Separating Survival from Work: The Quest for a Guaranteed Income


by Jim Smith, LA Labor News
originally published in 1996, republished here July 2013

It is we who plowed the prairies; built the cities where they trade;
Dug the mines and built the workshops; endless miles of railroad laid.
-- Solidarity Forever, by Ralph Chaplin

In 1915, Ralph Chaplin wrote his defiant labor anthem in opposition to robber barons who were taking credit for the industrial development of the country. Writing today, he might well have added computer chips, the internet, software and industrial robots to his list. In spite of, or perhaps because of, hundreds of years of backbreaking toil, workers have worked themselves out of their jobs.

Until the cybernetic and automation revolution got underway in earnest in the late 1970s, increases in production and profits meant the hiring of more workers. Today, the term, "downsizing," is as commonly understood as is the operation of an ATM (in fact they go hand in hand in the banking industry).

robots in car factory

Job security and an ever climbing standard of living
are no longer part of the "deal".

Advances in technology and automation combined with a rapidly widening income gap have caused massive dislocation, deskilling and unemployment. Job security and an ever climbing standard of living are no longer part of the "deal" for Americans. People of color, already the most disadvantaged in society, are trapped in inner cities that have been most heavily hit by social and technological changes. Life in the inner cities of the late 20th century is on the "cutting edge" of the social transformation brought on by the disappearance of industrial jobs with union contracts, the erosion of cities' tax bases and social services, permanent unemployment, and perhaps worst of all, loss of faith in the future.

Efforts by unions and their allies to oppose downsizing and the transfer of jobs out of the country make them seem like modern day Luddites standing in the way of progress - and the inevitable. Those who tried to stop the ratification of NAFTA and GATT found themselves run over by a steamroller. With the notable, although limited, exception of the recent United Auto Workers contracts with the Big Three U.S. automakers which guarantee 95 percent employment for the term of the agreement, most efforts for job guarantees or to stop runaway shops have been nearly universally unsuccessful. Capital continues to freely shed workers and roam the earth seeking the highest rate of profit.

One impact on individuals and families is the shift of millions of dollars in wealth from the poor to the rich. While the U.S. has not recently been known for its income equality, the stratification has worsened since the 1980s, according to the Census Bureau. As of 1994, families in the top 20 percent income bracket "earned" 47 percent of that year's total income. The bottom 20 percent received only 4.2 percent of the total. In terms of income distribution, the U.S. differs little from Mexico, where the top 20 percent receive 54 percent of the income and the bottom 20 percent get 4.3 percent.

Over the past 20 years, the top 20 percent has raised their annual income from an average of $81,447 to $105,945, while the bottom 20 percent has dropped from $8,312 to $7,762. The so-called middle class, or at least that 60 percent in the middle, has also seen its share of national income decline from 53.5 percent to 49 percent.

Political response has been limited and ineffective.

On a political level, the response, if any, has been limited and ineffective. President Clinton and his recently departed Secretary of Labor Robert Reich have meekly proposed retraining and emphasized more education. Presumably,workers will then be prepared to bounce back from unemployment and reenter the cycle once more, although likely at a lower wage.

However, retraining and more education are not likely to accomplish their purpose if forecasts of an increasingly smaller and smaller workforce are accurate. Ominously titled books like "The End of Work," by Jeremy Rifkin and "The Jobless Future," by Stanley Aronowitz and William DiFazio confirm that the need for workers will continue to decline. Movies like Blade Runner and "cyberpunk" writers like William Gibson give chilling fictionalized accounts of what our future will hold if an aggressive wealthy elite continue to control technology and automation for its own benefit while driving most of the population into a racially and class divided redundancy.

Reexamining the alternative: a universal guaranteed income

After years of fighting unsuccessfully to reverse the job drain, activists and academics are beginning to reexamine the alternative, a universal and guaranteed annual income. There are two different motivations for this reexamination.

A guaranteed basic income is advocated by some as a solution to the problems of welfare, poverty and homelessness. An income allotment would be provided in lieu of welfare and to those who have lost their jobs and cannot find reemployment. These plans invariable require recipients to accept work or retraining.

Others argue that a guaranteed annual income should be a fundamental right provided to everyone without strings. Since everyone - or at least their parents and grandparents - shared in the creation of the wealth of today's society, they should now receive a share or dividend of that wealth.

It would take a massive movement, and perhaps many years, to overcome what Martin Luther King, perhaps in understatement, called "fierce opposition" that would be generated to a guaranteed annual income. In order to achieve a decent living standard for all, draconian taxes would have to be applied to the rich and to large corporations.

The advantages of a movement for guaranteed income

Such a movement does have some advantages. The specter of communism and cold war is no longer haunting this country. The fight for a guaranteed annual income would not revive fears of totalitarianism. No one would have their property expropriated, no banks, factories, newspapers or second homes would become state property.

It was in an even more difficult political climate that the first full-blown guaranteed annual income plan was developed. In World War II England, Lady Juliette Evangeline Rhys-Williams proposed in "Something to Look Forward To" that every man, woman and child receive a weekly income benefit. She argued that the current system of social welfare discouraged individuals from working since their benefits disappeared when they found a job. Therefore, she reasoned, the benefits should be provided to all without regard to employment status.

