again.

Owen: That was Jim Pugh and Jared Bernstein on the Basic Income Podcast. I think it’s pretty clear that Bernstein comes from a perspective of fighting for and defending these programs such as the Earned Income Tax Credit, Medicare, food stamps. He’s defending them against people who often argue that they’re worthless and that we should just get rid of them. If we’re going to propose something big and new that might replace at least some of these programs, we do need to make the case that a basic income is an improvement on what we have now.

Jim: I think that’s exactly right. I think that there’s a fear of throwing the baby out with the bathwater here. I think it was clear also from the discussion that ultimately political viability is coming into play here. Despite generally talking outside the realm of what’s possible today, he had major concerns about how far from our current political thinking we actually get.

In some ways I think we’re coming at this from qualitatively different perspectives. Are we actually talking about something that feels more achievable with the way people think about things today, or are we talking about this North Star vision of where we ultimately want to end up, and then recognizing that it’s going to take us potentially decades to get there, but saying that that’s where we want to keep our eye, and see what steps we can take in that direction.

Owen: Honestly, I find the fact that we are maybe talking on a decade’s perspective to be liberating because we don’t need to be thinking about what is politically viable in the next five years. We need to be thinking about, what do we want going forward? What are the best policies? I think you can draw parallel to healthcare. There is a debate around, do we tweak and fix the system we have now, or do we move something towards something like universal healthcare?

I would think the basic income debate is pretty analogous. Do we improve systems like the Earned Income Tax Credit, or do we move toward this North Star vision of a basic income for everyone?

Jim: One thing that basic income supporters may have noticed is that we never actually talked about automation during our conversation. That was actually quite intentional.

Automation came up during the Intelligence Squared Debate, and there was just complete lack of alignment. Bernstein isn’t sold that automation is going to have a drastic impact on the workspace that we have today and that there will be new jobs created. I mean, we could have gone back and forth on that, but we’re really not going to come to any sort of consensus there. When we do start to see a drastic impact from automation and when you can really feel that more tangibly, I think that is going to lead to a different conversation. But it’s not one that we are really going to be able to get to a conclusion on where we are today.

Owen: And again, I would just take that zoomed out perspective. I think 10, 20 years from now this automation conversation is going to be quite different, and we do need to be thinking about how we might prepare for that if certain predictions come true about just how intelligent artificial intelligence is going to get.

Jim: I think for me really the big takeaway here is, even though Bernstein was skeptical about it, it seems like these aren’t competing policy, jobs guarantee and basic income.

If you’re looking at basic income and your motivation is really guaranteeing economic security, we’re fighting for the same things here. I worry about setting these up as head to head contestants because I think that if we’re actually pushing for big policies that aim towards that value of making sure everyone has enough to get by, we can be open minded here, and we can think about different scenarios. What are situations where guaranteed employment might be really attractive to people, and what are situations where an unconditional payment that opens up opportunities and spaces that really haven’t existed before actually could be the game changer that many us think it is?

Owen: All right. That’ll do it for this week’s episode of the Basic Income Podcast. Thank you to our producer Erick Davidson. I encourage you to subscribe on iTunes, and please do leave a rating or a review while you’re there. It’ll help other people find the podcast. See you next week.

Jared Bernstein on Basic Income vs. a Jobs Guarantee

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The Basic Income Podcast
The Basic Income Podcast
Jared Bernstein on Basic Income vs. a Jobs Guarantee
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Jim continues the discussion started on the Intelligence Squared debate over basic income with Jared Bernstein, who argued against the basic income. Bernstein explains various concerns he has with the concept, focusing on existing social programs, and a similarly radical proposal: a jobs guarantee. Bernstein is a Senior Fellow at the Center on Budget and Policy Priorities and served as Chief Economist and Economic Adviser to Vice President Joseph Biden from 2009-2011.

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Episode Transcript

Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.

Jim: And I’m Jim Pugh.

Owen: In every episode we’ve done, whether we’re talking to an artist, a politician, an activist, everyone has been a supporter of the basic income. But this week, we actually have a dissenter.

Jim: A couple months back, there was a debate on basic income that was organized by Intelligence Squared. It put Andy Stern and Charles Murray arguing for basic income up against Jared Bernstein and Jason Furman argument against it. Most of the debate focused on the pros and cons of universal basic income, but one thing that popped up was Jared Bernstein mentioned that he was actually a fan of a jobs guarantee program, which would be another ambitious plan that falls pretty far outside of the scope of the legislation that has been considered in the US, also aimed at providing economic security, but looking different than something like an unconditional basic income.

