The Case for Unions to Support a Universal Basic Income
How Andy Stern, the former head of the 2-million-strong SEIU, came around to the idea of giving everyone, even non-workers, a monthly stipend.
Andy Stern has been part of the U.S. labor movement for decades. He was formerly the president of the Service Employees International Union, which represents nearly 2 million American workers. During his tenure at the SEIU, he was hailed as “the nation’s most politically influential union president,” which made his resignation in 2010 something of a surprise.
Stern’s new book, Raising the Floor, details his views on the changing nature of work in America and explains why Stern has come around to supporting a universal basic income—an idea that has gained a lot of traction in the past year when it comes to media coverage, policy debates, and efforts to study its efficacy. I recently spoke with Stern about his book, and a lightly edited transcript of our conversation follows.
Bourree Lam: So tell me about your background.
Andy Stern: I'm a product of the one-job-in-a-lifetime careers: I spent 38 years working for the same organization, a labor union called Service Employees International Union, where I started as a welfare worker and spent the last 14 years as its international president. During that time, the SEIU became the largest union in the U.S. and the fastest-growing union in the world. I was appointed to the Simpson-Bowles Commission on Fiscal Responsibility and spent all of my life trying to change worker's lives, mostly through the growth of labor unions, which I call the greatest anti-poverty program that America ever created.
Lam: In the beginning of your book, you wrote that the American dream that had motivated unions, like SEIU, was replaced by “a paralyzing anxiety” around 2010. Can you talk more about that?
Stern: I'd spent my life believing that there was a way to continue what had been an enduring dream in this country that every generation of children did better than its parents. I lived that as a welfare worker—watching the sons and daughters of coal miners and autoworkers go to college and get white-collar jobs.
By 2010 though, the labor movement that I loved had gone from representing one in three or four American workers to one in 16 in the private sector. I could not figure out anymore how a shrinking labor movement, a changing economy, a changing structure of work could accomplish what I had spent 28 years trying to do—which is have the American dream continue.
So, out of ideas and realizing that something different was going on in the economy, I found it very hard to keep doing what I was doing and expecting that I'd get a different result. Unexpectedly to many, but very logically to me, if you can't figure out where you're leading an organization, it's pretty hard to get up everyday and go to work. So I resigned.
Lam: What were you trying to accomplish and what felt so impossible about that?
Stern: Our union had grown over a million members. We've seen the lives of many home-care, childcare, security officers, and other low wageworkers' lives change because of the union. But for all the time we were growing, the rest of the labor movement was shrinking. Inequality was rising. Wages overall were flat.
Today, we know that less than half of Americans believe that the American Dream is possible anymore. It's very hard to keep doing the job you're doing when you don't think it has the potential to produce results.
Lam: One of your arguments in your book is that unionizing is, in some ways, no longer enough.
Stern: Unfortunately, labor unions now play a particularly boutique role in the economy. When they represented one in three workers and were able to, as economists say, take wages out of competition for autoworkers or steelworkers so that companies competed based on quality and efficiency, not who could pay the least, they served a very economy-wide function.
Now, in certain labor markets—like New York or Chicago—unions play important roles, but they clearly are not in the position, other than in professional sports, to really create a level playing field amongst companies to add value on a large enough scale. So for the workers that are in them, they're an incredible opportunity. But, many people sort of don't understand how you get in one—it seems like a secret society at times. The unions have become more and more involved in the public sector rather than the private sector. It's hard to see in the private sector how traditional unions are willing and able to scale up like an Uber or AirBnB.
Lam: So after you quit SEIU, you started researching the future of work?
Stern: I started trying to understand two things in more depth: what was going on, and, if there was something going on, how we could build a stronger economy and renew the American dream. It's ironic that an answer I ended up with, which is universal basic income, I wouldn't have known what it was if someone proposed it when I first started. So I listened to lots of people—from Andy Grove at Intel to Dave Cote [at Honeywell], to advocates like Geoffrey Canada of the Harlem Children’s Zone—and just tried to hear from their perspective how the world of academics and the lead economists sort of played out in real life. It was that journey that took me to a series of conclusions.
