Restoring Abaco through universal basic income
A thing can die little by little, but in order for it to come alive it needs to happen all at once.
Hurricane Dorian left in its wake incredible destruction along with a death toll yet to be determined. The stories of desperation and fights for survival will be told for ages to come by those who survived this horror. The winds have subsided and the waters have receded; now begins the seemingly insurmountable task of restoring Abaco.
Abaco was more than the third most populated island in the Commonwealth of The Bahamas. It grew to become a reliable economic contributor to The Bahamas overall. It is this fact that must be causing significant handwringing to those who measure such things. Dorian’s aim at central Abaco devastated that island in the most significant way possible. So how do we rebuild?
Abaco’s economy was long thought to be driven by second homeowners. These are wealthy individuals, mainly from the United States, that made Abaco their home for a portion of the year. They were the geese that laid the golden eggs. But now, with Abaco’s infrastructure so completely destroyed, we must look elsewhere for our revival.
If Abaco is to be restored its true economic drivers must be recognized. Second homeowners provided a considerable source of income to the island, but to find the true strength of Abaco’s economy one must look lower on the totem pole. The strength of any economy has never been its rich but rather its poor. It is the lower class of society that are the true champions of any economy. If Abaco is to be quickly restored we must recognize and target our efforts at this subset.
A shepherd is nothing without sheep and teachers need students. In the same way, businesses are nothing without customers. Much emphasis is placed on welcoming the rich and well-heeled to our shores, but it is the lower class that is the true catalyst of wealth redistribution. It is to them we must now look to save Abaco.
To put it in terms that Bahamians can understand: “But the greatest among you shall be your servant.” – Matthew 23:11.
These words attributed to Jesus are economic gold. They capture the essence of the economic revival that Abaco would need in order to find its way back. We must recognize that it is the lower class that is most important to an economy.
Immediately after the cleanup and utility repairs, the government should identify 1000 households from within the affected areas. These households should represent families that occupied the lower-income stratum of the economy. Each of these households should be granted a monthly payment of $2000; with the stipulation that at least 80 percent of the grant be spent within the Abaco community. This payment will continue for a year. Each and every subsequent year it will decrease by $500 per month each year for the next five years. What will the cost be to the government: year 1 – $24,000,000, year 2 – $18,000,000; year 3 – $12,000,000; year 4 – $6,000,000; year 5 – $6,000,000.
Why will this work? Before you balk at the idea of ‘money for nothing’, consider these factors:
A large amount of Abaco’s workforce has been displaced and must be incentivized to return. This workforce represents the true drivers of the economy.
This grant provides an undergirding for those who are the most reliable spenders in the economy. The grant will restore confidence.
Economies are built on people spending and people willing to spend is based on confidence. The government alone can provide this necessary confidence by guaranteeing the income.
These payments would be in addition to any income they can generate through employment. This is not a time for half measures.
So why target the lower class? The answer is twofold:
The people who occupy this class are the most vulnerable and what do the vulnerable crave? Stability. These payments would provide stability to those most affected by this tragedy.
Quite frankly we need spending to stimulate the economy and it is the lower class who spend a greater portion of their income. They will spend it on rent, groceries, utilities, transportation, childcare, medical expenses and self-care. Most importantly they will not hoard it.
Abaco will be restored, so let’s get there by championing and recognizing the true heroes of the revival: the weakest amongst us. Through them confidence will be restored, businesses will regrow and flourish and Abaco will live again.
– Bertram Mills