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Should We Try Universal Basic Income?

Submitted by Joel on Tue, 01/30/2018 - 09:29

We have problems in the United States, as every country does. There are artists that can't afford to create, entrepreneurs that can't afford to keep the lights on long enough to get 'over the hump', and worst of all, children who go to bed hungry. Can we possibly fix these problems that have plagued humanity for most of history? Well, I have a thought on that...

What is Universal Basic Income?
Simply put, every adult citizen gets a weekly check just for being a citizen. The amount will be enough for food, modest clothes, modest shelter, and a small amount of extra money for other essentials. There have been a few experiments with the concept, but nothing full-scale has been tried as of yet. Alaska has something similar tied to oil sales. All Alaska residents get a check for around $2000 every year (if they were there the whole calendar year). It's not enough to live on, but everyone gets it. This would expand that concept to every citizen receiving enough to have a modest income. 

How does this fix anything? 
Don't we already have a system to help the needy? Actually, we have several of them. But there's quite a bit of overhead for them. This eliminates that overhead. Since every citizen gets a check, we can eliminate most welfare programs and possibly even other programs like the minimum wage, social security, and more. This makes it very attractive to many conservatives and libertarians. Even though it eliminates the need for many liberal programs, many liberals also like the system because it addresses those needs and others. 

Who benefits from Universal Basic Income?
Since everyone gets a check under the UBI system, most everyone benefits. It's hard to say who benefits the most, though. Every citizen is guaranteed the income to live, but there are already welfare programs for poor people. Some argue they aren't enough, but administration overhead cost reduction would mean more money goes to recipients. Artists would be able to create without concern for becoming a 'starving artist', so we'd have more art in the world (which I think is a good thing). Entrepreneurs could be more adventurous, as they have an income to fall back on. And best of all, no one would go to bed hungry. This helps veterans that struggle to find a place when they return from the military. It helps the working poor who don't quite qualify for help (or maybe they're too proud to accept it). Small stores would benefit since more people have the money for their products. The wealthy even benefit. With a reduction of overhead, this should be a more efficient system, lowering their taxes. Large corporations would benefit because there wouldn't be a need for a minimum wage. The United States would be more competitive for product costs since production costs would be reduced. People would work for extra spending money instead of working to survive. 

How would UBI be implemented?
The nuts and bolts would have to be determined by those much smarter than I am. If this was paired with Universal Health Care, it wouldn't cost that much to have kids, so there might be a bump for having children, but it wouldn't have to be a lot. We already have a foster care system, so it could be similar to that, except every child's guardian would get it. Accounts could be tied to government-issued IDs, so you could use your ID to pay for stuff (or transfer the funds to your bank account). If you don't spend it all, it could even make a little interest. While it makes sense to give more to places that have a higher cost of living, if everyone got exactly the same, it would entice people into living in the lower cost of living areas of the country, which would save money. There is a great deal to consider, of course, but once a system is in place, tweaking it shouldn't be too difficult.

Problems/Criticisms
Yes, there are critics of the system. Let's see if I can address most of the complaints.

"Isn't this socialism?"
No, it's not socialism. Socialism is the shared ownership of the country's means of production. UBI wouldn't make McDonald's owned by the government. 

"Won't everyone quit their jobs?
Many people will, I'm sure. But this isn't enough money to really enjoy life, but to survive and have a little mobility. If you want to go to Hawaii on vacation, you're gonna need another source of income. But people will have the freedom to pivot into work that they love. More people can be authors, actors, entrepreneurs, or whatever their dream is. But here's the thing... capitalism is a fantastic system to increase the efficiency of production. But that has a downside. More efficiency means that a factory needs fewer workers to keep up production. What are those workers supposed to do? Those jobs are just gone forever. We will need a system that accounts for this, and UBI addresses it quite well. Plus, wouldn't we rather have a society that needs fewer laborers and has more artists and visionaries?

"It will cost too much."
With increased efficiency, it shouldn't cost that much, but in order to really determine the cost, we'll have to experiment with it. Simulations can't reflect real-world implementation. And it will have to be on a large scale. Trying it with one person won't show the impact on small stores, for instance. With all the problems it addresses, though, I think it will cost the United States much more NOT to implement UBI.

