Finland recently revealed that it would be embarking on an experiment with universal basic income. This has sparked a fresh wave of mainstream interest in the idea, although it’s been growing steadily in the last decade.
Here goes my attempt to explain and justify basic income in America. Many others have done this before, but these are the components of it I find to be most relevant and compelling. It’s become rather dear to me and, at least until research comes out demonstrating it to be a colossal failure, it sits now at the core of my current political philosophy.
What is it?
The concept is called universal basic income (UBI). The notion is to give every adult citizen an untaxed salary, regardless of their income, marital status, or employment situation. No questions asked, no stipulations or requirements. You’re still breathing? You get a paycheck.
How is this paid for?
Initially, it would seem that funding something like this would be impossible. This would be a several trillion-dollar program. The primary means of payment is quite simple: eliminate or reallocate all existing systems for welfare, social security, unemployment, and need-based financial support. All of them.
In the current system, there are hundreds, if not thousands of local, state, and federal bureaucracies with completely different structures and methods of administration for each form of assistance. UBI would eliminate the need for many of them outright, and could be administrated at much lower costs. There would be no eligibility requirements or vetting of recipients and distribution could be vastly streamlined. The bureaucracy required to implement and maintain UBI is tiny in comparison to vast network of niche programs and systems we have right now.
Existing taxes used to support these systems would be reallocated to UBI. But let’s be real: this would necessarily require a higher level of taxation on everyone’s elective income (what you get from your job). The degree of that taxation depends a lot on how much the salary is.
How much is the salary?
In order to replace existing social support systems, the bare minimum UBI has to at least cover two things: food and rent. This means that UBI may also need to be adjusted for local cost of living. So for NYC it might be $1400 / month, but in rural Kentucky it might be closer to $800 / month. Not enough to pay for posh living – just enough to cover the basics. Alaska’s version of UBI requires its residents to have lived there for a year with no intent to move in the next year, which would likely be a necessary requirement for cost of living adjustments.
Beyond that, it depends a lot on what services you think should be covered, and there’s lots of debate about this.
- Utilities, specifically water, electricity, gas, and internet. This would mean providing enough to cover the minimum requirements and increase rates for consumption beyond those minimums to ensure people don’t consume more resources just because they can. That adds an additional layer of complexity beyond cost of living, but a place to live without heat or lights is not much of a home.
- Child support. Having children is expensive and many of our existing safety nets are specifically geared towards helping working families get by. Some proposals for UBI include giving a partial income for every child in a family. I tend to think that this might be better handled by a separate system from UBI, as I worry about increasing the complexity and burden of responsibilities in administration. As far as I can tell, nobody fully agrees on how to do this.
- Disability assistance is also complicated. Many disabilities incur a lot of costs that don’t squarely fall under the umbrella of health care, e.g. transportation costs or special dietary needs. Similar to child support, I tend to think a dedicated system would likely be more efficient and responsive.
What about health care? Well, if your society hasn’t implemented single-payer health care but is somehow comfortable toying with the idea of universal basic income, then this is a pretty critical paradox. Literally all of the reasons to support UBI are doubly true for single-payer health care, where the gains in efficiency (especially in America) by unifying all the different programs and administrations would be enormous. That said, in many ways I think the benefits of UBI are far more obvious and easy to explain than single-payer health care, and I could see a situation in which this occurred in reverse order, especially given that America struggled to pass even moderate changes to our health care system.
Won’t people stop working?
This is the first thing that always comes up.
The core of UBI is not that it pays for everything. Someone attempting to live off of UBI without any additional income is not going to find themselves very happy. As the saying goes, man cannot live by bread and water alone; very few people are content to live without the ability to afford entertainment or luxuries of any kind. UBI is intended to do three things: cover the bare necessities for the poor, mitigate risk for the middle and upper class, and provide a safety net for everyone.
If we’re being honest (and we should be), however, the answer is we don’t really know for sure. Wide-scale, long-term experiments haven’t been done. To really, truly know what would happen with UBI, we’d need at least 20 years of observation to see how people act and adjust over very long periods, across generations. That simply doesn’t exist. But the data we do have does not indicate that people would stop working.
Supporters of UBI come from surprisingly disparate backgrounds, because there’s a lot of different reasons one might get on board with this. Some people are attracted to the way it slims down the government and its intrusion into individual’s lives. Others appreciate its humanitarian and anti-poverty aspects. There are those who see it as our only option in rapidly changing world.
Part of that widespread support also stems from the fact that everyone has their own idea in mind when they talk about it – that would all change the moment pen is put to paper and legislation is drafted. But there’s still a lot of agreement on most of the core benefits of UBI.
IT’s Effective at reducing poverty
In the last few years, there have been several studies on homelessness that reached a seemingly radical conclusion: the cheapest and most effective way to eliminate homelessness is just to outright give people homes. No questions asked, no continued eligibility requirements, just give them a stable place to live. The reasons for this are many, some of which fall under the category of simplicity – you no longer have a case worker trying to help someone hold down a stable job so they can save enough money for a down payment on a place without any furniture which then falls through and they end up getting picked up by the police for vagrancy and sit in jail for a week so they lose their job. The point being: there is strong evidence to indicate that solving problems directly, rather than indirectly, is more effective and efficient.
