Futurists love to debate when our economy will be thrown into turmoil by self-driving cars and robots taking our jobs. But when it comes to economic disruption, the future is already here.
Record low unemployment and record highs for the stock market don’t tell the full story of what is really happening in today’s economy. For many, a job used to mean stability: 40 hours a week, benefits, vacation days, sick leave, and retirement savings plans. But according to a 2016 study by Princeton economists, nearly all of the jobs created in the preceding decade were part-time, contract, or temporary. Today a job is more often than not just an unreliable gig.
This didn’t happen spontaneously. Our political leaders over the past 40 years lowered taxes on corporations and the wealthy and encouraged globalized trade with few protections for American workers. At the same moment, automation reduced the number of factory jobs and created Lyft drivers and Etsy sellers in their place. We created an economy where median wages haven’t budged in 40 years, and jobs have become increasingly piecemeal. But we have the power to change this.
My own story illustrates how unfair today’s economy can be. I grew up in a middle-class family in a small town in North Carolina, the son of a paper salesman and public school teacher. Financial aid made it possible for me to go to a prestigious boarding school and Harvard. When I told my parents that my roommates, Mark Zuckerberg and Dustin Moskovitz, were dropping out to work on a website the three of us had started, they laughed. I had worked too hard and too long to throw away an Ivy League education. So I stayed one foot in, working on Facebook’s communications and product teams, and one foot out, getting that Harvard degree I had dreamed of.
I’m proud of the work that I did, but the fact that I could make nearly a half billion dollars for three years’ worth of work – while at the same time half of Americans can’t find $400 in case of an emergency – is a testament to what is wrong with our economy.
The same forces that made Facebook’s rise possible have created financial instability in the lives of working Americans. Few people want a handout, but almost all could use an income boost to enable them to go back to school, get the childcare or housing support they need, or move closer to a new job.
Sometimes the best solution is the simplest: we should provide a guaranteed income of $500 a month for every working adult who makes less than $50,000, paid for by raising taxes on the top one percent. A guaranteed income of this size would cut the number of people living in poverty in half and stabilize the financial lives of much of the middle class, for less than half of what we spend each year on defense.
We already provide 30 million American families with unconditional cash – between $500 and $6,000 per family per year – in the form of the Earned Income Tax Credit. Decades of studies show that people who get the money work just as much, if not more, than their peers. Their kids do better on tests and stay in school longer, and their families are healthier.
It is the most powerful income support program we have, lifting more people out of poverty than food stamps, unemployment insurance, and housing vouchers combined. Every president since Gerald Ford, Republican and Democrat alike, has expanded it, because people on the left and right agree that if you are working, you deserve basic financial stability.
Rather than imposing “work requirements” cynically as some on the right do, we need to expand the definition of work to recognize activities that have been ignored for too long. There are 30 million Americans who already work in childcare, eldercare, and study, just without pay. We don’t need more bureaucracy to verify their labor or the labor of others working in the formal economy.
If you reported income last year, claimed a young child or aging parent as a dependent on your taxes, or are enrolled in an accredited educational institution, you should be recognized as the worker you are. With a guaranteed income, you will earn an additional $500 a month, no strings attached, and in addition to other income or benefits you receive.
A guaranteed income of this size could be paid for exclusively by the one percent. If we close tax loopholes and raise tax rates on income in excess of $250,000 to be in-line with historical average rate of 50%, we can pay for it without chipping away at our existing safety net.
We can begin this work today by implementing the policy at the state level and by supporting pilots and demonstrations like what’s happening in Stockton, California. And when the time comes to repeal and replace Trump’s corporate tax cuts, we should make sure that a guaranteed income for working people is at the core of that fight.