Report: A $1,000 Monthly Basic Income Could Grow the Economy

A new study out this week suggests that an American basic income could massively benefit the overall U.S. economy. But not in the same sense as billionaires like Elon Musk, one of the most high-profile proponents of this kind of government handout who has predicted it will become “necessary.”

The typical “tech bro” narrative of basic income is as an innovation-driver or potential solution to a nearing future of rampant “technological unemployment” (the fancy economic term for when a robot or AI takes your job). This study, conducted by the Roosevelt Institute, however, merely looks at it from a macroeconomic perspective.

Using the Levy Macro-Economic model, which assumes that an underperforming economy is the result of low household income, the researchers propose that a universal basic income would stimulate the economy by providing an impetus and means for people to spend more on goods and services.

$1,000 a Month

It concludes that a basic income of $1,000 per month per adult (which would be added to the federal deficit — a controversial caveat) could allow citizens to grow the economy by over $2 trillion by 2025.

“Silicon Valley has a lot invested in the idea that it is itself extremely innovative and therefore…might be displacing labor,” Marshall Steinbaum, study co-author and research director at the left-leaning think tank, told Inverse. “I think the labor market problem we have is the opposite. There’s too little demand for labor. The better case for universal basic income is on the basis that it would lead to rising worker wages.”

Steinbaum denies that the automation of work is as much of an employment issue as it’s typically presented. This stance harkens to that of economist David Autor, known for a TED Talk that uses the example of ATM innovation actually leading to an increase in and salesperson-ification of American workers filling the role of bank tellers.

“Most of the work that we do requires a multiplicity of skills, and brains and brawn, technical expertise and intuitive mastery, perspiration and inspiration, in the words of Thomas Edison,” Autor said in 2016. “In general, automating some subset of those tasks doesn’t make the other ones unnecessary. In fact, it makes them more important. It increases their economic value.”

In this view, a benefit of UBI would be adding to the economy while empowering workers to learn new skills and seek higher pay before they’re willing accept a given job. In that sense, it may be time to imagine what a universal basic income could actually mean in practice at these Silicon Valley companies who’ve expressed interest in replacing their lowest paid workers (or contractors, as it were) with automation, like Amazon and Uber.

“If workers had the ability to say, ‘I’m not going to be squeezed, I have a basic income to support myself,’…[Amazon, for example] would be less of a dominating force than it is,” Steinbaum said.

Of course, Steinbaum doesn’t believe these tech giants could actually ever be replaced given a lack of antitrust laws. Still, it’s interesting to think — at least on a theoretical level — of what universal basic income looks like as something Silicon Valley would have to reconcile, rather than an end to its means.

See also: Facebook Founder Mark Zuckerberg Calls for Universal Basic Income