Poverty in a crisis: Why we need UBI during COVID-19

Illustration of a woman holding bills but being supported by the presence of a dollar bill representing universal basic income behind her
Armaan Mumtaz/Staff

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Content warning: suicide and substance abuse

The economic repercussions of the COVID-19 pandemic are far-reaching, ravaging families, businesses and communities across the country. Almost every business, charity and nonprofit nationwide has been affected by the pandemic, and millions of individuals and families have been left in financial ruin. In my eyes, the present remedies provided by the government will do nothing for the millions of Americans who are living paycheck to paycheck. The most effective way to provide immediate relief to the people most impacted by COVID-19 is to put money directly into their hands.

Before the COVID-19 pandemic ravaged our communities, there was support of a universal basic income, or UBI, by prominent figures and organizations — such as professor Robert Reich, Andrew Yang and 293 members of UC Berkeley’s Forward club — to combat job losses due to automation. But instead of automation, it is a global disaster that has inarguably destroyed our economy on a massive scale. However, we must not forget that smaller-scale “disasters” occur every moment of our lives; someone could lose their job, get evicted, come down with an illness or receive an unexpected bill that they can’t afford.

We live in a society in which 59% of Americans cannot pay an unexpected $400 bill. In addition, every single citizen struggles with time, empathy or money in some form or another; these struggles are the most pervasive problems of our era. Notably, we live in a time in which many of our social safety nets should solve these problems. Instead, our mental health as a society is declining, suicides and drug overdoses are increasing and income inequality is at an all-time high. A UBI would provide the financial safety net that so many people desperately need to guard against these issues.

Furthermore, as the coronavirus continues to wreak havoc on the very fabric of our society, our unemployment infrastructure is being overwhelmed. More than 30 million Americans have filed for unemployment since March, and the April unemployment rate skyrocketed to 14.7%. How much aid will all of these people really receive?

Even before COVID-19, our welfare system was not effective — the pandemic has simply revealed the inadequacies of our political and economic infrastructure. There are more than 38.1 million Americans who live in poverty. Current social safety nets, such as Temporary Assistance for Needy Families, or TANF, do an extremely poor job of reducing poverty. Poverty is killing people every day. And after the coronavirus pandemic, we will no longer be able to ignore it.

Moreover, in no single state does TANF provide the benefits of even half the poverty level. What’s more, the racial inequities with all states’ use of funds account for 15% of the Black-white child poverty gap. In no way do our current safety nets protect our most vulnerable populations.

But why should our society choose UBI over our current welfare system? In my eyes, it comes down to speed, universality and security. First, a UBI would allow our government to put money directly into people’s hands with the utmost speed. There would be no time whatsoever being wasted on bureaucracy — individuals would already have the necessary funds in their pockets.

Second, universality — or doing away with means testing — would ensure that everyone is included and no one is excluded. Currently, the Coronavirus Aid, Relief and Economic Security Act does not provide payments to undocumented immigrants, international students and families of mixed immigration status. We need to ensure that everyone who needs help will get help without having to jump over any additional hurdles. With universality, determining who is eligible is simpler and the cost of administering is reduced.

Lastly, security. People need to feel secure in their financial positions before they can thrive, and a UBI would provide that economic foundation. In addition, a Finnish basic income experiment found that recipients experienced improved mental health, confidence and life satisfaction. Although it is not an end-all-be-all solution to all of our country’s problems, it’s a start — a start toward leveling the playing field among the haves and the have-nots.

Policymakers in Spain, Canada and the United States are acknowledging the importance of emergency UBI in this crisis. On Friday, Sens. Kamala Harris, D-California, Bernie Sanders, I-Vt., and Ed Markey, D-Mass., proposed legislation that would send a $2,000 monthly check to everyone who makes less than $120,000. However, they’re ignoring the impact that a UBI would have during more normal times. In addition to protecting those left behind by our welfare system, a UBI would produce economic growth by putting money into people’s pockets to spend. Personally, I know an extra $2,000 a month would help my mom, who lost her job as a result of COVID-19.

According to a study by the Roosevelt Institute, a UBI would expand the United States’ GDP by $2.5 trillion. When people are given direct cash, they will inject that money directly into their communities, spending it on food, groceries, utility bills and auto repairs. A temporary UBI will be essential during this pandemic to combat the looming recession, but a permanent one will be needed to ensure that every single American can have the chance to thrive.

The fight for UBI will live on. The pandemic has opened a door, however, giving us a glimpse into the vast inequities of our current safety net system. We need a UBI to ensure that everyone has financial security no matter what and to provide an economic foundation for all. Hopefully, one day, we will be able to say with confidence that we’ve eradicated poverty.

Ken Hinh is a sophomore undergraduate student at UC Berkeley.