universal basic income argumentative essay

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Universal Basic Income - Student Essay

Last updated 13 Jan 2019

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Here is an answer to the question: "Assess the view that the UK Government should use fiscal policy to provide a guaranteed minimum income as a strategy to reduce inequality."

Tim Harford goes bouldering with Rutger Bregman, the provocative thinker whose bestselling book argues for a universal basic income https://t.co/bckPeLuAkm — Financial Times (@FinancialTimes) March 10, 2018

In recent years talk of a guaranteed minimum income, more commonly known as a Universal Basic Income (UBI), has risen enormously. In the wake of the Global Financial Crisis, many now look to our struggling welfare systems and unpopular austerity measures in despair. Drastic measures are now being called for. Indeed a guaranteed minimum income is one of those, and yet it has supporters such as Mark Zuckerberg, Stephen Hawking and Bernie Sanders as some of its many advocates. The idea is exactly as it sounds: each and every citizen will gain a certain income per week or month, with no strings attached.

In addition to the financial crisis, the cry for a universal basic income has largely grown due to the ‘hollowing out’ effect of technology that has propelled inequality to unprecedented heights. Primarily, middle-income jobs that are more administrative have been eroded, while the more physically-demanding, lower-income tasks are by and large yet to be automated. And it is why proponents of UBI believe a cash injection into the poorest sections of society could do so much for overall living standards. For one it could stimulate entrepreneurship, because workers will finally have enough in their pocket to make proper investment. Another possibility could be more volunteering in local communities, where workers won’t have to balance three jobs at once with no time for anything else. In an age of consumerism gone mad, there seems few other options but to provide everyone with a small sum on the side in an attempt to temper aggregate demand. It might allow the average gig economy worker to not work late evenings anymore so he can see his children, or the new mother to take a few more weeks leave before rushing back to work.

UBI has in fact already been tested. In January 2017, Finland launched a two-year pilot scheme where 2,000 unemployed people have been given 560 euros (around £475) per month. One lucky beneficiary, Juha Jarvinen, 39, spoke to the BBC about how it transformed his life: “I feel like a free man. I got out of jail and slavery … I felt I am back in society and I have my humanity back”. His situation had been desperate after all. He was running a small business making wooden window frames before it went bust in the 2008 financial crash, and since then he’d hardly recovered. Now though, he’s started up a new business making drums, and it brings in around 1000 euros a month, on top of his UBI. Indeed proponents of UBI will insist for the vast majority that’s how the money is really used.

The argument for UBI is also based upon what society would look like in years to come should it not go ahead. In ten to twenty years, the number of workers being displaced by automation looks set to increase. Their redundant skills with an underfunded benefits system unable to retrain them will then increase brain drain and hysteresis. With GDP growth then suffering, capital investment will dwindle yet further, and tragedies such as the fire at Grenfell Tower last June where cheap materials proved vastly inadequate will only occur more often. But with UBI, the burden on our existing welfare state will be greatly relieved, as families will no longer drain our health care and range of benefits like before. The estimated cost of UBI will therefore have to be contextualised on two counts – not only through it relieving public services but also through the lack of maintenance costs that the benefits system still endures. A world of UBI might seem impossible right now. In fact the same was said before the minimum wage, and even the NHS – where it seemed ridiculous to give the rich something they could already afford. Doubters of UBI should not get too confident.

Indeed they shouldn’t – the pace of economic progress and political upheaval suggests exactly that. But it might also suggest that an argument that floated around for decades might just have passed its sell-by date, because the labour market is not as it was. Only around fifty years ago, the workplace was a male-dominated arena, workers had one job for life and technology was still in its early stages. With all the complexities we therefore face, the notion that we must wipe the slate clean with a universal basic income that caters equally for such diverse circumstances is too simplistic. Already, despite its rigorous means-testing that one would hope should send the money where it’s most in need, we have a failing benefits system that’s desperately underfunded. Thus to provide equally for the families with elderly relatives or young children and those without would only seek to widen inequality by diluting whatever help available to the most deserving. Billionaires would even get a little more.

On the most discounted rate of £75 a week per citizen in the UK, the policy would total to £120 billion, 5% of GDP and to balance the books experts say the marginal rate of income tax would have to hit 75% - far exceeding the next highest tax rate of 60.2% in Denmark. Granted, the current benefits system has its inefficiencies: each year according to the National Audit Office around £230m is spent on sanctioning that saves an estimated £130m, leaving around £100m of government money wasted. But by comparison to UBI the scale of current funding worries are next to nothing. The incentives to work with UBI in place would be almost non-existent, and the long term effects of dependency and emigration of skilful labour could take generations to recover again.

The social benefits claimed by UBI proponents are also misguided. While cutting working hours or even becoming redundant might sound liberating, income won’t be the only loss. People also gain purpose, status, skills, networks and friendships through work. Delinking both income and work, while rewarding people for staying at home is simply a catalyst for social decay. With high unemployment, crime, drugs and broken families will continue to grow and with it so too will pressure on public services. Politically, the idea is also quite a dangerous one. UBI as a utopian thought-experiment sounds so awe-inspiring that real discussion about the future of jobs could well be postponed. The growing clamour in more populous countries with larger inequality could also take on a more populist stance, where leaders on the left will sell it as if it’s a flawless cure for all ills.

To say that UBI is not the answer is not to reject the legitimate concerns of vulnerable workers though. Other solutions must instead be looked at, such as higher marginal rates of taxation. Inevitably, the question is always whether the rich will tolerate it, and on the scale that’s required the answer seems not. In Canada, where UBI was trialled, the majority of respondents in a poll of 1,500 who were open to UBI still were unwilling to pay higher tax to finance the program. The cut from 50 to 45% income taxation in the UK in 2013 after the HMRC estimated the former would probably raise no more revenue also suggests returning to that figure or even beyond would be unwise – equally so if it is used to fund UBI. Bumping the 40% rate to 45% for £46k+ earners is a safer bet but also runs the risk of the same unintended consequences, stifling entrepreneurship that UBI sought to improve and potentially teasing the rich to venture abroad for lower rates.

A rise in VAT tax from 25 to 30% has also been discussed as an alternative, to reduce aggregate demand slightly and help reign in the UK’s long-hours culture – in fact research shows Britons work on average 43.6 hours a week, above the European average of 40.3 and France’s limit of just 35. Alternatively, the government could put greater emphasis on demerit goods such as fast food and sugary drinks, in an attempt to contain the obesity epidemic, thereby at least providing some social benefit.

Complications also arise here, as the inelastic demand for many of these goods would call for a greater level of tax and with that greater potential for backlash. More importantly, much of the consumption of these goods is because they are cheap, and taxing them would be regressive, thus widening inequality rather than reducing it. The same goes for a VAT tax, since the poor spend a higher proportion of their income than the rich.

Other possibilities must be considered, perhaps looking at one of the root causes of growing inequality: technology. With conglomerates such as the ‘FAANG’s (Facebook, Amazon, Apple, Netflix and Google) concentrating such a large section of wealth, and start-ups in general locating in cities because of higher multiplier effects, the government could launch training schemes specifically for entrepreneurship in rural areas, for example. Collaborating with the tech firms that are based rurally could help springboard that project. The patent box initiative, allowing lower rates of corporation tax for certain inventions, could also reserve rights to part of the wealth should the firm become the next tech giant.

Another step towards reducing inequality could be introducing what’s known as Universal Basic Assets (UBA), which identifies a fundamental set of resources every citizen should have access to – such as financial security, housing, health care and education – in order to achieve economic prosperity. When divided into three categories: private, public and open, it’s clear that public assets such as public education and health care are hugely important, and through encouraging more capital flows through distributive initiatives, such as cooperatives and employee-stock-owned companies, greater funding can be put aside. The Government could also give people ownership of their data, so they can use it as an asset which they – not Facebook or Google, for example – can leverage, and capture economic value. Critics might say it will discourage entrepreneurship, but ultimately it merely seeks to redistribute new assets to the workers who are fulfilling these firms, and not the original asset holders.

In many ways, the great debate about Universal Basic Income and its alternatives, and its powers to reduce inequality is a worthwhile one whatever stance one takes. As inequality reaches new heights though, the hype around UBI and other suggestions like it have received precious little rigorous examination. Finland’s small-scale experiment of 2,000 unemployed citizens answers few questions, and nor does a similar trial in Ontario, Canada. Nevertheless the number and scale of pilots is starting to see an uptick. Y Combinator’s 5-year trial for 3,000 Americans and Scotland’s investment of over £250m into projects in Edinburgh and Glasgow are just some showing promise.

So perhaps the verdict on whether UBI really does work still awaits us. But lessons can also be learnt from what we know now. The first is that there is much reform still to be done with the benefits system – be it improving conditionality, sanctioning, providing support for people re-skill, or schemes to improve less-affluent workers’ capabilities with technology. Indeed the labour market as a whole could do with better regulation over zero-hours contracts and greater job security, perhaps by handing incentives to employers to minimise turnover. Whatever the solution to reduce inequality and poverty might be, it mustn’t be oversimplified, as is the danger with shouts for a UBI like it’s a silver bullet. But neither must it be ignored.

Suggestions for further reading on this issue

Why Basic Income alone will not be a panacea to social insecurity https://t.co/lr7FSm7YKg — LSE British Politics and Policy (@LSEpoliticsblog) October 22, 2018

Yes, Universal Basic Income can help #endukpoverty , says @anthonypainter https://t.co/LJTukg9W0K — The RSA (@theRSAorg) May 1, 2018

A lack of ambition ended Finland's experiment with a universal basic income https://t.co/AL6bwCDk2F pic.twitter.com/hX0dj7y51G — Bloomberg Opinion (@opinion) April 29, 2018

The ending of the experiment in Finland has drawn media attention for the wrong reasons https://t.co/4WRaeizWSk — The Economist (@TheEconomist) May 1, 2018

Here's how a universal basic income could work pic.twitter.com/hbhT9T5HdJ — Business Insider (@BusinessInsider) May 10, 2018

• Universal Basic Income
• Extreme poverty
• Absolute poverty
• Poverty Trap

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The Deep and Enduring History of Universal Basic Income

Support for universal basic income (UBI) has grown so rapidly over the past few years that people might think the idea appeared out of nowhere. In fact, the idea has roots going back hundreds or even thousands of years, and activists have been floating similar ideas with gradually increasing frequency for more than a century.

Since 1900, the concept of a basic income guarantee (BIG) has experienced three distinct waves of support, each larger than the last. The first, from 1910 to 1940, was followed by a down period in the 1940s and 1950s. A second and larger wave of support happened in the 1960s and 1970s, followed by another lull in most countries through about 2010. BIG’s third, most international, and by far largest wave of support began to take off in the early 2010s, and it has increased every year since then.

Before the First Wave

We could trace the beginnings of UBI into prehistory, because many have observed that “prehistoric” (in the sense of nonliterate) societies had two ways of doing things that might be considered forms of unconditional income.

First, nomadic, hunting and gathering societies of less than 60 people have often been observed to treat all land as commons , meaning that everyone can forage on the land but no one can own it. A similar right to use land has existed in many small-scale agrarian communities right up to the enclosure movement, which was not complete in Europe until the 20th century and is not complete around the world today. The connection between common land and UBI is that both institutions allow every individual to have access to the resources they need to survive without conditions imposed by others.

Second, most observed small-scale, nomadic, hunter-gatherer societies had strong obligations to share what they had with others. If someone camping with the group found more food than they and their immediate family could eat in one meal, they had to share it with everyone in the camp, including people who rarely or never brought back food for the community. The food shared around camp could be seen as a “basic” income.

Some trace the beginning of UBI history to ancient Athens, which used revenue from a city-owned mine to support a small cash income for Athenian citizens.

The modern definition of UBI stipulates the grant must be in cash, and because small-scale hunter-gatherer or agrarian communities do not have cash economies, they do not have UBIs. But these practices show how the values that motivate much of the modern UBI movement are not new to politics but have been recognized and practiced for a very long time.

Some writers trace the beginning of UBI history to ancient Athens, which used revenue from a city-owned mine to support a small cash income for Athenian citizens. This institution sounds like a UBI, except that the meaning of citizen was very different in ancient Athens. Citizens were a small, elite portion of the population. Noncitizens, such as slaves, women, and free noncitizen males, were the bulk of the population and virtually all of its labor force. A UBI for the elite is no UBI at all.

