If there any talks about a 2016 Unemployment Extension bill in U.S. Congress, then they have been taking place behind closed doors. There’s been less of an incentive now that the U.S. unemployment rate has improved to 5.5 percent. Back when the 2014 Unemployment Extension bill was being debated, the unemployment rate was hovering slightly above 6 percent.
The final nail in the coffin was politics. When Congress avoided another fiscal cliff by saving the Highway Trust Fund, they did so by using two methods that were intended to provide funding for the 2014 Unemployment Extension bill. With no way left to fund the bill, supporters like Republican Senator Dean Heller eventually gave up.
“I think at this point, leadership on both sides realize the votes just aren’t there,” Heller admitted back in 2014.
The consensus seems to be that lawmakers, both Democrat and Republican, do not feel the need to provided extended unemployment benefits. But now there is increasing interest in what is being called the Universal Basic Income.
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The basic premise of the Universal Basic Income (UBI) is that government would deposit a set amount into every U.S. citizen’s bank account every month. The concept assumes that everyone is guaranteed a living wage that provides for the minimum requirements of life. In essence, there would no longer be the need for extended unemployment benefits at all because it would replace other welfare/safety net programs provided by the government.
Some progressive writers like Jeff Spross of the Week argue that some conservative tax plans essentially implement the UBI concept in all but name. The flat tax system is calculated to cause problems for the poor, so the Fair Tax plan “includes a check from the government that compensates every household for whatever sales tax they’d pay on consumption below the poverty threshold…. It’s literally a UBI as well. If you’re compensating people for consumption spending, you might as well be compensating them for breathing. Everyone gets it, no one has to be employed to get it, and it comes in 12 monthly installments. It’s a UBI by the backdoor.”
The Universal Basic Income idea is controversial because the money received is not tied to any requirement for work. The Swiss recently voted down a bill where every adult would have received $2,500 per month, and $625 per child, without working. A 4-to-1 majority voted the idea down, although some believe it was voted down due to practical reasons.
“Theoretically, if Switzerland were an island, the answer is yes,” explained Luzi Stamm, a member of parliament for the right-wing Swiss People’s Party, according to BBC News. “But with open borders, it’s a total impossibility…If you offered every individual a Swiss amount of money, you would have billions of people who would try to move into Switzerland.”
In the United States, Universal Basic Income laws would likely face stiff resistance based upon concerns over illegal immigration and how the federal government would be expected to pay for the bill. While those concerns are real and valid, it is possible that other factors will play a crucial role in the future.
Robots, automation, and artificial intelligence are poised to change the employment landscape forever. When Apple decided to move its manufacturing back to the United States, the stated intention was to create a highly automated plant. Fast food companies like McDonald’s and Wendy’s are working toward replacing certain jobs with automation. Over time, it’s even expected that dangerous and dirty jobs, such as firemen and farmers, could become automated to a certain extent.
Within our lifetimes, that means the U.S. unemployment rate could dramatically shift.
“Middle-skilled jobs are the ones most affected by automation,” said Adam Keiper, the editor of the New Atlantis and a fellow at the Ethics and Public Policy Center in Washington, according to Inside Sources. “In the service sectors — like restaurant wait staff, hotel personnel, certain kinds of medical professionals. And 25 percent of the jobs that exist today won’t exist in the next 20 to 25 to 30 years. To put it into context, that is about the unemployment rate of the Great Depression.”
According to CNET, Moshe Vardi, a professor of computational engineering at Rice University, believes robot automation could push the U.S. unemployment rate to 50 percent within 30 years. While some believe AI and robots can potentially usher in some sort of utopia, Vardi believes work is a human necessity.
“A typical answer is that if machines will do all our work, we will be free to pursue leisure activities,” he said. “I do not find this a promising future, as I do not find the prospect of leisure-only life appealing. I believe that work is essential to human well-being.”
Finding a balance over the long term will be critical. No one wants to be George Jetson pushing the red button all day long, nor does sitting around receiving a Universal Basic Income sound appealing. Regardless, in the long run, it seems that extended unemployment benefits laws will be updated by necessity. The question is how to do this fairly.
What do you think?
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