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The Case for Universal Basic Income as a Tool for Racial Justice

By Sana Farooqui

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Citation

Farooqui S. The case for universal basic income as a tool for racial justice. Harvard Public Health Review. 2021; 30.

The Case for Universal Basic Income as a Tool for Racial Justice

Introduction

The ongoing coronavirus pandemic shed a stark light on the legacy of racism in the United States. Ongoing focus has primarily centered on health disparities between white Americans and Black Americans in particular – and rightly so. Black (and Latino) Americans were disproportionately affected by the pandemic, with Black citizens being three times more likely to get infected with the virus than white Americans.1 Black and Latino patients were also dying at higher rates than white patients.2 In fact, the pandemic shaved off three years of the average life expectancy of Black men, compared to eight-tenths of a year for white men.3

 

The disproportionate impact of the pandemic on non-white communities is a direct health outcome of embedded structural racism. Black Americans are more likely than White Americans to be employed in essential customer-facing fields and unable to work safely from home; work-from-home jobs are generally white-collar positions requiring higher education, another structural barrier. After work, non-white Americans are more likely to be boxed in overcrowded zip codes due to redlining, exposed to and exposing others. Despite the risks, there are few alternatives. The existing racial wealth gap limits the monetary padding afforded to Black and Latino Americans, compared to white counterparts. Black Americans were already economically vulnerable going into the pandemic, with only 40 percent of Black households saying they could canvass $3,000 in emergency funds from family and friends compared to 72 percent of white households.4 The past year has exacerbated the racial wealth gap, with a higher proportion of Black families dipping into their retirement funds to pay for food and housing compared to white families.4  Black Americans were also more likely to be laid-off during the pandemic and less likely to get hired back, intensifying economic disparities.5 Without proper intervention, the pandemic will compound an already racialized economic structure for generations to come. To address and rectify systemic economic racism and prevent further generational inequities, universal basic income (UBI) measures must be implemented in the United States.

Background

The racial wealth gaps in the United States stem from the country’s foundation, when indigenous lands were colonized and reaped for white Americans’ profit by enslaved and uncompensated Black labor. Enslaved Black Americans were denied centuries of wealth accumulation. Post Emancipation, failure to follow through with the 40-acres land grant policy further stymied Black wealth-gathering.Simultaneous legal measures like segregation and the collapse of the Freedman’s Savings Bank continued to strip Black people of economic gains. State-sanctioned violence in wealthy Black communities like Wilmington, North Carolina and later in Tulsa, Oklahoma continued economic dispossession, reversing even whispers of prosperity.Adding insult to injury, Black Americans were barred from the same structural wealth-gathering mechanisms provided to white Americans, such as the initial Social Security Act, the benefits of the GI Bill, and access to nonpredatory housing loans.7 Indeed, Black Americans were expected to pay into Social Security benefits they couldn’t access, and fight for a country that would explicitly deny them resources afforded to others.

 

More recently, redlining, occupational segregation, and disproportionate incarceration feeds the cycle of racialized wealth dispossession. Redlining forces Black and brown Americans into living on underfunded and often environmentally unsafe areas. This modern segregation removes access to resources such as bank loans (which factor in zip-codes as a risk predictor), well-funded schools, and even nutritionally competent grocery stores. A lack of access to well-funded schools hurt students’ chances of applying for and receiving higher education, which in turn limits entry to well-paying jobs with health insurance and potential savings. Higher police presence in redlined areas and the racially based criminalization of minor offences lead to disproportionately higher numbers of incarcerated Black and brown men. Due to both the stigma of imprisonment and stunted career growth, this results in a loss of income during incarceration and reduced opportunities post-release.7

 

The cycle of racially driven economic harm is institutionally supported by past and current policies. The consequences are stark: the median wealth for Black families in 2019 was $17,000, compared to $171,000 for white families.6 In other words, Black families have $10 in assets compared to every $100 for white families.8 Similarly, in 2019 a full 19 percent of Black households had zero or negative net worth, compared to 9 percent of white households; that the COVID-19 pandemic has widened this disparity is not an unfounded assumption.The idea that this state of affairs illustrates a specific failure of Black Americans to pull themselves up by the bootstraps is both offensive and laughable; how is it possible when they’re constantly denied boots to even wear?

 

As the COVID-19 pandemic has displayed, there is a tangible health-based toll to this systemic racism. Reduced life expectancies, higher rates of premature death (almost 30 percent), barriers to regular healthcare, and continuous exposure to zip code-based environmental toxins are all manifestations of racism and racist policies.Public health practitioners are aware of this, though the more palatable phrase “the social determinants of health” is often used to describe these effects; never mind that the social determinants of health are upheld by a legacy of racism. Regardless, these health and economic disparities are driven by structural policies, and therefore require a structural solution for change and rectification. The time to implement change is immediate, with the difference of wealth between white Americans and people of color at its highest point in 25 years.7 The pandemic’s economic fallout is already worsening this divide and will continue to do so unless bold action is taken.    