The question then becomes: is giving people money the same as giving them food and shelter? Is that how the money ends up being spent? As far as we know, yes, it actually works. But we also don’t have a lot of hard data. There are a lot of conditional cash transfer programs that have been enormously successful around the globe, but these have largely been used to incentivize specific actions and come in smaller amounts.
More research is needed, as always – but the initial evidence would seem to indicate that people generally know what they need and will act accordingly.
It Simplifies the government’s role
Enormous gains come from wholesale eliminations in complexity of the bureaucratic process of helping people. Across the local, state and federal level, there are easily hundreds of thousands of people whose jobs are to handle applications, vet recipients for eligibility, investigate fraud, verify claims, and countless other tasks that go into the simple act of providing help to people in need. All of that goes away, and with it, all of the middle management that handles day-to-day office affairs and the upper management involved in decisions about how resources are to be allocated. Every unemployment office would be made moot. Every office handling food stamps, WIC, and welfare would be outmoded. It can all be merged into one administration whose primary task is no longer processing or investigation, but outright distribution.
This brings with it a huge benefit for recipients, as well: time. If you’ve ever filed for unemployment, you know that it can be a slow, often grating process, where totally legitimate applications will be rejected for no reason other than they’re trying to weed out the invalid claims. Underfunded services lead to understaffed facilities, which lead to incredible lines and wait times. There are countless forms and applications to fill out, and they never really end. Taxes for anyone on multiple forms of social support can be vastly more complicated than they are for an equivalent person in the middle class. A unified and streamlined system eliminates all of this.
Lastly, there is a hidden benefit to reducing the amount of human interference with aid: mitigating discrimination and corruption. The fewer hands a form passes between, the less chances there are for a bureaucrat to hold up processing for selfish or arbitrary reasons.
it gives power to individuals
The big question with UBI is exactly what people will do, knowing that a reliable source of income is available to cover the bare necessities. Some of the biggest source of libertarian and right-wing support for UBI (aside from its slimming effect on bureaucracy) actually comes from the way it empowers individual workers and consumers. If employees are no longer wholly dependent on their job for survival, individuals are suddenly given an enormous amount of power in the ability to decide when and where they should work. On the flip side, the government would have far less need to strictly regulate wages and work environments. There are also mixed effects to consider.
- The minimum wage could be lowered or even eliminated. If people are no longer dependent on employment for survival, it is no longer necessary for employers to provide that guarantee.
- Paradoxically, wages and working conditions for less attractive jobs would improve. If people are now more able to choose the job they actually want, employers would be forced to make many jobs more appealing to attract and keep employees. That said, this would also create a feedback loop with automation, but I’ll get to that.
- Costs for many goods and services would change. If agricultural workers can demand higher wages and better working conditions, the price of food will rise; but there is a strong argument to be made that this price increase is just a more accurate reflection of the actual value of the good. Other goods and services might drop in price as people would no longer be dependent on the price of their goods to put food on the table. The outcomes here are highly unpredictable.
- People would move. This is one of the biggest unknowns. It has to be assumed that if people were less concerned with rent, since UBI would be adjusted for cost of living, that a lot of people might end up moving. I’m not sure anyone can say whether this would be a bad thing or not, though there are ways of mitigating this incentive by creating a residency requirement for UBI to be changed after moving. Regardless, this is a wildcard factor.
Countless other impacts could be named – but the overall result would potentially be a huge increase in the power of the individual to make the right choices for their life. Though UBI initially comes across as a highly socialist system, it has great value to offer for shoring up many of the weaknesses of capitalism and the many negative externalities of open markets.
it’s the only known answer to automation
Basic income has a significant base of support in the tech sector for a very specific reason: a new wave of robotic automation is here, and it’s going to spread into nearly every sector of society. This should be really good news for our quality of life, ease of living, and free time, but our economy and government are currently totally unequipped to handle this adjustment.
The main thrust of the argument here is that at least 50% of current jobs are at risk of being fully automated. There’s no exaggeration here. Self-driving cars could replace every cab and truck driver within the next 30 years. Autonomous organization bots could replace the majority of inventory and stocking jobs. There are already self-service cashier machines for stores. Significant portions of cooking and cleaning jobs are trivial to automate. All of these jobs are at risk. There is almost no reason for business owners not to embrace these changes.
Under the current economic system, we have no ability to provide for these people who will be jobless through no fault of their own. UBI is, so far, the only proposition that actually addresses this problem.
Just kidding. I’m not going into (more of) those here. There are plenty to find out there.
In my mind, the theoretical critiques of a policy like this are worth relatively little. The only thing that matters is trying stuff out, looking at the data, seeing what worked and what didn’t. Rinse and repeat.
Is a universal basic income really the right path? I don’t know, nor does anyone else. But I don’t believe we’re in an period of history where we can really afford to sit still and hope that things turn out alright. We have to try whatever we can to improve the world. We have to take care of each other. None of that can wait.