Alternatives to the UBI for the Impending Unemployment Apocalypse
Could Medicare for All, Mass Transit, and Housing together be a better plan than Yang’s Universal Basic Income?
TLDR: Three programs: medicare for all, mass transit, and building more housing would lower the average cost of living by ~$1500. $500 more than a $1000 per month basic income.
Andrew Yang, a Democratic candidate for president, wants to give everyone $1000 just because they are a citizen of the US. This idea he calls the Freedom Dividend, and is perhaps more popularly know as a Universal Basic Income (UBI). The history of this bi-partisan policy idea is storied including supporters such as MLK, Milton Friedman, and Nixon.
For the past two years I’ve been a strong supporter of UBI, but recently I’ve become disillusioned with UBI, not because I don’t believe in its spirit — we must absolutely eradicate poverty in our society completely — but because there might be a set of better solutions than UBI itself.
This idea is based on one fundamental principle of equivalence: lowering the average cost of living by $1000 is exactly the same as giving everyone $1000.
So if a UBI would cost $3 trillion dollars, what are some policies to do this that cost less than that?
Selling Your Car: $700/month
“Average car ownership costs were $8,469 a year, or about $706 a month, in 2017, according to AAA.” (Nerdwallet).
So if people could sell their cars they could save roughly $700 per month. That means making infrastructural investments to make having a car unnecessary.
The federal government could give states and cities an economic stimulus package to pursue the following:
- Transit Oriented Development (TOD) — putting housing on the same block as stores and offices (Video explanation with smooth jazz saxophone)
- Bus Rapid Transit (BRT) — Faster busses that run almost like above ground subways. Video
- Light Rail
- Protected Bike Lanes
Investing in mass transit to make it so families with 3 cars can go down to 2, or families with 2 can go to 1, or with 1 to go to 0 will make as big a difference as being given a check.
Cars are usually shared across families or multiple people, so per capita the savings of reducing car ownership might only be a fraction of $700, but if it is only $200, we’ll still see as this list goes on, that even with a lower car cost number, these three programs will already save the average person over $1000 per month.
In addition to saving people a lot of money, this will be much greener. From this perspective it is also clear how environmentally unfriendly a basic income is.
Medicare for All: $440/month
With a Medicare for All program, experts project that 70% of people would use Medicare for All.
Current health insurance premiums are roughly $440/month. Sometimes these premiums are paid by individuals or by employers. When employers pay these premiums it depresses wages, so many economist predict that when businesses do not have to provide health insurance to their employees this will bolster wages. So in either case, individuals and families will have a large savings.
Bernie Sanders has promised that a Medicare for All program will lower perscription drug costs by 50%. The average costs of perscription drugs nin the US is $1075/year. So a 50% reduction represents another $40 per month savings.
Remember that the benefits of Medicare for All naturally goes progressively to those who most need it in our society, whereas a UBI is $1000/month for millionaires as well as those in need.
Increase National Housing Supply: $500/month
By far the biggest opportunity for savings for people is to increase the housing supply to reduce the rents and monthly costs of housing.
Multiple reports of experts and economists recommend that to maintain good financial health of people and the economy as a whole, the cost of housing should never exceed 30% of income. However, since the late 1990’s more and more people’s housing has exceeded this 30% limit and reached as high as 50% of their income. Those most effected by this are often the poor and the young who are most vulnerable to landlords and least capitalized to be able to buy and participate in the ownership economy.
The federal government could pass laws and provide stimulus to combat local “beggar thy neighbor” or “NIMBY” laws that drive up the cost of housing by illegalizing its supply. The federal government could also support cities of all sizes through stimulus and laws to create aggressive housing building agendas. Even so far as planting the seeds to found new cities, or Charter Cities, that are built to explore new paradigms of urbanism and laws.