Owen: Jim sat down with Jared Bernstein and discussed their feelings on the basic income and the jobs guarantee and a bunch of other topics. From my listening, I found that Jared Bernstein has a lot of the same goals and a lot of the same perspectives as people in the basic income movement but comes at them from something of a different angle and different experience and that comes out in the conversation. Without further ado, this is Jim Pugh and Jared Bernstein on the Basic Income Podcast.

Jim: I am here with Jared Bernstein, a Senior Fellow at the Center for Budget and Policy Priorities. Jared, thank you for joining us.

Jared: Thanks for inviting me.

Jim: Many of our listeners may have seen the basic income debate that was held by Intelligence Squared back in March between Andy Stern and Charles Murray arguing for a basic income as the social safety net of the future, and then you and Jason Furman arguing against that idea. One of the things you mentioned there was the idea of a jobs guarantee program in the US. I’m just curious, can you tell us a little bit more about how you think a program like that might work?

Jared: Well, sure. Let me start by saying a little bit about why I think we need it. As we speak, the unemployment rate is quite low nationally. It’s 4.4% and most economists, and I’m someone who thinks about the questions of full employment a lot, will tell you that’s full employment. That’s certainly what the Federal Reserve would say. In fact, we know that there are pockets of weak labor demand where even at a low national unemployment rate, there are parts of the country where people can’t find enough work. I’ve observed that even at full employment, sometimes, the labor demand is insufficient.

You need to think about a program to fill that gap. The way I think of it is we all agree or at least the economics community agrees that when credit markets freeze up, you need a lender of last resort, and that’s the federal reserve. Well, when the job market fails to provide adequate opportunities for all of commerce, I think you need a job creator of last resort. There’s a couple of different ways to do that which I can get into in a minute. I just wanted to give you that motivation first.

Jim: I know, I’m based out in the Bay Area, and particularly around here, there’s a lot of new companies that are basing their approach to work very much on a task-based model. Not seeing it as full employment but rather seeing it as smaller sets of work that people will take on in that “gig economy.” I’m curious to hear is that something that you feel connects here? Is that something entirely separate?

Jared: It’s definitely a connection. There’s definitely a connection there, but I think it’s separate in the sense that what I’m talking about are places where there’s just not enough work for people who want and need it. Now, in the case of the gig economy, there may be not enough steady work or work of a structure that people want. If somebody wants a steady job where they know their hours, the flexibility of the gig economy or maybe even the insecurity therein just doesn’t appeal to them, that’s a job quality issue or structural employment issue.

I’m talking about something that’s different than that. Think of the Rust Belt, you’ve certainly heard about that in the context of the Trump story, but also there are neighborhoods and urban areas that are like job deserts. There’s not enough jobs there for folks who want them.

I can think of two ways to deal with that. The first is a real direct job creation program by the federal government, where the federal government creates gainful employment for people. I do think not just in terms of job quantity but job quality, so these jobs have to be adequately remunerative, and the other is a subsidized model where the government subsidizes employers to hire workers, sometimes to the tune of 80% or 90%, that is the government would pick up 80% or 90% of the wage for some fixed amount of time. I know a lot more about the second one because we did something like that during the Recovery Act when I was working for the Obama Administration.

But those are the two broad models, one where the government directly creates jobs, almost in the spirit of the New Deal, and the other is more of a subsidized employment model.

Jim: If we were to pursue a jobs guarantee program, do you have any sense what sort of timeline this would be on? Is this something that we’re talking about, with the big caveat that who knows what will be happening with the federal government over the next few years, but is this something that seems achievable in the relatively short-term or is this more of a longer term, something 10 -20 plus years from now?

Jared: With a rational, functional government, at least the subsidized employment idea could would be ramped up quickly and interestingly, this is not very well known, there are a number of programs like that in place already. The VISTA Jobs Program, there’s a number of youth employment programs. These are all very small programs, but again, during the Recovery Act, so in 2009, we quickly ramped up a subsidized employment program, it was under the aegis of TANF Program, Temporary Assistance for Needy Families, and there was something like maybe under $2 billion I think I have that right, that was assigned to a program where in states — it was actually more of a kind of flow of resources than a program, but basically we said to states, you can use this money, which we’re ramping up for TANF, because we’re in this really deep recession, you can use this money to subsidize employment for low-wage people who are facing labor market barriers. They can’t get into the job market.

