Economic Rights Amidst a Pandemic: UBI vs. Jobs Guarantee

Updated: May 28

Because Google Adsense deemed this website to have too little content for ads, I'll be posting my top 25 undergraduate papers. This was one of my highest graded papers. It was the term paper for the human rights class which focused primarily on the United Nations. The COVID-19 pandemic hit during this class and we all knew we were about to witness a new era in terms of the application of economic rights.


Dalhousie University

POLI 3505

April 16th, 2020



If anything has been revealed from the coronavirus pandemic of 2020, it is that there is nothing more fragile than a job. Within a matter of months, a virus has mutated and spread so far and quickly that vast swathes of the populations of developed countries are now in isolation in their homes, unable to work. The motivation is not necessarily one to avoid death. In the aggregate, COVID-19 may have a death rate of lower than 1 percent in South Korea.(1) However, it is always more important to look at the age brackets. Assuming the individual does not have any underlying health conditions, individuals under the age of 45 are virtually at no risk of death. So why are we all in quarantine even though the virus will most likely only give cold-like symptoms, if any? Because we must flatten the curve.

“Flattening the curve” refers to the curve in a graph of hospitalizations over time. The curve of virus infections is going to naturally be a parabolic shape and there is a horizontal line representing the capacity limit of the hospitals in the given area. The idea is to take societal wide measures to make sure the peak of the curve stays below that hospital capacity because if hospital capacity is breached, people will die from not being able to have access to health care. Some of the measures that can be taken are excessive hand washing, social distancing, and isolation. The reason why everyone except for those who work at essential businesses are working from home or are laid off is because it ethically necessary to flatten the curve. And we won't be going back to normal until a vaccine is available because if we all go back to normal before the vaccine, we will simply have exponential growth of the virus again and risk overwhelming the hospitals once more.(2)

That reality has put all of the generations in a predicament they haven't been in before, and it is influencing dialogue surrounding many topics in new ways. For example, the anti-vaccination movement has never had to argue against a coronavirus pandemic. Another example is the debate around civil liberties versus the right to protect the vulnerable, specifically in the context of a global pandemic. However, to anyone concerned with economic rights, the conversation that has been influenced in perhaps the most interesting way is the debate around universal basic income (U.B.I.) versus a jobs guarantee. It is an economic rights debate around the solution to unemployment. And while it is interesting that the two proposed solutions are government-driven and neither are market-driven, both happen to have their own tribal-like subscription.

Traditionally, universal basic income has been seen by libertarians as a way to combine all government services into one single cheque to eliminate bureaucracy. The libertarian advocation for U.B.I. is still one of the significant slices of the tribal support of the policy.(3) On the other hand, a federal job guarantee is a policy that has been seen as a goal to many of the most ardent social democrats (sometimes referred to as "progressive left") in the United-States. It is something that Senator Bernie Sanders campaigned on in the 2020 Democratic Presidential Primary, and something that is included in the Green New Deal presented to Congress by Alexandria Ocasio-Cortez of the House of Representatives and Ed Markey of the Senate.(4)

To stop at libertarian influence for an explanation of universal basic income would be a disservice. It is one of the longest standing policy proposals never to be implemented federally in the United-States. Then again, social security is virtually universal basic income but exclusively for retirees. Regardless, it has been promoted by Thomas Paine, Martin Luther King Jr. and has now been popularized to a new generation by 2020 Democratic Presidential Primary contestant Andrew Yang. The entrepreneur and businessman rebranded it as "freedom dividend" to sway disaffected conservative-leaning voters into his fold.(5) But it has also made him a prominent figure among the youth's end of the Democratic Party. Not all U.B.I. proposals are the same, but for those three figures, the program is not meant as a way to combine all government services into one single cheque delivered to each citizen, but rather as a cheque given to all citizens to ensure they can pay for necessities. By definition it could eliminate homelessness, extreme poverty, reduce income inequality, and free up the middle class to invest in something new, whether it be stocks or purchasing a guitar to try to live out a lifelong dream of becoming a musician.

The background of a federal job guarantee is less acclaimed and documented, but it mostly has its roots in the New Deal ideals of Franklin Delano Roosevelt. In 1944, F.D.R. proposed a second bill of rights. "Every American has the right to: 1. A job, 2. An adequate wage and decent living, 3. A decent home, 4. Medical care, 5. Economic protection on during sickness, accident, old age or unemployment, 6. A good education."(6) It is interesting how F.D.R. wants Americans to have the right to a job, but also the right to economic protection during unemployment. That coexistence is probably due to the fact that in those times, recessions occurred in more of a boom-bust cycle than they do now because the writings of Keynes had not been adopted by most economists yet. This coexistence brings up the next important question.

