After Coal and COVID-19, Appalachia Needs More Than a One-time Check. Universal Basic Income Could Be Next.
By Laura Harbert Allen, 100 Days in Appalachia, August 4, 2020
Last year, before the COVID-19 pandemic, Matt Murphy started his first salaried job, scheduling and placing on-air ads for a state-wide commercial broadcasting company based in Charleston, West Virginia. Before landing full-time employment, Murphy worked as a substitute teacher, bartender and part-time radio announcer. But the transition to regular full-time hours has not translated into a real change in his lifestyle. In his mid-30s, he still felt he couldn’t afford to live on his own.
“I am finally at a point where I can count on the same amount [in each paycheck]. And it’s just not enough. There’s no way I could afford my own place and a car payment,” he said. Instead, Murphy lives with his grandmother in Cross Lanes and makes the 12-mile bus ride to work in Charleston a few times a week.
That financial strain is worse since the pandemic began in March, when his company furloughed staff, translating to a 10 percent pay cut. Some experts say that 28 percent of U.S. workers—roughly 46 million Americans—have been laid off or had their hours reduced through furloughs due to the COVID-19 pandemic. Workforce reductions like furloughs don’t show up in official unemployment statistics, but for many like Murphy who may have pivoted away from flexible income in favor of a regular paycheck, that sudden instability can prove to be just as disruptive.
Mayors in 11 U.S. cities responded to rampant national job loss in late June, agreeing to launch universal basic income experiments in the next year. Three of those are in the South: Shreveport, Louisiana; Jackson, Mississippi; and Atlanta, Georgia.
UBI—unconditional, government subsidized, regular cash payments for adults — has been studied as a potential part of a strategy to reduce poverty in the U.S. since the 1970s. In Appalachia, UBI is often discussed as a post-coal economic transition strategy. But Murphy’s story shows that workers outside the coal industry are hurting too. “I know people who have had to get forbearances on their mortgages because that 10 percent cut made things really tough financially,” Murphy said.
The $1,200 stimulus payment from the federal CARES act helped, but it does nothing to solve the immediate challenges he faced even before the pay cut. In Appalachia, unemployment rates have reached nearly 20 percent in some areas. “You know,” he told me during a phone call from the radio station where he works. “Why not have something that’s just on a regular basis?”
What is UBI?
The first round of CARES act assistance—billions of dollars spent on, among other things, relief for renters, stimulus payments, and extended unemployment benefits, expired on July 31. Millions of Americans now must grapple with what comes next.
As the nation watches Congress wrangle over a second aid package and COVID-19 infections spike in parts of the nation, the long-term decline of local economies in Appalachia brings the current crisis into sharp relief.
Jobs in the coal industry have decreased steadily since the 1950s, even as production rose due to mechanization and strip-mining. In 2018, less than 14,000 people worked in West Virginia as coal miners. About 50,000 coal miners work in the U.S. today.
In eastern Kanawha County, mounds of coal sit along the railroad tracks, poking out above the treeline. The demand for coal was already predicted to drop by 14 percent this year; now some experts say it could decrease by 25 percent.
UBI could help workers in the manufacturing sector get by as automation and robots increasingly replace blue-collar jobs. In a way, Appalachia serves as a bellwether for the nation. The U.S. economy could shed 1.5 million manufacturing jobs by 2030 according to some projections. Coal workers are among the first to be replaced—and the first to test drive larger-scale government interventions.
Dr. Caroline West is an assistant professor of cultural studies at George Mason University in Richmond, Virginia. She has written about UBI as a tool to mitigate the decline of the coal industry in central Appalachia.
She thinks UBI could provide people with the ability to make decisions about how to improve their lives in economically-depressed areas like Appalachia. It is an important distinction from other types of limited government-sponsored efforts of the past, like President Lyndon Johnson’s War on Poverty program of the 1960s. “I am much more interested in how people, you know, can create their own kind of initiatives,” she said.
She argues that because Appalachian coalfield communities have historically relied on outside financial capital to drive local economies and make up for extractive labor and resource practices—either from coal companies or the federal government—that Appalachian people have also been stripped of their power of economic choice.
West cites a 2017 Al Jazeera video series that profiled small business owners Brad Shepherd and Daryl Royse as an example of how the “bootstraps” mentality continues to further drain local capital in other industries as well. The couple lived and worked in Lexington, Kentucky to save the funds needed to open Heritage Kitchen in Whitesburg, Shepherd’s hometown. UBI, argues West, would have made the couple less reliant on “outside (or absentee) capital” to start their business locally.
