Running for president on a universal basic income platform

next up a conversation on universal basic income please welcome to the stage Andrew yang 2020 presidential candidate and founder of venture for America back to lead the conversation is the Atlantic's Derek Thompson again Andrew you're running for president yes yes I am you're running for president based on this issue of ubi universal basic income before we talk about the positives and negatives of this proposal and what it might do to America let's just define it to make sure that we're all on the same page what is a universal basic income what is your plan sure I just want to give a little bit of a run up to how I arrived at this point I spent the last seven years helping create 3,000 jobs in Michigan Ohio Alabama Louisiana and I'm convinced now that we're pouring water into a bathtub as a giant hole ripped in the bottom so universal basic income is a policy where every member of a society let's say every American adult receives a certain amount of money to meet his or her basic needs every month and my plan the freedom dividend is that every American adult would receive $1,000 per month free and clear $1,000 per month every American over the age of 18 18 this to a lot of people is gonna sound like a completely nutso idea so just to be clear has the u.s. ever has any government body in the u.s. existing or passed ever done anything like this well a law essentially identical to this passed the House of Representatives in 1971 under Richard Nixon Martin Luther King was for it Milton Friedman was for it and a thousand economists signed a letter saying this would be great for the economy and society and then a number of years later Alaska passed something identical to this in the form of the petroleum dividend where everyone in Alaska today was he was between one and two thousand dollars a year no questions asked from the petroleum fund and if you think about this for a moment Alaska is a deep red conservative state and the Republican governor made this case the Alaskan people he said who would you rather get the oil money the government who's just gonna screw it up or you the Alaskan people and the Alaskan said us and then now the petroleum did is wildly popular it has increased children's it's improved children's health and nutrition it has created thousands of jobs and no one can touch it and that's been an effect for 36 years so if you think about it what is the oil of the 21st century the oil of the 21st century is data AI autonomous vehicles and advanced technologies and that's how we're gonna pay for a freedom dividend for all Americans so a radical solution like this seems to at least imply a radical problem you have this book called the war on normal people what is the problem that this country and other developed and developing economies are going to face in the near future that you think necessitates a policy like ubi so I want everyone here to reflect why is Donald Trump our president today and the reason why Donald Trump is our president today is this we automated away four million manufacturing jobs in Michigan Ohio Pennsylvania Wisconsin Missouri Iowa all of the swing states that he needed to win and now we're about to do the same thing to millions of retail jobs call center jobs truck driving jobs fast-food jobs which are unfortunately the four most common jobs in the economy I have many friends in Silicon Valley who are working on this who know full well that this trend is about to accelerate so if we don't wake up and start implementing meaningful solutions to the fact that we are going through the greatest economic and technological transition in the history of the world then we are doomed to much much worse than Donald Trump a criticism of this piece a criticism of this argument says all right maybe we're entering the most radical transformation of the US economy in the history of the country but also maybe we're not like look at the unemployment rate it's under 4% in a period of technological unemployment with robots taking all of our jobs one thing you should absolutely see is rising productivity and said we see flatlining productivity another thing that you should see theoretically is that wage growth should be completely stagnant particularly at the bottom and in fact the Bureau of Labor Statistics just said today that wage growth is accelerating not only for a lot of for the entire country but in the last few years going back to the end of the Obama administration wage growth was rising the fastest at the bottom so what's going on if if the robots are really coming why can't we see it in the numbers yet so if you look at the headline unemployment rate it measures the people in the workforce we're looking for work what it does not measure is the fact that right now our labor force participation rate is sixty two point nine percent a multi-decade low and the same levels as El Salvador and the Dominican Republic and that is right now in year 10 of an expansion you can look that stat up almost one in five prime working age men in America between the ages of twenty one thirty it has not worked in the last 12 months so there is a massive displacement particularly of unskilled men that the Rosi unemployment stat which is essentially government misinformation and malpractice at this point does not bring to light and the productivity stats mean they're not going to show anything they're going to show a big zero for self-driving cars and trucks until the self-driving cars and trucks hit the road and my friends in Silicon Valley believe we are five to ten years away from automating away truck drivers trucking is the most common job in 29 states now think about this there are three and a half million truck drivers in the United States average age 49 ninety-four percent male average education high school they make about forty six thousand dollars a year on the other side you have my friends in Silicon Valley who are gunning for the hundred sixty eight billion dollars per year in labor savings fuel efficiency equipment utilization fewer accidents and they think that they are five to ten years away so what's going to happen when those three and a half million truckers start losing their jobs and as you suggest Eric the stats will show none of this until it happens but we're not ostriches you know we don't have to have our heads in the sand and just be like oh it's never gonna happen I mean