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How Switzerland’s Basic Income Proposal Could Both Help and Hurt the United States

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How Switzerland’s Basic Income Proposal Could Both Help and Hurt the United States

By Joe Baur | November 18, 2013

Switzerland is on the verge of voting on a historic referendum that would guarantee a monthly basic income of 2,500 CHF ($2,728) to the entire Swiss population regardless of personal financial standing. The idea, supporters believe, will cure poverty.


Annie Lowery, an economics reporter for The Times, covered the debate playing out in Switzerland.

The proposal is, in part, the brainchild of a German-born artist named Enno Schmidt, a leader in the basic-income movement. He knows it sounds a bit crazy. He thought the same when someone first described the policy to him. “I tell people not to think about it for others, but think about it for themselves,” Schmidt told me. “What would you do if you had that income? What if you were taking care of a child or an elderly person?” Schmidt said that the basic income would provide some dignity and security to the poor, especially Europe’s underemployed and unemployed. It would also, he said, help unleash creativity and entrepreneurialism: Switzerland’s workers would feel empowered to work the way they wanted to, rather than the way they had to just to get by. He even went so far as to compare it to a civil rights movement, like women’s suffrage or ending slavery.

It’s easy to imagine what a basic income could do if implemented in the United States, and there is a strong case to be made for the cause of freedom.

Suddenly student loans or paying basic necessities isn’t the mountain of burden it currently is for so many. Shopping local from farmers whose hand you can shake and independent manufacturers becomes affordable for all, not a socio-economic barrier that leaves food stamp recipients picking from junk food.

For some, this might sound like some sort of cockamamie socialist scheme to give more handouts. Those who think that might be surprised to hear some conservative economists have embraced the idea for the United States. A basic income, they say, eliminates the need for the plethora of bureaucratic programs that currently exist within our social safety net, allowing the poor to spend their basic income based on their specific needs without having to rely on several different organizations for help.

Of course, there are concerns the Swiss will have to address, most notably how to fund such a program. But in the United States, there would more to address.

Staying Sustainable

First let us agree that with the middle class going the way of the dinosaurs, the United States is in desperate need of a basic income program at some level to alleviate growing poverty across the country. We can no longer watch fellow Americans starve under crumbling roofs, shrug our shoulders and determine that they must have been too lazy to get a job or prayed to the wrong God.

A basic income would not take away the incentive to work hard. $10,000 per year, the amount suggested by conservative Charles Murray of the American Enterprise Institute, is hardly enough to get by let alone live a life of enviably luxury. There would still be the incentive to work hard for the promise of upward mobility that rests at the heart of American capitalism.

Where the United States differs substantially from Switzerland is in infrastructure, primarily rail infrastructure. Our lack of an extensive, efficient public transportation network across the country and within our cities could prove a formidable challenge to the successful implementation of a basic income in the United States.

Stay with me.

Trends have shown that the country is moving toward a more sustainable future. Miles driven is down, licenses attained are down, and millennials simply do not prioritize driving in the same way other generations have. This is a trend cities are trying to capitalize on by returning populations to their respective cores and lowering emissions by lowering reliance on the automobile.

Throw a basic income of $10,000 into the mix with no regulations and that could spell trouble for the sustainability movement this high-emissions country sorely needs. Because you know what else comes in around $10,000? Car ownership, according to AAA estimates.

Kicking and Screaming

Oil, gas and asphalt lobbies have already been kicking and screaming as we trudge along into a more sustainable future. Even with the progress we have made in our cities, massive highway projects are continuing to be built without any demand, and rail projects have been axed or threatened in states like Ohio and Wisconsin.

By giving a basic income of $10,000, we might be taking away the incentive American municipalities need to continue developing in an environmentally friendly manner. If car ownership is no longer the financial burden that has pushed many American workers and lawmakers toward embracing public transportation, the sustainability movement could very well be set back decades as our reliance on foreign oil only increases.

Switzerland, however, boasts one of the best rail networks and most efficient public transportation systems in the world. The infrastructure already exists, meaning the Swiss already understand the benefits of a sustainable society. Perhaps some would use their basic income toward an automobile, but it seems unlikely the Swiss would revert to a 1950’s urban renewal in America style of thinking. They like their trains and they like their dense cities.

Break Away From The Beast

Like most issues, the success of a hypothetical basic income in the United States seems to hinge on other facets of American government. Would the aforementioned lobbies step up their game and force politicians to continue supporting auto-friendly policies as our infrastructure continues to crumble? Or would we see campaign finance reform before a basic income that would allow politicians to break away from the beast?

Either way, there is a strong case to make that a basic income could do wonders to alleviate poverty. That in of itself merits it for exploration in the United States.

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