Free Money for All Citizens

American flag

The immigration issue deeply divides our nation and threatens to tear our society apart. The issue is complex. The true arguments are nuanced; the political talking points are ugly and often reek of racism or accusations thereof. The issue divides all factions. It divides the political Right between nativists who wish to grow old in an uncrowded land where English is still the primary language vs. owners of farms and factories who profit from the cheap labor which floods across our borders. It divides the political Left between those who see immigration as foreign aid as well as a source of new Democratic voters vs. unionists and other labor activists who compete against the flood of cheap labor. It even divides libertarians between cosmopolitans who see national borders as a suspect institution vs. Ron Paul and his followers who call for closing the borders and reducing immigration – at least until we repeal the welfare state…

The welfare state. That is the problem. As long as we have our current welfare state unskilled immigrants are a burden, even those who work hard; for they pull down the market wage for manual labor, driving more natives onto the welfare rolls. Not only that, with a progressive tax system low wage workers are net tax recipients. Minimum wage immigrants, even those who work hard, learn English and obey the law perfectly, are still a net tax burden.

But we as a nation have decided we don’t want too big a gap between rich and poor. We don’t want miserable beggars and corrugated metal shantytowns surrounding our cities, even if it allows us lower taxes and cheap household help. Se we have a welfare state…and a problem.

We also have an available solution: free money for all citizens. This allows us to provide a poverty floor for all U.S. citizens without taking on several other countries worth of welfare burden. Not only that, if we collect that money with a flat on the bottom tax system, we can have low wage immigrants paying enough taxes for the government services they receive while working in this country. Immigrants, including manual laborers, cease to be a burden on the treasury, which given the enormous government debt, is a rather good thing.

Compensating for Cheap Labor

Much of the world is still extremely poor…and cheap. Travel to a rich country and work even for minimum wages and you can live quite well when you go home. In many ways it is a win-win situation. Rich country citizens receive cheap labor while poor countries receive money in a way that bypasses corrupt governments. Guest worker programs are effective foreign aid.

Alas, that aid comes at the expense of native manual laborers. Most the progress labor organizers achieved in the heyday of unions has been undone by millions of immigrants eager to work for wages that are low here, but good in their home countries. Increasing the minimum wage is one solution, but a crude one, which creates unemployment among those who don’t have the skills/talents/diligence to earn a higher minimum wage. Also, increasing the minimum wage makes first world farm and factory products less competitive on the world markets. Old factories rust. Rain forests are cut down to produce beef which should have been imported from rich countries which have plentiful grasslands.

A flat on the bottom tax system couple with free money for citizens solves the problem. The tax (whether it be a flat income tax, national sales tax or carbon tax) reduces the take home pay of non-citizens, reducing the urge to cross borders illegally. The free money supplements the lowered wages of native born workers, so that the market minimum wage plus citizen’s dividend becomes a living wage.

As for the guest workers, they pay more in taxes, but they get something important in return: legal status. Instead of paying smugglers to get across borders, they pay taxes when they arrive. While here, they can safely call the police when their rights are violated. They can visit without fear of deportation or unchecked criminal gangs.

Free Money for Non U.S. Citizens

The article above addresses the situation in the United States. Other wealthy nations – such as Canada, Great Britain, Australia, France, Germany – have a similar immigration problem, and they could apply a similar solution. They main difference is that their citizen’s dividend would differ based on the wealth of each respective nation.

But even poor nations could apply the principle. Many poor nations subsidize basic necessities in order to maintain support for the government and alleviate poverty to a limited degree. This is very inefficient, since the necessities are often wasted, and locals have less incentive to produce them due to the low price. And when the government owns an industry in order to provide subsidized prices, the result is more opportunity for corruption and inefficiency.

A better solution is free money for all citizens. For example, Mexico and Venezuela could benefit by privatizing their oil companies, charging high royalties for the oil extracted, and giving all citizens an equal share of the proceeds. Alaska has a program along these lines they could emulate. Cuba could tax its beachfront real estate and give the proceeds to its citizens. North Korea could negotiate to receive most of South Korea’s military budget to be divided among North Korean citizens in return for disbanding its government and army.

Should the poorer nations of the world switch from nationalized industries and subsidized necessities to private industries taxed to provide free money to their citizens, they will eventually cease to be poor. When that happens, people will move to different countries because they like them, not because they are desperately poor and are willing to work hundreds of miles away from their homes and families.