Proposed Intervention

To help rectify the 300+ years of racial and socioeconomic disenfranchisement, a universal basic income program must be implemented. This intervention refers to a regular provision of cash to a specified population group within a targeted area. Some form of UBI has been promoted since the 1500s, by advocates as varied as Thomas Paine, Milton Freidman, Mark Zuckerberg, and Elon Musk. More recently, former Democratic presidential nominee contender Andrew Yang built his platform on UBI, inadvertently becoming the most famous proponent for the cause.9 Similar to Yang’s policy, my recommended proposal is a no-strings attached, monthly payment of $1000 regardless of the recipient’s income. This plan would target all residents of the United States ages 18 to 70, with state and federal governments each shouldering half the costs. The age limits are based on the assumption of full social security benefits remaining intact upon reaching age 62, with eight years of buffer in between. The federal government would provide oversight and distribution responsibility. State governments have the option to increase monthly amounts based on cost of living. The funds can be disbursed as live checks, direct deposits based on IRS information, or mailed “debit cards,” similar to those used by SNAP recipients. The latter method is to help reach the 5.4 percent of Americans who are unbanked and mainly low-income people of color.10 The no-strings attached approach would ensure there are no limitations to use and limit exclusions. UBI payments would include currently incarcerated people; if imprisoned folks still have to pay income taxes, then they should be afforded the payments indiscriminately. This would also be untaxed income for everyone, easing some of the middle-class/upper middle-class squeeze – and helping foment cross-class buy-in.

 

Guaranteeing a steady cash flow will help Black and brown Americans engage in wealth accumulation without the traditional barriers of property- or stock-market based methods. In a more roundabout manner, UBI could assist Americans in formally entering the financial economy, another source of wealth generation. More directly, UBI payments can prevent a descent into poverty, a sobering reality as almost 40 percent of Americans are only one paycheck away from being homeless.11 A regular source of income could prevent entrapment by predatory loans and ease debt burden; Black students in particular hold $25,000 more in student loans than white counterparts.12 Likewise, UBI implementation would have more social and psychological effects as well, including a potential reduction in crime and increased trust in U.S. social institutions. The policy may alleviate stress and anxiety, which can ease the effects of weathering in Black Americans. A guaranteed cash stream can also reduce barriers to healthcare access by promoting utilization, preventing future wealth losses in the form of medical debt.

 

Critics of UBI claim this policy would be disastrous, namely as an assured cash deposit would disincentivize employment and consequently wreck the economy. Accordingly, UBI would essentially create a lazy and unmotivated society dependent on state-provided handouts.13 Yet, the evidence displays the opposite effect. In a recent small-scale experiment in Stockton, California, 125 residents who made less than the median income of $46,000 a year were given $500 per month for the past two years. Less than 1 percent of the entire amount of disbursed cash was spent on tobacco and alcohol. Rather, recipients used the cash to pay off debts and obtain better-paying fulltime jobs. Enrollees reported that they had lower rates of anxiety, depression, and fatigue; having a sustained source of cash gave them enough financial security to allocate time for better job-hunting, for example.13

 

This isn’t a novel policy; the Eastern Band of Cherokee Indians in North Carolina has been providing all tribe members with a yearly payment of $4000 to $6000 since 1997. Employment statistics remain unaffected, with tribe members continuing to work. However, educational and mental health outcomes have significantly improved, while there is a noted decrease in addiction-related issues and crime.9 On a larger scale, the state of Alaska has guaranteed income to each adult and child since 1982. Rather than harm its economy, Alaska has instead managed to eliminate extreme and cash-based poverty. More Alaskans actually joined the workforce, with some positing the payments allowed workers to afford fixed job costs like transportation or childcare. Additionally, Alaska’s internal economy flourished, as the payments stimulated more spending, enabling businesses to hire more employees and consequently increasing overall employment.14 Again, this isn’t as foreign of an idea as opponents may suggest.

