Andrew Yang banks upstart campaign on $1,000 proposition

Tech entrepreneur Andrew Yang is banking his 2020 presidential campaign on an experimental idea: a $1,000 a month “Freedom Dividend” for every American adult, no questions asked.

The policy, a form of universal basic income (UBI), is seen by proponents as a solution to income inequality. The idea has helped him attract a loyal following known as the “Yang Gang” and given the little-known tech entrepreneur an unexpectedly high-profile role in the crowded Democratic race.

But Yang is facing skepticism from strategists about whether he can turn UBI into a winning idea in light of polls showing it is broadly unpopular. Some critics believe the policy is an example of socialism run amok, while others prefer a more targeted approach to combating income inequality.

{mosads}Democratic strategist Eddie Vale said Yang’s Freedom Dividend mostly just appeals to the “Silicon Valley tech bro.”

“It is a very Silicon Valley solution,” he said. “Many things in life are a lot more complicated … and you can’t just think of one idea that’s going to magically solve everything.”

Vale added that the Freedom Dividend also lacks emotional resonance, largely because he says it has not been incorporated as part of a “bigger policy platform.”

“Most of the candidates are incorporating their policies into the themes of their campaigns,” Vale said, adding that UBI is “this one technical solution … and it doesn’t really have any theme or emotion or vision behind it. That is what you more normally center a campaign around.” 

The Yang campaign, however, believes it can win over skeptics by providing universal basic income the full spotlight of a 2020 presidential campaign. Yang himself mentioned the Freedom Dividend in his opening and closing statements during the second Democratic presidential debate earlier this week.

The proposal is simple: If elected, the Yang administration would give $1,000 a month to every U.S. citizen 18 years or older with “no strings attached,” a policy the campaign describes as one “on which a stable, prosperous, and just society can be built.”

Yang, who earlier led a standardized test prep company, sees the Freedom Dividend as a solution to the “unprecedented crisis” that will be sparked by increased automation and new technologies, which he believes could leave as many as 1 out of 3 Americans without a job in the next 12 years.

During the debate this week, Yang promoted the Freedom Dividend as helping women and minorities, noting that it was “the most effective way for us to address racial inequality in a genuine way and give every American a chance at the 21st-century economy.” 

Giving out a Freedom Dividend would cost more than $3 trillion a year based, on the estimate of U.S. adults in the census.

The Yang campaign proposes paying for it through a value added tax aimed at major corporations that it says could raise $800 billion in new revenue, though it did not provide a specific time frame. 

It would also reduce benefits provided by “welfare programs, food stamps, disability and the like” to help offset the cost of the Freedom Dividend, though the campaign has said Yang would protect entitlement benefits such as Social Security.

That means the program’s actual cost, after factoring in revenue and benefit offsets, remains uncertain, leaving it potentially vulnerable to attack.

“Republicans will probably be pretty hostile to it,” said Vale. “They’re going to come at it with their same attacks that they do on any safety net programs.” 

UBI has also failed to gain much traction in the 2020 race, even though Yang himself has remained remarkably competitive in a crowded Democratic primary.

Yang also founded “Venture for America,” a nonprofit that prepares younger professionals for work in startups. He has campaigned as an outsider who eschews ties and who described himself at the most recent debate as “the opposite of Donald Trump” because he is “an Asian man who likes math.”

Yang is only one poll short of qualifying for the fall debates under much more stringent criteria. Only eight other Democrats, including former Vice President Joe Biden and Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.), have made the debate stage in a crowded race of about two dozen candidates.

Yang’s opponents in the 2020 race have said they don’t support UBI.

Warren, for example, has argued policies such as lowering student debt, improving housing availability, and investing in universal child care and education are better ways to reduce income inequality. 

Meanwhile, Sanders, when asked about UBI at a town hall, responded by saying, “Nah, I got a better idea,” while mentioning policies he supports such as creating jobs through investment in sustainable technology. 

The idea has also failed to gain much traction so far. A recent NPR/PBS NewsHour/Marist survey found just 26 percent of U.S. adults described UBI as a “good idea,” while 66 percent called it a “bad idea.” 

Across those identified with a political party, the idea was also unpopular, especially among Republicans: Only 42 percent of Democrats liked the idea, while just 8 percent of those identifying with the GOP supported it. 

{mossecondads}Yang campaign spokesman Randy Jones acknowledged UBI has not polled well, but he attributed it largely to a lack of understanding about the program.

“If you polled the American people and asked them if they thought $1,000 a month in their pocket would be helpful, it would be overwhelmingly yes,” he told The Hill. “When you break this issue down for the average American and explain it in a better way, the majority of people would be on board.”

Examples of true unconditional UBI programs are hard to find, but analyses of comparable cash transfers in developing countries conducted on a smaller scale have generally found minimal effects on unemployment as well as some positive economic benefits.

The closest point of comparison in the United States is the Alaska Permanent Fund, a state-held wealth fund that disburses roughly $1,000 to $2,000 to every resident of the state yearly — much smaller than the program envisioned by Yang.

Two researchers, Ioana Marinescu from the University of Pennsylvania and Damon Jones from the University of Chicago, analyzed the dividend since its creation in 1982 and found it did not negatively affect employment rates or propensity to work in comparison to similar states.

Nonetheless, the Yang campaign believes it has a winning issue in UBI. Yang tweets about the policy frequently as he looks to introduce the policy to more Americans. 

“I know this may sound like a gimmick, but this is a deeply American idea,” Yang said at the debate.

“The automation of our jobs is the essential challenge facing us today. It is the reason why Donald Trump is president today, and any politician who’s not addressing it is failing the American people,” he said.