Proposals that begin to fit the modern definition of UBI begin in the 1790s with two writers, Thomas Paine and Thomas Spence. Paine’s famous pamphlet “Agrarian Justice” argued that because private ownership of the land had deprived people of the right to hunt, gather, fish, or farm on their own accord, they were owed compensation out of taxes on land rents. He suggested this compensation should be paid in the form of a large cash grant at maturity plus a regular cash pension at retirement age. That amounts to a stakeholder grant plus a citizens pension: nearly, but not quite, a UBI.

From a similar starting point, Spence carried the argument through to a full UBI, calling for higher taxes on land and a regular, unconditional cash income for everyone. If anyone can be said to be the “inventor” of UBI, it is Thomas Spence, but his proposal remained obscure, and the idea had to be reinvented many times before it became widely known.

Joseph Charlier, a Belgian utopian socialist author, reinvented the idea of UBI in 1848, suggesting the socialization of rent, with the proceeds to be redistributed in the form of a UBI.

Henry George, a late 19th-century economist, set out to solve the problem of persistent poverty despite economic progress. He proposed taxing land value at the highest sustainable rate and using the proceeds for public purposes. At one point, he suggested that part of the proceeds could be distributed in cash to all citizens, but UBI was never a central part of his proposal.

BIG proposals remained sparse until the early 1900s.

The First Wave

By the early 20th century, enough people were discussing BIG to constitute its first wave — or at least its first ripple — of support. The idea was still new enough that most advocates had little knowledge of each other, and they all tended to give their versions of the program a different name.

In the United Kingdom, Bertrand Russell and Virginia Woolf both praised the idea in their writings without naming it. In 1918, Dennis and E. Mabel Milner started the short-lived State Bonus League, which briefly attempted to get a conversation started with pamphlets and other publications, including what was probably the first full-length book on UBI: Dennis Milner’s 1920 publication “Higher Production by a Bonus on National Output.”

Several economists and social policy analysts, especially in Britain, discussed UBI, often under the name social dividend , in the 1930s and early 1940s. These included James Meade (economist and later Nobel laureate), Juliet Rhys-Williams (writer and politician), Abba Lerner (economist), Oskar Lange (economist), and G. D. H. Cole (political theorist, economist, and historian). It was apparently Cole who coined the term basic Income in 1935, although that term did not become standard for more than 50 years.

Major C. H. Douglas (a British engineer) included UBI under the name national dividend in a wider package of proposed reforms he called social credit . His ideas were most prominent in Canada, where the Social Credit Party held power in two western provinces on and off between 1935 and 1991, but the party abandoned support for Douglas’s proposed dividend not long after it first took power.

In 1934, Louisiana senator Huey Long debuted a Basic Income plan he called Share Our Wealth. He seems to have come up with the idea on his own; there is no evidence that he was influenced by the ideas spreading around the United Kingdom in those years. Long’s plan might have served as the basis for a presidential run in 1936 had he not been assassinated in 1935.

Although some of these early advocates were highly respected people, they were unable to get any form of BIG onto the legislative agenda in this era. As World War II drew to a close, most Western democracies built up their welfare systems on a conditional model, typified by the British government’s famous Beveridge Report, which recommended fighting poverty, unemployment, and income inequality with a greatly expanded welfare system based on the conditional model. Discussion of BIG largely fell out of mainstream political discussion for nearly two decades.

The Second Wave

Discussion of BIG was kept alive between the first and second waves largely by economists who increasingly portrayed it as an interesting theoretical alternative to existing social policies.

During the second wave, the phrases income guarantee and guaranteed income were often used without indicating whether the guarantee was a negative income tax (NIT) or a UBI. When specified, it was most often an NIT. However, the second wave was extremely important in directing international attention toward the idea of creating a world in which everyone would have an income above poverty level.

The second wave took off in the early to mid-1960s, when at least three groups in the United States and Canada separately started promoting the idea at about the same time. First, feminists and welfare rights activists, including Martin Luther King Jr., mobilized people frustrated by inadequate and often demeaning conditional programs. The feminist and welfare rights movements for BIG were closely tied together because there was widespread belief that existing welfare programs were inadequate, punitive, and too closely tied to the belief that “typical” families were “headed” by a “male breadwinner” with a “housewife.” Feminists led a large grassroots effort to replace U.S. welfare programs with BIG, and it became an official demand of the British Women’s Liberation Movement by the 1970s.

Some futurists saw a guaranteed income as a way to protect workers from disruptions to the labor market caused by the computer revolution.

Second, futurists such as Robert Theobald and Buckminster Fuller saw a guaranteed income as a way to protect workers from disruptions to the labor market caused by the computer revolution. This effort foreshadowed the automation argument for UBI in the 2010s, but it dropped off considerably in the 1980s and 1990s.

Third, several Nobel Prize–winning economists — including James Tobin, James Meade, Herbert Simon, James Buchannan, and Milton Friedman — and many other prominent economists began arguing that a guaranteed income would represent a more effective approach to poverty than existing policies. To them, BIG would have been an attempt to simplify and streamline the welfare system while also making it more comprehensive. The interest from economists made BIG a hot topic among policy wonks in Washington and Ottawa.

The mainstream media started paying attention to NIT around the time Lyndon Johnson declared War on Poverty . Politicians and policy advisors began to take up the idea. The Canadian government released several favorable reports on guaranteed annual income in the 1970s. For a short time, many people saw some kind of BIG as inevitable and as the next step in social policy: a compromise that everyone could live with. People on the left viewed it as the final piece of the welfare system — a policy that would fill in the remaining cracks. Centrists, conservatives, and people from the burgeoning libertarian movement saw it as a way to make the social safety net more cost-effective and less intrusive.

In 1971, the U.S. House of Representatives overwhelmingly passed a bill introducing a watered-down version of NIT. It missed becoming law by only 10 votes in the Senate. The next year, presidential nominees from both major parties endorsed a variety of similar proposals: Richard Nixon supported the watered-down NIT, and George McGovern briefly proposed a genuine UBI. The similarity of the two nominees’ positions probably made BIG less of an issue in the campaign than it would have been if one of them had opposed it.

Although Nixon won the 1972 election, BIG never got another vote. It died partly because it had no groundswell of support outside the politically marginalized welfare rights movement. Its proponents in Congress made little effort to sell the proposal to the public at large. Many prominent guaranteed income supporters viewed Nixon’s version with skepticism, seeing it as too small with too many conditions to fit the model. In the absence of a wider movement for BIG, politicians paid little or no political cost for letting Nixon’s plan die and letting the idea fade from public discussion.

Although the second wave was most visible in the United States and Canada, the discussion spilled over into Europe, even as the second wave waned in North America. A high-level government report in France focused on NIT in 1973. At about the same time, James Meade and others managed to draw attention to the idea in the United Kingdom. In 1977, Politieke Pariji Radicalen, a small party in the Netherlands, became the first party with representation in parliament to endorse UBI. The next year, Niels I. Meyer’s book “Revolt from the Centre” launched a substantial wave of support in Denmark.

People often look back on the second wave of the BIG movement as a lost opportunity because no country introduced a full UBI or NIT, but the second wave had some major successes. The United States and Canada conducted the world’s first BIG implementation trials. The United States created or expanded several programs that can be seen as small steps in the direction of BIG, including food stamps, the EITC, and the Child Tax Credit. All these programs provide income supplements to low-income people. Although they have restrictions and conditions that UBI and NIT don’t, they represent steps toward BIG because they have fewer conditions than most traditional social policies and because they were proposed or expanded as compromise responses to the guaranteed income movement.

In 1982, the State of Alaska introduced the Permanent Fund Dividend (PFD). The PFD provides yearly dividends, varying usually between $1,000 and $2,000 per year to Alaska residents. Despite being very small, Alaska’s PFD is the closest program yet to meeting the Basic Income Earth Network ’s definition of UBI — falling short only by requiring people to fill out a form to verify that they meet the residency requirement.

Not only did these policies help a lot of people, but their success also provides evidence that can help to push social programs slowly in the direction of universality. But by the late 1970s and early 1980s, politicians such as Ronald Reagan and Margaret Thatcher dramatically changed the conversation. They successfully vilified virtually all welfare recipients as frauds , no matter how well they might have satisfied programs’ need-based criteria. As a result, many people stopped talking about how to expand or improve the welfare system and started talking about whether and how much to cut it. In response, the left largely went on the defensive. Any suggestion that the existing system might be replaced by something better could at that time be seen as lending support to people who wanted to cut existing programs and replace them with nothing.

In 1980, the United States and Canada canceled the last of their implementation trials. Canada stopped analyzing the data that it had spent years and millions of dollars collecting. For the next 30 years, with a few notable exceptions, mainstream politics in most countries included virtually no discussion of BIG.

Between the Waves

The 1980s, 1990s, and 2000s were downtime for BIG in world politics, but there were significant exceptions, when proposals briefly gathered attention in one place or another. These exceptions and the growth of academic interest in UBI were extremely important to building what became the third wave of the BIG movement. In 1982, a British parliamentary committee considered a UBI proposal. National waves of support happened in the Netherlands, Denmark, and postapartheid South Africa at various times. But for the most part, discussion of UBI took place outside the political mainstream.

Proposals continued to come out in various circles, but they were more easily ignored in this period. For example, Leonard Greene, an aviation expert and successful entrepreneur, wrote two books and sponsored a demonstration project in which he gave a small UBI to several families, but he received little, if any, media response. When I had the pleasure of meeting him, he described his 10-year-old son’s reaction to UBI, “So what you’re saying is that income doesn’t have to start at zero.” I’ve used that phrase ever since.

As one 10-year-old put it, “So what you’re saying is that income doesn’t have to start at zero.”

One place the UBI discussion grew steadily in this period was in academic journals. In 1984, a group of Britons, led mostly by academics, formed the world’s first national UBI network, the Basic Income Research Group (now the Citizen’s Basic Income Trust ). In 1986, a group of academic researchers established a group that was initially called the Basic Income European Network (BIEN). Philippe Van Parijs (a Belgian philosopher) and Guy Standing (a British economist) were the most active leaders of BIEN for the first 20 or 25 years of its existence.

From the founding of BIEN to the present, UBI, rather than NIT, has dominated the BIG movement. However, in the last few years, the NIT model has come back. In some countries, the BIG discussion is dominated by NIT, usually under other names, such as guaranteed income.

The academic debate grew substantially between the mid-1980s and the 2000s, especially in the fields of politics, philosophy, and sociology. By the mid-2000s, national groups existed in at least two dozen countries, including the United States, where the U.S. Basic Income Guarantee (USBIG) Network had been established in December 1999. Because so many UBI networks around the world wanted BIEN affiliation, the network changed its name to Basic Income Earth Network in 2004. Yet UBI stayed mostly outside the political mainstream.

I became interested in UBI as a high school student in 1980, just as the second wave of discussion was dying down. I started writing about it professionally after finishing graduate school in 1996, when the idea seemed hopelessly out of the mainstream. For those of us taking part in UBI events in the late 1990s and early 2000s, it felt less like a movement and more like a discussion group.

Even the activist contingent within BIEN and other networks concentrated more on discussion than action, believing (probably correctly) that they had to increase public awareness before they could gather the critical mass of support needed to make political action viable. Isolation from mainstream politics distracted supporters from how much their movement was growing. But as supporters would learn in retrospect, they were helping to lay the groundwork for a takeoff.

The Third Wave

Interest in UBI has grown enormously since 2010. The discussion crossed over into the mainstream international media by the mid-2010s. In some places, the crossover began earlier. Those of us who were volunteering at BIEN’s Basic Income News service noticed a substantial increase in media attention in late 2011 and early 2012, and media attention has grown steadily since. It is impossible to attribute the third wave of the UBI movement to any single source. It is the confluence of many widely dispersed actions and events, which I will try to sketch here as well as I can.

The financial meltdown of 2008, the subsequent Great Recession, and the Arab Spring sparked a new climate of activism. Public attention turned to poverty, unemployment, and inequality. UBI supporters suddenly had a much more welcoming environment for activism.

By 2008, a national wave of UBI support had begun to swell in Germany. Prominent people from across the political spectrum all began to push different UBI proposals in very public ways. That year, UBI activists in Germany, Switzerland, and Austria attracted the critical mass necessary for effective UBI activism and jointly organized the first International Basic Income Week . This event has taken place every year since and has spread around the world, now including actions as far away as Australia and South America.

In 2008, the Namibian Basic Income Grant Coalition , funded mostly by private donations from the Lutheran Church, began a two-year pilot, giving a small Basic Income to every resident of a rural Namibian village. This project coincided with a smaller one in Brazil and was followed by a much larger one in India in 2010 (both also largely or entirely funded by private donations). These trials attracted substantial media attention both locally and internationally. They helped inspire the privately and publicly funded experiments later conducted around the world.

