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The Dreamer’s Case for a Guaranteed Basic Income

There’s been a big push lately to increase the minimum wage to $15 an hour. Seattle was the first to do it, and other places, like New York and Los Angeles, are pushing to up the minimum wage to the same level. But there’s a lot of push back, because doing so puts the onus on the business. They have to eat the costs and pass them on to their customers. And it still doesn’t mean that someone who wants a job can get it. The conventional wisdom says that there will be less jobs with these higher minimum wages. Of course, thanks to the value of those extra dollars to the people who have the least, there might be a boost to the local economy as they spend their new dollars.

But there’s another option. Guaranteed basic income (GBI) would pay everyone a minimum amount yearly. Yes, everyone. You can sit on your ass and get the money. No means tests, no hassles over whether you are on drugs, just a check. It would also eliminate all other social support programs, like welfare, food stamps, and social security. And, of course, it would eliminate the minimum wage. The simplicity of it appeals to both liberals and conservatives.

But the best reason to implement GBI is that it gives labor the power back. Your survival is no longer dependent on your employer. You have the money to provide for your basic needs, any work you do pays for your extra ambitions. Right now, we’ve got a ton of people working multiple, low-paying jobs just to provide for their family. McDonald’s hands out tips on how their employees can survive on minimum wage, including how they can get food stamps.

Now imagine if those people did not have to work those jobs in order to make ends meet. A lot of people would be happy just getting the basics and would drop out of the labor force. These jobs would have to pay some amount that makes that job worth it to an individual. Would pay rise? Maybe. Employers would definitely have to do more in order to attract workers. You wouldn’t see 11,000 people apply for 400 Walmart positions, though.

The other thing it would do is make up for a lot of the productivity gains from the past 40 or so years that workers haven’t seen. A lot of that has come from automation and computer technology. The employee is still doing the same job, albeit with a computer or with the help of robotics. Why pay them more? And computerization and automation is only going to increase. When we are replaced by robots, we’ll need to feed ourselves somehow.

The current government fix for poverty and financial stress is a combination of welfare programs and tax breaks. Welfare programs are often labyrithine and frustrating, especially if you work another job and have to schedule time in their offices around you work. Tax breaks help only those with enough income to afford a tax specialist. Neither of these have been very effective. Maybe it’s time to try something new.

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The American Dream, Cadillac Style

Cadillac put out an ad that debuted during the Sochi Olympics that’s not only selling their $75,000 car, it’s also selling the American Dream. Not the American Dream where you and I hope to pay off our bills, send kids to college, and retire without starving to death. The upper end American Dream, the one where you work harder and harder for luxury goods, for pool cleaning bills, for your hot, patronizing wife.

It opens with the actor, Neal McDonough, back to the camera, facing his pool, as if he is smack in the middle of an existential crisis. He looks at the camera, which has snuck up on his and surprised him. “Why do we work so hard? For all this stuff?” Right off the bat, two assumptions. That we naturally work hard — that isn’t even a question worth asking, apparently— and that by working hard, we are rewarded with adequate compensation.

By we, of course, he means college-educated people in lucrative careers. He does not mean people working 70 plus hours on minimum wage just to afford rent. The people he’s talking about work hard by choice. He’s talking about people who are already successful and work harder for some reason. That reason can’t be all this stuff, can it?


The number of hours required to make rent by state.

Then he talks about how people in other countries dare to stop off at the cafe after work and take a whole month off for vacation. As if working were more important than enjoying a life. People value experiences more than stuff. Vacation is good for employee health, though you’ll be lucky to get two weeks. Nobody regrets working too little while on their deathbed.

And then there comes the sell on the American Dream. He tells us why we work so hard, not what we are working for, mind you, but why we love to work for its own sake. “Because we’re crazy driven, hard-working believers, that’s why.” And later, “You work hard, you create your own luck, you’ve got to believe anything is possible.” This isn’t pitching the car; this is pitching that the American Dream still rewards hard work, that it’s something worth believing in.

You have to work hard and believe, you guys. Things aren’t going great and you are working all the time? You have no faith, infidel. Clearly, any deviation here is a sign of weakness. This is an echo of free-market dogma: the poor are poor because of their own fault.

stop being poor

Todd Wilemon on the Daily Show handing out free advice.

And that “create your own luck” line? Coming from a guy playing the game of life on the lowest difficulty setting, straight white male, is a bit of a bridge too far. We don’t play in a level playing field, so extolling someone to create their own luck when they are down is an extra kick.

The Cadillac advertising director, Craig Bierley, responded to a lot of the criticisms, but his response here was even more wrong-headed. “You have to believe in yourself, you have to believe in possibilities. It’s really about optimism.” Optimism, when wielded without a reason to be optimistic, can be harmful to your mental state.

The ad closes with McDonough getting into his sweet ride and saying with a wink, “As for all the stuff, that’s the upside of only taking two weeks off in August.” Guess what, everybody! It is for the stuff. We work hard, don’t take off August, and the benefit of that lifestyle is stuff.

