Universal Basic Income — the idea that citizens of a country get paid, just for being citizens — has grown more popular over the last half-decade. But does the idea make sense?
People do a lot of unpaid work. If you want someone to take care of your children, you will have to pay them to do it. If you want someone to clean your house, you will have to pay them to do it. If you want someone to fix you car, you have to pay them to do it. So clearly these tasks have a monetary value.
However, if you do them yourself — take care of your own children, clean your own house, or fix your own car — you don’t get paid to do these things. Why not? Why don’t you get paid to do a job that has monetary value? But who would pay you for it?
Listen to a podcast where Michael and Lee discuss the related question: ‘What are our responsibilities to others?’ We also discuss a bonus question: ‘Are we too busy?’
In a similar vein, we all share common resources. From the water we drink to the land we live on, shouldn’t we all benefit when these resources are used?
Alaska has done exactly that. The state has the “Alaska Permanent Fund” which receives a percentage of oil, gas, and mineral development in the state. Each Alaska resident then gets an annual check from the revenues generated from the fund — typically somewhere between $1000 and $2000 each year. It is wildly popular in the state, and has cut the poverty rates drastically. Could something like that work on a national level?
Simple mathematics shows that if each U.S. citizen — 330 million — received $2000, it would cost $660 billion each year. That is a lot of money, to be sure, but the annual U.S. defense budget is higher ($778 billion in 2022). But would it make sense to spend that much, particularly when a large percentage of people receiving the money would hardly notice the $2000? Wouldn’t it be more prudent to target just the people who would most benefit?
But then you would be creating a large amount of bureaucracy to administer the funds. That would not be substantially different from the welfare system that is currently in place.
Is Universal Basic Income an effective way to reduce poverty and empower individuals, or would it actually increase inflation and decrease productivity? In your opinion, does it make sense?