Does Universal Basic Income Make Sense?

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?

Related questions: What is the purpose of money? Time or money? How can we encourage debate?

3 thoughts on “Does Universal Basic Income Make Sense?”

  1. Sure. But only because it may be the only culturally and politically acceptable way to significantly reduce or eradicate poverty in this country.

    Let’s be clear: Many elected officials and significant parts of our population do not trust poor people. And out of that mistrust, they would only support a universal program, so the poor don’t receive “special treatment.” Despite clear evidence that poverty, for example, dramatically impacts childhood physical and mental development, increases education costs for children as well as healthcare costs for poor folks of all ages, and often leads to premature death, we’d rather support watered down support to everyone rather than focus our resources on where the need is.

    Truth be told, coupled with requiring employers to provide their workers with a living wage — significantly reducing poverty through a non-governmental approach — I wish a minimum income program that is focused on eradicating poverty would be acceptable in this country. But, again, because that is less likely to be supported by elected officials and significant parts of our population, let’s have at it and rally support behind a robust Universal Basic Income program.

  2. Yes, I think Universal Basic Income makes sense.

    While some people who are against it suggest that it would lead to a loss a productivity — after all, if you get free money, why would you bother to work for it? — I disagree with this idea. If anything, I think it might very well lead to an *increase* in productivity.

    If an individual can pursue a career that they actually care about, they they are actually invested in, rather than just working for a paycheck in order to pay rent or buy food, they may put more into that job, be more creative, and be a happier employee while doing it. We are never worried that giving workers raises will make them less productive.

    And time and again we see that if there is something that someone actually *wants* to do — as opposed to *needs* to do) they are often willing to do it for lower wages, and might even be willing to pay someone else to make it happen. For example, think of an adult learning to play guitar: they will spend hours and hours practicing, buy a higher quality instrument, and maybe even hire a guitar teacher. All without any sort of promise of a return on investment. (Unless you consider happiness or satisfaction a suitable return.)

    I also think that it would be particularly beneficial for women and children. As stated in the question, there is a lot of unpaid work being done, and the majority of that work, I think, is being done by women because expectations in our social order are that women should give up or limit their careers in order to raise their children, clean house, cook meals, and in general maintain the household. If that work can be compensated in some way, it would go a long way to lifting some out of poverty (particularly those with children to care for).

    I do think that from a financial standpoint, a Universal Basic Income would be more sustainable if it was generated from a source, rather that just a negative line item in a budget. As in the Alaska model, charging a percentage of transactions on natural resources is a start. I also like the idea of increased charges for automation — if work is being done by a machine that would normally be done by a human, then there should be some payment involved into a UBI general fund.

    Things won’t be perfect, of course. As with everything else, there will be unforeseen problems that will arise that will need to be dealt with. For example, as we are seeing in the wake of the pandemic, it is getting harder and harder to staff menial type jobs. That may continue, or even accelerate. If more people find themselves in a position to pursue a job that actually has meaning to them, the mindless, monotonous, or dangerous tasks that need to be done may become nearly impossible to staff.

    But the current system we have is also not perfect, and has problems that need to be dealt with. Implementing a UBI may be a way to deal with some of those problems.

  3. Well, I’ve been advocating for something like this since the 1990s, so my answer is yes. To add just a couple points: We already have a near-universal basic income for the elderly (only certain non-citizens are excluded). And virtually every other developed country has some sort of universal allowance for children.

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