"Why should we pay for people to be lazy?"
This is more about ensuring punishment for those that don't produce. And it's true, there are some chronically lazy people. First, though, the vast majority aren't. Second, if there was the opportunity to pursue a passion, as UBI provides, perhaps they will work towards those goals. Finally, for those that are truly completely bereft of life goals and just want to stay home and play Xbox all day, let me ask you this: would you really want those people as your co-workers or employees? There are times that we need to subsidize those that would hurt the environment. Yes, we'd be paying for that person to stay home and play games. But that person is still consuming and adding to the economy. Isn't that better than being a drain by forcing them to be lazy at work? They go from job to job, sucking up resources, failing at everything. I'd rather them just stay home and play video games, personally. It would cost us much less.

"If we remove other safety nets, like food stamps, what happens if a person gambles their money away?"
There will still be a need for food banks and soup kitchens. There will be people that refuse to use the government ID or that refuse to accept the money. Those people will exist and we'll have to rely on charities to help them. No system is going to be able to help everyone. Food stamps (Supplemental Nutrition Assistance Program, or SNAP) can have similar problems. People can sell their food money or waste it. Yes, this makes it easier for them. But if they would have done it anyway, why not make it cheaper for the system? It's not a good answer, I know. Sometimes a person's problem can't be solved by a government program. 

"If everyone had more money, wouldn't there be rampant inflation?"
Yes, there will be some inflation as people have more money, but it shouldn't be more than any other time of prosperity. When we're prosperous, inflation goes up. This would impact the vastly wealthy, as they have the most wealth saved back, but they should also benefit from the increased value of their assets. In reality, we'd only really know the impact with large-scale implementation. We'll have to cross that bridge when we get to it, but it's a small price to pay for the prosperity and freedom that Universal Basic Income seems like it would produce.

In conclusion...
So that's my thoughts on the topic. I've owned a small store. In bad months, I would have loved to have my food be guaranteed. I'd also have loved for my patrons to have a guaranteed income. I've been employed, so unemployment was my safety net if I lost my job. Losing that security by being self-employed is scary, which is why many people aren't willing to try it. Universal Basic Income would give people security and freedom. That seems like it's worth it to me. 

What do you think? Are there other issues that I haven't thought of? Am I wrong about something in here? Let's hear what you have to say! Comment below!

Your thoughts?

For me there are three really big positives for the UBI. 

The first one is one that was not discussed.  It is the ability to be dependent on assistance without being shamed for it.  If no one has food stamps, then when you pay in cash no one can shame you for what you are buying.  People have bad luck and get in bad situations and there is no reason to shame them for that.  It doesn't allow people to be judgmental about others that they have no idea what that person's situation is. 

Second is the loss of jobs to automation.  We should not have to fear our jobs being taken by robots.  We should rejoice in it.  As a society we should be moving towards more automation of mundane tasks.  We need UBI to be able to do this successfully and humanely.  

Third is that everyone's situation is different.  Everyone gets down on their luck for a variety of different reasons and every has a way different resources.  By giving just cash, it allows people to use that money to fill gaps as they see fit and as they need, not how others think or make them.  If you have a brother that gives you a place to stay, great!  You don't have to spend your money on housing.  If you have a cousin farmer that provides most of your food needs, great you don't need to spend money on food.  Etc.  Spend it on what you as an individual feel is important and what you need.  

I really feel that we need to explore this idea as soon as possible.  

This is very similar to my answer to "Why should we pay for people to be lazy?" The shame is all about punishment for being poor. I agree that removing that punishment and shame is an important benefit for UBI. There should be no shame in feeding your family.

I will probably write another post about embracing automation, but I agree there, too.

Thanks for your reply!

http://money.cnn.com/2018/03/19/news/economy/chris-hughes-universal-inc…

Chris Hughes is part of the 1% because of his investment in Facebook. He suggests $500/mo to every American worker making less than $50,000/yr. 

Personally, I think that every citizen should get the poverty line (about $1000/mo). It should go into an account for every citizen. Then you don't have the overhead of figuring out who qualifies and who doesn't. You also don't send out checks. It gives citizens a guaranteed bank account (which many don't have and suffer for it). 

Since this is paid through income taxes, it will be offset, of course. If you make a certain amount (probably around $70,ooo/yr), you would break even and pay about $1000/mo in taxes to go toward the UBI. But if a millionaire falls on hards times, which happens a lot to lottery winners, for instance, they automatically have a fallback. Not only that, you don't have to worry about the sting of pride for signing up for 'poor people money'. 

What do you think?