Can’t solve for stigma or collective bargaining

How would a basic income impact workers and firms in this context? It would surely protect workers against the economic harms of unemployment and underemployment by giving them unconditional resources, and it would enable them to bargain for higher wages and to refuse terrible jobs. But a basic income would do little to reduce corporate power, which is a function not just of wealth but of the ability of firms to structure work relationships however they wish when countervailing institutions—such as a powerful regulatory state—are absent or ineffective. Yes, a basic income would make it easier for workers to organize and demand reforms—Andy Stern dubbed it “the ultimate permanent strike fund”—but the threat of termination or retaliation would still prevent many workers from protesting or striking in the first place. And of course many have argued that a basic income would make minimum wage and collective bargaining laws less necessary, since workers’ material needs would be met by the state. But cash benefits and reasonable wages are not morally equivalent. In Robert Solow’s memorable phrase, the labor market is a “social institution” governed in part by norms of reciprocity and mutual respect. Workers often demand higher wages from larger and more profitable employers. And they work less diligently when they feel disrespected. So there is a major difference between a generous wage on the one hand and a meager wage supplemented with cash from the state on the other. Generous wages help make firms’ economic responsibility roughly commensurate with their economic power. Meager wages signal disrespect, and state transfers are impersonal. In fact, without labor market regulations in place, the impact of a basic income on very low-wage work could be disastrous. If a basic income were not extended to green card holders, guest workers, or “irregular” immigrants (those who enter or stay without authorization), such workers would be far cheaper to employ in menial jobs, at which point they would be permanently enshrined as a laboring underclass. (Currently minimum wage laws apply regardless of work authorization, on the grounds that differential treatment would undermine standards for all.) A basic income could even be designed to serve white nationalist ends. In fact, far-right European parties have often embraced the welfare state as a means of defending citizens against a purported tide of immigrants. A standalone basic income also will not ensure equal access to quality education, health care, mental health care, housing, and transportation. Liberal markets systematically fail to provide such goods to the poor and working class, for the simple reason that they often are not profitable when provided on equitable terms. Giving cash to individuals to purchase them will not suddenly change matters. Popular debates have largely ignored these limits of a standalone basic income, an oversight that is not entirely accidental. As a tax-and-transfer program, basic income would be consistent with a wide variety of political-economic systems, including neoliberal capitalism, social democracy, and various forms of socialism, but much of the basic income literature has a libertarian streak. On the right, Milton Friedman proposed a negative income tax in large part because he hoped it would reduce government bureaucracy. On the left, Philippe van Parijs’s now-classic argument for the policy held it would maximize what he called “real freedom” better than standard welfare-state policies. And Silicon Valley’s take exemplifies an “everyday libertarianism,” which views market results, including pre-tax incomes, as presumptively fair. Unlike many libertarians, basic income proponents accept the necessity and fairness of income and wealth taxation. But a basic income is still no cure for the moral ills of liberal markets. Since labor cannot be separated from workers, it will never be a classic commodity, and labor markets will never be stock exchanges for faceless buyers and sellers. Low wages carry a stigma that low bids for soybeans never will. In the long run, companies cannot treat workers or even consumers as line items on a balance sheet without risking a revolt. Uber is now paying a high price for ignoring this lesson. The company’s flagrant disregard for our moral economy and its open embrace of a cutthroat, winner-take-all libertarianism made it a pariah in many quarters well before it faced allegations of a workplace culture of sexual harassment.