Just as the Indian experiment faded from the headlines, European activists introduced UBI to the European mainstream media by pushing two citizens’ initiatives, one in Switzerland and one in the European Union, both of which attracted hundreds of thousands of signatures. The EU initiative recruited across Europe and collected signatures from every EU member state. The Swiss initiative collected enough signatures to trigger a national vote, which was held in 2015. Although neither initiative ultimately passed, they both built an infrastructure for UBI activism across Europe and attracted enormous international media attention, which in turn sparked additional activity and attracted more support.

At about this time, journalists around the world started paying attention to UBI, greatly increasing its visibility. By 2015, a third wave was visible to people who were paying attention, and all subsequent activism for UBI owes something to the cumulative results of the actions up to that point.

However, the chain of activism building on activism was only one of many sources of growth in the UBI movement. One of the movement’s most important strengths is its diversity: Support comes from many different places and from people who do not usually work together, follow similar strategies, or adhere to similar ideologies.

By the time the UBI experiment was underway in Namibia, economists and sociologists had already begun reassessing the results of the 1970s NIT experiments in the United States and Canada, bringing renewed press attention to BIG and helping to spark new interest in the idea.

Another source of momentum for UBI came from developing countries that had been streamlining and easing the conditions of eligibility for redistributive programs by creating what are now known as conditional cash transfers (CCTs). Although these programs were conditional, the results from easing conditions were so positive that they significantly bolstered support for further steps toward UBI, not only in lesser-developed countries of the Global South but all around the world. At least one CCT program, Brazil’s Bolsa Familia, inspired by the senator and UBI advocate Eduardo Suplicy, was introduced explicitly as a step toward UBI.

Support comes from many different places and from people who do not usually work together, follow similar strategies, or adhere to similar ideologies.

The third wave of the UBI movement is more identifiably left of center than the second wave, which involved many people who portrayed BIG as a compromise between left and right. But some right-of-center support has boosted the movement as well. For example, a group of philosophers and economists calling themselves Bleeding Heart Libertarians wrote a significant amount of pro-UBI literature in the 2010s.

Mirroring the futurism discourse of the 1960s, new attention to the automation of labor and the related precariousness of employment brought many new adherents to UBI. As unemployment reached new highs during the Great Recession and job openings lagged behind the overall economic recovery, many people, especially in high-tech industries in the United States, began to worry that the pace of automation was threatening large segments of the labor force with high unemployment, low wages, and gig-economy precariousness. Labor leaders, activists, academics, and tech entrepreneurs have all proposed UBI in response, making automation-related labor market changes one of the prime drivers of recent interest in UBI, especially in the United States. Some entrepreneurs, such as Chris Hughes of Facebook and the late Götz Werner of the German drugstore chain DM, have put their money where their mouth is, supporting UBI research, activism, and experimentation, giving an unquestionable boost to the movement.

Another way technology has affected the UBI debate is through cryptocurrencies (privately issued, all-electronic mediums of exchange). Some people see cryptocurrency as a way to bypass central banks entirely and provide users with a UBI in the newly created currency.

Environmentalism has also played a major role in the growth of interest in UBI. Two of the most popular proposals for combating climate change are the tax-and-dividend and cap-and-dividend strategies, both of which involve setting a price on carbon emissions and distributing the revenue to all citizens — thereby creating at least a small UBI. Some environmentalists see UBI as a way to counteract the depletion of resources by giving people a way out of the cycle of work and consumption. These kinds of proposals have received support from both Republicans and Democrats.

Growing interest in UBI, and to some extent tech industry money, have inspired a new round of UBI and UBI-related pilot projects in Finland, Kenya, Canada, the Netherlands, Germany, the United States, and many other places. UBI experiments are both a product and a driver of the current wave of support for UBI. This new round is characterized mostly by many small experiments rather than the few large experiments of the 1970s. Part of the reason is that many of the contemporary experiments are privately financed and therefore have to work on more limited budgets.

One exception is GiveDirectly’s enormous project in Kenya . This nonprofit has raised enough funds to finance a UBI of 75 cents per day for 20,000 people for 12 years, in an area where many people live on a dollar per day or less. When complete, this study will be the largest and longest UBI experiment ever conducted.

Between 2017 and 2020, UBI support got a large boost from Andrew Yang’s campaign for president of the United States. He was the first major-party candidate to endorse UBI since 1972, and the first ever to make UBI the centerpiece of their platform. For a political outsider, Yang did extremely well, qualifying for debates and recruiting a large network of supporters. Partly inspired by Yang, many candidates for lower offices also endorsed UBI in 2020 and 2022.

U.S. activism for UBI took off in October 2019, when activists in New York organized a UBI march from Harlem to the South Bronx. Hundreds of people, including myself , participated in the New York march, while 30 cities around the world joined in with their own marches. The march was so successful that organizers decided to make it an annual event. The 2022 march took place on September 24 at the climax of Basic Income Week.

Just as Yang suspended his campaign in 2020, UBI got yet another boost from an unexpected source. The COVID-19 outbreak and the related economic meltdown gave impetus for a temporary, emergency UBI. Suddenly mainstream politicians across the world were discussing UBI.

UBI was particularly well suited to the COVID situation. It functions as a cushion for people who are unable to work either because of social distancing or because of the economic downturn, and at the very same time it functions as a bonus for the essential workers asked to remain on the job during a pandemic. In both ways, it helps reduce the severity of the recession by stimulating the economy from the bottom up. To some extent, these policies represented politicians catching up with activists who had been calling for quantitative easing for the people (rather than for bankers) since the start of the Great Recession in 2009.

As late as perhaps 2015, it remained unclear whether the third wave would match the size and reach of the second. By 2019, the answer was obvious: Grassroots support and international media attention are more extensive than ever. The third wave represents the first truly global wave of UBI support. The first two did not extend much beyond the United States, Canada, and the United Kingdom, but the third wave involves major campaigns on all inhabited continents.

The Pattern

This look at the ups and downs of the UBI movement shows that UBI has tended to enter the mainstream conversation at times when people were concerned with and open to new approaches to address inequality, poverty, and unemployment. UBI has tended to recede from the mainstream conversation when public attention turned to other issues, or when other ways of addressing inequality became dominant. The first wave subsided when policymakers settled on the attempt to build a comprehensive welfare system on the conditional model. The second wave subsided (at least in the United States and Canada) not in the prosperous economy of the mid-1980s but in the troubling times of the late 1970s, when right-wing politicians convinced large numbers of people that redistributive programs should be cut instead of improved.

The biggest danger to the third wave appears to be growing nationalism. If nationalist politicians can convince enough voters to blame immigrants and foreign competition for growing inequality, they can effectively distract people from mobilizing around better social policies.

Karl Widerquist , a professor of philosophy at Georgetown University-Qatar who specializes in distributive justice, is the author of “ Universal Basic Income ,” from which this article is excerpted.

This article draws heavily on Widerquist’s essay “ Three Waves of Basic Income Support ,” published in “The Palgrave International Handbook of Basic Income,” edited by Malcolm Torry.

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Pro and Con: Universal Basic Income (UBI)

To access extended pro and con arguments, sources, and discussion questions about whether a Universal Basic Income (UBI) should be implemented in the US, go to ProCon.org .

A  universal basic income (UBI) is an unconditional cash payment given at regular intervals by the government to all residents, regardless of their earnings or employment status. 

Pilot UBI or more limited basic income programs that give a basic income to a smaller group of people instead of an entire population have taken place or are ongoing in Brazil, Canada, China, Finland, Germany, India, Iran, Japan, Kenya, Namibia, Spain, and The Netherlands as of Oct. 20, 2020

In the United States, the  Alaska Permanent Fund (AFP) , created in 1976, is funded by oil revenues. AFP provides dividends to permanent residents of the state. The amount varies each year based on the stock market and other factors, and has ranged from $331.29 (1984) to $2,072 (2015). The payout for 2020 was $992.00, the smallest check received since 2013.

UBI has been in American news mostly thanks to the 2020 presidential campaign of Andrew Yang whose continued promotion of a UBI resulted in the formation of a nonprofit, Humanity Forward.

• Universal Basic Income (UBI) reduces poverty and income inequality, and improves physical and mental health.
• UBI leads to positive job growth and lower school dropout rates.
• UBI guarantees income for non-working parents and caregivers, thus empowering important traditionally unpaid roles, especially for women.
• Universal Basic Income (UBI) takes money from the poor and gives it to everyone, increasing poverty and depriving the poor of much needed targeted support.
• UBI is too expensive.
• UBI removes the incentive to work, adversely affecting the economy and leading to a labor and skills shortage.

This article was published on February 25, 2021, at Britannica’s ProCon.org , a nonpartisan issue-information source.

The pros and cons of universal basic income

By Melissa Stewart

Unconditional cash payments to residents are more of a floor to stand on than a safety net, say these Carolina scholars in light of a proposed pilot project to give $500 per month to formerly incarcerated Durham, North Carolina, residents.

The idea of governments giving residents no-strings-attached cash payments is picking up steam, due in part to the economic impact of the coronavirus pandemic. Last June, Mayor Michael Tubbs of Stockton, California, created Mayors for a Guaranteed Income, a coalition to “advocate for a guaranteed income — direct, recurring cash payments — that lifts all of our communities, building a resilient, just America.”

Durham Mayor Steve Schewel joined the group. In January, Schewel announced that Durham was one of 30 U.S. cities being considered to receive a $500,000 slice of a $15 million gift from Twitter co-founder and CEO Jack Dorsey. The money would fund Universal Basic Income pilot projects, such as the  Stockton Economic Empowerment Demonstration . Durham council member Mark-Anthony Middleton announced that  Durham’s proposed project  would guarantee $500 per month to 55 formerly incarcerated residents until the pandemic ends and the city’s economy recovers.

Before the pandemic hit, 2020 Democratic presidential candidate Andrew Yang put UBI, also known as guaranteed basic income, on the map by making it his signature policy. His proposed “Freedom Dividend” — $1,000 per month payments to every American adult — was a response to job displacement by automation.

For a deeper understanding of this issue, The Well spoke with two Carolina faculty members who have studied UBI.  Fabian Wendt , a teaching assistant professor in the College of Arts & Sciences’ philosophy department and the philosophy, politics & economics program, first came across UBI while studying theories of distributive justice.  Doug MacKay , associate professor in the College’s public policy department, grew interested in UBI through research into paternalism in the U.S. social safety net.

What is universal basic income?

Wendt:  It is a regular cash payment by the government that is given on a monthly or annual basis. It’s unconditional in several respects. In contrast to many other welfare programs that you only get when you prove your willingness to work, a UBI would be unconditional in that respect. It would also be unconditional on what money you make, what you have in general and on what contribution you made to finance the UBI. Finally, it would be unconditional on your family situation, on whether you’re married or not.

UBI is probably best conceived as a floor to stand on, not as a safety net. A safety net is only meant to catch you when you need it, which requires some institution to test whether you really need it, and that opens up all these worries about paternalism, bureaucracy and so on, whereas the UBI would be a floor to stand on for everybody.

MacKay: I completely agree with Fabian’s description. UBI is a platform to stand on and to build a life on. But it’s not something that’s going to allow you to live a great life. The sort of numbers that we’re talking about are, at most, $1,000 a month per person. People will still have a strong motivation to work.

What are the goals of UBI?

MacKay:  The goals really differ, depending on the policymaker but also on who’s proposing it. I think for a lot of folks on the left, they see it as more a platform to build your life on. So it’s going to be there for you when you when you need it.

If you think about the pandemic, when people are losing their jobs, it takes a long time for government to react. Had we had a basic income in place, that would have been a way of ensuring people are secure, have the ability to meet their basic needs and live a dignified human life. They don’t need to appeal to various agencies. They have consistency in terms of being able to afford housing, food and so on. It’s an anti-poverty measure.

You also see from people on the left the idea of UBI as promoting freedom. Oftentimes we talk about freedom as being freedom from constraints. Some folks on the right, libertarians in particular, emphasize the need for government to stay out of our lives. And thinkers on the left often point out that if people are just leaving you alone, you might be unlimited in terms of choices, but you’re not actually going to be able to do anything unless you have resources. So the idea is that if people have a platform to build their lives off, they have resources every month. They can actually do things. They can meet their needs. They can pursue various projects.