 

That isn’t to say that a UBI policy won’t face an immense uphill battle. The current polarized political climate will be a severe barrier to passage, as are the ongoing culture wars. A national UBI policy – especially one promoted to rectify facets of structural racism – goes against the very mythos of America. As the belief goes, “true” (i.e. white) Americans earn their wealth through hard work alone. This thinking racializes any sort of social safety net or UBI program, dismissing groups who need assistance despite welfare primarily boosting the white middle class.15 More harmfully, the notion rejects the presence of structural racism, powering the cycle of racial inequities. To combat this idea, reframing is necessary. Any UBI measure would have to center around perceived white benefits to muster through. Another major barrier is finding funding sources; such a plan would cost almost three trillion dollars per year or the equivalent of one COVID-19 relief bill. Revenues from corporate taxes or hyper-efficient taxes such as land value, carbon emissions, or vice taxes could cover some of the required money. A suggestion would be to pass complementing wealth taxes, i.e., tax 1-2% of accumulated wealth of those with more than a million dollars in their bank accounts or investment holdings to cover the program. Overall, this intervention is more palatable to policymakers than reparations. It would also enable generational wealth-gathering, versus simply raising the minimum wage for income.

Implications

Implementing a UBI intervention can directly help address the social determinants of health. Explicitly, economic stability is one of the five major determinants; UBI will foster this. Other factors, such as education, neighborhood and environment, and healthcare access are significantly improved when reducing economic burden. Extra cash can secure transportation or childcare, enabling low-income parents to get regular primary care for example. Implicitly, the social determinants of health are underpinned by inequities sustained by racism. Money is quite literally power and can help diminish the effects of structural racism in accessing healthcare. As part of the reframing suggestion mentioned above, UBI should be pushed as a public health initiative rather than an economic initiative, taking out some of the resource-driven politics.

 

In a wider U.S. context, a push for UBI will normalize the intersection of well-funded safety nets and robust public health. Perhaps this will change the dialogue around UBI, which is opposed by a very slim majority of Americans.16 Rather than framing UBI as a “welfare scheme,” it should be illustrated as a right of the people from the government, no different than the rights enshrined in the Bill of Rights. The acceptance of “creeping socialism” could pave a path towards U.K.-style universal healthcare or perhaps a push for free higher education. UBI may quite possibly be the first step in a gradual and total revamp of the American structure; this new reconstruction should address and rectify longstanding racial inequities from the root.

 

Closer to home, the UBI push should be initiated by Harvard Chan; we direct much attention to the social determinants of health at the school. Doing so would legitimize this initiative and potentially even help pass such a law, especially considering the number of faculty and affiliates currently working in the Biden administration. But, to put it bluntly, I doubt this will happen. The larger Harvard organization itself thrives on exclusivity and competition. UBI seeks to level the playing field, albeit in a smaller manner. Leveling the playing field is absolutely not in line with Harvard’s brand, despite all the talk around diversity and inclusion. The university benefitted from the economic disenfranchisement of Black Americans and continues to profit from the legacies of generations of wealthier white Americans. Even our own socially aware School of Public Health has partaken in gentrification, forcing out many Black and Latino residents of the Roxbury area and harming their wealth building.17,18 Ultimately, I believe the responsibility for advocating equalizing and racially corrective measures will be up to me and my fellow student-colleagues, using the brand for legitimacy and access.

Conclusion

As discussed, one method to repair centuries of inbuilt structural racism is through economic measures, namely a universal basic income intervention. Doing so would tangibly assist Black Americans in wealth generation, narrowing the racial wealth disparities and impacting future generations. Such an initiative would have been impossible to suggest a decade ago – and was ridiculed just a year ago during the Democratic primaries. Yet the three COVID-19 stimulus checks indicate there is some political will to pass cash-based interventions. The policy window for such a bold and lasting intervention is right now.

