Chris Hughes, who made a fortune as a co-founder of Facebook, told CNBC on Tuesday American workers who make less than $50,000 per year should get agovernment stipend of $500 per month — paid for by raising taxes on the wealthy 1 percent.
Such a plan is necessary because of the growing digital economy, said Hughes, author of “Fair Shot: Rethinking Inequality and How We Earn” and an advocate for a basic income. “I don’t have a crystal ball on exactly where technology is headed. But I do think that it’s going to continue to destroy work.”
“So we talk a lot about Uber drivers, Lyft drivers, Postmates, the ‘gig economy,’ that is up and to the right” in terms of expansion, he said in a “Squawk Box” interview. But for the workers in these “alternative work arrangements,” their incomes are “deeply unstable,” he said.
The labor market has been squeezed by decades of jobs going overseas — and the void is often being filled by automation, said Hughes. “The future is already here. Work is already changing in America.”
Under his plan, Hughes said, “As long as you’re working for your country, your country takes care of you.” He explained, “If you make less than $50,000 a year, and you’re working, you get $500 as a guaranteed income in the background every month via direct deposit or a debit card.”
Hughes said it’s kind of like the existing earned income tax credit, or EITC, a government program that gives a financial boost for families with low incomes or moderate incomes. The EITC, popular among Democrats and Republicans, “needs to be expanded” and modernized, he continued, “and made flat so people actually know how much money they’re getting.” Right now, he added, it’s a “complicated government formula.”
Hughes, a Harvard dormmate of co-founder and current Facebook Chairman and CEO Mark Zuckerberg, was the early spokesperson for the social network. He also worked on the products team. Unlike Zuckerberg, Hughes did not drop out of Harvard and got his degree in 2006.
However, Hughes left Silicon Valley shortly after to help organize online efforts for Barack Obama’s 2008 presidential campaign. He was also formerly the publisher of The New Republic, a liberal media outlet whose journalism aims to debate and take a stand on the issues of the day.
“The same forces that made Facebook’s rise possible have created financial instability in the lives of working Americans,” Hughes argued in an op-ed in The Guardian, saying his story illustrates how unfair the economy can be. “I’m proud of the work that I did [for Facebook], but the fact that I could make nearly a half billion dollars for three years worth of work — while at the same time half of Americans can’t find $400 in case of an emergency — is a testament to what is wrong with our economy.”
Hughes’ vision for how to solve for what he considers a damaged labor market is similar to the concept of universal basic income, or UBI, cash handouts to everyone regardless of employment status. “What you get with these changes is a modest basic income, which is not exactly the UBI … that one day may be necessary,” he told CNBC. “But what we know now is that people working hard aren’t living stable financial lives and deserve to be.”
UBI is supported by many tech billionaires including Zuckerberg, Richard Branson of Virgin Group, and Elon Musk of Tesla and SpaceX.
The Economic Security Project, which Hughes co-chairs, said Alaska already has a version of a universal basic income, with all state residents receiving yearly cash dividends of $2,072 from state oil revenues. Finland, the Netherlands, Switzerland, the United Kingdom and Canada are all in some stage of discussions, according to the group.
In Tuesday’s CNBC interview, Hughes also said Facebook’s efforts to prevent foreign entities from influencing U.S. elections are a “step in the right direction.”