On the right side of the political spectrum, people see UBI as potentially realizing a number of goals. One, they emphasize this is anti-paternalistic in nature. There’s an element of government not interfering with the lives of individuals by imposing all these conditionalities on them, but rather just letting them be free to live their lives as they see fit with the income.

The other thing that folks on the right emphasize is the way UBI might allow you to shrink the size of government. People on the left often think of basic income as something we’re going to add to the safety net and keep much of the safety net intact. People on the right often see it as a replacement: We’re going to give people a guaranteed income, and we’re going to get rid of a whole host of social safety net programs that cost a lot of money and require a lot of people to administer.

Wendt:  One thing I found interesting about Andrew Yang’s proposal was his idea to let people choose whether they either take the UBI or keep the benefits from current programs.

Another thing different proponents will disagree upon is how high UBI should be. A thousand dollars a month was Yang’s proposal, but you could also go much lower or much higher. Maybe even “as high as is sustainable,” as [Belgian philosopher and economist and chief UBI proponent Philippe] Van Parijs would say.

Its sustainability will depend on how high it is pitched, but also on how it’s financed. It seems very natural to think that it would be financed through the income tax. That would make it a close relative to a negative income tax proposal, which was popular in the 1960s and ’70s. [The influential American economist] Milton Friedman was a famous advocate of that. But Andrew Yang and others propose a mix in terms of how it’s financed. It could also be a sales tax or capital income tax or some other way.

Andrew Yang put UBI on the map, but what’s driving it and why now?

Wendt:  UBI has often been seen as a response to the challenge of automation — the worry that many people are going to become unemployed and replaced by machines. For example, truck drivers will lose their jobs once there are automated trucks. In the end, that’s not a new concern, though. People have worried that machines would replace jobs at least since the 19th century, but usually new types of jobs were always created elsewhere.

The idea of a UBI was brought up last spring as a response to the pandemic — an emergency UBI. The coronavirus hit so hard. Many people felt like this was a chance to get some serious reform of the welfare state going. In the end we got the stimulus checks instead, which were not completely different, but a one-time thing, and not unconditional. The checks depended on how much you earned.

One thing to emphasize is also how UBI would empower women. It gives working mothers cash to pay for childcare, for example, or it makes it easier to leave an abusive husband if you have something to rely on that is independent from the family situation.

MacKay:  The other thing I would point to are concerns about income inequality. I don’t think this is necessarily a great solution to the problem of income inequality, but I think the economic anxiety leads people to UBI.

Is there evidence that UBI works?

MacKay:  There’s been a variety of studies. There were a couple of really famous experiments in the ’70s in Canada and here in the United States. There was a really interesting study in Manitoba in the late ’70s, where they had a whole town that was subject to a guaranteed income policy — a floor that families would not fall below. A lot of randomized controlled trials in low-income countries have been using cash transfers since the late ’80s, early ’90s. Some of these are conditional cash transfers. In Mexico, for example, you might get a cash transfer from the government if you send your kids to school and take them for yearly doctor visits. And there was one recently in Finland, where they gave $500 per month to unemployed folks.

These are high-quality studies. The evidence has shown that the UBI programs are pretty effective in a number of different ways. The caveat I would give is that they happen in different contexts, and the interventions are very different.

Wendt:  An experiment in Kenya is the largest. It involves around 20,000 people and unconditional cash payments that cover basic needs. It started in 2017 and will last 12 years. There are four different groups. One group gets the cash for the whole 12 years. Another group gets paid up front rather than on a monthly basis, I believe. Another group receives payments for a shorter period of time. And then there’s a control group that doesn’t get any cash. Some people reported that it has changed how women see their role in the household, because they felt entitled to have a say over how to spend the money.

What are the main points of criticism against UBI?

MacKay:  A big one is a reciprocity worry — that in order to get access to public benefits, you should be at least willing to participate in the labor market.

Think of the earned-income tax credit. That’s a cash transfer that goes to low-income Americans. But to get access to it, you need to be participating in the labor force. A lot of programs like SNAP [the federal government’s Supplemental Nutrition Assistance Program, also known as the Food Stamp Program] and TANF [Temporary Assistance for Needy Families, another federal program] have work requirements attached to them. The Trump administration was trying to attach a work requirement to Medicaid programs, as well. The thought is, you should only get access to public benefits if you are participating in the formal labor market and earning an income.

The question they ask is: Why should some group of individuals be participating in the labor force and paying taxes to fund a UBI for other people who aren’t participating in the labor market? One of the responses to this is that UBI recognizes all those forms of contribution to society that aren’t remunerated. Think about parents taking care of their children or poor people taking care of elderly family members. There’s lots of ways in which people contribute to society. And you can think of a UBI as reciprocating in that sense, remunerating people for those contributions.

Wendt:  Another common worry is that UBI is a waste of money on the wealthy. Why should all of those wealthy people get a monthly check? If the goal is to do something about poverty, then why UBI, since the rich by definition are not poor? That’s an understandable concern for sure. But the reply there is that depending on how the UBI is financed, the rich will not be net beneficiaries. They will contribute more to finance the UBI than what they get as their monthly check.

What do you think about the Durham proposal?

MacKay:  This is the first time I’ve heard of a guaranteed income program that’s aimed at people coming out of prison. I think it makes perfect sense. Part of the justification here is that people with a felony record face a lot of difficulty in terms of accessing other public programs. I think they’re actually banned for at least some period of time from federal housing programs and from receiving SNAP benefits. Felons face a lot of difficulty getting jobs. Employers can legitimately ask if they have a record and deny them employment on that basis. So it makes a lot of sense that you would target this type of pilot project at those folks. If you think about who needs a platform in American society, it’s going to be people who don’t have access to these other programs and are economically vulnerable in terms of not being able to get a job. And so I think it makes a lot of sense that you would target the program this way.

Oftentimes we discuss UBI as a major transformation to society, as a sort of utopian policy. That draws a lot of attention. But I think the discussion might lead to a simpler idea — just using cash payments in more of our social safety net programs. That might be more sustainable, more cost effective, than trying to try to implement a full UBI type policy. For that reason, what’s happening in Durham — a guaranteed income for a very narrow group of individuals — is really interesting.

One thing the pandemic has shown us is that the government got a little bit more comfortable with giving cash payments to people. Another thing I’m really excited about are these proposals to expand the child tax credit, both coming from [Mitt] Romney and also coming from the Democrats, which you might think of as a basic income for kids. Every month, they would get a certain amount of money, maybe a few hundred dollars. The parents decide how to spend it, but the thought is it’s kind of like a baseline for kids. We don’t want to spend too much time focusing on the big UBI utopian policy proposals and miss that there’s a lot of interesting and potentially really important, cost-effective policy proposals around using cash payments in very targeted ways.

By Logan Ward, The Well

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Given the flux of American politics right now, an idea like “universal basic income” could gain political traction, a Stanford historian says.

Stanford scholar Jennifer Burns , a research fellow at the Hoover Institution and an associate professor of history in the Stanford School of Humanities and Sciences, says such a program could help protect workers who hit rock bottom in an age of technological disruption.

A basic income – also called basic income guarantee, universal basic income or basic living stipend – is a program in which citizens of a country receive a regular sum of money from the government. Tech leaders Elon Musk and Mark Zuckerberg have floated the idea, and the city of Chicago is considering such a proposal as a way to reduce the disruptions of automation in the workforce.

Jennifer Burns, associate professor of history, says a universal basic income program could help protect workers who have hit rock bottom. (Image credit: Courtesy Jennifer Burns)

Burns researches and writes about 20th-century American intellectual, political, and cultural history and is currently writing a book about the economist Milton Friedman , who supported the idea of a universal income.

What would be the benefits of a universal basic income if it were to become a reality?

The most attractive aspect of universal basic income, or UBI, is that it can serve to underwrite market participation, in contrast to other welfare programs that essentially require people to not be employed to receive the benefit. Some programs even require participants to have essentially zero assets in order to qualify. In effect, the programs kick in when people have hit rock bottom, rather than trying to prevent them from getting there in the first place.

What are the best arguments against a universal basic income?

The best argument against UBI is feasibility. You may be surprised I do not mention cost. If one multiplies the popular figure for an annual UBI – typically $12,000 a year – by the population of the United States, you get an eye-popping figure of over $3 trillion. The figure varies depending on whether children are included and at what benefit level. However, if you set this against current taxes and transfers, and conceptualize the UBI as a benefit that can be taxed for higher earners, the costs come down significantly.

The real challenge is political. First, there is significant bias against unconditional transfer programs. Most welfare programs in the United States are tied in some way to employment; for example, think of Social Security. Building popular support for a program that breaks this connection between welfare and work will require political leadership of the highest order. And then there is the enormous hurdle of integrating a UBI with the extant institutional and bureaucratic structure of the federal state. For these reasons, we may see a UBI on the state level first.

What did Milton Friedman think of the idea of a universal basic income?

Although he didn’t call it a UBI, the idea of a minimum income was the earliest policy proposal Friedman came up with. In his papers, I was astounded to find his first proposal for what he called “a minimum standard of living” written in 1939. This is when he was completely unknown as an economist, although he was clearly already thinking big.  Eventually, he revised it into a proposal for a negative income tax, which was enacted through the earned income tax credit, or EITC, a policy still in place today. The EITC is considered a highly successful program, with well-documented benefits for children in particular. Scholars have also found it serves to increase workforce participation among recipients.

Although he has a reputation as a radical libertarian, Friedman believed there was a clear role for the state in society. In particular, he believed there would always be persons who could not compete effectively in a market economy. He also recognized the role of luck in life, even calling the memoir he wrote with his wife, Rose, Two Lucky People . Whether it was temporary assistance or long-term support, Friedman saw a place for welfare. But Friedman was a great believer in the power of choice. Rather than give poor people specific benefits – food stamps, for example – he favored giving people cash that they could then bring into the marketplace and use to exercise individual choice.

Wouldn’t people stop working if they got “free money”?

That’s another common response to the idea of UBI. In most scenarios, the grant would not be enough to forsake paid employment altogether. The idea is that when combined with paid income, a UBI would lift the living standard of even low-skilled, low-income workers. This is why the EITC has been so effective. However, families could pool grants, perhaps enabling several members to leave the workforce altogether. This possibility has proven a point of interest both to conservatives, who point out that current welfare programs often incentivize fathers to live apart from their children, and progressives who want to provide cash benefits to mothers and others providing family care.

Milton Friedman had an interesting take on this issue. William F. Buckley asked him if he wasn’t worried about people taking the money and neglecting their children, etc. Friedman responded: “If we give them the money, we will strengthen their responsibility.” He seemed to be making a point that more recent social science research has fleshed out. Poverty, scholars have found, actually makes it harder to be responsible, to plan, to think about the future. When you are focused on getting enough to eat, or making rent, you don’t have many psychological resources left over to focus on anything else. And, when you can’t pay a traffic fine or afford safe housing, all the other foundations of a good life like steady employment and getting your children an education can also be out of reach.

What does the future hold for universal basic income in the U.S.?

If the future of UBI can be gauged from media interest, its future is bright. Also, the idea has attracted an enormous number of high-level supporters. Particularly in Silicon Valley, it’s a genuine fad, attracting adherents from entrepreneurs and tech leaders like Mark Zuckerberg and Elon Musk.

There are two challenges ahead. The first is to spread the basic idea so that it continues to move from fringe to mainstream. The second is to build it into a workable policy with a political base. Given the fluidity of American politics right now, it could be the perfect moment for a policy that is at once utopian, bipartisan and deeply rooted in American thought.

Media Contacts

Jennifer Burns: [email protected]

Clifton B. Parker, Hoover Institution: (650) 498-5204, [email protected]

UC Berkeley’s Premier Undergraduate Economics Journal

Unboxing Universal Basic Income

YASH RAJWANSHI – FEBRUARY 25TH, 2020

EDITORS:  ALEX CHENG & ANDREAS MAASS

Andrew Yang, a former 2020 Democratic presidential candidate, started his campaign with the proposal of “the Freedom Dividend.” This policy, which guaranteed every American adult a basic income of $1,000 every month, gained traction with the general public quickly . Yang’s flagship proposal is more commonly referred to as universal basic income (UBI), or just basic income. As Yang describes it, UBI is a “ type of social security that guarantees a certain amount of money to every citizen within a given governed population, without having to pass a test or fulfill a work requirement .” The key difference between UBI and other welfare programs is the final descriptor—that the money is given with no strings attached. Traditional non-cash income programs tend to have work requirements , and, as recently as 2018, there has been a new push by Republicans for even more. The lack of these requirements differentiates UBI, and is a key reason why Yang believes it will have a revolutionary impact on the US economy. To thoroughly understand the Freedom Dividend proposal and the effects of UBIs in general, it is crucial to look at arguments on each side of the discussion, and analyze their applicability the context of past economic experiments.