References

  1. Soucheray, Stephanie. 2020. “US Black [citizens] 3 times more likely than whites to get COVID-19.” Center for Infectious Disease Research and Policyhttps://www.cidrap.umn.edu/news-perspective/2020/08/us-blacks-3-times-more-likely-whites-get-covid-19  (August 14, 2020).
  2. Editorial Board.“Too many Black Americans are dying from COVID-19.” 2020. Scientific American. https://www.scientificamerican.com/article/too-many-black-americans-are-dying-from-covid-19/ (August 1, 2020).
  3. Santhanam, Laura. 2021. “COVID-19 Has Already Cut U.S. Life Expectancy by a Year. For Black Americans, It’s Worse.” PBS NewsHourhttps://www.pbs.org/newshour/health/covid-19-has-already-cut-u-s-life-expectancy-by-a-year-for-black-americans-its-worse (March 13, 2021).
  4. Moss, Emily, and et.al. 2020. “The Black-White wealth gap left Black households more vulnerable.” Brookings Institute. https://www.brookings.edu/blog/up-front/2020/12/08/the-black-white-wealth-gap-left-black-households-more-vulnerable/ (December 8, 2020).
  5. Clark, Dartunorro. 2020. “The economy is showing signs of recovery. Many Black Americans are not.” NBC Newshttps://www.nbcnews.com/politics/politics-news/black-unemployment-economy-covid-n1243838 (October 29, 2020).
  6. Lee, Trymaine. 2019. “How America’s Vast Racial Wealth Gap Grew: By Plunder.” The New York Timeshttps://www.nytimes.com/interactive/2019/08/14/magazine/racial-wealth-gap.html, https://www.nytimes.com/interactive/2019/08/14/magazine/racial-wealth-gap.html (March 13, 2021).
  7. Bhattacharya, Jhumpa. 2019. “Exploring Guaranteed Income Through a Racial and Gender Justice Lens.” Roosevelt Institutehttp://rooseveltwec.wpengine.com/publications/exploring-guaranteed-income-through-a-racial-and-gender-justice-lens/ (March 13, 2021).
  8. Bassett, Mary T., and Sandro Galea. 2020. “Reparations as a Public Health Priority — A Strategy for Ending Black–White Health Disparities.” New England Journal of Medicinehttps://www.nejm.org/doi/10.1056/NEJMp2026170 (March 13, 2021).
  9. Samuel, Sigal. 2020. “Everywhere Basic Income Has Been Tried, in One Map.” Voxhttps://www.vox.com/future-perfect/2020/2/19/21112570/universal-basic-income-ubi-map (March 13, 2021).
  10. Holder, Sarah, and Olivia Rockeman. 2021. “What Andrew Yang’s UBI Proposal Would Mean for NYC.” Bloomberg CityLabhttps://www.bloomberg.com/news/articles/2021-01-28/what-s-in-andrew-yang-s-ubi-proposal-for-nyc (March 13, 2021).
  11. Biron, Carey. 2020. “One paycheck away from homelessness: housing inequality fuels U.S. protests.” Reutershttps://www.reuters.com/article/us-usa-protests-housing/one-paycheck-away-from-homelessness-housing-inequality-fuels-u-s-protests-idUSKBN23A2UM (June 3, 2020).
  12. Miller, Ben. 2019. “The continued student loan crisis for Black borrowers.” Center for American Progress. https://www.americanprogress.org/issues/education-postsecondary/reports/2019/12/02/477929/continued-student-loan-crisis-black-borrowers/. (December 2, 2019).
  13. Beam, Adam. 2021. “125 People Got $500 per Month Free for 2 Years. Here’s What Happened.” king5.comhttps://www.king5.com/article/news/nation-world/universal-basic-income-experiment/507-768a521c-3f24-497f-b85d-04a81aaf6f97 (March 13, 2021).
  14. Matthews, Dylan. 2018. “The Amazing True Socialist Miracle of the Alaska Permanent Fund.” Voxhttps://www.vox.com/policy-and-politics/2018/2/13/16997188/alaska-basic-income-permanent-fund-oil-revenue-study (March 13, 2021).
  15. Ward, Marguerite. 2020. “How decades of US welfare policies lifted up the white middle class and largely excluded Black Americans.” Business Insiderhttps://www.businessinsider.com/welfare-policy-created-white-wealth-largely-leaving-black-americans-behind-2020-8 (August 11, 2020).
  16. Gilberstadt, Hannah. 2020. “More Americans oppose than favor the government providing a universal basic income for all adult citizens.” Pew Research Center. https://www.pewresearch.org/fact-tank/2020/08/19/more-americans-oppose-than-favor-the-government-providing-a-universal-basic-income-for-all-adult-citizens/ (August 19, 2020).
  17. Angulu, Hakeem. 2018. “How Harvard’s Expansion Affects the Communities Around It.” Medium.com’s Harvard College Open Data Project.  https://medium.com/harvard-open-data-project/how-harvards-expansion-affects-the-communities-around-it-c4e669dc9f2a (September 7, 2018).
  18. Solomon, Danyelle; et.al. 2019. “Systemic Inequality: Displacement, Exclusion, and Segregation.” Center for American Progress. https://www.americanprogress.org/issues/race/reports/2019/08/07/472617/systemic-inequality-displacement-exclusion-segregation/ (August 7, 2019).
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About the Author

Sana K. Farooqui

Sana Farooqui is a second-year health management MPH student and Equity, Diversity, and Inclusion Fellow at the Harvard T.H. Chan School of Public Health. She received a bachelor’s degree in government and politics and a Master’s in Public Policy from the University of Maryland, College Park. She is interested in addressing the causes of health disparities among underserved communities using integrated healthcare delivery mechanisms and reduced systemic barriers to care.