Universal Basic Income: The Path to Economic Parity?
- More than 1 in 4 black households have zero or negative net worth
- In 2016, black families had a median net worth of $17,600
In the last several years, there has been a real and concerted effort to bring Universal Basic Income (UBI) to the forefront. UBI is a system of wealth distribution where people would receive a guaranteed livable income that would meet basic human needs. Google (GOOGL -1.82%) futurist and director of engineering, Ray Kurzweil, predicts Universal Basic Income will be widespread by 2030. Tech giants such as Tesla’s (TSLA -2.36%) Elon Musk and Facebook’s (FB -2.19%) Mark Zuckerberg have even supported the idea, as well.
Why This Matters: For years, technology thought-leaders and pundits have discussed the idea and emergence of UBI in the United States. As artificial intelligence (A.I.) begins to replace human workers in a variety of work settings, the appeal of UBI among political and business leaders, nonprofits and others has grown.
According to a 2017 report by the Economic Policy Institute, average wealth for white families is seven times higher than the average wealth for black families. Median white wealth is twelve times higher that than os median black households. Lastly, more than one in four black households have zero or negative net worth, compared to less than one and ten white families in the same category.
By providing a basic income, UBI could level the financial playing field in the African American community, after generations of income inequality. In 2016, white families had a median net worth of $171,000, compared with $17,600 for blacks and $20,700 for Hispanics. Put another way, nearly half of black and Hispanic households had a net worth of less than $50,000 in 2016, compared with about a fifth of whites, according to a 2017 report from the Federal Reserve.
What’s Next: In Stockton, California a city with a 14% African American population, will launch a UBI program in the fall of 2018. Over in Chicago an alderman last month submitted legislation for a UBI plan and Hawaii is considering the idea of a statewide UBI.
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