we can all see it happening if we just wake up and open our eyes my sense is that every room like this is always relatively divided between some people who say I believe it technological unemployment is coming the robots will take our jobs even if you can't see in the numbers and some people who say I don't think this future is coming at all but I want to be clear and to be fair to universal basic income because this is a solution that's not like a knee replacement for failing knees something that only makes sense given the eventual occurrence of technological unemployment like aspirin it's like yes it can help with the headache but it might also be good for heart problems and it might also be good for general bodily health so even if this future of the robots taking our jobs doesn't come to pass what are the other benefits of ubi that you see yes so if you look at what's happening in America today a mindset of scarcity has swept most of the country where 57% of Americans today cannot afford an unexpected $500 bill so they're lurching week to week month to month and asking them to be positive about the future is unrealistic now if you put $1,000 a month in the hands of American families but you see very clearly in the data is you see an improvement in child nutrition and health you see an improvement in graduation rates you see an improvement in mental health you see lower levels of domestic violence you see lower hospital visits so these are things that you would expect a hundred percent very very clearly just by putting a thousand dollars into the hands of American families I also want to say on a more fundamental level right now our economic stats for example they dismiss the work of moms and my wife is at home with our two young boys right now one of whom is autistic and GDP will measure her contribution and zero one would really her contribution is what we need more of and more of in an age where we're going to be automating away more and more work so we need to broaden our conceptions of both work and value to become much much bigger and broader and this is necessary in my mind in part to achieve some measure of racial and gender inequality because the marketplace will systematically disregard and undervalue the work of women will also systematically exclude under represented minorities for meaningful opportunities I think I'm really glad you said that the last person who was on the stage with me Phil Thompson the deputy mayor of New York City was talking about the growing need for personal care aides and home health aides the two fastest growing jobs according to the Bureau of Labor Statistics over the next decade these are jobs whose average salary is below $30,000 but taking care of the old and the sick and those who can't take care of themselves even if market values that is an extremely unvalued service it's clearly immensely valuable to families yes and and that's something that I can't tell you how frustrating I find out when people is like oh we're gonna need more of this it's like yes we are gonna need more of that but right now that job pays twenty five thousand dollars a year with a turnover rate of 100 percent so if that's the job of the future like is that really the plan so what we need to do is we need to to create our own estimation of how these things ought to be valued because the market is gonna punish many of these things the market does not recognize caregiving arts and creativity journalism the environment infrastructure and public goods and so we need to broaden our conception of GDP GDP is something we invented almost a hundred years ago during the Great Depression and even the inventor said this is a terrible measurement of national well-being and we should never use it as that and we should include Parenthood and motherhood in the calculation so we need to evolve to the next stage of capitalism right now in 2018 and 2020 and redefine our economic measurements to include things like childhood success mental health and freedom from substance abuse levels of engagement with work I mean what percentage of Americans you think like their jobs right now it's at you I'm sure you all like your jobs but but most Americans do not environmental quality if we create a more holistic measurement for the economy we would also create touch points for many more Americans particularly those who are about to be displaced from the workforce or have already been displaced to be able to participate in meaningfully alright I have three big critiques that I need to go through with you those are basically cost inflation and laziness let's go through them in that order cost you're proposing a thousand dollars for every single person in this room every single month every single you know 280 million Americans every single month $12,000 for 280 million pete's only adults so it only makes it a bit it's only adults well yeah but the population is like 320 million so I was trying to do a math on that 250 million people let's say how much is this going to cost and can we afford it yes so the headline cost it's about two point four trillion dollars per year for content one more time two point four trillion a year be the headline cost and the US government currently spends just under four trillion dollars here the federal budget is four trillion the economy's up to 19 trillion up four trillion in the last ten years so two point four trillion seems like a lot but if you break it down it actually becomes affordable very quickly now the big change we need to make is we need to be in position to harness the gains from artificial intelligence and new technologies the big winners from those technologies are going to be Amazon Google Apple uber like the mega tech companies with trillion dollar valuations and the trap Orion right now is that they do not pay a lot of tax Amazon's trick is we didn't make any money this quarter no taxes alphabets trick is it all went through Ireland nothing to see here and so as these companies soak up more and more value the public's going to be seeing less and less even as the opportunities disappear so what we need to do is we need to join every other industrialized country in the world and have a value-added tax which would give the public as a slice of every Google search in every Amazon transaction which is the equivalent from the consumer standpoint of a consumption tax that's how a lot of people will experience it right now but it