Build an economy of care with universal basic income

Since the start of the COVID-19 closures in mid-March, 2,523,804 Texans have applied for unemployment insurance benefits. State UI payments, meant to allow the unemployed to scrape by while job searching, supply about a quarter of a worker’s usual paycheck — from a minimum of $69 up to a max of $521 per week (average $246). But during the pandemic, the CARES Act has supplemented those scrawny state dollars with $600 a week per laid-off person, through July 31, regardless of prior income, full or part time. A two-worker household laid off in mid-March and unemployed through the end of July, 20 weeks, will bring home $24,000 — in addition to the state benefits, while one-worker households will see $12,000 additional. Given that the Houston median household income is $65,394, this infusion of federal cash has not only kept many afloat, it has brought many above their pre-pandemic earnings.

This freaks out some folks, who worry that workers won’t want to return to a job that pays less. But in the transformed global context after the killing of George Floyd, discussions of racial disparities demand re-evaluations of and improvements to wage inequities. The CARES Act has started us in a good direction.

Of course, CARES Act funds don’t just help individual families, they will also infuse roughly $30 billion into the Texas economy between March and July. In a time of two simultaneous economic crises here (the pandemic plus the energy downturn), the customers spending those funds are keeping many businesses afloat too.

Nationally and especially in Houston, the combined economic and social crises demand rethinking of our economic model. Why, as the richest nation on the globe, have we allowed so many of our workers and families to struggle by on so little, with such an inequitable education system? And how will we right that?

We’ve long debated raising the national minimum wage — Texas currently pays $7.25 per hour, which means $15,080 annually for 40 hours a week. Raising it to $15 per hour would mean $31,200. Also much discussed, universal health care would be both an economic and a health boon to all, since as we’ve all learned, our health is interdependent. But both efforts have failed repeatedly.

Among the many problems that our flimsy safety net creates, the loss to the wider economy gets small mention. The money that doesn’t go to lower-paid workers ends up sitting idle in the already-full pockets of people with too much to spend. Hoarded dollars don’t make up for the loss of the energy and innovation that would be brought into the economy by expanded numbers of small businesses run by those currently without the capital needed to get started or by members of diverse cultures with new ideas and insights.

The CARES Act payments give us a firsthand look at the universal basic income effect — a concept long espoused by feminists such as Kathi Weeks, and which Andrew Yang brought to national attention in the Democratic Party debates. Suddenly, we see that giving people a basic income makes sense on multiple levels. Since March, for instance, these funds have allowed single moms as well as two-parent families to feed their kids.

And it will make sense post-pandemic as well, especially for workers hurt by our current by racial and gender pay gaps. Such funds could also reduce domestic violence — by lowering the incidence (abuse rates rise with stress) and, if abuse does occur, of allowing women with their own money to leave with their kids.

Racial and gender equity both demand economic equity, and building on the CARES experience, a universal basic income could be a solid start — even stronger if it included funds for the unauthorized workers who have long been critical contributors to the Texas economy. As old models fail, we can recognize that investment in people through equitable education, health care and wages is an economic motor in itself.

Texas has much budgetary rethinking and restructuring to do. New sources of state income will be needed. Congressional leaders have already begun rethinking old decisions to refuse federal funding: Now that millions have lost their health coverage, the Affordable Care Act’s expanded Medicaid funding looks viable even to past critics such as Sen. John Cornyn. Likewise, our leaders must advocate for the expanded stimulus bill that would extend the $600 weekly supplement into 2021, because both individual families and the statewide economy need it.

We can debate the particulars, but everybody wins in a culture and economy of care to replace the exploitative systems we’ve let stand too long. We will end up with a stronger economy and a stronger state if we really invest in all Texans. Starting now.