The small but vocal cohort of universal basic income (UBI) proponents has found a well-heeled tech titan to ignite the movement.
In response to the coronavirus pandemic, Jack Dorsey is moving $1 billion of his Square (SQ) stock to a limited liability company called Start Small, which will fund coronavirus relief efforts around the world. Dorsey is the chief executive of the financial services company Square, which recently got approval to offer some banking services, and the social network Twitter (TWTR). The pledge to support UBI and other initiatives is approximately 28% of Dorsey’s net worth.
After the pandemic subsides, the Dorsey will prioritize girl’s health and education and UBI, which have long been and will continue to be conversations outside of this health and financial crisis.
Universal basic income is not a novel concept, but has certainly experienced a mainstream rebirth over the last two years — and it is considered to be more relevant than ever now by some as millions of Americans have lost their income amid coronavirus shutdowns.
Here’s how UBI would work, as Yang sees it: All U.S. citizens between the ages of 18 and 64 would receive an unconditional $1,000 per month, which would cost the U.S. between $2 trillion and $4 trillion per year. While proponents have long believed the safety net can help reduce poverty, critics argue the sheer amount of federal funds would only increase the nation’s debt load and burden taxpayers.
But the $2 trillion coronavirus stimulus law known as the CARES Act — and potentially more stimulus on the way — showcases the dire need of average Americans to stay afloat, with $290 billion dedicated to one-time stimulus checks of $1,200 to those making less than $75,000 per year.
Yang’s idea wasn’t in reaction to a pandemic, of course, but instead was rooted in the belief that automation will ultimately displace most Americans. But the novel coronavirus is keeping businesses shut and Americans at home, forcing a record of nearly 10 million workers to file jobless claims in a two-week period alone.
Perceived as a privileged cocktail hour discussion not too long ago, UBI has become a serious policy idea for governments around the world. Spain’s Economy Minister Nadia Calvino said, “We are going to implement UBI as soon as possible,” in an interview with broadcast network La Sexta on Sunday. She added that the instrument may be used “not only for this exceptional situation,” and “that it may stay forever.” While there’s no specific start date, Spain will be the first country to provide this guaranteed income if it’s implemented.
Tech titans push for UBI
Basic income experiments around the world have been limited in scope. In 2018, Finland decided to scrap a two-year UBI experiment with 2,000 unemployed people. Meanwhile, a 12-year trial in Kenya revealed that people spend the monthly stipend on basic necessities — not alcohol and drugs like skeptics claim.
In the U.S., most of the ideas have come from tech-heavy California, where Dorsey is also based. The city of Stockton launched an 18-month program last year, paying $500 a month to 125 low-income residents. In 2016, Sam Altman, the founder of startup incubator Y Combinator, launched a five-year trial in Oakland in 2016 and has since expanded upon it.
Prior to entering politics, Yang was the CEO of Venture for America and wrote “The War on Normal People: The truth about America’s disappearing jobs and why universal basic income is our future.”
Chief executive officer of Twitter Inc. and Square Inc. Jack Dorsey arrives to attend the "Tech for Good" Summit at Hotel de Marigny on May 15, 2019 in Paris, France. (Photo by Chesnot/Getty Images)
“UBI is vital so we can build a ground-up economy, based upon the businesses that people want to start in their towns,” he told Yahoo Finance in 2017.
In the absence of additional government support to respond to the coronavirus crisis, tech leaders are doing their part by donating portions of their overwhelming wealth. Facebook CEO Mark Zuckerberg has committed $30 million, mostly focused on the medical treatment side of things. Meanwhile, Amazon CEO Jeff Bezos has donated $100 million to U.S. food banks. But the magnitude of Dorsey’s donation has surely raised the stakes.
In an effort to show transparency, he’s listing each donation in a Google document. To date, he has made one $100,000 contribution to America’s Food Fund, which provides “safe and consistent access to meals.” The GoFundMe fundraiser, led by Leonardo DiCaprio and Laurene Powell Jobs, has raised $13.4 million since being created six days ago.
Melody Hahm is Yahoo Finance’s west coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.
