At Tuesday’s debate, Andrew Yang once again leaned heavily on his “Freedom Dividend,” his attempt at rebranding universal basic income (UBI). In response to a question on automation, Yang argued that his program, in which the government would give $1,000 a month to every American over 18, would be better than a federal jobs guarantee. “When we put the money into our hands,” he said, “we can build a trickle-up economy from our people, our families and our communities up.”
Yet as much as Yang has surpassed our nonexistent expectations as a sharp and charismatic candidate, his presidential campaign has done little for the cause he says he represents. The hot idea that’s transforming the 2020 primary is not universal basic income. It’s Elizabeth Warren’s wealth tax, which has prompted Bernie Sanders to outbid her and compelled the Joe Biden campaign to consider its own version. Four years ago, Bernie Sanders similarly turned “Medicare for All” into a rallying cry that now a majority of House Democrats support, and several 2020 presidential candidates have adopted his position.
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Yang’s Freedom Dividend has not caused the same kind of political reverberations. No major presidential candidate has adopted a proposal for a universal basic income in response to Yang’s rise. Both Joe Biden and Bernie Sanders are in fact outspoken opponents of UBI. Elizabeth Warren has given it a diplomatic reaction: “I think there’s so much more that we should do before we get there.” Yang has had more influence over the marginal candidacies of Tulsi Gabbard and Marianne Williamson, both of whom have expressed support for UBI to varying degrees.
That might be because Yang has so far shown himself to be a less-than-perfect pitchman to sell a multi-trillion-dollar transformation of America’s economy and social contract. He lacks a strong résumé. His economic analysis is thin. And his numbers don’t easily add up. In fact, despite all of his success to date, Yang may end up hurting the UBI cause more than helping it.
Donald Trump may have proven that political outsiders from the business world can impress voters with their money-making prowess. But Yang is not an especially successful businessman; estimates put his net worth at less than Sanders’, America’s most famous socialist. His attempt to create 100,000 jobs through a nonprofit that supported entrepreneurship was a bust. And he has no experience at designing public policy or managing government agencies. Perhaps it’s unsurprising that America is not following him into the very expensive unknown.
Still, Yang seems to have had some success in moving public opinion. Scott Santens, one of America’s leading universal basic income advocates, points to a recent Hill-HarrisX poll that found support for “a universal basic income program that pays all Americans $1000 per month” rising, between February and September, from 43 percent to 49 percent. The rise was particularly sharp among adults under 35: from 55 percent to 72 percent. There were also upward ticks among Republicans (27 percent to 30 percent) and independents (44 percent to 48 percent). With no other obvious factor to cite, Santens reasonably argued to me in an interview, “that’s pretty much almost entirely because of Yang.”
Santens is optimistic that a passionate niche constituency is forming. “However small they are compared to the entire population, these are people who are very passionate about the idea of basic income,” he said. “Different economic conditions, in say 2022, 2024, in regards to the effects of automation [and] stagnant wages” will create additional pressure on candidates to put UBI in their platforms, he further predicted.
But even if Yang has made universal basic income more popular than it was a year ago, that doesn’t mean the issue has become part of mainstream political discourse. Forty-nine percent is not a gangbusters poll number for a policy idea, especially when pollsters don’t mention any counterarguments. Plenty of ideas, such as an assault weapons ban or a public health insurance option, have much stronger numbers and still have difficulty getting through Congress.
Working in Yang’s favor is the simplicity of his pitch: He taps economic fears about robots wiping out our jobs, then offers a bumper-sticker solution. His approach resonates with some economic pessimists across party lines. After hearing Yang sound the alarm about “robot trucks” devastating working-class communities, Fox News’ Tucker Carlson raised his perpetually furrowed brow and said, “I sit with my jaw open, I agree with you so strongly.” (Carlson did not, however, discuss, let alone endorse, Yang’s policy proposal.) At a Yang rally, CNN’s Jon Sarlin interviewed a former Donald Trump supporter who said Yang convinced him that, “it’s not immigration, it’s automation.”
