The time has come to reward work

Amid the recent national debates about the minimum wage, food stamps, universal healthcare, farm subsidies, unemployment benefits, and more, the most common argument against these sort of safety net programs comes from those who say they reward people who do not work.  In a highly globalized, fast-changing, and increasingly unstable economy, we place the responsibility for learning skills, finding employment, maintaining employment all on the individual worker.  At the same time, we have a national economy that has never had less than three percent of the available workforce unemployed.  In a world efficient at delivering basic needs, and unable to provide enough work for those who want to pursue it, placing all of the onus on an individual jeopardizes the long-term health of our republic.  Republics only survive when a thriving middle class makes up almost all of the population, and the lowest class of citizen has the resources to meet their basic needs.  The time has come to explore the most effective way to accomplish this….

A guaranteed minimum income, or GMI.

Simply put, GMI means that every individual willing to work in the economy receives monthly income equal to the cost of the basic services in the area where the individual lives:  food, shelter, healthcare, education, and transportation to work.  If a person works, their salary comes from the company at a level at least equivalent to GMI.  If a person has no job, the GMI comes as a distribution from a fund managed state-by-state.  A program like this, implemented on a national level, will require several basic safeguards and precepts:

1. The program must be run on a state-by-state level.
2. The program must be managed as a private insurance product and not a government program.
3. Government at all levels (national, state, and local) and corporations will pay premiums into the program, with the private insurance companies (chosen through competitive procurement at each state) managing the payouts.
4. All federal, state, and local aid programs like SNAP, unemployment insurance, farm subsidies, and the like will end.  An individual government entity's premium payment will constitute its total responsibility to the program, and the market will set the premium payment, not a political entity.  The political entity can control its cost by implementing policies that have a proven record at creating and sustaining jobs.
5. Corporations will no longer pay into unemployment insurance, but will have their premium set in the same way: if their corporate policies create financially sustainable jobs, they will have lower costs.
6. People will receive their benefits based on their willingness to work, and must work if called.  Each state and private market can determine if work includes participation in a training program, or providing services to a non-profit through volunteer time, and other ways that people can provide value without receiving traditional salary from a place of employment.
7. The private insurers will have incentive to move people quickly from GMI to work, and will create and manage programs that provide training, relocation, and other services that facilitate getting people back to work.  People receiving GMI cannot move to a higher GMI location except to accept full-time work.
8. Households will receive GMI based on the number of people within, but cannot increase GMI during any one period of time.  Although the number of people "having babies to get welfare" has always been small, this would end that practice.
9. For parents of children under 12, GMI would include the cost of safe, quality childcare.  As other countries have shown, government-run programs for childcare can provide the most cost-effective solution, but GMI would not require that.  It would include the cost in the system, and if government-run programs provided a more efficient approach, they could significantly reduce the cost of GMI in any area.
10. This same principle applies to healthcare.  If universal healthcare provides the most cost effective option, then GMI will not include this cost, but if a state prefers private insurance markets for healthcare, the premiums, copays, deductibles, and maximum out of pocket would become part of the payment.

For those that think this looks similar to the services unions provide, you would be right.  In several unions, everyone wishing to work "signs the book" and waits in line for work.  During this time, they receive a stipend that comes from the dues they and other have paid, and those working continue to pay.  As the number of unions, and overall union membership, has declined significantly over the past forty years, the portion of the population protected by these types of practices has dropped.  To those following the decline of the middle class, one can hardly ignore the coincident drop in the income of labor with declining union membership.  A guaranteed minimum income provides at least one portion of the financial protection that underpinned many communities, especially those in dense inner cities and small towns.

Guaranteed minimum income will reward work, not laziness, and promote an economy that creates jobs, not one that incentivizes unemployment.  In addition, implementing GMI in our economy will determine the amount of employment needed to provide basic goods and services.  Since our economy has moved from the one-income home to the predominantly two-income household, we have seen only slight improvement in length of life, and almost no increase in quality.  This suggests that our need for more jobs is not one of utility.  

As a last benefit, GMI will promote two parts of society that have suffered over the past decades: entrepreneurship and the arts.  Without being tied to a certain level of employment, people can make the lifestyle choice to pursue work that may have long-term payoff, but require short-term, low-pay effort.  The safety net of GMI will ensure that these innovators have the time to make their visions reality, to the benefit of the society as a whole.

Guaranteed minimum income rewards and incentivizes work, uses the efficiency and knowledge of the insurance industry to minimize costs, and creates a culture of value within a society.  The benefits extend far beyond those listed here, and ultimately creates a more engaged class of citizen.  The time has come to put our words into action, and put all of us to work who want to work.