Do advocates of a jobs guarantee also advocate for unemployment insurance during situations like a global pandemic where we must isolate? Probably. However, F.D.R.'s second bill of rights does not refer to protection from pandemics. Regardless, it is not irrational to assume those who think the federal government should spend whatever it takes to ensure everyone who wants to work has a job also feels that individuals should have guaranteed unemployment insurance during a pandemic. As a counter to that, U.B.I. advocates may say their proposal would be less complicated. It would simply be more efficient to have a guaranteed cheque to cover necessities at all times than to have a job guarantee and unemployment insurance during pandemics. So how do the policies compare in terms of cost?

The estimates for the cost of a federal jobs guarantee in the U.S. could range from 400 to 700 billion dollars per year, and would be even more during economic downtowns.(7) The cost of giving all Americans 12,000 a year would be about 3 trillion dollars per year. The one complexity to the U.B.I. proposal is that it might eliminate the need for some government programs such as food stamps. And if the income were taxable, a lot of the cash going to the top would simply be taxed away. Which results in an effective cost of about half a trillion dollars.(8) Then again, perhaps the entire conversation on how to pay for these programs is misguided. Much of the debate around the proposals is not arguing with each other, but instead against those who demand every cent of the proposal be paid for. Meaning it doesn't add to any government deficit. That may seem reasonable concerning plans which cost hundreds of billions of dollars per year. However, to a rising economic theory, the question of its cost is the wrong question entirely.

Modern Monetary Theory (M.M.T.) is a relatively new macroeconomic theory and practice that describes the practical uses of fiat currency in a public monopoly from the currency-issuing authority, which is usually the government's central bank. Meaning that countries where one currency is used, and it is issued by the federal government from within, cannot run out of money. As Stephanie Kelton argues in The Deficit Myth, they cannot go bankrupt as a result of too much spending.(9) They do not risk defaulting on their currency from too much "debt" as a result of recurring large deficits. Instead, the risk of large deficits or too much spending is inflation. That is because the government is issuing more currency than they are eliminating. M.M.T. posits that those governments issue currency to pay for everything they spend money on, and then taxation is a way the currency-issuing government takes money out of circulation to prevent inflation. If this theory is correct, it defeats entirely the idea that there is any benefit to having a "balanced budget” in countries that use their own currency. It explains why countries like Japan and the United-States can run large deficits causing massive amounts of public debt and yet see no negative consequences of it. Neither country has a particular problem with inflation either.(10) That is because inflation is complicated and not solely caused by how much currency is issued.

M.M.T. makes it clear as to why these proposals of economic rights are particularly difficult in countries that borrow currency from another government, such as nations that use the Euro. This is one of the main difficulties of economic rights. Susan Kang and Jennifer Rutledge note this in Human rights: Current Issues and Controversies as it pertains to forced Austerity measures of the European Union.(11) Whether or not people chose to believe in MMT, the possibility of it being how the world works is enough to say that there is not inherent superiority in either proposal of economic rights based simply on cost. Then again, not all countries produce their own currency. Perhaps the argument between the two is more generational, as is claimed by one famous economist.

Joseph Stieglitz is a professor of economics at Columbia University and served as the chair of the Council of Economic Advisors from 1995 to 1997 as well as the chief economist at the World Bank from 1997 to 2000. In a CNBC interview for YouTube in 2019, he was quoted as saying, "[The jobs guarantee] is especially important for two reasons. I think, and I may be a little old fashion on this, I think there's a certain dignity from work. Younger students say there can be a lot of dignity from meditation and from other ways of spending time, but I think for most people, there will be a real desire to work..."(12) Stieglitz then talks about the challenges of jobs moving forward because of automation. Before that argument, he said that if we had a job guarantee and everyone received decent pay from their jobs, along with protections for the disabled, then the worry around a U.B.I. would not be there. Perhaps younger people are more inclined to see a jobs guarantee instead of U.B.I. as a life where you'll be working at Walmart from 9 am to 5 pm or having to work a trades job you have no interest to work. And they might see a world where there's a U.B.I. as a world where you can try to be a freelance journalist, content creator or artist, and you don't have to worry about paying for life necessities. Although, one thing for sure is that the number of jobs that exist is going diminish as time goes on because of the exponential increase in automation and artificial intelligence.(13) That has grave implications for the human rights aspect of this debate.