But Yang overstates the threat of robots coming for your paycheck—and tying UBI to a vision of the future that may not come to pass might well undermine other cases for the proposal. MIT Technology Review examined 18 studies of the effect of automation on employment and found wildly different predictions, concluding, “We have no idea how many jobs will actually be lost to the march of technological progress.”
Yang’s website trumpets McKinsey’s prediction that a third of American workers “will lose their jobs to automation by 2030.” But the consulting firm’s research arm actually said that “up to” one-third of Americans “may need to learn new skills and find work in new occupations,” not that they would become destitute. With sufficient infrastructure investment, McKinsey projects that American job gains would outstrip job losses. The analysis suggests spending money on infrastructure and education would do more to mitigate economic disruption than issuing monthly personal checks.
Asked about the differing conclusions found in automation studies, Yang campaign spokesperson S.Y. Lee acknowledged that “projections and timelines may vary” but still stressed that “experts agree that the automation of jobs in many industries is not only inevitable but is happening now.” “Unlike with previous economic disruptions like the Industrial Revolution,” he continued, “this time new jobs will not appear quickly enough and in large enough numbers to make up for displacement.” Considering America’s track record on infrastructure and education investments, such pessimism is understandable.
But some basic income advocates reject an emphasis on automation. For them, the economy of the present—with its persistent poverty and widespread low-wage work—provides a sufficient rationale. And Yang may be undercutting their argument.
“It’s about the incredible instability that the current economic environment has created for the majority of Americans,” said Chris Hughes, the Facebook co-founder who is now co-chair of the Economic Security Project, an advocacy group that promotes “guaranteed income.” “It has really little to do with technological automation,” he told me. “It has to do with decades of economic and racial injustice that need to be directly addressed head on.”
Michael Tubbs, the mayor of Stockton, California, is in the middle of a basic income pilot project largely funded by Hughes’ Economic Security Project. He gives Yang credit for calling attention to universal basic income. But he also stressed that the idea’s origins predate the rise of Silicon Valley. “I didn’t learn about basic income from Andrew Yang, or from Mark Zuckerberg or from Elon Musk,” Tubbs said in an interview. “I learned about it from studying Dr. [Martin Luther] King.”
This difference in opinion on what drives the need for a UBI leads to another divide that Yang is exposing: the disagreement on how to execute it.
The most significant policy disagreement among advocates involves whether UBI should replace the welfare system, or be built on top of it. Yang proposes to cut back the existing social safety net, by asking the poor to choose between receiving existing welfare benefits or the monthly $1,000 check. “The best way to do math is additive,” counters Tubbs, in what could be interpreted as a jab at the one-word slogan that festoons Yang’s campaign gear. “I think those folks who have those benefits have them for a reason,” continued Tubbs. “Giving them some cash on top of that will allow them to get off those benefits faster.”
Last Thursday, after Tubbs made similar comments critical of the Freedom Dividend’s impact on welfare in a Twitter post, Yang replied, “I agree we need to supplement what exists and improve on it.” Asked if that comment represented any change in Yang’s position on existing welfare programs, Yang’s spokesperson did not answer directly, but his answer reinforced the position that recipients would have to choose between the Freedom Dividend and existing benefits. “The Freedom Dividend is opt-in. Anyone would be free to keep their current benefits,” Lee said. “The Freedom Dividend is meant to be an alternative to means-tested welfare programs.”
While some of the left chafe at Yang’s reduction of the current welfare state, those on the right who support UBI don’t like that Yang wouldn’t eliminate all other government income transfers, which is part of the conservative case for a basic income. Charles Murray of the American Enterprise Institute told me, “You can fund UBI, if you get rid of other things.” For Murray, “other things” include not just welfare, but also Social Security, Medicare, Medicaid and more.
Yang’s pitch lands somewhere in between Murray’s tear-it-all-down philosophy and Tubbs’ just-add-more. While he would scale back some welfare programs, he backs Medicare for All. To pay for the Freedom Dividend, he proposes a 10 percent value-added tax—a tax on goods and services at every stage of production, including final sale—plus a carbon tax and a financial transaction tax.