The Argument for UBI

Yang’s campaign website provides a concise list of reasons to support UBI. The most convincing argument relies on the predicted effects of automation on US jobs within the coming decades. As Yang claims, “ since 2000, technology has replaced the jobs of four million American manufacturing workers and decimated communities throughout the Midwest .” Even more surprisingly, experts predict that, within the next 12 years, one out of four Americans will lose their job to technology. Yang’s go-to example for the adverse effect of automation is truck driving, the most common job in 29 out of the 50 states . Drivers alone account for 3.5 million jobs , and the supporting infrastructure, which includes truck stops and motels, accounts for an even higher number. These jobs are predicted to soon be replaced with fewer, high-skill programming positions as the push for autonomous driving grows in the US. Yang argues that the Freedom Dividend will become a necessary and crucial part of society throughout this period of automation and transformation.

Emerging evidence suggests that a UBI program would have positive effects on the workforce and help soften the adverse effects of automation. There are multiple interesting shifts in human capital that may follow a basic income being implemented in the US. First, research shows that financial insurance tends to have a significant impact on the decision-making of individuals . UBI would ensure that taking a financial risk, such as attending night classes or buying a more expensive computer, will not lead to immediate poverty. This “income floor,” funded by the government, can lead to more people taking these developmental, calculated risks. Through this method, former members of the now automated labor force may be able to pivot from their past careers into more advanced technological fields, and grow in interdisciplinary ways that will ensure high employability. Essentially, the financial security provided by an UBI would enable and motivate members of the workforce to retrain and join emerging labor markets. Furthermore, under UBI framework, individuals may be incentivized to find jobs they actually find interesting– a rare scenario within work requirement-based welfare programs. Rather than finding a job just for the sake of receiving welfare benefits, citizens have the financial backing to explore more rewarding careers. This may lead to higher employee happiness and, consequently, an increase in overall company productivity . As a result, some argue that UBI is projected to help workers with automated jobs to reenter the workforce in a productive manner. Yang argues that automation will marginalize these people from the next economic era; the “Freedom Dividend” would involve them in the 21st century economy.     

Another key argument for UBI is the effect it will have on the growth of the economy. Proponents of UBI claim that putting money in the hands of every American will create an economic multiplier, and permanently grow the economy. Evidence from past case studies and economic predictions seems to support this assertion. A 2017 report by the Roosevelt Foundation used the Levy Institute macroeconometric model to demonstrate that an unconditional cash assistance program of $1,000 for all adults annually would expand the economy by 12.56 percent over the baseline after eight years. The study shows that, in addition to a rise in aggregate demand, a $1,000 UBI would likely cause an increase in output, employment, labor force participation, prices, and wages. Various studies of cash transfer programs in other countries demonstrate that economic growth ultimately also trickles up? to other aspects of welfare programs. The “ Mincome ” Experiment in Manitoba, Canada, where an experimental basic income project was tested almost 40 years ago, showed that the population receiving a basic income had an 8.5 percent reduction in hospital visits, with fewer incidents of work-related injuries, and fewer emergency room visits from accidents and injuries. Additionally, the population experienced lower psychiatric hospitalization, which is an indicator of higher overall mental health. Another example, the GiveDirectly ™ program, created cash transfer methods for poor households in Kenya, and showed positive effects in nutrition-based spending and overall assets for these households. This also correlated to overall healthier lifestyles and less hospital visitation. With this information, the benefits of UBI seems to be substantiated by strong empirical evidence and a number of logical macroeconomic predictions. That being said, the studies are smaller-scale than anything that would be implemented in the United States. They also are focused primarily in under-developed markets with lower wage floors. For that reason, many critics maintain that UBI in the US may not be a foolproof idea or work in a similar manner as the smaller scale sample in Kenya.

Too Good to be True?

The main arguments among opponents of UBI can be roughly categorized into four key areas: the negative effect on the workforce, the misuse of income, the inability to pay for it, and the resulting increase in prices. Beginning with the negative effect on the workforce, many claim that an influx of $12,000 of annual income would incentivize employees to not work, or to work for a shorter time during an average day. With a quarter of households in America making less than $25,000 in yearly wages, people believe the influx of cash would sap the incentive to work for families under the poverty line. Although the rhetorical argument makes logical sense, and appears to be very popular, empirical evidence from past programs indicates the contrary. A report by MIT and Harvard researchers from September 2016 showed that, after aggregating evidence from randomized evaluations of seven government cash transfer programs, there was no systematic evidence of an impact on work behavior. More specifically, the report showed that the only two groups that had decreases in work hours for an average week were mothers of young children and high school students. In that sense, although the implementation of UBI could very well lead to lower work responsibility for these two demographics, it may still represent a net good for society. To add another dimension, theoretical calculations show that in situations where income levels are so low that subsistence considerations are important, UBI would have minimal effect on the labor supply. Additionally, for individuals below the level of subsistence, the utility gains from UBI that pushes them above the subsistence level are high. Thus, the UBI program may make more sense and have more benefits to society in a developing economy, whereas a developed economy may face a more detrimental effect on labor supply than anticipated. Under this pretense, UBI may make more utilitarian sense in developing countries.

The next key argument presented by critics is that income will be misused by its poorest recipients . Often influenced by social rhetoric, the idea that low income individuals will spend a basic income on “temptation goods,” such as alcohol and tobacco, has been repeatedly disproved by empirical data . In fact, as a report from the University of Chicago concluded, “on average cash transfers have a significant negative effect on total expenditures on temptation goods, equal to -0.18 standard deviations. A growing number of studies therefore indicate that concerns about the use of cash transfers for alcohol and tobacco are unfounded.” The economic theory behind decreased consumption of alcohol and tobacco after UBI supports this empirical data. Alcohol and tobacco are subject to strong substitution effects. In other words, if the consumer has the economic ability to purchase goods and services that replace alcohol and tobacco, they are likely to spend more money on these alternate goods than the “temptation goods.” These alternate goods and services can include higher education and health-based expenditures such as nutritional meals.

Another consideration against UBI is how the state will pay for the $4.3 trillion program. Yang’s proposal for funding the Freedom Dividend includes the reduction of some current welfare programs and a Value Added Tax (VAT). Essentially, Yang argues that a monthly income of $1,000 would be more beneficial to many welfare recipients than the United States’ current programs. Thus, he would offer those on welfare the opportunity to choose between their current welfare programs and UBI, predicting that the vast majority will elect for the cash influx. This shift is projected to save nearly $500 billion in revenue for the government. The second arm of this funding plan is a VAT, which has been implemented in more than 140 countries worldwide, including every other economically advanced nation, and is projected to generate between $100 and $200 billion for the US in annual revenue. Essentially, the VAT taxes the value that each member of a product’s supply chain adds to the final cost of the product. As a result, the VAT is deemed a highly effective method of redistributing wealth, as it taxes corporations at every step of their involvement in a product. Finally, the economic growth that the UBI is predicted to foster will lead to a general increase in sales tax revenue and income tax revenue for the federal government. This tax revenue will be the final piece in UBI funding and account for $800 to $900 billion . Putting these funds together, the money is in the budget for this type of federal expenditure, but it definitely puts a significant stress on other welfare programs and would likely lead to the eradication of many of them.

The final argument to consider is the inflationary effects of this policy. A fundamental concept here is the separation between production and income. Economists argue that income is earned by people because they are essentially selling their labor on the labor market as a contribution to the production of goods and services for the economy. Increases in income that aren’t directly related to correlating increases in production tend to result in higher prices so the two sides of the equation can balance. For this reason, many argue that income and economical production can’t be separated without dispatching macroeconomic effects for the whole country. In this case, the particular concern is that UBI will increase the inflation rate, which would lead to workers’ wages being valued even lower than in a pre-UBI world. Interestingly, if the participation in the workforce actually decreases, this inflation would be compounded and be even more detrimental for the country. 

A secondary concern here is that the funding mechanism for Yang’s proposal is a VAT, as explained above. Traditionally, the majority of the tax burden from VATs are placed on the consumers, as the corporations will just add their tax burden to the price of the product. This tax would generally be regressive as it would disproportionately target those with lower incomes. Moreover, those with lower incomes will have more price inelastic demand for goods that face price increases as a result of the VAT. Therefore, the majority of the tax burden will fall on these low-income individuals. Thus, the implementation of it may lead to requests for more intensive government-funded welfare programs, effectively defeating the purpose of the UBI.

So, is it a Good Idea?

Here’s the bottom line: evidence indicates that UBI will foster job creation and economic development.  Andrew Yang suggests that it is the economic policy of the future. But a program of this scale has never been implemented before, and especially in a country as economically developed in the US. There is still not enough research to conclusively understand whether the idea would be beneficial for the country, but the potential does seem promising. If it works as intended, UBI would lift dozens of millions of individuals out of poverty, and simultaneously foster economic growth for the United States. A post-automation society will likely require a drastic transformation of the US economy. Despite Yang’s campaign officially being suspended , the questions he raised about a post-automation economy are legitimate. Bringing universal basic income into the discourse of mainstream politics will be valuable for years to come.

Featured Image Source: NBC News Disclaimer: The views published in this journal are those of the individual authors or speakers and do not necessarily reflect the position or policy of Berkeley Economic Review staff, the Undergraduate Economics Association, the UC Berkeley Economics Department and faculty,  or the University of California, Berkeley in general.

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5 thoughts on “unboxing universal basic income”.

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Moreover, those with lower incomes will have more price inelastic demand for goods that face price increases as a result of the VAT. I just copied this sentence directly from the above article. Any idea what it’s trying to convey? I will never get used to the lack of any proof-reading in this medium.

A value added tax (VAT) is what is implemented to fund a UBI. It basically increases the tax on companies for consumer goods, which forces companies to increase prices in order to compensate for the added tax. When that happens, the price of every day goods increases. The article is saying that lower income individuals will be less capable of affording those price increases.

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Home — Essay Samples — Economics — Political Economy — Universal Basic Income

Essays on Universal Basic Income

Brief description of universal basic income.

Universal Basic Income (UBI) is a social concept that proposes providing all citizens with a regular, unconditional sum of money, regardless of their employment status or income level. It has gained attention as a potential solution to poverty, inequality, and automation-related job loss. UBI has the potential to transform society by ensuring financial security for all individuals.

Importance of Writing Essays on This Topic

Essays on Universal Basic Income are crucial for academic and personal exploration as they encourage critical thinking, research, and debate on a topic that has far-reaching implications for society. By writing essays on UBI, students and scholars can contribute to the discourse on economic and social policy, and develop a deeper understanding of the potential impacts of UBI on individuals and communities.

Tips on Choosing a Good Topic

• Consider the practical implications of UBI: Explore how UBI can address poverty, inequality, and unemployment.
• Examine the ethical considerations: Investigate the moral and ethical implications of implementing UBI.
• Analyze the economic impact: Delve into the potential effects of UBI on the economy, labor market, and government expenditure.

Essay Topics

• The impact of Universal Basic Income on poverty reduction
• Ethical considerations of implementing Universal Basic Income
• Universal Basic Income and its effect on workforce participation
• The economic implications of Universal Basic Income
• Universal Basic Income as a solution to automation-related job loss
• The role of Universal Basic Income in promoting gender equality
• Universal Basic Income and its impact on healthcare access
• The feasibility of implementing Universal Basic Income in different countries
• Universal Basic Income and its potential effects on entrepreneurship
• The psychological and social impact of Universal Basic Income on individuals and communities

Concluding Thought

Writing essays on Universal Basic Income provides an opportunity to engage with a topic that has the potential to reshape societal structures and address pressing economic and social challenges. By exploring the various aspects of UBI, individuals can contribute to the ongoing dialogue and shape future policy decisions. Get involved in the conversation by delving into the world of Universal Basic Income through your essays.

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Debating Basic Income

Vol 1 No 3 Fall 2017

• David Calnitsky

In relatively short order, universal basic income ( UBI ) has transformed from what was little more than a glorified thought experiment into a concrete policy option, and discussion in the media has mushroomed accordingly. Debate has likewise intensified on the Left, taking on a sometimes productive, sometimes acrimonious, tenor. The reasons for the latter are obvious, but when productive, the discussion has proceeded as a debate among those who share a set of moral commitments but disagree on questions of strategy or analysis. In the case of UBI , an abstract policy measure with no history of genuine implementation, it is natural to see a good number of different intuitions, crosscutting hypotheses, and wide-ranging concerns about unintended consequences. Indeed, the debate on the Left may ultimately rest on empirical outcomes. Will UBI in fact improve people’s lives? Will it facilitate wider and deeper transformations? Or is it just a neoliberal mirage?

