Employment vs. Income Security

Employment vs. Income Security

by Richard Cook

The Bureau of Labor Statistics reported two days ago (May 8), that the U.S. lost 539,000 more jobs in April 2009. Unemployment now stands at 8.9 percent, twice the level of two years ago. This does not include “discouraged workers” who have stopped looking for work or part-time workers who want to work full-time.

Nor does the figure reflect the plight of those whose earnings are insufficient for the necessities of life, don’t allow for adequate health care, etc. The federal minimum wage of $6.55 an hour provides a person with annual income of $13,654, placing the person above the federal policy level of $10,830. But this assumes the person is paid for a full 2080 hours a year, can find an affordable room or apartment, has no unusual expenses, and probably drives an old used car. We all know that a person or family in such circumstances is barely surviving. Yet the number in the U.S. and around the world who are in such straits, or worse, is growing.

We are conditioned to think that the only way the growing number of people without sufficient job-related income can improve their lot is through more or better jobs or government relief programs, preferably temporary. The exceptions are the elderly on Social Security who may or may not have supplementary retirement income, or unique categories of people such as the permanently disabled, etc.

The issues are complex, but what should be examined is whether income policy should be based on the presumption that employment and income security should be inextricably linked. In a technological society, worker productivity is constantly increasing. This means that employment is becoming more and more unreliable as a means of income generation.

The answer is to pay people a “productivity dividend.” Society as a whole should benefit from the impact of technology, not just those who own businesses, including the financiers who control the monetary system that allows business to function.

In my “Cook Plan” the productivity dividend becomes a $1,000 a month payment to any person who applies. This would serve as a basic income guarantee for everyone while supplement earned income for those who do work. Those who do not work could enroll in job retraining, perform volunteer work, or retire earlier than is presently allowed.

Yes, in a sense we would be paying people not to work. But with an income they would still be consumers, so would support the rest of the population with jobs. It’s the way to channel the benefits of a modern economy for the benefit of all. If we can pay $6 trillion to bail out the financial system so they can put people deeper into debt we can afford to pay a basic income guarantee.