It is not hard to imagine a situation, given the nature of automation and A.I., where the jobs the federal government can provide are mostly those in skilled trades. If you are educated in the sciences, arts, business, etc., you may not want to live a life doing those kinds of jobs because it was never your interest or goal. But in a country where there is a jobs guarantee and no U.B.I., you're going to have to spend almost all of your time on that job and hope to save enough money to find a sustainable income in doing what your interest truly is. The living expenses of trying to make a career out of being a freelance journalist, entrepreneur, or artist are actually fairly simple. It is finding the time that is the real challenge, especially when one is working 40 hours per week.

Perhaps there will be a shift of thought that the dignity of perusing your personal goals is more important as a human right than the dignity of having a job. With so much focus on the right to have a job, why is there no dialogue on the right to not work? Is there anything inherently wrong with wanting to spend your days consuming content and meditating while having your life necessities paid for? And we must not forget that only a job guarantee and protections for the disabled (no U.B.I.), is a situation where homelessness will still exist. Do those individuals have a right to necessities? Perhaps some advocates of a jobs guarantee also believe that the government should provide all necessities. Whether or not they think they should be provided if the subject is not working makes a big difference concerning the economic rights of people who are now homeless. It may sound as though the advocates of a jobs guarantee have a complicated situation, but U.B.I. is not without its significant challenges either.

Pertti Koistinen and Johanna Perkio point out in their 2014 journal article Good and Bad Times of Social Innovations: The Case of Universal Basic Income in Finland that U.B.I. advocates have to grapple with the fact that the proposal has not successfully been implemented anywhere long term. In places like Alaska, the money given is not enough to cover all necessities.(14) An entry in the Dollars & Sense publication in 2018 also lays out an advantage that the jobs guarantee proposal has over U.B.I. A country with a job guarantee is most likely going to have very robust public infrastructure seeing as those are the kinds of jobs that governments tend to provide.(15)

The coronavirus pandemic of 2020 has affected many conversations around human rights. In the dialogue around economic rights, this new situation could be seen on the surface like a win for advocates of U.B.I. Advocates of a jobs guarantee who do not want a U.B.I. now have a situation wherein their proposed nation, people would be working their government-provided job, only to now be living on a government-provided U.B.I. during the pandemic. Therefore advocates of U.B.I. would simply suggest providing the U.B.I. at all times to ensure there is no rushed cluster of change when a pandemic takes hold. Both have an interesting proposal history, U.B.I. has a more historical lineage that goes back centuries while a jobs guarantee arose mainly from F.D.R. While U.B.I. is perhaps more expensive, that argument comes with the caveat of the rising theory of MMT. However, for countries that borrow currency from other governments, the cost factor can be very real.

In terms of the logic behind the rights aspect of the economic rights debate, Joseph Stieglitz says there is dignity in work, and that thinking makes him old fashioned. Perhaps a younger generation will argue that true economic dignity is having necessities guaranteed and having the ability to pursue one's passion instead of working a job that one does not want to work. And perhaps the right to not work and still live comfortability is an economic right that will begin to take shape as the amount of jobs that become available diminish further. Because automation is another factor in the debate. U.B.I. is immune from the exponential increase in automation and A.I., while jobs guarantee advocates will have to adjust around that change, considering not everyone wants to work a skilled trades job. The jobs guarantee has the advantage of being inherently infrastructure friendly, while the U.B.I. has the inherent problem of not being successful anywhere yet. Perhaps at the end of the day, the biggest question that needs to proposed - why not both? As long as inflation stays below its target, shouldn't people have the right to pursue what they want to pursue while also getting a job if they want one?






Bibliography


Kang, Yun-Jung. “Mortality Rate of Infection With COVID-19 in Korea From the Perspective of Underlying Disease.” Disaster Medicine and Public Health Preparedness, 2020, 1–3. doi:10.1017/dmp.2020.60.


Specktor, Brandon. “Coronavirus: What Is 'Flattening the Curve,' and Will It Work?” LiveScience. Purch, March 16, 2020. https://www.livescience.com/coronavirus-flatten-the-curve.html.


Dolan, Ed. “The Libertarian Case for a UBI.” Medium. The Startup, September 3, 2019. https://medium.com/swlh/the-libertarian-case-for-a-ubi-3469faaf6364.


Nilsen, Ella, and Umair Irfan. “Why Bernie Sanders and AOC Are Targeting Public Housing in the First Green New Deal Bill.” Vox. Vox, November 14, 2019. https://www.vox.com/2019/11/14/20964660/aoc-bernie-sanders-green-new-deal-housing.


Floyd, David. “The Long, Weird History of Basic Income – And Why It’s Back.” Investopedia. Investopedia, June 25, 2019. https://www.investopedia.com/news/history-of-universal-basic-income/.