applies to businesses at every level of production so it's like oxygen and every other advanced country has already done this because our economy is so vast a value-added tax that even half the European level would generate almost a trillion dollars in revenue for the US that plus the 800 billion we currently spend on welfare spending plus the fact that by putting a thousand dollars into the hands of American adults you'd grow the economy by 12% and we'd get back five hundred billion a new tax revenue plus the hundreds of billions we would save in health care incarceration homelessness services and the massive value gains from having a population with higher education rates better health better nutrition better mental health better productivity all of those things together would make the freedom dividend pay for itself and then some conservatively we have to start investing in our people good companies invest in their people but then in the public space we say oh we have to try to like treat everyone like costs and avoid spending money and that's the opposite of what we need we need to reverse the mindset of scarcity with a mindset of abundance and the best way to do that is to secure Americans futures okay so when some economists here mindset of abundance they think a lot more money flowing around the same economic system we're giving a bunch of people who are only making say twenty thousand dollars a year an extra $12,000 a year why isn't inflation gonna go completely crazy on a bunch of consumer staples especially those that are over consumed by the poorest Americans well if you look at the causes of inflation right now in the US they tend to fall into three buckets housing education and healthcare if you look at consumer goods they're actually not surging in price a lot of them are even getting cheaper so that's clothing electronics media like the things that people consume and so putting money into people's hands there's no reason to think that it would cause a surge in the prices of these consumer goods where the market is quite efficient because they're still going to be a lot of price sensitivity it's not like these people all of a sudden I'm like oh I can pay ten bucks for a burger it's like price sensitivity will still be there and then they'll still be competition between firms in every particular industry and vertical so really the cause of inflation right now in the US are around these protected dysfunctional markets of health care education and housing alright last question before we turn to questions very quickly why won't this make us all lazy why won't free money just turn us into a nation of layabouts yes so $1,000 a month is still below the poverty line in this country the poverty line is twelve thousand seven hundred seventy dollars there is no reason to think that everyone's gonna be like oh I got a thousand dollars a month I can live large and stay at home even if you were a server making twenty four thousand dollars a year are you really gonna take a 50% pay cut and stay home but if you keep working you're up to $36,000 maybe you can actually put a little bit of money away start getting ahead take your kid out for a movie the data and I'm a very data-driven guy the opposite of Donald Trump is an Asian man who likes numbers and the data says that only two groups work fewer hours with more money new mothers who spend more time with our kids which I think we can all get behind and teenagers who graduate from high school at higher levels Andrew thank you we've got time for a couple of questions let's see how about right over here in the back this kind of reminds me of Lyndon B John we're gonna make America great again type of concept how different will that be we're after lyndon b johnson a lot of individuals did fall into that that laziness that idea of the government will support or help support how different is this this idea well one thing I love about universal basic income is that it's it aligns the incentives the individual with society's we're right now for example a disability program in the u.s. if you show yourself to be healthy then your benefits disappear and so everyone stays on well truly I mean the the churn rate from long-term disability is literally zero percent in this country whereas universal basic income if you start to make any money or get ahead you have to keep every dollar and you still keep the dollar that we gave you so the problem with a lot of the existing welfare programs is that that they're designed to take to give you less if you start to succeed and that's the opposite of what we need I'd also say really quickly the labor force participation rate actually grew rather tremendously after the 1960s especially as more women entered the labor force will go with right here in the front and row really interesting how do you sell this to the American people who have words like socialism or handout you know as you mentioned laziness how do you sell it it's great idea well I've been running for president now for a number of months I've been to Iowa five times and when I go to Iowa I say to them hey guys have you noticed doors closing in your Main streets they say yes and I say why is that they say Amazon it's like yeah is that gonna get better or worse worse what are you gonna do about it what can we do about it I'll tell you what you can do about it you can build a new economy from your people up from your families up from your communities up the trickle up economy and do that all we need to do is is vote in a freedom dividend and the Democrats of Iowa are super excited about that possibility I was talking to Derek backstage and he said you're only talking to Democrats and that's true so the Democrats I have to say are very very excited about this possibility and so we need to convey the Democrats of Iowa New Hampshire in the rest of the country first and then we can bring it to the rest of the country but I have no doubts that we're going to be able to make this incredibly popular very quickly because I'm already getting Trump supporters coming my way because if you think about conservatives and libertarians what they hate is government making decisions in bureaucracy what they like is self-determination and agency and so a dividend that puts money into their hands is actually very very appealing to a wide swath of Americans on both sides of the aisle and you thank you and thank you all thank you all [Applause]