Under Rhys-Williams plan, the able-bodied unemployed would lose their benefit if they refused work but would keep the benefit if they accepted work. Her plan sought to avoid the resentment many in the middle class have of the "welfare dole." She did this by proposing that the benefit be tax free, no matter what the recipient's total income. In other words, for the poor and unemployed, the benefit would house, clothe and feed them. For the middle class, it would act as a tax rebate. Rhys-Williams proposal would also act as a means of income redistribution, since it would be financed by a progressive tax on all income, borne mainly by the rich. The Rhys-Williams proposal popularized the concept of a guaranteed annual income but never led to government action.

The guaranteed income idea found fertile ground in 1960s America.

The guaranteed income idea found fertile ground in 1960s America. Almost simultaneously, two extremes were proposed. On the right, Milton Friedman wrote in "Capitalism and Freedom" that a negative income tax should be extended to low-income families. Instead of paying taxes, they would receive taxes in the form of a grant instead of welfare. Unfortunately, Friedman's proposal would have provided only about half the income needed to exceed the poverty level.

On the left, economist Robert Theobald proposed a universal guaranteed income that would not be tied to acceptance of work. In the early 60's, Theobald predicted that automation would continue to eliminate jobs and therefore, income should be separated from employment. He was roundly attacked for suggesting a jobless future.

Theobald was part of a blue-ribbon National Commission on Guaranteed Incomes appointed by President Lyndon Johnson. The commission, which included business and labor leaders issued a unanimous report in favor of the concept.

However, it remained for the most unlikely political leader to initiate guaranteed annual income legislation - Richard Nixon. With strong support from Counselor to the President Daniel P. Moynihan and Health, Education and Welfare Secretary Robert Finch, President Nixon launched his sweeping welfare reform bill in 1969.

The Nixon administration was undoubtable motivated by massive unrest in inner cities and civil rights and anti-war movements numbering in the millions. Its bill would have provided a floor (approximately $1,600, plus food stamps) beyond which the "needy" could not sink.

When confronted with a poll showing a guaranteed annual income proposal was not acceptable to Congress or the public, the administration changed the program's name to the Family Assistance Program. When he was asked if this wasn't really an income guarantee, Nixon lied! This was three years before Watergate and before the press and public began disbelieving every Nixonian utterance.

The Family Assistance Program bill passed the House but was defeated in the Senate, where conservatives watered it down. Ultimately, liberal democrats abandoned it.

The National Welfare Rights Organization countered with a bill calling for a $6,500 minimum income guarantee, but it went nowhere. By today's standard, Nixon's bill (if adjusted for inflation) is far more advanced that anything proposed by the Clinton administration, even before he caved in to the Republicans by signing their legislation dismantling the federal welfare program. Nixon's proposal, however, was not considered to be an "earned right" but rather a gift to the poor. Like other negative income tax schemes, it served to stigmatize the poor, instead of affirming everyone's right to draw their share of society's wealth.

In 1972, George McGovern proposed a $1,000 per year guaranteed income to every American as part of his Democratic presidential campaign. Even then, it would have been difficult to live on $1,000 a year per person but it would have been a start. Unfortunately, neither McGovern, nor the left, had done the necessary groundwork for such a proposal. Instead of emerging out of a mass movement, it seems as just another "crazy" proposal from a campaign that had no chance of winning.

25 years later, interest in a guaranteed annual income is reemerging

Nearly 25 years later, interest in a guaranteed annual income (and welfare reform) is reemerging. In "The End of Work," Jeremy Rifkin declares in favor of a guaranteed annual income, provided recipients are required to work in non-profit organizations. Likewise, Stanley Aronowitz and William DiFazio, in "The Jobless Future" call for a guaranteed standard of living that meets "basic nutritional, housing and recreational requirements." They stress, however, that "no able citizen would be freed of the obligation to work."

In addition, Green parties around the world advocate a guaranteed annual income for all without a work requirement. Indeed, most western European countries have some variation of a guaranteed income, although many are under attack from local conservative forces. No less a centrist group than Canada's Liberal Party adopted a favorable resolution for a guaranteed income at its last convention.

From coercion to freedom: a truly revolutionary idea

An unrestricted guaranteed annual income can be a truly revolutionary idea. It would, in effect, replace a society based on the coercion of millions with a free society. What would you do with yourself when you begin receiving your dividend checks? In a free society, the answer is that it's nobody's business.

Would some people become full-time couch potatoes or drug addicts? Yes. Probably many more initially, until the euphoria of freedom wears off. Then what to do? Probably the number of artists and writers of all kind would drastically increase as would the number of people engaged in self improvement whether by individual courses of study, the internet or in formal education. And even without coercion, probably many would join Rifkin's non-profit organizations.

Those who have little confidence in the fellow men and women would call a guaranteed annual income a dole, an invitation to sloughfulness and the beginning of the end of the Republic.