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The idea of UBI is not new. The U.S. social security system, which ensures a basic income for seniors, grew out of another economic crisis: the Great Depression. Some experts say unemployment jumped to as high as 25 percent during the Depression-era 1930s. Similarly, in April of this year, unemployment in the United States went from 4.4 percent to 14.4 percent, the largest one-month jump in U.S. history.
Like the Great Depression, the coronavirus pandemic may make gaps in the social safety net more visible, Richard Stafford, a Ph.D. candidate in cultural studies, also at George Mason University said. “Something like coronavirus could trigger people to say ‘hey maybe business as usual isn’t working perfectly if it’s so vulnerable to crisis, What could we do differently?’”
But Stafford remains skeptical. He thinks that there is more political will to pass emergency-driven payments than there is to pass UBI legislation into law. ”I don’t know that a relief payment is a vehicle to a universal basic income,” he said.
UBI in Action
In theory, UBI enjoys support across a broad swath of the political and social landscape. Figuring out exactly how it fits into the U.S. social safety net is where things get sticky.
Conservatives favor cash payments in lieu of other social safety net programs, like SNAP and housing subsidies. The logic in this argument is that the money saved from the costs of administering those programs could help fund UBI payments.
But UBI supporters on the left say that route would only increase poverty, because administrative costs for those programs are actually pretty low—ranging from 1 percent—9 percent of program costs. They favor funding UBI through taxes on carbon emissions and a value added tax (VAT), a strategy used in the European Union countries for decades to fund the social safety net.
Rev. Roberta Smith, a pastor in the African Methodist Episcopal tradition is president of Charleston’s Black Ministerial Alliance. She has worked with congregations throughout the Kanawha Valley of West Virginia since 1993. Rev. Smith thinks that UBI could be a tool to help alleviate poverty in the Black community.
“We have a lot of government and nonprofits that supply a lot of utility and food assistance,” she said. “But if you could have money consistently, at least for a time, it would help.”
But, she also thinks other programs—such as tuition-free college, community college, or vocational education—are important too. “It [UBI] should be contingent on other things,” she said, “so that you can get to where you can be in a position to take care of yourself.”
Policymakers also disagree on whether they think implementing UBI would disincentives work. The current debate between Republicans and Democrats in Washington over the $600 weekly addition to unemployment benefits is a case in point. The New York Times recently reported that Republicans want any additional unemployment supplements capped at 100 percent of weekly wages. They argue that $600 a week is more money than many workers make when working full-time. As a result, some congressional leaders claim, employees may feel they do not need to go back to work.
But a recent UBI experiment in Canada’s Ontario province showed that 75 percent of people receiving a basic income kept working. Researchers at McMaster and Ryerson Universities also found that 80 percent of participants surveyed about the program said their overall health was better. Nearly half said they used alcohol less when receiving basic income. Respondents who stopped working often returned to school with the goal of obtaining a better job in the future.
In Finland, participants in a pilot UBI project also reported a greater sense of satisfaction with their lives and an enhanced sense of economic security. While some said that finding employment remained difficult, others were willing to take lower-paying jobs because of the buffer UBI provided. According to the study, UBI also provided entrepreneurs and artists in the pilot project the security to pursue independent work.
The Future of UBI in Appalachia
West and Stafford agree that UBI alone is not a magic bullet solution that will end poverty or make up for the loss of jobs due to automation. Stafford cautions that simply giving people money to spend in the market still puts them in a vulnerable position when the economy faces significant disruptions as it has in the past few months.
“I’m interested in the idea that people have a social right to health care, a social right to housing, a social right to education,” he said.
For Stafford, having structures in place that protect people from worrying about having a home or getting seriously ill could be part of an overall strategy to strengthen the social safety net in the U.S. He also thinks Appalachia has lessons that should inform policy makers about that net. “It is a place that saw job loss due to mechanization before everyone else,” he said.
For West, it is about the power of people to choose rather than living with choices made for them by forces outside the region from the corporate or government sectors. UBI could be part of a solution that empowers a bottom-up revisioning of Appalachia that starts with the people who live there. And that could be a model for a nation.
This story was produced and co-published in collaboration with Scalawag, a journalism and storytelling organization that illuminates dissent, unsettles dominant narratives, pursues justice and liberation, and stands in solidarity with marginalized people and communities in the South. Research and assets for this article were made possible with support from Spotlight on Poverty and Opportunity, a nonprofit, nonpartisan site devoted to poverty news and analysis.
