Over the four weeks of coronavirus shutdown, more than 17 million Americans working in retail, transportation and other service-related industries lost their jobs. And, as much as we’d like to deny it, “a lot of” those jobs are “gone for good,” said entrepreneur and former Democratic presidential candidate Andrew Yang.
Speaking at an Axios virtual event on Wednesday, Yang warned that businesses that laid off workers may not be able to hire them back even after the pandemic is over.
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“Macy’s just furloughed the vast majority of their 130,000 employees. How many of those employees do you think they are going to rehire [after the pandemic]?” He asked, rhetorically. “Do we really think every Macy’s is going to suddenly reopen and be back at 100 percent capacity?”
“We are at unprecedented levels of joblessness,” he added. “…So we need to make very dramatic moves to allow millions of Americans to have the dollars that they can feed their families with in the days to come.”
Early Wednesday morning, Yang proposed on Twitter that the federal government should give every American a monthly stimulus check of $2,000 “for the duration of this crisis,” highlighting the fact that the onetime $1,200 payment the government has started handing out isn’t going to be enough to cover basic living expenses if the pandemic drags into May or even the second half of the year.
I’m for $2,000 for every American adult for the duration of this crisis. #MoneyForThePeople — Andrew Yang🧢🇺🇸 (@AndrewYang) April 15, 2020
To make the stimulus check bigger and a monthly payment, it means trillions of dollars of additional government assistance on top of what Congress has already signed off.
“This, to me, is a necessary investment,” Yang explained his tweet during the Axios call. “When your house is on fire, you don’t worry that much about the water you are using to put it out. We have an equivalent of a $21 trillion fire on our hands, and we have to do everything we can do help people get through this.”
“In the absence of this kind of stimulus, you will see unthinkable things happening,” he added. “I mean, unthinkable things are happening right now.”
On Wednesday, fresh data from the Census Bureau showed that U.S. retail sales plummeted 8.7 percent in March from a year ago. It was twice as much as the worst fall during the 2008 financial crisis and the largest monthly decline on the Census Bureau’s record since 1992.
Almost every retail category, except grocery stores and other “essential” businesses, saw a major decline due to business closure. Clothing and accessories stores, for example, saw sales plunge 50 percent in March; the furniture and home furnishing category was down 26.8 percent; sporting goods fell 23.3 percent; and electronics and appliance declined 15 percent.
lmward10 on April 18th, 2020 at 18:28 UTC »
I studied Andrew Yang’s UBI last semester in college. Although I am far from an expert, I did learn a lot of interesting ways the UBI would be successfully paid for. It turned me from a sceptic into a full on supporter.
Yang’s policies would be paid through various changes to our tax policies. (I am going to focus on $1000 a month instead of $2000 as this was his original, most popular, and most studied plan)
His first change would be to remove most welfare. We currently have around 80 welfare policies in the US, which cost the taxpayers 1.03 trillion dollars [1 ] By eliminating most of these welfare programs, we can save a lot of money by reducing overhead, reducing the amount of firms and bureaucracy, and by simplifying the payment process. Instead of filing endless forms to qualify for dozens of different programs, every adult American citizen is just given $1000 a month.
This would also reduce the Samaritan’s Dilemma.[2 ] I am not as eloquent with my words as E.C. Pasour is, so I will try to just summarize his very interesting article (I highly suggest you read it). The Samaritan’s Dilemma is the problem a society faces when they hand out welfare. People on welfare have two choices. Either 1) work harder or take a higher paying job and break out of the welfare threshold, and stop receiving benefits from the state or 2) stay unemployed as they know that working harder will only result in losing the “free” money. By just paying every American citizen, this problem no longer exists.
Yang’s second way of paying for UBI would be through a VAT or a Value added tax. A value added tax would take a percentage of a good’s value in a tax at each stage of the production process.
To directly quote Yang, “A Value-Added Tax (VAT) is currently used by 160 out of 193 countries, including every developed nation except the US, because it is a more efficient way of generating revenue with no loopholes. Big companies and rich people are excellent at moving assets around to avoid taxes – Amazon, Google, and other companies funnel hundreds of billions in earnings overseas. In fact, Amazon paid zero in taxes last year. A VAT makes it impossible for them to benefit from the American people, automation, and infrastructure without paying their fair share.” [3 ]
A well constructed VAT tax could net the government anywhere from $800 billion to $1.3 trillion depending on the % taxed. [4 ].
So if we add the $1 trillion created from eliminating welfare and the $1 trillion average collected from a VAT, we are looking at $2 trillion total. If we pay every American adult $1000 a month or 12k a year, this would come out to be $2.5 trillion dollars. (209,000,000 x 12000 ≈ 2.5 trillion)
So we are $500 billion short. Through some carbon taxes and other various taxes that Yang planned to implement, this number would be lower. (I cannot find any articles that do the explicit math because these tax rates would have to be negotiated once Yang took office).
The final bit of of the UBI would simply be paid by the richer citizens. Since everyone from Bill Gates to the local homeless population gets UBI, the cost is calculated as such. For example, if there is a room with ten people, and everyone gets paid $2 a year, the cost of a UBI would be calculated as $20. However, if two of those ten people were billionaires, and paid $4 in taxes every year, the government gets a net gain of $4 from the billionaires, and the actual cost is $16 for a UBI.
This is a simplified version of what a UBI would do. Poorer people would not have to pay their UBI back through taxable income because they aren’t in the higher tax brackets. But billionaires would essentially pay back their UBI every year through taxes, plus additional money that would help pay for other people’s UBI. The poor would get a net gain, and the rich would receive a net loss. Through this system, UBI could easily be funded.
OhmazingJ on April 18th, 2020 at 11:11 UTC »
Here in Las Vegas much of what our economy survives off of is likely to be crushed for a reasonably long time to come. This may certainly be something we need otherwise it might force many of us to have no choice other than to leave our city.
Nardelan on April 18th, 2020 at 10:22 UTC »
I think he’s definitely right about many jobs being gone for good. I think a lot of employers realized they can be just as effective with employees working remotely.
That means instead of paying someone in California or NY $150k a year, they can get away with someone in the Midwest to do the same job for $75k a year.
The employer can save on office space costs and worst case scenario they can start to offer those same jobs contract work and eliminate healthcare or paid time off.
The Gig Economy is expanding and with it, taking healthcare, sick time, and paid time off from people.
Take a look at the Jobs section of Craigslist lately. There are Uber/DoorDash/Instacart type jobs popping up for every field. This is just a few but there are several more:
Lawncare Movers Appliance Repair Laborer Gutter Cleaning Retail assembly Lowe’s and HD just started using contract workers for assembly instead of employees. It’s just a sign of more positions being outsourced to contract workers to cut costs. *Edit- it appears some parts of the country have been doing this for a while but it just started near me.
All Gig work with no benefits at all.