The Freedom Dividend’s sticker shock is also making some people who might otherwise embrace the plan hesitant. To pay out $12,000 a year to nearly 254 million American adults costs a treasury-busting $3 trillion. That’s equivalent to more than two-thirds of today’s entire federal budget. And the taxes he proposes, while far-reaching and politically fraught, don’t even cover the full cost. Former Obama administration economist Austan Goolsbee told CBS’ Sunday Morning that a value-added tax might need to be set at 30 percent to pay for it all.
Yang, however, argues the Freedom Dividend partially pays for itself, with reduced welfare payments and stronger economic growth. But if you drill into his projections, it becomes clear that Yang is using fuzzy math. Yang’s website projects the Freedom Dividend would “permanently grow the economy by 12.56 to 13.10 percent,” based on a study from the progressive Roosevelt Institute, which assessed the eight-year impact of various UBI models. Based on that projection, Yang assumes reaping $800 to $900 billion in new government revenue. But the libertarian Foundation for Economic Education spotted that Yang uses the growth projection scenario of a UBI fully financed by government debt, the most stimulating way possible, despite the fact that Yang’s Freedom Dividend is largely financed by new taxes.
Yang also appears to be overselling how much money would be saved by forcing poorer Americans to forgo most welfare benefits. Back in March on the “California Nation” podcast, Yang said that the net cost of the Freedom Dividend would be roughly $1.2 trillion less than the “headline” number of “about $3 trillion,” because so many people would forgo welfare assistance. The Yang website uses different numbers, claiming an unspecified reduced cost because “we currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and the like.” But Max Ghenis, founder of the “open source think tank” the UBI Center, estimates that the savings from reduced welfare would be only $133 billion. Asked about the differing analyses, Yang’s spokesperson Lee didn’t directly challenge Ghenis’ conclusion, but said in an email that “the $20 trillion U.S. economy can easily afford the Freedom Dividend once we take into account the cost savings, new revenue and economic growth it will yield.”
These bad numbers, from the man with the “MATH” hat, may also be limiting his ability to unify basic income advocates around the Freedom Dividend. The political arm of the Economic Security Project is more supportive of proposals from some of Yang’s 2020 rivals—Cory Booker, Julian Castro and Kamala Harris—which dramatically expand the Earned Income Tax Credit system, putting more cash into the pockets of lower-income workers without sending checks to the rich, too. Although short of “universal” basic income, these plans would achieve a similar goal of creating a higher “income floor” for all who work. And they would cost about $200 to $300 billion annually—a significant chunk of change, but a fraction of the Freedom Dividend’s price tag. (Booker would also establish “baby bonds” that give all American children, starting at birth, at least $1,000 annually in government-run accounts that they could tap once they reach 18. That would cost another $60 billion a year.)
Granted, Booker, Castro and Harris have had even less success than Yang in popularizing their plans. Perhaps that’s because a proposal to tackle poverty, in and of itself, lacks the drama of an enemy to vanquish. Yang at least has the robot apocalypse. But Warren’s wealth tax—the biggest breakout idea of the 2020 campaign—hits a more visible target for populist discontent: the human multimillionaires who are already here.
Warren leans in to polarization. Yang, as Santens noted to me, shies away from it, often framing his plan as “not left, not right, but forward.” But America’s polarization can’t be avoided, only navigated. Yang has won over a few Trump-friendly converts here and there, but he has not unified the community of basic income proponents behind him, let alone enough Democratic primary voters to persuade his opponents to co-opt his ideas.
Yang does appear to be a savvy marketer who knows the value of a good gimmick. He super-charged his donations after announcing a contest during the September debate in which 10 entrants would receive their own Freedom Dividend for 12 months. Entering the contest meant giving the Yang campaign your contact info, and three days after he announced the contest, his email list of current and potential donors ballooned by more than 400,000. Unsurprisingly, his third quarter fundraising haul more than tripled his second quarter number, giving him the veneer of fresh momentum.
But juicing your fundraising through a (possibly illegal) contest is not strong evidence your policy ideas are catching fire. If basic income is going to become a bigger part of our national discourse, in all likelihood a new leader is going to have to step up: one with a more polarizing edge, and a better grasp of math.