Sarah Jacobs/Business Insider
- Chris Hughes is a cofounder of Facebook and the Economic Security Project.
- He is advocating a guaranteed monthly income of $500 for working Americans who are part of households making less than $50,000 a year.
- The initiative is aimed at growing the US's economy by bringing money to low-income communities and encouraging work, even when jobs are low-paying.
- This post is part of Business Insider's series on Better Capitalism.
Chris Hughes helped his Harvard roommate Mark Zuckerberg launch Facebook. Though his three years of work on the project earned him just 2% of the company, it made him very rich.
After Facebook went public in 2012, Hughes cashed in and suddenly found himself with half a billion dollars.
It was a much more dramatic version of a feeling he first felt in 2008 when he sold his first tranche of stock for $1 million. He was officially wealthy.
Rising to the upper level of US society from being solidly middle-class caused him to reconsider his role in the world, he explained in a recent interview for Business Insider's podcast, "Success! How I Did It." It has been the catalyst for his latest venture: working toward bringing a so-called basic income to 60 million Americans.
You can listen to the full episode below.
Here's Hughes' plan, laid out in his new book, "Fair Shot":
- "Government should provide a guaranteed income of $500 a month to every adult who lives in a household making less than $50,000 per year and who is working in some way."
- Included in that definition are those taking care of young children or an aging adult with disabilities or impairments full time, or adults in college full time.
- A tax on the richest Americans, whom Hughes defines as those making at least $250,000 a year. He suggests this group would have income in their highest tax bracket taxed at 50%.
- Dollar amounts for both the monthly check and the salary requirement would be subject to adjustments based on a state's population.
- It would cost the federal government $290 billion, making it the fourth-largest federal social benefit.
- It could start with a guaranteed income of as little as $150 a month.
While some may see the plan as radical, Hughes considers it a "modest" alternative to a universal basic income, in which every citizen receives a guaranteed amount of money.
"So UBI is a big-picture ideal that motivates a lot of people, including myself, to think about 2030, 2040, in the future," he told Business Insider. "Today, however, I think a guaranteed income of $500 a month to people who make $50,000 or less — so a more modest starter version, if you will — is what's most required. And that's because I believe that a guaranteed income is the most powerful way to combat income inequality."
Hughes portrays the idea not as an act of charity, but as a way to grow the economy by reviving low-income communities and encouraging employment — a belief supported by research from the Roosevelt Institute, though under a different form of a guaranteed income.
While Hughes' version of a guaranteed income is coming from a liberal perspective, there are right-leaning versions — particularly among libertarian thinkers — that would look similar. In alternate proposals, that money would come not from a tax increase, but from the reduction of other federal welfare programs.
His main vehicle for his advocacy is the Economic Security Project, a think tank he founded in 2016. It is already working with the mayor of Stockton, California, on a guaranteed-income experiment designed to bring new energy to the community and lower unemployment rates by rewarding work when it would otherwise seem like an endless struggle.
Hughes said that in the past couple of years, he's been reflecting on the strange turn of events in his life that began with the luck of being Zuckerberg's roommate.
"As a result, I made a boatload of money for three years' worth of work," he said. "And as much as people might want to see the American dream in that, I actually think it's indicative of the fact that a small number of people are getting extremely lucky while 99% of everybody else is working hard and is having a harder and harder time to make ends meet. And we have the power to change it."
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