This essay surveys the debate surrounding UBI that has emerged in recent years, focusing on the main objections from the Left. This entails analyzing the gamut of possible empirical effects, from the impact on wages and labor force participation to gender and collective action. The debate on these empirical questions, it must be said, is decidedly unresolved. As with any major social transformation, the impact of offering substantial cash transfers to all might generate outcomes that are impossible to foresee. To claim otherwise — that we have a clear-eyed understanding of the full set of consequences — would be foolhardy. With this caveat registered, it should be said that we luckily do know something about the impact of UBI , and drawing on the available evidence we are able to say something meaningful about its consequences in multiple spheres of social life.

The concept of a universal basic income refers to a monthly cash income paid to each member of society without regard to income from other sources and with no strings attached. 1 There is no precise level of payment built into the definition. Proposals on the order of $14,000 per person — a number exceeding the official poverty line for single individuals in the US ($12,000) and totaling about one-quarter of US GDP — are often seen as somewhere between modest and substantial. Proposals that are more generous tend to hover around $18,000 or $20,000 per person. I have the number $14,000 in mind as more or less the minimum payment level required to achieve the normative objectives discussed herein; in particular, this sum is meant as the lower-bound threshold that affords people an above-poverty fallback position, providing everyone with a measure of freedom from work, and therefore, of power at work.

Understanding basic income requires a consideration of its likely empirical consequences, as well as clarifying the underlying normative agenda. In some cases, there are pragmatic empirical tests that any normative vision must pass for it to be realized; in others, the normative arguments can hold their own whatever the empirical consequences. All things considered, including some ambiguities discussed below, there is a powerful socialist case for basic income. This essay shows that the scheme, were it sufficiently generous and universal, would help realize the moral vision socialists ought to hold. It is worth getting back to basics, so to speak, to make some sense of this debate.

The Ends of Social Policy

One of the constitutive aspects of left politics is that the policies advocated for are not mere ends in themselves, but rather instruments for realizing a broad set of normative commitments that envision how the world ought to be. Sometimes the Left, mistakenly in my view, evades these lofty commitments because they are far removed from the grind of political struggle or because moral argument is seen as the domain of liberal and conservative politics. But this position has never been persuasive. To evaluate policies and politics we have to commit to a moral vision, even if it is somewhat hazily characterized as a future defined by human flourishing and real, substantive freedom.

When it comes to the impact of actual policies, it is useful to distinguish ameliorative from emancipatory reforms. Ameliorative reforms, like traditional welfare policies, are valuable because they provide direct material benefits and improve people’s lives, which is a normative end in itself. If a political vision loses sight of life-improving reforms, it will be abandoned by poor and working people; they would rightly see that vision as callous to their needs. Still, it is difficult for left political operatives to get overly excited about purely ameliorative reforms. While they make people’s lives less painful, such policies do not, by definition, help to mobilize people or expand their power. The concept of an emancipatory reform, on the other hand, refers to some social policy that may ameliorate a particular deprivation but does so in a way that pushes us closer to an underlying moral vision. These are policies that tip the balance of power and strengthen the position of poor and working people when facing off against bosses, spouses, and other powerful individuals in their lives.

The main reason UBI ought to be a part of a left normative vision is because it facilitates exit from relations of exploitation and domination — the power of exit has ameliorative as well as emancipatory significance, as I will show. The foundational Marxist objection to the structure of capitalist labor markets is that they are superficially free but substantively unfree. Dispossessed of the means of production, and therefore of subsistence, workers can happily choose between capitalists, but are ultimately forced to choose one. This is what Marx termed “double freedom”: our freedom to be exploited by the employer of our choosing is coupled with the freedom to remain hungry should we choose none. For those who object to the compulsory nature of the capitalist labor market, basic income is appealing because it ensures that people not only have the abstract right to freedom, but the material resources to make freedom a lived reality. It gives people the power to say no — to abusive employers, unpleasant work, or patriarchal domination in the home.

People often use that power. In the case of the Canadian Mincome experiment from the late 1970s, some participants did in fact take up their newfound ability to quit. In the town of Dauphin, Manitoba, a three-year guaranteed annual income led to an 11 percentage point drop in labor force participation. 2 Across the five major guaranteed annual income experiments previously conducted in the US and Canada, there was a wide range of average labor supply reductions for men and women, from a low of nearly zero in some cases to a high of about 30 percent. 3 The guaranteed annual income is not identical to the UBI ; the former phases out above a certain income threshold, reducing its universality and, to an extent, its desirability. However, even this version touches a wide swath of the population: a high guarantee level and a low phaseout rate will run deep into the middle class. It moreover makes the option of work withdrawal universally available and allows for a good amount of inference about a fully universalistic model. As discussed below, I also found evidence suggesting that in the Mincome case, the guaranteed income reduced domestic violence. In providing people with a decent fallback position, such a policy affects underlying power relations and changes the background conditions under which negotiation takes place, both at work and at home.

But there is a stronger point about emancipatory reforms to be made here: as a social policy, basic income can pave the way toward broader social transformations. In particular, UBI can help set in motion a dynamic process that empowers people to struggle to build a better society. It achieves this in two ways: the power of exit, noted above, and the institutionalization of solidarity. The former allows poor and working people a better footing to bargain from, instigating broader and more far-reaching gains; the latter, by redrawing the social boundaries carved by categorical welfare states and reducing the appeal of “defection” from collective action, improves the odds that they do so collectively rather than individually. At bottom, the vision of basic income is attractive because of its dual function as an ameliorative and emancipatory policy measure.

In this hopeful depiction, basic income thus articulates both an economic alternative and a theory of social change. There is a concern, however, that social change happens not when people are given exit options, but when circumstances lock them into unavoidable interaction, when the lack of alternatives leaves collaboration and struggle as the only viable option. To be sure, it is sometimes argued that the Left ought not to allow people an exit option; that is, if we aspire to build power and mobilize people, we ought to encourage “voice” over “exit.” 4 As an empirical matter, this argument cannot be dismissed.

Indeed, there is always a chance that giving people the freedom and capacity to do what they want might mean that they do things we would prefer them not to do. Perhaps basic income would be emancipatory for individuals, but inadvertently fragment us as collectivities. After all, some might choose to withdraw from the social world entirely.

To the contrary, however, there is good reason to believe that it is the possibility of exit that facilitates voice. If a stable flow of cash gives you the power to threaten to leave a marriage or a job — that is, if your threat of exit has real credibility — you are in a better position to speak your mind. In what follows I attempt to make this case, though I advance basic income as a desirable reform even if it fails this empirical test. Differently put, basic income can provide resources to facilitate collective action, as will be explored below, but it does so without precluding more solitary escape routes. This position ought to be seen as perfectly consistent with a socialist ethics: we wish to nurture collective action by fostering its conditions of possibility in a positive sense — not through the active obstruction of alternative pathways, and not by leaving collective action as the only path to individual survival.

Basic income thus both enhances people’s negative freedom from coercion and their positive freedom to do what they want. There are few on the Left who would disagree with these principles. Do we wish, for example, to block a Walmart worker from quitting her job if she so desires? If we are in favor of basic human autonomy, the answer is no. The answer ought to be no, even if my argument about the positive relationship between basic income and collective action fails to persuade — even if collective action is nourished only when people are locked inside conflictual relationships. Rapunzel might survive best in her tower, but that would scarcely convince her of its value. There is a real sense in which left opposition to basic income’s underlying principle entails advocating some degree of coercion. This might be philosophically defensible, but it does not square with a commitment to decoupling Marx’s double freedom, nor with deep socialist commitments to expanding the domain of human autonomy. We return to these core philosophical issues after taking stock of an array of normative and empirical questions, and addressing the major left criticisms of basic income.

Neoliberal in Practice?

Left objections to unconditionally giving people money have proliferated of late, sparked no doubt by UBI ’s strange bedfellows on the Right. Some of these objections are highly pertinent and have pushed the debate in positive directions; others are less persuasive. With basic income on the policy agenda in a number of countries around the world, it is necessary to appreciate the broader context of the discussion.

The first and most important objection has been stressed recently by John Clarke of the Ontario Coalition Against Poverty, among others: given the constellation of forces and the political commitments of many proponents, odds are that basic income, if implemented, will come in a neoliberal guise, dishing out meager payments and accompanied by severe austerity measures. 5 Indeed, like every social policy, basic income could be implemented in neoliberal fashion, and over the past four decades there has been no shortage of such regressive proposals in Canada and the US.

This is a legitimate worry, and it is in the implementation of the policy where the strange bedfellows problem will be resolved, one way or another. The rogue’s gallery of right-wing supporters, from Milton Friedman to Charles Murray, is often unambiguous in its desire to use basic income as a knife to eviscerate the expensive insides of the welfare state. To different degrees, recent support within elite tech-chauvinist circles, from Peter Thiel to Mark Zuckerberg, might be similarly understood. How on earth could Marxists form a political alliance with the boy-king of Silicon Valley? Perhaps some elites see basic income as a pragmatic means to avoid the radicalization of a population that has seen little improvement in living standards in recent years, but others envision a Trojan horse designed to raid the citadels of Social Security, Medicare, and education spending.

If basic income is little more than a dressed-up neoliberal policy, there is no doubt: it ought to be resisted. But why not work towards a better version of basic income? There are vastly different visions for what a basic income would look like, and a small basic income deployed in a libertarian fashion to replace the welfare state is not just different from a generous version built into the existing welfare state, but it is actively rooted in the opposite philosophical vision. Where the former is designed to reduce the tax burden on the rich and avoid supposedly paternalistic social policies, the latter is designed to negate the coercive nature of the capitalist labor market and empower popular forces. Quantitative changes in generosity induce qualitative changes in result. There are qualitatively different varieties of basic income, and it is entirely possible that in the contemporary political context an undesirable vision becomes reality. But no political vision, it must be said, can escape the uncertainty built into the passage from theory to practice.

An instructive comparison here is the call for guaranteed work. If a jobs guarantee were implemented in the contemporary context, it is easy to imagine a version that is far from liberatory, where the jobs would be backbreaking and the breaks would be few. Political scientist Adam Przeworski argued against this unsavory but plausible vision of a work guarantee: “Making people toil unnecessarily, just so they can be paid something without others complaining and so they will not hang around with nothing to do, is to substitute one deprivation for another.” 6 This is not to claim that a progressive vision of a jobs guarantee is unimaginable; to the contrary, a workable scheme of that sort has a great deal of potential, and if implemented successfully would be a vast improvement on the current configuration of social policies. But the forces that might sabotage a basic income would operate similarly in the case of a jobs guarantee. 7 There is, moreover, a well-known historical example of an ugly implementation of the jobs guarantee; it was called the workhouse. For centuries the old English workhouse tied public assistance benefits to toil and operated on the principle of “less eligibility,” a doctrine ensuring that workhouse conditions be made worse than those outside in order to deter its use. It might also be noted that highly suspicious proponents were attracted to this system of poor relief. For example, Jeremy Bentham advocated for the workhouse because it was a “mill to grind rogues honest and idle men industrious.” 8

The problem, therefore, is a general one. As a rule, the Left opposes meager unemployment insurance and embraces generous unemployment insurance. Bad health care policy is bad, and good health care policy is good. Left strategy has always involved fighting to improve those policies, and any model of the world suggesting that decent unemployment insurance or good health care is won through struggle would apply equally to UBI . Criticism of the abstract idea thus ought to be distinguished from criticism of its concrete implementation — this talking point ought to be old hat for socialists, at least those old enough to remember unsavory implementations of their dearest ideas. As with all social policy measures, a basic income might be implemented in an appalling way. Should we therefore reject the idea out of hand? As an argument against the impulse to loosen the compulsory nature of capitalist labor markets, this line of reasoning is hardly sustainable.

A related critique is that basic income is a bloodless, technocratic social policy — many UBI advocates seem to imagine that once the appropriate legislation is passed, the job is done. They imagine a policy that gets wonkishly imposed, outside the context of social struggles, as if policy and power exist in separate worlds. But the critique here is primarily of those advocates, not the idea itself. Indeed, if basic income is abandoned to the technocrats we will be sure to get a tepid or even regressive set of social policies; a desirable, radical version will find many opponents, in particular employers, and will require massive popular mobilization. But it is strange to believe this problem is unique to basic income.

