A basic income matters, even if you make six figures or more
A basic income is an unconditional payment from the federal government to every adult citizen. How much would the payment be? In the US, something like $1,000 per month is a reasonable number.
A basic income is a revolutionary idea. For poor people, right? If you make six figures or more, you’re talking about a nice, but not life-changing, raise.
Why should high income earners care?
That’s where the argument is misunderstood. It’s easy to think of the basic income as something you receive, as a supplement to your income. Flip that idea on its head. What if the most important part of the basic income isn’t the portion you get, but the portion everyone else gets?
I help scientists and engineers build their business acumen. I help them get out of the laboratory, and into leadership roles where they can make their largest contribution.
The people I work with have incredible income potential, well above the threshold of a basic income. Why should they care about this debate? Because a basic income could help companies find more success with innovation. I’ll explain.
The prevailing barriers to innovation
Innovation is a buzz word. You hear it so often, it has little meaning. So what’s its definition? Here’s one from BusinessDictionary.com:
The process of translating an idea or invention into a good or service that creates value or for which customers will pay.
There are two sides to the innovation coin: (1) the new idea and (2) the market value. A new idea isn’t worth much if it doesn’t make a market impact.
Why might a new idea might not make a market impact? The idea might suck, sure. But we all know plenty of good ideas that didn’t make a market impact for any number of reasons. (Think of the search engines before Google. Or the social networks before Facebook. Or the electric cars before Tesla. Or any other example where today’s market leaders weren’t around when the market opened.)
Let’s focus on good ideas that don’t land in the market. Why not? You can have execution issues, or management issues, or political issues. You have tons of potential explanations. One explanation that’s easy to ignore is a distracted market.
The notion of a distracted market
You have a distracted market when you have a new product or service, you have potential customers, but you can’t earn enough attention from customers to make the product or service a success. You’ve probably heard the adage about how expensive it is to educate a market. It’s really tough to change behavior when people are distracted.
I don’t mean distraction in a pejorative sense. People can be distracted by fantastic products and services. In that case, no market opportunity exists. But there are tons of other possible reasons.
One big source of distraction? The fact that your customers have to earn their own incomes. It’s a requirement. If you’re going to shelter, feed, and clothe your family, you need some sort of income.
The lower you are on the income ladder, the more time and energy you spend earning your income. If you have a job that pays you little, you spend an enormous amount of time commuting.
You’re likely in an area with poor public transportation. You likely don’t have access to reliable private transportation. Your job prospects almost certainly require you to leave your house. Without disposable income, you can’t hire a lot of help, to take things off your plate. You exhaust your time and energy pursuing an income that barely keeps your head above water.
How can a basic income battle the distracted market?
The basic income isn’t a panacea. Like I noted, in the US, we’re probably looking at something like $1,000 per month. It won’t pull you much above the poverty line. But at this low end of the income ladder, every dollar makes an enormous difference.
Most people would choose to supplement their basic income. The difference is the lack of compulsion. The basic income meets basic needs. It introduces freedom that never existed before. You would likely still choose to spend time and energy pursuing a supplemental income. But the risk and urgency would come way down.
The key word is freedom. The basic income affords people freedom they might not otherwise experience. Ever. And with personal freedom comes a whole new way of life.
When people are free to think a little less about how they’ll get to work, or how they’ll pay for health care, or how they’ll complete their education, everyone wins. The market wins. A basic income eliminates structural distractions in the market.
People are more free to think about their lives. What works, what doesn’t. What they need, what they want. A thoughtful, engaged consumer base is a windfall for innovative companies.
Again, we have two sides to the innovation coin: ideas and market value. To this point, we’ve focused on ideas. If only we could have more ping pong tables, or more nap rooms, or more natural light, we’d come up with better ideas. And those things make sense. More play, better rest, and a deeper connection to the outside world will put all of us in a better place.
But we need to explore the market value piece as well. Some great ideas fail because the market simply isn’t looking. If people are too focused on how to meet their basic needs, they can’t focus on all the ways they might be able to add deeper value to their own lives.
A basic income is only a fractional solution to the innovation problem
I don’t mean to overplay my hand here. The people most helped by a basic income aren’t traditionally in the wheelhouse of truly innovative companies. Lycos didn’t fail because poor people didn’t have enough time to search the Internet. That’s ludicrous.
At the same time, every little bit helps. People on the lowest end of the income spectrum spin their wheels furiously, trying to collect an income from a market that doesn’t highly value their skills. Remove some of the pressure for these folks, and what might happen?
You open a whole new class of potential innovators. Innovation doesn’t happen in a vacuum. A small idea from one person, joins with another idea from a different person, and progress snowballs. A basic income brings new idea machines online. And the more idea machines we have, the more innovative our economy becomes.
That’s the supply side of innovation. Like I said, we already focus a lot on idea generation. More attention can’t hurt, but the basic income is even more profound on the demand side of innovation.
Maybe we see more social service innovation, as people can donate more time to unpaid causes. Maybe health care innovation accelerates, because people who are too busy to even seek care today can now participate. Maybe our public education system sees a step change improvement, as parents can become more engaged in their local schools.
The possibilities are endless, and difficult to predict. Again, the key here is freedom. Our economy looks night and day different if we can even slightly reduce the energy people devote to earning their incomes.
Even if basic income is only a nudge in the right direction, it’s a critical nudge
Tons of people have written eloquently about the virtues of a basic income. I got turned onto the idea here at Medium, reading Scott Santens. He’s a powerful, inspirational advocate.
The basic income is a super disruptive idea, worthy of deep thought and vigorous debate. And while I play up the innovation angle, the basic income is much more profound. Yes, I harp on the added freedom. Dignity is an even bigger win. It’s tough to imagine how much dignity people mortgage in pursuit of a poverty-level income. The basic income goes a huge way toward overcoming that conflict.
It’s not just folks with poverty-level incomes that should care about the basic income. The whole market should care. High wage earners, in the six figures and up, could see enormous gains. New customer bases would emerge. New collaborative partners would become available. The social institutions on which we all rely would get stronger.
The basic income is a profound change from the direction we’re currently heading. It’s one way we can revisit questions about why we’re here, what we’re meant to do with our lives, and how we can help each other find happiness and fulfillment. It helps all of us win, regardless of our current income.
I am the founder of STEM to Business, where I help scientists and engineers build their business acumen and make their strongest contribution.
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