So, let’s review: We work crazy-driven hard (which we will regret on our deathbeds) and take less time for vacations (which, if we get them, are good for our health) because we believe in success (at least in straight while male success) so that we can buy luxury goods like this car (which won’t make you happy).

Europe sounds pretty great right now.

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What is the American Dream?

The American Dream has always been how America pitched capitalism to the masses, that you could work hard and get ahead based on how much you were willing to work. It grows out of one of the big three rights laid out in the Declaration of Independence, the pursuit of happiness. With enough work and perseverance, sacrifice and ingenuity, an American can achieve their dreams.

For most people, the American Dream is the same thing as a comfortable middle-class lifestyle. You hope for financial security for you and your family, jobs that value your contribution both personally and financially, and a space that you can call your own. Basically, Maslow’s hierarchy of needs type stuff.  If life is hard, the American Dream says that there is a way to make it less hard.

The United States has worked to make the pathway to the American Dream easier for those who want it. Over the last half of the 19th century, individual states began requiring children go to one of the many schools that independently sprung up since the country’s founding. To help people struggling or otherwise disadvantaged, the US created social safety nets, from workers comp in 1908, social security in 1935, Medicare in 1966, and the ACA more recently. Women and minorities have increasingly been given voting and other public rights, so that they too have access to the American Dream.

In the period between World War II and the gas crisis in the 1970s, this was something you could actually pull off without a college degree, thanks to a strong manufacturing base built up during the war years and strong unions. You could graduate high school, get a factory job, move up through the ranks, and buy a little suburban house somewhere.

The American Reality

Now, it’s a hustle. As George Carlin said, “They call it the American dream because you have to be asleep to believe it.” It’s the why Americans, in general, identify with the rich and not the poor. The American Dream claims the rich got where they are through hard work and good planning. Hell, maybe even a bit of luck.

If you’re poor, it’s because you are too lazy. If you weren’t lazy, of course you’d get yourself out of your situation. Because that’s how America works, you work hard, you prosper. Someday, all of us temporarily embarrassed millionaires will get back to our rightful place through sweat equity.

But here’s the heart of the scam: providing labor doesn’t often get you rich. Capital investment gets you rich. Entrepreneurship gets you rich. Working two minimum wage jobs so you can afford community college in the hope to get something that pays better than ten bucks an hour? That gets someone else rich. Same as the unpaid internship you took after going into debt to get your degree. The difference is that one of these requires some privilege to get, but neither has the benefits.

Politicians love to name check the middle class, almost as much as they love shout outs to small businesses. But that’s lip service. The folks who get real political love are big business and investors. The US spends more on corporate welfare than they do on social welfare. They favor capital. Capital’s important, sure, without it, there’d be no one to pay labor costs. But labor is treated as just a cost that must be minimized in an investment instead of what it really is, the basis of any value generated. Nobody gets rich from working hard for someone else. You get rich from owning the fruits of your own labor.

Then the question is why don’t the people who do the work own the fruits of that work? Well, that would be communism. Or a corporation where everyone gets paid in stock. Either way, stop trying to take my BMW.

My Bootstraps are Broken

Since the 1970s, moving up in status has gotten harder. The old pathways no longer have the benefits that they used to. You could argue that increased access to social services and student loans and easy credit has devalued them. You’d be wrong. It’s that the things that once helped people are fail them or, in some cases, make things worse.

Being poor is expensive and makes it hard to get ahead. Because public primary schools are funded by local taxes, schools in poor areas receive less funding. Social services have been cut thanks to fraud scares – some of which was based on real horror stories. Manufacturing peaked in the late 70s at about 19 million jobs, but about 5 million of those jobs have gone overseas in search of countries with softer labor laws. Unions have been gutted, thanks to organized crime and corporate friendly officials.

If you come from the middle class, the American Dream isn’t much closer. College tuition is skyrocketing, outpacing inflation and GDP growth, while college loans become a burden graduates bear most of their lives. Professional jobs increasingly rely on an unpaid army of interns, desperate unemployed degree-holders trying to beef up their resumes. The prices of homes grow and collapse as homes become risky assets, inflated by frenzied investment to the edge of what people can afford, only to collapse and leave the amount owed more than the value of the home.

If you are at a job, you are already on the losing end of things. If you work hard at this job, if you improve this business and help them succeed, you create value for your employer. The extra money the business gets goes to the owner of the company, generally, unless they are so sweet and generous that they kickback bonuses based on performances.

Fixing the Dream

All this is a shame. Because the idea of the American Dream has as its heart a meritocratic, democratic ideal that’s actually pretty admirable. The idea has worked, but in perception and not reality. A 2005 New York Times poll found that 92% of the respondents considered themselves middle class. Everyone, or almost everyone, believes in saving for the future and working hard for that future.

Anybody who works hard and works for a theoretical future should reap the value that they create. You bust ass, you get paid. But that’s not how things work today. Investment, in either corporations or politicians, gets you paid. Who you know trumps what you can do. The American Dream drove young men to seek their own fortunes outside of their family trades. But you can’t make your own fortune without a strong base of support, whether by building up a network, or better yet, being born into it.

Right now, we don’t have answers. All we have are questions.

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