Neoliberal Even in Theory?

Apart from the anxieties about right-wing politicians implementing their preferred version of basic income, there are a number of criticisms of even a generous and truly universal basic income. This essay evaluates a range of empirical arguments concerning gender, capitalism, and collective action, but in this section I zero in on two oft-made normative arguments: (1) that we ought to expand the public provision of key services before we consider income maintenance; and (2) that we ought not have a basic income because we have an obligation to work, contribute to the community, and not live off of the productive labor of others.

To begin, some argue that money earmarked for a UBI should instead be spent decommodifying important services like housing, childcare, transportation, and more. This objection to basic income, first made by the economist Barbara Bergmann, is a powerful one, but in the end is not persuasive. 9

The issue is sometimes framed in the following way: If you had one additional dollar to spend, where should it be spent first? The services-over-income argument is perhaps most powerful in the form of a utilitarian hypothesis. Using one marginal dollar of additional tax revenue to expand existing public transportation or health systems, or to provide new kinds of public services, might improve people’s lives more than offering people the equivalent dollar in cash. 10 Perhaps it would more effectively extend the average lifespan or improve people’s subjective well-being. This is an unanswered empirical question, but if true it would be hard to ignore. Framing the question in narrowly economistic terms, however, posits a false choice between decommodifying labor power and decommodifying services — as if both cannot be pursued at once. In a rich, productive society we ought to be able to afford both a basic income and high-quality public goods. Were popular forces powerful enough to make progress on one, they very well might be powerful enough to make progress on the other.

But granting the framing, the calculus still makes two mistakes. First, it ignores the goal of real freedom as a non-instrumental moral objective. On the grounds of freedom — in particular, the positive freedom to decide on the activities we want to pursue and how to spend our days — it is worth defending a strategy that directly and forcefully erodes workers’ background condition of market dependence. That is, it is a good thing to be able to quit your Walmart job whatever the long-term consequences. Second, the Bergmann argument ignores the process whereby reducing labor market coercion and providing a genuine fallback better positions people to achieve broader goals.

There is, of course, a degree of symmetry between the exit option provided by basic income on the one hand and a comprehensive set of publicly provided goods and services on the other. However, I believe the expansion of freedom and power is weaker in the latter case. As Offe and Wiesenthal emphasize in a well-known essay, the needs and preferences of poor and working-class people are deeply heterogeneous — the needs of a young man living in a small rural town, a single mother in a large city center, and an older suburban couple are inescapably diverse. 11 On these grounds, money, a highly fungible good, can better satisfy diverse needs and subjective preferences than even a fairly comprehensive suite of specific goods and services. 12 This means that basic income would more effectively reduce the costs of being fired and better create an alternative to the labor market for a wide swath of society; by more effectively constructing a fallback position it would better expand workers’ leverage at work.

If we must choose between expanding the public provision of services and providing a basic income, and we go with the former, we should be clear on the meaning of this choice. It implies that we prefer a system where people remain somewhat more dependent on the labor market for survival, that we prefer to retain, in all likelihood, Marx’s double freedom. By contrast, a basic income insists that it is important to decommodify not only a range of goods and services, but labor power itself. 13 It says that taking coercion out of the labor market and abolishing what the labor movement once called “wage slavery” may ultimately be more liberatory than taking a broad spectrum of commodities off the market. It says that we ought to have the positive freedom to spend our time as we wish. Rather than improving our ability to get to work, UBI provides the means to avoid it if we need to.

There is another side to the services-over-income objection. John Clarke argues that even in the best case, giving people money will foster a consumerist society. Labor power might be decommodified, but if everything else must be bought, we will end up spending all our time as “customers in an unjust society.” 14

It is worth making two points in response. First, a world with an open market in most goods but no compulsory capitalist labor market in fact might be a decent transitional vision of market socialism. The injustices of capitalism have much more to do with the coercive nature of the labor market than the existence of markets for consumption items. Indeed, the anti-consumerist argument misidentifies the sources of injustice in capitalism. The goods market is not so much a bad in itself; the problem is rather that people have insufficient purchasing power to make effective demand correspond to actual want and need. 15 A more egalitarian distribution of purchasing power would help bring the neoclassical fantasy that market demand equals need into alignment with reality. 16

Second, it seems perfectly reasonable to expect a basic income to make for a much less consumerist life. As noted above, the Dauphin experiment generated a nontrivial drop in labor force participation. For some people, basic income might also mean exiting the paid labor force, collecting a lower income, and thus having less, not more, to spend. It is often hoped and hypothesized that socially valuable activities would be encouraged if people’s basic needs were secured outside the labor market. Moreover, the virtue of basic income is its potential to expand people’s leisure activities. We can turn to data from the urban portion of the Mincome experiment — a randomized controlled trial based in Winnipeg conducted in conjunction with the Dauphin portion of the experiment — to analyze this very question. Mincome inquired into the day-to-day activities of basic income recipients who left the labor force; relative to controls, the intervention led to growth in a range of socially valuably activities, including care work and education (see Table 1). The intervention also led to growth in the portion of men and women reporting that they were not working simply because they “did not want to work.” In a free society, this decision ought to be available to the poor as well as the rich.

Treatment effects for survey question, “What is the main reason you were not working?”*

NOTE: “Treatment effects” refer to the isolated effect of the experiment, or the “difference-in-difference”. The difference-in-difference subtract the baseline/study period change in the control group from the baseline/study period change in the treatment group. For example, the treatment effect of the experiment for answering “education” is 2.6 percentage points. In this case, the percent of control subjects reporting that they were not working due to education increased from 4.6% at the baseline to 5.7% during the experiment, and the percent of Mincome treatment subjects reporting the same answers increased from 4% at the baseline to 7.7% during the study period, leaving the full treatment effect at 2.6 percentage points. See also D. Calnitsky, Latner, J., & Forget, E. 2017. Working Paper. Life after work: The impact of basic income on non-employment activities. Available upon request.

While it’s possible that some people would spend more of their newly freed-up time shopping — not to mention doing experimental theater and rollerblading, the most underrated of all basic income critiques — they also might spend free time with others, pursue social and political projects, undertake care work, or engage in a wide array of other, non-consumption-related activities.

Before moving on, it is worth making note of a second normative critique of basic income, one that stretches from Rosa Luxemburg to Jon Elster, and which is anchored in a good deal of liberal and left political theory: that we do not have a right to live off someone else’s earnings. 17 Rather, the argument goes, we have a moral obligation to contribute to the community, and therefore, to work. In part, this is what led Tony Atkinson to propose a “participation income” in place of basic income: the participation income would provide a stream of income conditional on participation in some socially valuable activity, be it inside or outside of the formal labor market. 18

Here I see two issues worth contemplating. First, from the viewpoint of socialist freedom, there is every reason to believe that rather than equalizing work levels and incomes we ought to provide people a choice between higher income and more leisure. This is consistent with what G. A. Cohen has named “socialist equality of opportunity.” 19 In such a world, inequalities in income and leisure reflect nothing more than differences in personal tastes for income and work — that is, differences consistent with socialist justice. For Cohen, a society where each person has roughly equal work/wage bundles is inferior to one allowing for a choice between varying bundles of income and leisure. Basic income goes some way to allow for individuals who might choose a basic-income/maximal-leisure bundle or a high-income/minimal-leisure bundle. I return to this question of socialism and freedom in the conclusion.

Second, the normative argument that people do not have a right to live off another’s earnings — and by implication that only those who work shall eat, that only those engaged in productive labor ought to be compensated — is unacceptably libertarian in its underlying theory of remuneration. The theory ignores the non-attributability of outputs to production inputs: production is a deeply interdependent activity and, particularly in a world of non-constant returns to scale, the abstract process of linking one person’s productive effort to their ultimate compensation is always an ambiguous exercise. This means that the very concept of an individual’s appropriate earnings is ill-defined. But even more importantly, the principle suggesting that we ought not live off the labor effort of others gives far too much weight to current productive labor — that is, the labor of living workers rather than the whole history of work — as the driving force of current output. As Herbert Simon has argued, high levels of individual productivity in rich societies are, for the most part, consequences of the brute luck of being born into a rich society. 20 High incomes and high productivity are attributable less to current labor effort and more to past labor effort, and all members of society ought to benefit from the work of prior generations and the overall wealth and development of society. For the current generation, this means that through no contribution of our own we have been endowed with highly developed technologies, infrastructure, language, and culture, and this gives current income, in large part, a morally arbitrary character. This is, therefore, a powerful reason to redistribute a good amount of it to people whether they work or not.

Basic Income and Capitalism

A separate set of critiques from the Left concerns the unintended consequences of basic income on the labor market, employer behavior, and capitalism more broadly. These arguments are often framed in terms of the apparent limits of capitalism and the subterranean economic forces that compromise progressive social transformation. As a general rule, arguments taking the form “a decent basic income is impossible under capitalism” should be treated with the same suspicion we have for claims about capitalism’s fundamental incompatibility with a decent welfare state. History has shown capitalism to be a highly flexible system; what was once said to be impossible under capitalism is later said to be an essential feature of its legitimation. In such arguments it is pro forma to allude to some deep and unmovable economic (rather than political) impasse, but the idea that a decent basic income is impossible under capitalism boils down to the claim that real reform of capitalism is impossible.

However, one very real feasibility constraint concerns labor market participation: if basic income pulls most of the workforce out of the labor market, the scheme’s ultimate revenue source will dry up. Yet, as noted above, experimental evidence suggests that basic income payments hovering at half of median family income induce some labor market withdrawal, but not catastrophic levels. To my mind, this result is more or less desirable: no work reduction would mean no expansion of freedom and no lessening of toil, but extreme work reduction in the short-run risks unraveling the program. Contrary to common opinion, basic income should not be understood by itself as a post-work utopia: indeed, if most everyone dropped out of work, there would be no revenue to fund the scheme. The wager is that even though work would be a choice rather than an economic necessity, people would for the most part continue to find work attractive, albeit less so; poorly remunerated jobs would be bid up (itself a process that makes work more appealing, partially compensating for exits elsewhere), and workplaces characterized by the worst forms of domination would be less sustainable.

A further prediction made by David Purdy is that workers who reduce labor hours or exit from the labor market will make it easier for underemployed or unemployed workers to find work. 21 If it is indeed the case that employers require replacement hires for exiting workers — and it should be said that there exists no evidence for or against this hypothesis because of data limitations — this particular mechanism predicts not so much an increase or decrease, but rather a redistribution of available work. There are reasons, therefore, to expect increases in labor market participation in some cases, even if the scheme generates net declines.

Nevertheless, despite evidence to the contrary, it may be the case that basic income does drain most workers out of the labor market. Or perhaps these perverse effects would eventually materialize with a massive basic income. If so, the non-sustainability argument has force, and it means that there is some Goldilocks level of basic income, above which people drop out in droves. My own estimation is that if some such level exists, it is considerably higher than the figures posed above: none of the evidence from a wide range of benefit levels in the various experiments comes close to inducing a collapse in the labor market. Because of the benefits of added income, the inherent appeal of work, and its potentially growing attractiveness due to changing power relations, it seems to me that an increasingly generous basic income will face other sustainability problems long before some mass exodus of labor buckles the economy.

This brings us to a second feasibility constraint: a decent basic income might be impossible under capitalism due to capital flight. In this story, high taxes or high wages will lead capitalists to disinvest, thereby undermining the revenues required to fund an expensive basic income. How narrow are the bounds of a progressive welfare state within the context of capitalism? Would basic income provoke debilitating levels of capital flight, thereby depleting the tax base necessary to fund the scheme? 22 Although UBI is undeniably expensive, this criticism is overstated. One way to think about the problem is as follows: At the highest level of abstraction it is clear that a country like the United States is far from the threshold where tax revenue as a percentage of GDP reaches its theoretical limit inside a more or less capitalist economy. If the lower bound for this theoretical upper limit is the Danish level of about 51 percent, the United States, at about 26 percent, can afford to double its spending. On abstract feasibility grounds, there is plenty of room to grow the portion of resources that we devote to public purposes before the Marxist theory of the state kicks in to insist on a hard limit to left policymaking within capitalism. 23 This counterargument obscures many important details — for example, the types of tax instruments used can significantly impact the likelihood of capital flight — but it is worth recalling that the threat of capital flight is often just that: a threat. 24 If higher social spending is forcibly imposed on them, there is good reason to believe most capitalists would accept it, albeit unhappily, rather than abandon their firms.