Sunstein, Cass R. "We Need to Reclaim the Second Bill of Rights." The Chronicle of Higher Education 50, no. 40 (Jun 11, 2004): B9-B10. http://ezproxy.library.dal.ca/login?url=https://search-proquest-com.ezproxy.library.dal.ca/docview/214695439?accountid=10406.


Lowrey, Annie. “A Promise So Big, Democrats Aren't Sure How to Keep It.” The Atlantic. Atlantic Media Company, September 4, 2018. https://www.theatlantic.com/ideas/archive/2018/05/the-democratic-party-wants-to-end-unemployment/560153/.


Widerquist, Karl. "The Cost of Basic Income: Back-of-the-Envelope Calculations." Basic Income Studies 12, no. 2 (2017): 107-118. doi:http://dx.doi.org.ezproxy.library.dal.ca/10.1515/bis-2017-0016. http://ezproxy.library.dal.ca/login?url=https://search-proquest-com.ezproxy.library.dal.ca/docview/1982845579?accountid=10406.


Kelton, Stephanie. The Deficit Myth: Modern Monetary Theory and How to Build a Better Economy. New York: John Murray Press, 2020.


Oh, Sunny. “Here's a Lesson from Japan about the Threat of a U.S. Debt Crisis.” MarketWatch. MarketWatch, May 14, 2018. https://www.marketwatch.com/story/heres-a-lesson-from-japan-about-the-threat-of-a-us-debt-crisis-2018-05-14.


DiGiacomo, Gordon. Human Rights: Current Issues and Controversies. Chapter 15. Kang, Susan & Rutledge, Jennifer. Toronto: University of Toronto Press, 2016.


CNBC. What Will Cause The Next Recession - Joseph Stiglitz On Trump's Protectionism. YouTube. CNBC. 2019. 14:15. https://www.youtube.com/watch?v=lyzS7Vp5vaY&t=512s


Arntz, M., Gregory, T., & Zierahn, U. (2016). The risk of automation for jobs in OECD countries: A comparative analysis. OECD Social, Employment and Migration Working Papers 189, OECD Publishing, Paris. Retrieved Accessed March 27, 2018, from http://www.ifuturo.org/sites/default/files/docs/automation.pdf


Koistinen, Pertti, and Johanna Perkiö. "Good and Bad Times of Social Innovations: The Case of Universal Basic Income in Finland." Basic Income Studies 9, no. 1-2 (2014): 25-57.


"UNIVERSAL BASIC INCOME (UBI) AND JOB GUARANTEE (JG) COMPARED." Dollars & Sense, no. 339 (2018): 12. Economic Affairs Bureau.




1 - Kang, Yun-Jung. “Mortality Rate of Infection With COVID-19 in Korea From the Perspective of Underlying Disease.” (2020).

2 - Specktor, Brandon. “Coronavirus: What Is 'Flattening the Curve,' and Will It Work?” (2020).

3 - Dolan, Ed. “The Libertarian Case for a UBI.” Medium. (2019).

4 - Nilsen, Ella, and Umair Irfan. “Why Bernie Sanders and AOC Are Targeting Public Housing in the First Green New Deal Bill.” Vox. (2019).

5 - Floyd, David. “The Long, Weird History of Basic Income – And Why It’s Back.” Investopedia. (2019).

6 - Sunstein, Cass R. "We Need to Reclaim the Second Bill of Rights.” (2004). The Chronicle of Higher Education.

7 - Lowrey, Annie. “A Promise So Big, Democrats Aren't Sure How to Keep It.” (2018).

8 - Widerquist, Karl. "The Cost of Basic Income: Back-of-the-Envelope Calculations." (2017).

9 - Kelton, Stephanie. The Deficit Myth: Modern Monetary Theory and How to Build a Better Economy. (2020).

10 - Oh, Sunny. “Here's a Lesson from Japan about the Threat of a U.S. Debt Crisis.” MarketWatch. (2018).

11 - DiGiacomo, Gordon. Human Rights: Current Issues and Controversies. (2016). Chapter 15. Kang, Susan & Rutledge, Jennifer.

12 - CNBC. What Will Cause The Next Recession - Joseph Stiglitz On Trump's Protectionism. YouTube. (2019).

13 - Arntz, M., Gregory, T., & Zierahn, U. (2016). The risk of automation for jobs in OECD countries: A comparative analysis.

14 - Koistinen, Pertti, and Johanna Perkiö. "Good and Bad Times of Social Innovations: The Case of Universal Basic Income in Finland.” (2014).

15 - "UNIVERSAL BASIC INCOME (UBI) AND JOB GUARANTEE (JG) COMPARED.” (2018). Dollars & Sense.