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June 28 2019

Andrew Yang’s Random $12k Giveaway is Charity Not Universal Basic Income

by Patrice Lee Onwuka

Democratic Presidential candidate Andrew Yang is running a campaign stunt to promote his sole campaign issue: universal basic income (UBI). The problem is that even Yang gets his own idea wrong. What’s he’s doing is charity, not UBI. 

This week, Yang announced that he would give one random Twitter user $12,000 if they followed and retweeted him. That is a creative example of charity or philanthropy but it’s not UBI because, thankfully, he’s not the government.

The former tech executive wants Washington to fight unemployment and expected poverty from automated jobs displacing workers, by giving every adult in the U.S. $12,000 annually ($1,000 each month) with no strings attached to spend however he or she wants. 

By no strings attached it means the government check would not depend on having a job or income level. 

In theory, Yang would give Oprah, Beyonce, T-Swift, Hillary Clinton, Kylie Jenner, Kim Kardashian West, Melinda Gates, Rihanna, and Lady Gaga each $1,000 a month. I’m not sure what they would do with $1,000 given that they probably spend more on their manicures each month.

This is the ultimate socialist giveaway. Yang calls it a “freedom dividend” paid for by each of us in a new 10 percent value-added tax (or sales tax). A VAT is a consumption tax on the value added to a good or service by businesses at each point in the production chain. (Heritage Foundation has a nice explainer on VATs.)

All of our products would suddenly become a lot more expensive. While Rihanna and Kylie could afford that, how about middle-class and poor families, who already pay more of their income in sales taxes on things like gas and groceries?

Yang is right to draw attention to how our workforce is changing because of technology and innovation. But, he ignores the positive benefits they also provide.

As companies look to boost productivity and lower costs on goods and services, we benefit as consumers from lower prices and new goods and services that boost our quality of life and offer new opportunities. Imagine you can build a multi-million dollar business just using a smartphone camera. That was unimaginable less than two decades ago.

However, there are human costs such as workers who become replaced by automation in industries as varied as retail and law.

A government check is not the answer to this problem.

No country has employed UBI on a national scale except Finland. There, workers who received the no-strings-attached check were no better at finding work than those who didn’t and those who did work, earned less than their non-UBI counterparts.

Any “evidence” that UBI boosts health and well-being is tentative. It’s too early to model a full-scale social program for 200 million people after the tiny country of Finland. Some cities are starting to experiment with the idea, and we’ll have to monitor what happens.

What we truly need is more opportunity, not more welfare. That stems from smart economic and regulatory policy.

A strong economy produces jobs that allow workers to secure better jobs and increased wages. Risk-takers can also start businesses when unnecessary regulations are reduced or eliminated and they have access to capital. When families have more income from tax cuts, they can spend it on goods and services that generate the need for workers. In short, growing the economy helps everyone.

If Yang wants to give away his own money, he’s more than welcome, but if he wants more of our tax dollars he needs to keep his hands to himself.





Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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