You have to be careful not to displace somebody else, so an employer can’t say, “oh, well, by the way, you’re fired, but Ricky, you’re hired.” So you have to be careful to avoid this. There are ways in which you have to craft this thing to make it most effective, but we found that during the Recovery Act, this program created over 250,000 jobs in a bunch of different states, subsidizing employment, again, often to the tune of 70, 80, 90% sometimes for three months, six months, maybe a year and after the subsidized employment ended, as it’s a time-limited program, a number of those workers were able to stay on in the labor market. It looked like in some cases the program helped them get over a labor market barrier that was blocking them.

Jim: During the Intelligence Squared Debate, you raised several concerns about universal basic income as a policy to pursue. For those who weren’t able to watch the debate, could you share with us what your main concerns on that front are?

Jared: Yes. I would say my main concern comes from the proposal by Charles Murray who is one of my opponents in that debate. So he was on the other side, and he’s arguing for a form of UBI that I am absolutely sure would significantly worsen and deepen poverty and economic insecurity.

What Murray wants to do and I’m not telling tales out of school here, because I’ve debated him numerous times on this. Sometimes it’s not fair to argue with somebody who’s not there to defend themselves, but Charles knows exactly where I’m coming from here. He wants to essentially take all of the resources that we’re devoting to both the safety net and to some of our social insurance programs, Social Security, Medicare, and giving them up per capita across the whole population, so make it a universal basic income paid for by aggregating all the resources we’re currently spending on the safety net and social welfare program, and social insurance programs.

Obviously the arithmetic is quite simple because you’re going to be really seriously diluting the resources that are already targeted and pretty well targeted, I argued in that debate, at folks in the bottom half, bottom third of the income scale. So if you take resources that are well-focused, well-targeted and as I argued that night, having their intended effect and pretty effective and you give them to 320

million people, the population of the US, you’re very much going to dilute the program. That’s probably my main objection to at least that version of the plan.

Jim: I do think that something that’s become more apparent within the space of people advocating for basic income in recent months is that there are two quite different views on what the policy could be. What you just described, the repeal and replace model, tends to be favored much more by Libertarians…

Jared: That’s a phrase we hear a lot these days.

Jim: [chuckles] …often with the idea of having something radically simpler being one of the main things that attracts people to that version of it.

On the flip side, you have a more progressive view, which is more to support and strengthen model, of something that would be providing basic income and perhaps replacing some programs that exist today that seem fully redundant if people are receiving a basic level of cash every month, but done with the intention of making sure that people are not being left worse off than they were previously. I’d be curious to hear your perspective on that vision of the policy.

Jared: Well, there are aspects of that vision that I like and share. As I said that night, mostly focused on some of the work of Andy Stern, who I’m sure is known to your audience — he was the other “opponent.” I can’t really think of Andy as an opponent because he’s fighting for social justice for as long as I’ve known him and that’s been many decades — is a version that says, “let’s build off of what we have.” And there are many ways in which I’m supportive of that.

However, while I think it’s perfectly legitimate to suspend political disbelief when you have these debates — even the jobs debate we had earlier about guaranteed or subsidized employment, as I said, this congress isn’t going to do that. I’m always happy to suspend disbelief. I think there’s a question of just how far out of the box do you want to go. One of the things that worries me is that if you start opening up this opportunity to take resources from one program and give them to a bunch of people. There is a U, in UBI. In other words, there’s a universal aspect to it. This dilution problem I think is a real one unless you’re really talking about adding significant new resources.

Well, we’re in a climate where that’s really tough to do and one of the things that I recognize, I recently wrote about this in a piece called UBI and I, is that many of the programs that I think are well-targeted and working pretty well — not perfectly by a long shot, and I suspect you and I can have a good conversation about how to improve some of the safety net programs that are existent — but they’re underfunded.

Before I would think about building on top of what we have, I probably want to get the Earned Income Tax Credit to be a lot more robust. I’d want the child tax credit to be a lot more robust and to start, instead of at dollar 3,000 of earnings, to start at zero and perhaps be fully refundable and not conditional on work. There’s a child allowance idea that I’ve been getting more interested that shares some characteristics with UBI, but it’s just targeted at kids.

There’s ways in which I’d want food stamps to be, SNAP to be, maybe expand benefits particularly in the downturn which is something that worked in the recession, and I could go on. I very, very much want to see a quality preschool program in place. I think we just really hurt the potential of a lot of kids who really need a quality opportunity when it comes to preschool.

There’s a bunch of stuff I’d rather put in place before I start thinking about building on top of what we have in the spirit of UBI. Again, I’m always worried about the dilution problem. I do think that U in the UBI is something that gives me pause sometimes.

