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Hawaii is considering creating a universal basic income

Honolulu, Hawaii
Jan Tyler | Getty Images
Honolulu, Hawaii

It has a long way to go, but Hawaii is now one step closer to adopting a full universal basic income for all its residents.

Basic income — a plan under which the government would regularly send everyone in a given country/state/city/etc. money just for being alive — has been gaining a significant amount of interest in recent years, with trials ongoing or set to start in Finland, Ontario, and Kenya. The Hawaii state legislature has unanimous passed a concurrent resolution which sets up a "basic economy security working group" tasked with considering the idea.

State Rep. Chris Lee, a Democrat from the Honolulu suburb Kailua who spearheaded the measure, says he first heard about basic income as a concept on Reddit.

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His interest in the idea, he said, is motivated by a concern that automation will make good jobs rarer, particularly in a service industry-dependent state like Hawaii. Manufacturing has never been a major part of the economy and while agriculture used to be dominant, the state's last sugar mill closed last year and the pineapple industry has declined dramatically.

"Because we don't have a heavy manufacturing base or a heavy tech sector, it really is that there are regular services available in other cities that make up a much larger share of the overall economy," Lee says.

And those service jobs, he argues, are at risk of being automated away: "We've seen automation of the retail space, with self-checkout systems proliferating, as well as automation in fast food and similar sectors, and the biggest thing, which obviously is yet to come but surely around the corner, is on the transportation side with respect to autonomous driving." (For a good counter-argument to the claim that automation threatens jobs, see this Matt Yglesias piece.)

Lee's resolution, HCR 89, was supported by major unions and the Chamber of Commerce, and sets up a working group to study the idea of implementing a basic income. Its text cites these concerns, and positively mentions basic income as a potential means of addressing them:

WHEREAS, the governments of Finland, Uganda, and the Canadian province of Ontario, along with private sector partners in Oakland, California and non-profit partners in Kenya, have begun pilot projects that explore providing different types of universal basic income; and

WHEREAS, the concept of universal basic income is analogous to providing social security to every citizen at a level sufficient to cover their basic needs; and

WHEREAS, the availability of universal basic income would allow individuals seeking job retraining or working part-time to maintain a basic standard of living; and

WHEREAS, universal basic income would also allow more people to share part time work between the fewer number of jobs that may be available, while lifting burdens on businesses, and providing a more secure and substantial safety net for all people, ending extreme financial poverty, and providing for a more financially sustainable and equitable future for all citizens in spite of coming economic disruption; now, therefore,

The working group will include members from the State Senate and State House, the state's director of human services, the head of the University of Hawaii's Economic Research Organization, and representatives from the Chamber of Commerce and the AFL-CIO.

"We had support both from the Chamber of Commerce and the biggest unions in the state," Lee says. "Everybody recognizes that if large portions of our population are no longer able to work jobs that no longer let them pay the rent, they're not going to have the discretionary funds available to keep a lot of the industries in our economy going."

The legislature approved the measure unanimously. There are only five Republican state representatives in Hawaii out of 51 state reps total, and zero Republican state senators, but unanimous passage also meant getting support from more moderate and conservative Democrats. One of the sponsors is Beth Fukumoto, who for years led the Republican party in the State House before losing the job for attending a Women's March in February; she's since left the party entirely.

Alaska already has a basic income of sorts — Hawaii would be second

Hawaii actually wouldn't be the first state to adopt a basic income, if it comes to that. Since 1982, Alaska has sent out an annual "dividend" from an investment fund financed by revenues from the state's oil industry to every man, woman, and child in the state. The amount fluctuates from year to year according to how the fund's doing, but can get quite high; in 2015 it was $2,072 apiece (meaning a family of four would get nearly $8,300, no strings attached).

And like Alaska, Hawaii is particularly well-suited to such a program because it is remote. Migration complicates implementing a basic income plan in, say, New Jersey but not neighboring states; if suddenly every New Jersey resident started receiving $10,000 each, there'd likely be a massive influx of people from New York, Connecticut, and Pennsylvania. The Supreme Court has ruled that states can't offer new residents lower welfare benefits than longtime residents, so New Jersey would be forced to give all those people the money, bankrupting the state.

But while it's easy to get from New York to New Jersey, it's quite expensive and burdensome to get from New York to Hawaii or Alaska. That minimizes the odds that basic income will lead to a big, sudden influx of new residents who render the system unsustainable.

Of course, we're a long ways off from Hawaii actually adopting a basic income plan. The working group has yet to convene, and Lee is hazy on when it might get around to actually making policy recommendations. "The way we've structured it is that the working group reports back every year to the legislature," Lee told me. "It will take more than one year to come up with options that make the most sense."

But if nothing else, the working group will produce some novel economic analysis of the cost of basic income in a US state, and that state's vulnerability to automation, that should inform similar debates in the future.

"I do think based on early glances at the numbers," Lee says, "this is something that will pencil out to the benefit of both taxpayers and the economy in the long-run."