Increasingly, working hard hardly works
For some Americans, their thoughts when waking up in the morning are not as simple as: What am I going to have for breakfast? Or, Did I remember to buy coffee at the store yesterday? The thoughts that race through many minds are: Do I have any money to buy food today? Or, Can I make it to school with the remaining gas in my car until I am paid next?
For many people, their twice-a-month or monthly paycheck can only stretch so far before they are skipping meals or classes because they do not have enough money to get by until their next payday.
In Iowa, paycheck-to-paycheck living is prevalent — and for about 38,000 people who are living along the poverty line, which is $12,140 annually for one person or $25,100 for a family of four, said Dave Swenson, an economist at Iowa State University, finding ways to pay everyday expenses, let alone unexpected bills, may be difficult, if not impossible.
At Des Moines Area Community College in Carroll, students may skip class if they can’t afford gas; sometimes a $20 gift card provided by the school is all they need to get class. It’s the little things that make all of the difference, said Joel Lundstrom, the provost at DMACC’s Carroll campus.
“The things we always give are for like domestic situations or things like that if they need a hotel room,” he said. “We do that all of the time. It’s amazing that no one has an extra 100 bucks — no one has an extra 50 bucks.”
Democratic 2020 presidential candidate Andrew Yang thinks he has a solution: a universal basic income, or what he calls a “Freedom Dividend,” where every American citizen 18 and older will be paid $1,000 a month from the government.
“The fact that so many Americans are living paycheck-to-paycheck is really a sign about how unhealthy our economy has become,” Yang said. “The assumption is that if you have a full-time job then you’ll be able to support yourself and your family, but that assumption is becoming less and less true. I saw a stat that 30 percent of Iowa (residents) who are working full-time can’t make ends meet. We need to change that.
“The problem is now that we are asking it all of employers and we are saying employers need to treat workers better, even though their incentives are in the other direction. We need to evolve so there are ways that we can get buying powers into people’s hands that don’t rely upon a middle man.”
There are too many people whose thoughts are constantly rooted around their finances. It hinders their ability to work, focus in class or even care for their children.
While in college, I had many unpaid internships, so I needed to have a job while also taking at least 15 credits a semester.
Like many, I understand what it can be like to ask myself these questions. In college, I worked two jobs — one at a restaurant as a server and another as a local newspaper as a sports clerk.
After college, the real world hits and not only are you struck with student loans, but everyday bills or unexpected car repairs begin to weigh down on your mind like cinder blocks, stacking up — one more bill — one more block.
Or so it feels.
Like others, I understand the constant worry and anxiety, but the stigma is, if you work hard then you will make enough money to live and support yourself, and if you can’t, then you aren’t working hard enough or you are spending too much money.
Is that always true, though?
Recently, Yang spoke to about 50 people at DMACC in Carroll during his daylong tour around rural Iowa.
To prepare for his speech and my time with him after, I read his book “The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future,” which lays out how the Freedom Dividend would work.
To provide Americans with a little extra money for unexpected bills or ensure they have enough to fund their children’s day care, piano lessons or any other miscellaneous bills, this $1,000 a month — no strings attached — would come from a 10 percent value-added tax or VAT on goods and services, which would affect large tech companies such as Amazon, Uber and Facebook the most, Yang said.
“We need to get that money from these tech companies, and the most efficient way to do that is through something called a value-added tax, where with a value-added tax, the American people would get a sliver of every Amazon transaction, every Google search, every robot truck mile, and it would bring that money right back here to you all in Iowa,” Yang said during his talk at DMACC.
With this extra $1,000, not only Iowans but every American would have an extra cushion for bills or any other expenses that may come up.
Yang’s idea did not appeal to me just because it is a way to help out Americans that do struggle financially, but because it is a way to support stay-at-home mothers or people who do not have the financial freedom to get out of unhealthy relationships like those with domestic problems DMACC currently helps support.
“It also helps pay and recognize women for all of the work that is done in our communities every day that, right now, society ignores,” Yang said. “I say this because right now my wife is at home with my two boys today, one of whom is autistic. Right now, the market values her work at zero. If we have a dividend for all Americans, then that would be a very powerful step forward for women because there are thousands of women — millions of women around the country that are in exploitative jobs or relationships because they lack the economic freedom to walk away.”
On top of that, universal basic income might make it more possible for people to explore different career options such as entrepreneurship or new hobbies they may not have the time or money to try right now.
Some may worry the extra, no-questions-asked $1,000 a month could be an incentive for people to become “lazy” or less likely to put that money toward future career options or retirement, but if people have extra support that will not be taken away if they improve their lives or financial situation, that’s all the more reason for them to better their life while having the financial freedoms to know they can take risks and explore different career opportunities.
Renee Schon, a coordinator for student and community resources at DMACC, said many students the school works with have no financial freedom at all — no extra savings or support, which can tack on stress and lead them to question if they can even stay in school.
“Something as simple as help with transportation or child care expenses can help ease the financial stress that these students face,” she said.
This further begs the question: Is this Freedom Dividend what Americans need?
Instead of looking at paycheck-to-paycheck living as something taboo that only lazy people experience, why not address the problem and find a way to help others out, while also growing the U.S. economy by giving everyday citizens more dollars to put back into it?
After his speech, Yang spoke more about the problem with paycheck-to-paycheck living, which he said is the way about 30 percent of Iowans currently live.
“If people had a Freedom Dividend of $1,000 a month, it would provide a cushion for unexpected expenses,” he said. “Then when you get hit with a $500 bill (you) could manage it that month, and it doesn’t send your budget into a tailspin. This would have an enormous effect on families, not just financial help (but) mental and physical help, because right now we are stressing people out about how they are going to manage their expenses on a monthly basis and if something unexpected happens, it’s a near existential disaster, and it doesn’t need to be that way.”
So what if people were given that extra $1,000 a month? How would it change their life?
Would they be able to afford day care while finishing nursing school and not worry about running out of gas on the way to clinicals?
Would it bolster the U.S. economy?
To me, it is worth a shot.
It is worth talking about, debating over and finding a way to support those who work tirelessly and are still left lying awake at night thinking: How will I get through tomorrow?