Jim: One thing I’d be curious about is, it does seem that there is, at least to some degree, a chicken and egg issue around how big of or how radical of a policy you propose versus what’s realistic today. I think that’s something that, as basic income has become, at least to some degree, more of a mainstream idea over the last couple of years, people who support it are thinking about, well, what are the stepping stone policies that move us in that direction?

I think some of what you just mentioned, actually, are policies that are discussed there, something like a child allowance. Programs that are providing unconditional cash in different scenarios. So I don’t know, and I realize that this is in some degrees conflating two worlds here, the economic side and the political marketing side, but if you have any thoughts around, do you think maybe that fighting for something that’s radical, basic income, might actually make some of these policy that you were discussing possibly easier if we’re shifting the debate window?

Jared: Yes. I think that’s a good point. One has to be very careful to not negotiate with yourself and not say, “oh, I don’t like super progressive idea X because it’s too progressive. I like some other idea because that’s half as progressive or half as ambitious.” Because if you realize that you’re already starting on a very tough battlefield, Negotiation 101 suggest that you should start from a very ambitious place. What you’re saying resonates with me.

I think one of the problems that UBI has this — some of my friends are Libertarians, so this sounds worse than it than I mean it – this kind of infection from the Libertarian side. There are those who are just gunning for what they call the welfare state. There are people in this debate, this UBI debate who view it as a vehicle by which they can undermine social insurance, by which they can undermine the safety net.

Read Charles Murray, literally on page three he says, “The safety net is a horrible failure. It is imploding. It’s crashing in on itself, and before it explodes or implodes, or whatever the words there, we have to do something different.” Well, that’s all completely wrong. I think that not to say that these programs are perfect, but if you go back to my wrap during the Intelligence Squared Debate, I tried to provide pretty nuanced analysis of the way in which these programs are having their intended effect, working very well in terms of staving off probation that is faced by many low income people, but also having some very positive long term effects.

Medicaid, food stamps, Earned Income Credit. We now have people who were exposed to these programs as children, and we follow them over their life cycle. We can look at their outcomes as adults and we see earnings advantages, better health outcomes, better educational outcomes. These programs aren’t just consumption, they’re also investment.

Every time I say this, I’ve been careful to say that they’re far from perfect. I’m not saying that there’s not work to be done there, but I do think one of the challenges — while I take your point about the importance of being ambitious and not being, not self-negotiating because of political constraints — I also think you’ve got to be mindful of these dark forces in this debate.

Jim: Going back to the jobs guarantee idea: one aspect of basic income that appeals to a lot of advocates is opening up new types of opportunity for work. The ones that come up most often, I would say, are entrepreneurship — giving people a runway to be able to pursue a new idea for business — but also recognition of unpaid labor, particularly care giving work that happens at home. Is that something that if you were to pursue a jobs guarantee program, you might be missing that gain?

Jared: I think those are legitimate concerns. I must say that the UBI programs that I’ve seen articulated — I think it’s important not to talk in the abstract, but look at the programs that Andy Stern or Charles Murray is writing down there — they don’t look to me like they really afford people all the resources they would need to explore much in terms of entrepreneurship.

For that I think you just need much more liquid credit markets and the ability of people to access those markets. Perhaps they need a backstop, a loan guarantee if they don’t have the wealth or the resources or the networks to collateralize the loans they need. I probably approach that more through credit markets than through a UBI.

In terms of the work things: one of the things I don’t know that I have mentioned is I’m pretty sensitive to two aspects of this debate. One is that, the US approach to anti-poverty policy has consistently become more and more oriented towards work. Now again, this is a trend that you could decide to accept in your policy taking or push back on.

But there are many aspects of that trend that makes sense to me. I started out about 150 years ago in this business as a social worker in New York City and ever since then, and since then I’ve recognized that a lot of people particularly low income people raising kids really want to have a good, secure, high quality remunerative jobs.

The problem that many of them face is sometimes inadequate skills, but just as often, inadequate demand for labor. One of the things that really sticks in my craw in this debate is this conservative mantra that all you have to do to get a good job is to want a good job. The only thing it’s holding you back is you’re lazy, or you’re dependent on welfare programs. The demand side of the labor market, the opportunities and availability of good jobs, that’s something that I’ve been very sensitive to, the insufficient numbers of throughout my work. That motivates me in that space.

Jim: It seems like on one hand, we have some people who may not currently have access to a job who really want one, but on the other hand, there may be people who are interested in entrepreneurship or engaging in labor that isn’t paid in today’s economy. Could there be some hybrid model that actually can combine a jobs guarantee and a negative income tax in order to be serving both of those populations?

