Andrew Yang's Freedom Dividend: Can It Work?

Are you worried about the future of work in an increasingly automated world? Have you heard about a potential solution called Universal Basic Income?

In his book The War on Normal People, Andrew Yang proposes a bold idea to address economic instability. Andrew Yang's Freedom Dividend is a form of Universal Basic Income designed to provide every American adult with $12,000 annually. This article explores the concept, its potential benefits, and how it might work.

Read on to discover why Yang believes this radical approach could be the answer to our economic challenges.

What is the Freedom Dividend?

Andrew Yang's Freedom Dividend, a cornerstone of his political platform, is a form of Universal Basic Income (UBI) designed to address the economic challenges posed by increasing automation and job displacement. This innovative proposal aims to provide every American adult with an annual income of $12,000, regardless of their employment status or other factors. The Andrew Yang Freedom Dividend concept has gained significant attention as a potential solution for economic instability in the face of rapid technological change.

The Freedom Dividend is Yang's response to the rapid technological advancements that are reshaping the job market and threatening traditional employment across various sectors. Since 2000, around 4 million manufacturing jobs have been lost due to automation, and this trend is expected to accelerate and expand into other industries.

Why is the Freedom Dividend Needed?

The Automation Crisis

The rise of artificial intelligence, robotics, and advanced software is poised to revolutionize sectors once considered stable, including healthcare, law, and finance. This technological upheaval is happening at an unprecedented pace, outstripping previous waves of innovation and putting immense pressure on economic structures and social cohesion.

As automation continues to advance, it's not just blue-collar jobs at risk. White-collar professions are also vulnerable, as AI and software can increasingly perform tasks that were once thought to require human intelligence and decision-making.

Community Breakdown

The impact of automation extends beyond individual job losses. Entire communities, especially those that have historically relied on manufacturing or industrial labor, are facing devastating unemployment rates and subsequent social unrest. Cities like Youngstown, Ohio, have seen their economic and social fabric torn apart by the decline of traditional industries.

The rise of e-commerce, led by giants like Amazon, has resulted in widespread closures of brick-and-mortar stores. This not only affects retail employees but also has a ripple effect on local economies, including service industries and tax revenues.

Mental Health and Social Cohesion

Job loss and economic instability have profound effects on mental health and social cohesion. Unemployment and underemployment are closely linked to increased rates of substance abuse, domestic violence, depression, and suicide. The loss of traditional work threatens people's sense of purpose and community, striking at the core of self-worth and leading to social breakdown.

In areas with a strong industrial base, there's often an increase in reliance on social security benefits. The rise in mental health issues and musculoskeletal disorders signals growing stress on social structures.

How Would the Freedom Dividend Work?

The Freedom Dividend would provide $12,000 annually to every adult American. This universal basic income would be funded through the introduction of a value-added tax (VAT) on goods and services throughout the production process. The estimated cost of the program is around $1.3 trillion per year.

This financial aid would replace existing social welfare programs, offering protection to those dealing with economic instability and mitigating the effects of job losses. According to a study from the Roosevelt Institute, the introduction of the Freedom Dividend could stimulate economic growth and strengthen the employment sector.

Evidence Supporting the Freedom Dividend

Pilot programs providing a stable income in various areas, including Alaska and Canada, have shown promising outcomes for community welfare. These experiments have demonstrated that additional income can enhance:

• Mental well-being
• Frequency of domestic altercations (reducing them)
• General health
• Launch of new enterprises

Contrary to widespread concerns, these trials did not show an increase in substance abuse.

Beyond the Freedom Dividend: Additional Solutions

While the Freedom Dividend is a cornerstone of Yang's proposal, he also advocates for other measures to address the challenges posed by automation:

Revamping Education and Training

Yang emphasizes the need to overhaul education and skills development systems to prepare individuals for the economic shifts brought on by automation. This includes:

• Promoting technical, vocational, and ongoing education rather than exclusively emphasizing four-year degree programs
• Integrating character-building, problem-solving capabilities, and social skills alongside technical abilities
• Teaching crucial life skills such as financial management, effective communication, resilience, and methods for preserving mental health

Shifting to a "people-focused Economic Model"

Yang proposes a concept called "Human Capitalism," which redefines the priorities of traditional capitalist values to focus on individual well-being. This involves:

• Broadening the criteria for societal progress to include the welfare of people and neighborhoods, education levels, and the robustness of community connections
• Establishing stronger oversight and control mechanisms to ensure that technology serves the community's well-being rather than just chasing profits

Potential Impact of the Freedom Dividend

The Freedom Dividend could act as a stabilizing force for consumer spending, providing a safety net for those affected by job losses due to automation. It aims to ensure a foundational degree of economic security and boost overall consumer spending.

Moreover, by providing a basic income, the Freedom Dividend could potentially alleviate some of the mental health issues and social problems associated with job loss and economic instability. It could give people the financial breathing room to retrain for new careers, start businesses, or pursue education.

However, it's important to note that the Freedom Dividend is just one part of a larger strategy to address the challenges posed by automation. It needs to be complemented by reforms in education, job training, and economic policies to truly prepare society for the technological changes ahead.

As we navigate the rapidly changing landscape of work and economy in the age of automation, proposals like the Freedom Dividend offer a potential path forward. While debates about its feasibility and potential impacts continue, it's clear that innovative solutions are needed to address the economic instability and job displacement caused by advancing technology.