Universal basic income (UBI) is not a new concept. The idea of money for nothing has been journeying across the globe for centuries. In the 16th century, a basic income had been recommended to prevent the impecunious from stealing. The great philosopher Thomas Paine suggested guaranteed cash for young people in their 20s. Throughout the 20th century, multiple states, from New Jersey to Iowa, experimented with UBI. In the years before the COVID-19 public health crisis, a basic income guarantee had generated substantial momentum. In the aftermath of the coronavirus pandemic, more people are in support of this public policy pursuit – a majority of voters think the government should establish this program. But the United States is already coming off the world’s greatest UBI trial run. So, after 18 months, what are the results?
The Man With the Golden Stimulus
Since the beginning of the once-in-a-century global health crisis, the U.S. has had several pandemic-related benefits schemes that millions were forced to rely on since it took more than two weeks to stop the spread. This included the pandemic unemployment insurance program, additional state benefits, and emergency claims. Plus, the U.S. government sent out stimulus checks and sweetened the jobless perks by $300 per week. Overall, the federal and state governments approved an unprecedented amount of money to assure households could weather the storm, handing out free money like candy. Moreover, considering the state of the economic recovery, Washington might employ additional income-support payments over the next 12 months.
For now, as Liberty Nation recently reported, many of these jobless perks have concluded, although long-term unemployed workers will continue to have access to federal jobless aid in several states. Now that the U.S. has closed the window on these sweeteners, what is the damage?
Data … For Your Eyes Only
The U.S. economy faces a huge challenge right now: a labor shortage. Companies have tried everything to attract talent: higher pay (the average hourly wage is nearly $31), more significant benefits, signing bonuses, free food and coffee, and even payment to attend a job interview. But, so far, many Americans have yet to take the bait. The latest numbers suggest there are approximately one million more employment opportunities than people looking for work – the number of job openings in the U.S. topped ten million.
According to a recent Morning Consult study, nearly two million out-of-work Americans turned down jobs because of the ultra-generous UI benefits. The top reasons? Child care obligations, COVID-19 concerns, and “I receive enough money from unemployment insurance without having to work.” In recent months, a lot of the data pointed to the same trend, but this is straight from the horse’s mouth.
In states that ended their benefits early, they have enjoyed an employment recovery rate of 80%, compared to the 66% national average. Plus, during a July CNN town hall, even President Joe Biden conceded that his $300 top-up and rent moratorium contributed to the labor shortage.
It is also notable to determine what or where consumers spent their stimulus checks. According to the U.S. Census Bureau figures, households were more likely to spend their first payment (CARES Act). In contrast, they were more likely to save or pay off debt with their second (Consolidated Appropriations Act) and third (American Rescue Plan) funds. Indeed, based on the retail sales data from the last few months, this money has been exhausted, which is worrisome because two-thirds of the economy is consumption.
Overall, what did these pandemic-era bailout packages achieve? They certainly did not grow the economy, and the recovery has been less than adequate since nearly six million pre-pandemic jobs have not returned. Instead, the costly efforts kept Americans’ heads above water as lawmakers confiscated their livelihoods at all three levels of government. But did the politicians, bureaucrats, and COVID cultists achieve their long-term objective of eviscerating the spirit of individuality?
The Yangian Bargain
All the desperate tricks, tactics, and ploys employers have utilized in the post-COVID economy might dissipate in the months to come due to the inevitable injection of supply in the labor market, and many low-wage workers might ask the reasonable question: “I went back to work for this?” And so begins the adventure down the UBI rabbit hole.
Unfortunately, too many people have imbibed a taste of what it is like to be a member of the Something for Nothing Society. At the height of the pandemic, Americans were placed under house arrest, confined to their fortresses of solitude to play video games, munch on plant-based cheddar corn puffs, and park themselves on the sofa for several hours without moving. Or, perhaps, they did something more constructive with their time, such as reading Friedrich Nietzsche’s The Birth of Tragedy or listening to J.S. Bach’s Goldberg Variations. Either way, they have been given a glimpse of what life would be like with a UBI. Will a greater percentage of the public demand a basic income now? They might not have to since dozens of U.S. cities are implementing some UBI incarnation. It is time to stockpile the Cheetos and Red Bulls and be ready for bingeing on The George Burns and Gracie Allen Show.