Jared: There could be, but I think one of the things you’ll run into there is the income constraint that Jason Furman and I focused on at the Intelligence Square Debate. Again, I recognize that it’s a little squirrely to keep raising these political hurdles where you want to. I think that the job guarantee is more in sync — I’d say I know this — with anti-poverty policy, which is becoming more and more work oriented.

In that sense, while everything is a hugely heavy political lift, it’s less of a heavy political lift than a UBI. At least a UBI that’s not done in the Libertarian or Murray sense, which just undermines stuff we’re doing already. I think in a way you’re saying, the hybrid services “well, let’s do both.” If we had unlimited resources, I’d say, “yes, let’s do both and a bunch more too.” But in a world with constrained resources I’ve at least set my sights on a job guarantee, which I think is actually a pretty already ambitious and progressive program.

Perhaps, as in the child allowance case, which I view as not conditioned on work, and as you and I agreed earlier, that is certainly a step in the direction I think you want to take things. There may be other ways to go about that, maybe other ways to get at conditioning income not on work, but I’d say before I was too interested in a hybrid, a UBI attached to a job guarantee, I’d work on the job.

Jim: Alright, Jared, this has been great. Really appreciate you taking the time to chat. Anything else you’d like to add?

Jared: No. I think we’ve covered a lot of ground.

Jim: Great. Alright. Well, thank you again.

Owen: That was Jim Pugh and Jared Bernstein on the Basic Income Podcast. I think it’s pretty clear that Bernstein comes from a perspective of fighting for and defending these programs such as the Earned Income Tax Credit, Medicare, food stamps. He’s defending them against people who often argue that they’re worthless and that we should just get rid of them. If we’re going to propose something big and new that might replace at least some of these programs, we do need to make the case that a basic income is an improvement on what we have now.

Jim: I think that’s exactly right. I think that there’s a fear of throwing the baby out with the bathwater here. I think it was clear also from the discussion that ultimately political viability is coming into play here. Despite generally talking outside the realm of what’s possible today, he had major concerns about how far from our current political thinking we actually get.

In some ways I think we’re coming at this from qualitatively different perspectives. Are we actually talking about something that feels more achievable with the way people think about things today, or are we talking about this North Star vision of where we ultimately want to end up, and then recognizing that it’s going to take us potentially decades to get there, but saying that that’s where we want to keep our eye, and see what steps we can take in that direction.

Owen: Honestly, I find the fact that we are maybe talking on a decade’s perspective to be liberating because we don’t need to be thinking about what is politically viable in the next five years. We need to be thinking about, what do we want going forward? What are the best policies? I think you can draw parallel to healthcare. There is a debate around, do we tweak and fix the system we have now, or do we move something towards something like universal healthcare?

I would think the basic income debate is pretty analogous. Do we improve systems like the Earned Income Tax Credit, or do we move toward this North Star vision of a basic income for everyone?

Jim: One thing that basic income supporters may have noticed is that we never actually talked about automation during our conversation. That was actually quite intentional.

Automation came up during the Intelligence Squared Debate, and there was just complete lack of alignment. Bernstein isn’t sold that automation is going to have a drastic impact on the workspace that we have today and that there will be new jobs created. I mean, we could have gone back and forth on that, but we’re really not going to come to any sort of consensus there. When we do start to see a drastic impact from automation and when you can really feel that more tangibly, I think that is going to lead to a different conversation. But it’s not one that we are really going to be able to get to a conclusion on where we are today.

Owen: And again, I would just take that zoomed out perspective. I think 10, 20 years from now this automation conversation is going to be quite different, and we do need to be thinking about how we might prepare for that if certain predictions come true about just how intelligent artificial intelligence is going to get.

Jim: I think for me really the big takeaway here is, even though Bernstein was skeptical about it, it seems like these aren’t competing policy, jobs guarantee and basic income.

If you’re looking at basic income and your motivation is really guaranteeing economic security, we’re fighting for the same things here. I worry about setting these up as head to head contestants because I think that if we’re actually pushing for big policies that aim towards that value of making sure everyone has enough to get by, we can be open minded here, and we can think about different scenarios. What are situations where guaranteed employment might be really attractive to people, and what are situations where an unconditional payment that opens up opportunities and spaces that really haven’t existed before actually could be the game changer that many us think it is?

Owen: All right. That’ll do it for this week’s episode of the Basic Income Podcast. Thank you to our producer Erick Davidson. I encourage you to subscribe on iTunes, and please do leave a rating or a review while you’re there. It’ll help other people find the podcast. See you next week.