A Modest Proposal: Get Rid of Unemployment Insurance

Provide everyone a guaranteed basic income instead.

Congress is currently debating extending emergency unemployment insurance to the over 1.3 million Americans that have been out of work for more than 26 weeks.

I know what you’re thinking: why can’t these lazy unemployed people just stop watching Keeping up with the Kardashians for a few minutes and go get a job?

Well, it turns out, that there there is still a 7.0% unemployment rate nationwide (12.5% if you happen to be Black) and slow job growth, meaning there simply aren’t enough jobs for everyone that wants one. The job creators are apparently still busy enjoying a nice vacation in Biarritz.

Today, roughly 10.9 million people are out of work. And that’s not counting the millions of men and women who would like to be working but have been completely discouraged from seeking work and so are considered “out of the labor force” and not counted in official unemployment figures. And we’re not even going to talk about the 2.3 million prisoners in America, mostly able-bodied men in the prime of their working lives—men that have disproportionately low levels of education and come from poor areas, who many decades ago might have had decent union jobs working in construction of manufacturing or mining, but those jobs don’t exist anymore, so it’s pretty safe to say most of them would be unemployed if they weren’t in prison. (Okay, so we talked about it a bit).

The dirty little secret of the labor market in America is that there will always be unemployment. According to economisits, unemployment is a normal part of even the healthiest economy. In theory, part of this “natural” unemployment is voluntary, as workers quit jobs that suck for better jobs, and part of it is structural, as some industries wither and others rise up. (Marx called this phenomenon “the reserve army of labor” and he didn’t think there was anything normal or natural about it.)

Before the recession, many economists believed America’s “natural” rate of unemployment was 5%. Several years into the “recovery,” the Congressional Budget Office now says that natural rate has risen to 6%, so sorry, 6% of the working age population, you are shit out of luck forever.

So even if the economy was running smoothly—the job creators came back from vacation, and we all decided to buy lots more stuff again—millions of Americans who want jobs, so they can feed their families and put food on the table, would not be able to find jobs and/or would not be qualified for the jobs that exist.

Why not just stop this charade? Why continue to bicker about extending “emergency” unemployment insurance for the 12th time? Why can’t we just admit that capitalism is great in many, many ways, but it will always leave millions living in poverty and millions more living precarious lives, reliant on a bunch of white men with government benefits and pensions to decide whether they, the unemployed, are worthy enough for help paying the heating bill this month?

If we could just be honest with ourselves and stop the moralizing “pull yourself up by your own bootstraps even though we don’t really make boots anymore” schtick, we would all be better off.

How? Provide each citizen with a basic income, enough to take care of the necessities of life, such as housing, food, clothing, and medicine.

We could get rid of the Kafka-esque system of welfare benefits, food stamps, housing vouchers, and infinite other federal, state and local program (which is why even some prominent conservatives like Charles Murray have advocated for a basic annual income). Everyone would be entitled to the basic income, rich and poor alike.

We would be able to keep our market-based economic principles in tact, while ensuring that poverty is eliminated and the promise of social mobility is restored in America. There is some fascinating empirical evidence about this. As the New York Times recently reported:

In the mid-1970s, the tiny Canadian town of Dauphin ( the “garden capital of Manitoba” ) acted as guinea pig for a grand experiment in social policy called “Mincome.” For a short period of time, all the residents of the town received a guaranteed minimum income. About 1,000 poor families got monthly checks to supplement their earnings.

Evelyn Forget, a health economist at the University of Manitoba, has done some of the best research on the results. Some of her findings were obvious: Poverty disappeared. But others were more surprising: High-school completion rates went up; hospitalization rates went down. “If you have a social program like this, community values themselves start to change,” Forget said.

Most importantly (to me), we would not have to listen to economists argue that not being able to pay for your rent for a few months because Congress didn’t pass an unemployment benefits extension is worth it because it will mean more people, but probably not you, will have a job at some indeterminate future date, based on totally theoretical models.

Today, Switzerland is seriously considering implementing a basic minimum income. Given Swiss unemployment hovers at around 3%, I would say we need it more right here in America.

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