Here’s the proposal: Government should provide a guaranteed income ($500 per month) to every adult who lives in a household making less than a set amount ($50,000 per year).
Fair Shot: Rethinking Inequality and How We Earn
By Chris Hughes
St. Martin’s Press (February 20, 2018)
For most Americans, this would total $6,000 a year for a single individual and $12,000 for a married couple. A family of four making $38,000 a year would then be making $50,000 per year.
This guaranteed income, along with a number of variations, is the central theme of “Fair Shot: Rethinking Inequality and How We Earn” by Chris Hughes, one of the wunderkind of Facebook.
The idea deserves consideration, Hughes writes. Implementing guaranteed income would lift 20 million people out of poverty while also providing stability to the middle class.
If the idea of someone like Hughes (with a net worth close to half a billion dollars) giving financial advice to the poor and middle class seems misplaced, Hughes states upfront that his proposal of a guaranteed income also affects working people.
Further, it would give people the chance to start small businesses, as well as keep up with the cost of living. “Perhaps most importantly, the guaranteed income would embrace the dignity and freedom for people to chase their own dreams,” Hughes says.
While the unemployment figures in the United States continue to fall to historic lows, such numbers do not address how they mask the effects of such work, according to Hughes. One hundred and fifty million Americans are living from check to check, and it isn’t because they aren’t trying hard enough. Surveys show that nearly every middle-class person tries to put away money for a nest egg. Few of them are able to do so, due to personal economic situations like hospitalization or childcare.
Hughes is a realist about what would be needed to implement such a plan. “It’s important to be clear about the scale of this program; it would be big and expensive,” he said.
First, a tax to pay for the program would be levied on the incomes of the richest Americans, those who make more than $250,000 a year. Anyone who made more than $50,000 would not get the money.
Hughes makes clear that he is not proposing a universal basic income plan that would provide a set amount to each American every month.
This would provide 60 million adults with monthly checks at a cost of $290 billion, making it the fourth-largest social benefit in government, just behind Social Security. The plan also must build in incentives so that people are still motivated to work, Hughes says.
“The idea of a guaranteed income that encourages work isn’t a fringe idea. Nearly a dozen Nobel Prize-winning economists believe that it’s a smart way to grow the economy and reduce inequality,” Hughes writes. “Many make their case from a moral perspective, but others from a practical one.”
Hughes sees it as “the most powerful tool we have to combat inequality in our country.”
In the past four decades, Hughes says, economic and social conditions have created opportunity for unprecedented wealth for a small group of people.
The book’s real strength lies not in retelling details of the Facebook story, but how the explosive growth of such companies as Facebook, Google and Amazon has changed the world. He parallels this growth with his own personal history, growing up in a small North Carolina town with middle-class parents. He also never discounts the role that luck plays in each individual’s economy.
Hughes says he hopes his book starts a conversation about the need for guaranteed income and the pursuit of an end to inequality and an end to poverty.
“There is a long road and a lot of work ahead of us,” Hughes says. “But at the end of the road awaits a country where every American enjoys the freedom and dignity that a stable, reliable income affords.”