January 29, 2020

Yang’s Pet Issue Could Outlive His Campaign
(Bloomberg) -- When Andrew Yang started thinking about a long-shot bid for the U.S. presidency, he asked Andy Stern, the former president of the Service Employees International Union, out for lunch in Greenwich Village.Back in 2017, Stern was perhaps the most prominent advocate for the idea of giving every American $1,000 each month. The year before, he had written a book called “Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream.” It hadn’t made any bestseller lists, but it did help popularize the idea, known as universal basic income, or UBI, amongst a certain kind of politically-minded technologist. Yang, who was then running a nonprofit called Venture for America, fit right into that profile.The lunch seemed to be developing into a classic if-only-the-universe-worked-this-way gripe session until Yang asked the question that he had clearly been gearing up for: Did Stern know anyone running for president on this platform? Stern remembers being surprised by the question, but he told Yang to go for it.UBI has played a central role in Yang’s subsequent run for the presidency. Like Stern, he would give all American adults $1,000 a month. The Freedom Dividend, as Yang calls it, would put a family of four—two adults, two children, and no other form of income—$2,200 below the annual federal poverty line.Yang has argued this money would be the solution to almost every ill. Unfair elections controlled by wealthy donors? People can use their “democracy dollars” to support whatever candidate they want. Worried that global warming will flood your coastline property? Use your government check to “adjust and adapt.” First and foremost, however, Yang sees UBI as an answer to job losses caused by automation.Yang has outlasted many veteran politicians who were also vying for the Democratic nomination. After failing to qualify for the last debate, he got into the next one, scheduled for Feb. 7. This practically guarantees that at least one candidate on stage will be discussing UBI.Yang spoke Wednesday morning at a Bloomberg News reporter roundtable in Des Moines, Iowa, ahead of the caucuses. “To me, job one is to get more money into the hands of the American people,” he told Bloomberg TV’s Joe Weisenthal. The chances that Yang becomes president remain minuscule. But even if UBI isn’t enough to land him in the White House, his campaign’s legacy may be how it contributed to the mainstreaming of UBI. Yang’s embrace of one of Silicon Valley’s pet causes hasn’t come without complications—people associated with some prominent UBI projects take issue with the specifics of Yang’s approach. Still, UBI seems more relevant to the American political debate than it has in decades. “Andrew Yang,” said Stern, “has done more to promote the idea of universal basic income than almost anybody in American history.”  The concept of UBI has existed in one form or another for decades, but has mostly faded from the public discussion in the U.S. since the 1970s. Instead, other related ideas were implemented, like the earned income tax credit, which gives tax credits to low-wage workers based on their incomes and number of children.UBI has been inching back into the public conversation in the U.S. for years, with an unusal appeal across ideological lines. The left sees UBI as a step towards socialism; the right sees cash assistance to create a more market-based approach to services currently provided by government-managed programs. The idea also proved to be a good fit for the odd politics of Silicon Valley, where tech leaders worried about the downsides of the economic disruptions they were creating. “I think automation will cause a lot of job change,” said Sam Altman, CEO of OpenAI and the former president of Y Combinator, in a recent interview. Y Combinator has funded a UBI research project in Oakland, which is expected to continue for another three years. Elizabeth Rhodes, who is leading it, said in January she expected to share early analysis from the study in “next few months.”The interest in UBI doesn’t necessarily translate to support for Yang’s plan. Rhodes declined to comment on Yang’s approach. Even Altman, who has made personal donations to Yang and held fundraisers for his campaign, said the candidate still needs to develop the plan’s details. “It’s not a policy that I would implement today,” Altman said. He wants to see the results of YC’s research before settling on an approach, and is concerned about striking the right balance between cash assistance and funding services like education. Altman also said he preferred distributing a “fixed percentage of the money generated by a society each year, not a fixed dollar amount, so that the better a society does, the better everyone does in a very direct way.”Chris Hughes, one of the co-founders of Facebook Inc., in late 2016 helped start the Economic Security Project, a group pushing for what it calls “unconditional cash stipends.” His group is funding a research project giving 125 people in Stockton, California $500 a month for 18 months. With the support of the city’s mayor, researchers sent a letter to everyone who made less than $46,033, the median income for the city. Then they randomly selected families to receive money.Natalie Foster, co-chair of the Economic Security Project, also met with Yang before his presidential run. But unlike Stern, she’s not supporting him. Her group has dropped its insistence on the idea of “universal” income, proposing limiting payouts to just those that need it.Foster also takes issue with Yang’s plans to pay for his freedom dividend. Yang’s version would implement a so-called value-added tax on everyday consumption to pay for his Freedom Dividend. This would affect everyone, and people on the left have generally supported paying for social programs with targeted taxation on the rich. “We would favor a way of paying for the policy that's more progressive, something like a wealth tax,” said Foster.Yang has adjusted his guaranteed income proposal during the campaign. He’s had to grapple with what to do about poor people who would no longer qualify for existing government services like food stamps once they receive $12,000 a year from the government. Yang now says he’d give people the option between the two programs. More progressive versions of the proposal would give people both.For some of Yang’s supporters, one appeal of the plan is how it doesn’t fall easily into existing political camps. “He convinced me that universal basic income is the best way forward,” said Pradhyumna Agaram, an engineer at the augmented reality company Magic Leap who became a die-hard Yang supporter after he watched an interview with the candidate on Joe Rogan’s popular podcast. “He's not ideological. Everything is based on logic and data.”Over the course of Yang’s campaign, support for UBI has increased, according to polling data. Voter support for UBI grew to 49% in September, up from 43% in February, according to a Hill-HarrisX poll. According to an Emerson college poll conducted in January, 53% of potential Iowa caucus voters now support Yang’s UBI plan, with 30% of them opposing it. None of the leading Democratic candidates have taken up UBI. But they have various proposals based on related ideas. Many want to expand child tax credits, increasing the credit available to parents based on how many children they have, regardless of whether they work. Some candidates also support expanding the earned income tax credit.In Congress, Representative Rashida Tlaib introduced a bill in June that would offer money unconditionally to individuals earning less than $50,000 and married couples earning less than $100,000 a year, a version of a bill introduced the year before by Senator Kamala Harris. An unemployed person could receive up to $3,000, without cutting into their social security or disability payments. Another proposal introduced by Senator Sherrod Brown with widespread Democratic support would offer the child tax credit to families regardless of whether they were working.Even Republicans have toyed with a guaranteed income concept. Senator Mitt Romney co-sponsored a bill in December with Democrat Michael Bennet that would offer parents $1,000 for every child they have under 18 and $1,500 for children younger than seven."I love all of these approaches I think they're all pushing us in the right direction," Yang said Wednesday. “I obviously prefer a dividend for the simplicity and impact."The longer that UBI remains a part of the political discussion, the greater the likelihood that related ideas like these will continue to emerge, said Foster. “A whole lot of people are thinking about what an income floor could mean in America today thanks to the fact that he's running for president,” she argued. “That means that we have to take our policy differences even more seriously as the idea gets bigger. And that is what primaries are for.”(Disclaimer: Michael Bloomberg is also seeking the Democratic presidential nomination. He is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)To contact the author of this story: Eric Newcomer in New York at enewcomer@bloomberg.netTo contact the editor responsible for this story: Joshua Brustein at jbrustein@bloomberg.net, Anne VanderMeyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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