The MATH Behind Yang 2020
Updated: Aug 21, 2020
If you follow US politics, then you will have noticed a fresh face on the campaign trail of the 2020 Presidential Election. 'Fresh' because, unlike most candidates (and very much like Trump), he's never held political office. 'Fresh' also because of his race, a reminder to Asian people all around the world that we too can be leaders in western society.
His name is Andrew Yang, the third American of East Asian descent to run for President and the first in most people's living memory. (Patsy Mink and Hiram Fong's bids in 1972 and 1964/68 respectively are beyond the recollection of even my parents.)
Yang often describes himself as a 'numbers guy'. This article aims to explore why the data behind his central campaign promise, the 'freedom dividend', makes him one of the most electable presidential candidates. Note that it does not claim that Yang will win. Rather, it simply posits that his policies result in the greatest benefit for the greatest number of people and accordingly, voters as rational agents have the greatest incentive to support him. Since politics is influenced by a multitude of unpredictable factors that tap into human biases and emotions, voters don't always vote rationally and the best policies alone are rarely enough to win.
The problem with promises
Political candidates are in the business of making promises. From lower taxes to more healthcare benefits, from bringing the troops home to building a wall, promises flesh out a candidate's platform and acts as a reputational sanction to deter non-fulfillment. Yet reputational sanctions are not equivalent to legal ones, and seemingly coup de grâce moments can be deflected via a variety of tactics, as President Trump has repeatedly demonstrated. This is the 'moral hazard' dilemma of political campaigns.
While many promises fall prey to this dilemma, however, campaign promises which are central to a candidate's campaign provide a sufficiently strong reputational sanction to compel fulfillment. After all, if first-term presidents hope to become second-term presidents, the promise they are most closely associated with will take utmost priority.
UBI represents this central promise for Andrew Yang. Since the launch of his campaign, Yang has championed UBI as his flagship policy. As Yang is a new face to politics, much of his limited screen time on interviews and debates are used to introduce himself, and little time is allocated to detailed policy analysis. As a result, Yang has become as closely associated with UBI as Trump was associated with the infamous Wall.
From the voter's perspective, the second issue is that however emotionally stirring, promises may be of little objective benefit.
If the nature of politics is such that promises are fleeting, then the nature of humans is such that appealing to emotion is the best way to win votes. The combination of these two factors means that many promises lack concrete foundation, supported by data and science. President Obama's 'Yes We Can' motto is a classic example. Our ancestors said it, and we say it now. Yes we can ... what? It doesn't really matter. For the average American voter, these three words were more memorable than any of Obama's proposals to introduce universal healthcare or lower national debt.
Don't get me wrong - grand promises can be a good thing. We need these ideas to inject hope and a sense of camaraderie between fellow countrymen and women. Yet, for a family struggling to make ends meet, concrete benefits should appeal more than grand ideas. That's where Yang's UBI policy stands out.
According to the Q319 Bureau of Labor Statistics (BLS) report, the average American earned a wage of $919 a week, or $3982 a month. An extra $1000 a month under Yang's policy equates to a 25% boost in income. That's 25% more to pay off a mortgage, pay down a credit card debt or save toward tuition. From another (less practical) perspective, one could afford to shave off three-quarters of her working hours, while maintaining a constant wage. That's 10 hours of an average workweek - Fridays off every week forever to do whatever makes you happy.
Whether from an objective economic perspective or subjective happiness one, the promise of UBI leads to the most concrete and direct benefit for the average American voter. Sure, Bernie Sanders and Elizabeth Warren's medicare for all may result in more savings 'on the bottom line' after raising costs here and lowering costs there, but would you really take that risk that over a secure thousand pesos every month?
The average American
So far, we've argued that the average American would benefit more from Yang's freedom dividend than any other candidate's policy, both because of the likelihood of its fulfillment and the concrete benefits that it brings to their lives.
But who is the average American and what does this mean in election terms? The BLS's average wage figure is calculated as the median of a dataset of 118.4 million American workers. That means there are 59.2 million people who would benefit by a factor of 25% or more, with a significant number more benefiting by a large amount, albeit less than 25%.
For comparison, Donald Trump won the 2016 election with 63 million votes. As the nominee of a major political party, however, the number number of people you have to convince is far less. Studies estimate that voters who 'swung' between the 2012 and 2016 elections numbered around 10 million, with the rest of voters voting for the same party regardless of the candidate running. Only a fraction of that figure would need to be convinced to win the presidency. That's a lot of leeway to play with.
So while we may not see a US president with Mongoloid features come this time next year, we will look back and acknowledge that Andrew Yang exceeded all expectations and lived up to his reputation as the numbers guy.