Lam: And now, do you believe universal basic income is the answer?
Stern: I believe that this is not our father's or our grandfather's economy, that the 21st century will not be employer-managed. It's going to be self-managed, because the growth in alternative work relationships—contingent, freelance, gig, whatever you want to call it—is clearly going to increase. Although the economy can grow in terms of GDP and productivity, it no longer means there will be wage growth or job growth, as opposed to the 20th century.
There's now an ever-growing amount of research—from McKinsey, and Oxford, Larry Summers, Bill Gross, Deloitte, Pew, Brookings—that says that the potential for a tsunami of job disruptions is quite high, although the estimates can range from 25 percent of jobs to nearly half of tasks. The numbers are huge, and grow at an accelerating pace. So if that's a conceivable scenario, then what's an appropriate response? Universal basic income is the best idea I have. I appreciate some of its potential shortcomings, but it can work.
Lam: There's a section in your book about the idea itself seeming quite un-American.
Stern: Yeah, the idea seems un-American because people like myself and my parents came from a world where work was not only an economic function, but it was very tied to your sense of dignity, your identity, to your social relationships. And the idea that we would provide money to everyone, even if they didn't work, just seems particularly un-American.
Having said that, Thomas Paine at the early founding of the country proposed giving every American 15 pounds sterling as compensation for the wealth of a country that we were going to turn over to private hands. Conservatives like Frederick Hayek, and most importantly Milton Friedman and Richard Nixon, were huge supporters of the idea as a way to provide stability and end poverty. So although the concept of giving away money to people who don't work sounds rather un-American, the idea has very strong roots in American history and politics.
Lam: It's interesting because besides the question of political viability, there's also the culture of work—the American way being that hard work can lead to success. How can we square decades of that mentality with a concept like universal basic income?
Stern: I'd say two things: One is that clearly there's a generation issue here. But also, more and more Americans are having a really hard time. I think some of this worship of a work-centric economy is very illusory for many Americans. We're now seeing the limits of the traditional answers—if you just worked hard or just got a degree, things would be fine. Now we find people with advanced degrees, adjuncts having a hard time getting by.
Historically, a degree was the ticket to the middle class. Reality will change what is still probably mostly an elite held vision of the world. But I also think that young people entering the economy clearly have a different attitude about work and jobs than their parents and grandparents. Even in the Swiss referendum on universal basic income, where only 22 percent of the overall voters voted in favor—nearly 40 percent of Millennials did. I think time will demonstrate that people that are having a harder time in the job market.
Lam: How do you reconcile unions and universal basic income? Are unions for basic income? And if not, how did you get to a place where you're in such strong support of universal basic income now?
Stern: I would say that unions are not generally oriented towards thinking too far into the future. We spend most of our time chasing the future and trying to understand it rather than finding ideas that put us where the future was heading and have it come towards us. We are spending, appropriately, a large amount of energy on $15 an hour wages, getting governments to promote paid family and sick leave. In the absence of unions being able to make changes in workers’ lives, people are turning to the government as a solution to do that on a broad scale.
But unions have rarely thought 10 or 20 years ahead, and universal basic income requires that kind of thinking. What I'm hopeful, somewhat from this book, is that unions can look up from the defensive crouch they're in, look into the future, and understand that so many of the things they're doing now that are enormously important could be very insufficient. And that they'll begin to think of universal basic income as they think of minimum wage, as an idea that becomes essential if we're going to end inequality, provide stability, and keep the American dream alive.
Lam: The old American dream or the new one?
Stern: I think a new one that's a mixture of hard work and a floor that allows people to have choices, and not live in constant fear of missing a paycheck or not paying rent or not being able to take care of their children—which is what universal basic income will allow.