Those who have faith in humanity will agree with Martin Luther King when he explained in 1967 why he supported a guaranteed annual income: "A host of positive psychological changes inevitably will result from widespread economic security. The dignity of the individual will flourish when the decisions concerning his life and in his own hands, when he has the assurance that his income is stable and certain, and when he knows that he has the means to seek self-improvement."

Dr. Martin Luther King Jr. called for a guaranteed income pegged to society's median income

King called for a guaranteed income pegged to society's median income with an automatic increase as the total social income grew. He pointed out that two groups in society already enjoy a guaranteed income - the richest and the poorest. Nearly 30 years later, this year's welfare "reform" threatens the meager guaranteed income of the poor, while "coupon-clippers" are still thriving on the dividends from their individual investments. One might add to these groups, senior citizens who receive a small guaranteed income through social security benefits.

In 1996, Robert Theobald, after many years, returned to the subject of a guaranteed annual income. How would individuals react to a guaranteed annual income? Theobald believes "people would spend most of their lives on self-development, on relationships, on the arts, on finding purpose and meaning. Sufficient goods and services would be available for a high quality of life but we would treat our ecological systems with care."

Even after extending a guaranteed income to all, most would probably still work at conventional jobs since this is what they know. Of course, they would continue to receive a wage for doing so. However, the relationship of workers, managers and owners would likely change drastically. If fear of losing one's job is no longer present, working conditions and democracy on the job would improve markedly. Union organizers know that fear of losing one's income is the main reason workers don't stand up for their rights. If all workers have the option of quitting and still providing for their basic needs, the balance of power in the workplace would drastically shift.

Garbage collectors would probably be among the elite of the post-coercive society

Jobs that carry their own innate gratification, such as doctors nurses, teachers, public service, scientific and technical work would continue to attract individuals without coercion. Dangerous and low skill jobs would be the hardest to fill. It is likely that wages for these jobs would probably be the highest allowed in society. Until their jobs are automated out of existence, garbage collectors would probably be among the elite of the post-coercive society.

In order to be a truly fundamental step to a society free of wage slavery, a guaranteed annual income must do all of the following: it must apply equally to all adults regardless of income status (whether parents receive additional income for their children is a question that must be decided by a mass movement after consideration of population increase and children's health issues); it must be paid at least monthly, not just at tax time; there must be no deduction for other income; and they should be tax free.

The elimination of wage slavery through a guaranteed annual income would cause enormous disruption in society. Indeed, could capitalism survive without coercion of its workforce? Opponents would argue that spreading incomes more evenly would destroy the economy's ability to provide enough investment (savings) for continued growth since workers and the poor consume all or most of their incomes in contrast to the rich who invest most of their incomes. There is an element of truth in this argument. Society would no doubt have to make investments more wisely, less for defense spending, fossil fuels, high rises and more for sustainable resources such as solar and wind power, family housing and environmental cleanup.

New investment and growth would likely come from a boom in worker-owned companies created by individuals pooling their dividends and free labor. New inventions and discoveries could be expected after a massive upsurge in education and research. It's shear speculation, however, to attempt to describe a society based on free labor when we live in one based on wage slavery.

On the verge of the 21st Century, a wrenching restructing of the economy is taking place, caused by huge advances in cybernetics and automation. More of the same can be expected when artificial intelligence applications begin emerging from the labs. The good news is a drastic increase in the total wealth of society. The bad news is that more and more people, in the U.S. and around the world, are becoming victims of this transformation instead of its beneficiaries.

Rather than enjoying a secure present and confident future as the creators - and sons and daughters of the creators - of society's wealth, the vast majority of the population continues to be at the mercy of the very wealthy and multinational corporations who are making use of the economic revolution to increase their wealth and power without concern for the well being of the millions who have been, or will be, "downsized."

A guaranteed annual income can be viewed both as revolutionary and reformist

A guaranteed annual income can be viewed both as a reformist and as a revolutionary answer to this economic challenge. Even in the context of a social reform, a guaranteed annual income could eliminate homelessness, poverty and differential rates of poverty based on race and gender. A full blown income guarantee could eliminate wage slavery and make work a matter of choice rather than necessity.

With a total gross national product of more than $5 trillion, the wealth of our society has now reached the point where a social dividend can be delivered to all. How large should the guaranteed annual income be? It should be high enough to lift everyone out of poverty. The official poverty threshold for 1995 stood at $7,763 for an individual and $15,569 for a family of four. However, those figures are much too low to adequately define poverty, according to many critics.

A complete equalizing of income differentials could be realized by dividing the nation's total personal income by the population. This method, which would require a draconian taxation of upper income levels, would give all adults a $33,312 annual dividend, or $640 per week. A less drastic approach would provide each person with a two-thirds draw on their annual dividend, or about $22,200 per year. If the dividend was indexed to total national income, it would automatically increase (or decrease) as society thrived or declined. There's no need to worry about the rich, though. Even if the national income was divided up evenly, it would take a long time to achieve true economic equality. Accumulated financial wealth is even more skewed than income. The top one percent of the population own 48 percent of the national's financial wealth, while the bottom 80 percent own but six percent!

Copyright by Jim Smith, 1996