Even if there is good reason to believe that the threat of paralyzing capital flight is itself far off, it may still be ultimately fatal at some threshold. At this point, however, it is likely that social and political conditions also begin to change. Indeed, as basic income grows — because of rising expectations, the program’s rising popularity, and an increasingly empowered populace — there will be a greater need to find new funding by directly taxing capital through a range of mechanisms. Perhaps funding schemes that heavily tax capital are avoided at first because of the sensitivity of investment, but eventually it becomes an unavoidable revenue stream, thereby exacerbating the capital flight threat. One solution that may become viable for political leaders is — in fits and starts, and in specific industries — a program to socialize various means of production. The initial hazard posed by capital flight may thus become an opportunity. This will help solve the underlying economic problem of abating private capital’s need for profits, while also serving as a fresh source of funding. For example, John Roemer’s coupon socialism model is essentially a basic-income-like dividend funded by the universal ownership of all capital assets. 25 This story is of course highly speculative, but as a sketch of the transition to socialism it seems about as plausible a way to surmount the capital flight problem as any. Call it the basic income road to socialism.

To conclude this section, it is worth making note of a final, more pointed economic critique of basic income; namely, that the policy is nothing more than an employer subsidy. One version of the argument goes like this: there is a subsistence wage out in the world that is historically determined, but more or less fixed, and if the state can be made to cover some of that wage, employers will happily pay less of it. 26 Apart from resting on an unsustainably functionalist argument about wage setting, the inner logic is absent. Wage declines do not happen magically — they have to be imposed. But when workers have an exit option, a bargaining chip, wages are likely to go up rather than down. 27 Indeed, in the case of Mincome, we can observe this very effect: relative to businesses in control towns, basic income forced Dauphin businesses to raise wage offers in order to better attract workers who now had a decent alternative. 28

The argument goes further. Even a small but unconditional basic income would not be an employer subsidy. To clarify, take a seemingly similar case: The US Earned Income Tax Credit is an employer subsidy, but not because of some functionalist mechanism about subsistence wages; it is an employer subsidy because it is an income transfer that is conditional on work and therefore increases the labor supply, which pulls wages down. 29 In contrast, a small unconditional basic income would, in a small way, raise the reservation wage of labor, just as food stamps, in a small way, raise the reservation wage of labor and lower work hours — they allow people to be just a bit pickier. 30 Provided a basic income policy is not conditional on work, even a modest version added to the current welfare state would make it marginally easier to say no to bosses because it offers a modicum of an alternative.

It is important to put the employer subsidy position — a truly classic case of Albert O. Hirschman’s perversity thesis — to bed because, first, there is no evidence to support it, and second, it forecloses on the otherwise reasonable strategy that views a small basic income as a way station to a large one.

Basic Income, Collective Action, and Solidarity

If the above argument about wage growth is correct, coupled with public support, an insufficient-but-unconditional basic income presents a viable path to a more generous one. While I make this case below, it is first worth laying out an argument leveled against the potential impact of basic income on solidarity: UBI will not only dramatically increase the tax burden on some and redistribute a good amount to others, but it will do so in a way that is immediately socially recognizable as a transfer; unlike, say, health care and housing, transferring actual cash from one party to another is conspicuous. As a consequence, it is easy to imagine a vulnerable group being publicly accused of laziness and dependence. Is it possible that the net-contributors to the program will strongly differentiate themselves from and even begrudge the net-recipients?

In response, it is useful to distinguish between different types of income transfer programs. For example, unlike a negative income tax, where some people — those below a given threshold — collect payments and others do not, the universal basic income makes everyone a recipient. The calculation of the net impact of a UBI is far less conspicuous than under a negative income tax where you either physically receive payments or don’t. The UBI computation requires comparing the amount you receive to the portion of your tax contribution allocated to the program. Post-tax-and-transfer winners and losers are far less visible, even if the two schemes achieve the identical post-tax-and-transfer income distribution. It is also worth mentioning that family allowances — in Canada, France, and the UK — are (or were) near-universal cash transfer programs and among the most popular social policies in those countries. Indeed, there are plenty of cash transfers that are robust and popular. Those that are, as I discuss below, tend to avoid distinctions between the “deserving” and “undeserving” poor, and thus escape the cycle of stigma and victim-blaming that so many social assistance programs are vulnerable to. 31

By contrast, traditional welfare policies suffer from inherent limits to political mobilizing: they impact only a small, poor, and marginalized group, and are consistently at the top of the list of the most unpopular social policies. Because so few people are touched by welfare policies targeted at the poorest populations, organizing benefit increases is always an uphill battle and requires disproportionate reliance on moral arguments, rather than material ones. It is for the same reason that such policies are uniquely vulnerable to austerity. Yet even a weak basic income could touch a broad array of people and help build a solid constituency to support its continual growth and expansion. As more people are folded into a program, two things happen. First, quality improves. And second, it becomes a political third rail. Programs with benefits dispersed broadly across diverse social layers tend to become highly popular and can start to be seen as a civic right, making for ratchet effects where gains become irreversible.

Indeed, this popularity effect is clear from the qualitative commentary from Mincome participants in Dauphin. Mincome helped blur the usual lines of demarcation between the deserving and undeserving poor. For many, welfare was viewed in moralistic terms; it was a signal of a tarnished moral character and consistently too humiliating for most to consider joining. Mincome, however, was viewed as a neutral, pragmatic program, and its widespread availability meant it was not interpreted as a system for “other” people. People took casual and positive attitudes toward Mincome and participated because they simply “needed money,” while the vast majority despised welfare because, among other things, it was for the “needy and bums.” They often distinguished their own Mincome receipt — which was based simply on needing cash in an economy with precarious employment opportunities — from the circumstances of welfare receipt, which were caused by recipients’ moral failings. Even Mincomers with strong ethics of self-reliance or negative attitudes toward government assistance felt able to collect Mincome payments without a sense of contradiction. 32

There is thus a powerful argument that the universalism of UBI would facilitate solidarity that is otherwise obstructed in a highly fragmented and categorical welfare state marked by deep tensions between low-wage workers, unemployed workers, and social assistance recipients. Similar life experiences are critical in facilitating communication and solidarity (for Marx, it was the similarity of life inside the walls of the factory that galvanized solidarity). At minimum, even if a UBI does not actively nurture solidarity, breaking down the categorical nature of social provisioning may reduce the barriers to alliances across otherwise separated groups of poor and working people.

However, there are other aspects to consider when thinking through the impact of basic income on collective action and solidarity. Indeed, it may be the case that the overall impact of basic income on solidarity is somewhat indeterminate, with certain forces facilitating it, and others running against the grain. Although we have seen that the impact on wages is likely to be favorable, what can we say about the manner in which those wage gains are made? Put differently, if wage increases can be won through individual or collective strategies, how might UBI play out in this respect? The basic fact of an exit option might mean that individuals use their newfound powers to bargain on their own, not collectively. It might allow them, moreover, to opt out entirely. After all, basic income increases workers’ bargaining power with their bosses, but it also increases their power with respect to their unions. Offering people alternatives to economic dependence on employers also means alternatives to economic dependence on collective solutions. 33

The optimistic view proposes that basic income would for the most part facilitate collective action. It is sometimes suggested that a UBI could operate as an inexhaustible strike fund; indeed, the National Association of Manufacturers ( NAM ) was the first to recognize this in their Congressional testimony on Nixon’s Family Assistance Plan, a guaranteed income that nearly passed in Congress in 1970. The business group was willing to support the plan as long as it was a significantly watered-down variant of the original, fairly radical and work-unconditional proposal. In congressional hearings the NAM insisted that they would support the program only “if the basic allowance is a realistic minimum, and if the earnings disregard provides a true incentive to work and advancement and if the work requirement is strong.” Finally, they expressed concern about the link between the guaranteed income and labor upheaval: “We suggest that anyone directly involved in a labor dispute should be ineligible for benefits under the family assistance plan.” 34 This worry on their part seems perfectly reasonable.

In this vision a UBI aids collective action because it provides the positive resources to facilitate it. Moreover, the policy would reduce the temptation to “defect” from collective action. Desperate workers, individuals with few alternatives, would be less inclined to scab if they had another decent survival option. However, while basic income provides the positive sustenance for collective action, it weakens the negative motivations that spur it on. Much collective action happens because workers have no alternative but to struggle in conjunction with others. Basic income eliminates the external condition of starvation, the condition that forces collective action on people as the only viable path to advancement. Thus, while it undermines the push factor, it strengthens the pull factor by providing the material support that makes collective action more likely to occur and succeed.

It is of course perfectly reasonable to imagine that basic income might empower people both as individuals and collective actors, facilitating both solitary and collective struggles against powerful social actors. From the perspective of socialist freedom, this approach to collective action strikes me as desirable. Moreover, as noted in Table 1, survey data on why people were not in the labor force during the Mincome experiment reveals some evidence suggesting that people acted individually and some suggesting collective action. I noted above that survey data showed that care work and education were cited, but the strongest reason for not working was related to dissatisfaction with job or work conditions. One can see answers relating both to workplace struggles and opting out in the data — another common answer, as indicated above, was “did not want to work.”

But what if, contrary to my arguments, universalistic income maintenance ultimately hampers solidarity? If basic income enhances some of the positive reasons for collective action and undermines some of the negative reasons, the net effect could still be negative. It may turn out that the only way to nurture solidarity is to leave workers with no exit option, and no alternative to collective action. Perhaps free (or freer) people will not choose solidaristic strategies and prefer to go it alone. Should we decide that it is then preferable to maintain an external starvation constraint in order to better ensure group solidarity? Even in this limiting case, it would be strange for the Left to argue in favor of economic dependence on the capitalist class. Certainly the freedom tradition in socialism would find little in the way of argument to justify an instrumental case against current autonomy in the anticipation of greater autonomy in the faraway future. The intuition that suggests workers ought not have a basic income because they might behave in ways we don’t like is the same intuition recommending that the Garden of Eden ought to be destroyed should it one day be discovered on Earth. A place like Eden, where our subsistence needs can be met by plucking fruit from the trees, where we can make ends meet on our own, might corrupt our other-regarding impulses. But that would be a bad argument against Eden. The issue is best conceived as a socialist wager: we hope and hypothesize that free people would prefer cooperative, collective action, but if they don’t then they don’t. That sad counterfactual is an insufficient reason to limit their freedom.

Basic Income and Gender

Among the open questions concerning the empirical consequences of basic income, the issue of gender is sometimes seen as the most ambiguous. Before interrogating the evidence on this matter it is worth recalling the 1970s Marxist-feminist campaign for “wages for housework,” a social movement (and demand) with much affinity to basic income, as demonstrated by Kathi Weeks. 35 Wages for housework was in part a real demand for remuneration for valuable economic activity, and in part an attempt to socially recognize the unpaid care work done disproportionately by women. It was meant to make visible labor that was otherwise invisible. The demand itself was straightforward: Women do valuable and productive, but unremunerated, domestic work and they ought to be paid for it. 36 There is a “social factory” that is largely invisible but facilitates the very existence of the industrial factory insofar as the former partially produces (or “reproduces”) the human inputs for the latter.

However, even the chief proponents in the movement were hesitant to commit to the normative demand as a concrete social policy. Ellen Malos noted that it was “not clear whether campaigners for wages for housework really want what they are asking for.” 37 As an earnest normative demand it was a nonstarter. Few feminists could get on board with a scheme that is dangerously essentialist and at bottom a categorical social policy only available to women — or women who do housework. As it was designed, it would fortify a highly gender-inegalitarian division of labor — indeed, male housework was sometimes regarded as scab labor in the milieu of the time. Moreover, the perspective views the assignment of housework to women as more or less appropriate. The wages for housework demand might render the housework done by women visible, and recognize it as socially valuable, but it also naturalizes it, and buttresses a gendered division of labor. For these reasons, wages for housework, taken as a genuine attempt to reorganize social life and envision a just system of remuneration, was indefensible.

In Weeks’s overview of the debate, she draws a straight line from wages for housework to basic income, arguing that the latter better achieves the underlying objectives of the former. Weeks writes that wages for housework proponents sought a “measure of independence”: a certain level of autonomy — and power that flows from it — was the underlying objective, and wages for housework was the means for achieving it. The problem was that it was a categorical social policy that poorly realizes its own core normative vision. For Weeks, “[p]recisely because it does not address its potential recipients as gendered members of families, the demand for basic income is arguably better able to serve as a feminist perspective and provocation.” 38 Unlike wages for housework, basic income comes without the strings of actual housework: for that reason it better undermines economic dependence and better realizes the twin goals of autonomy and power.

From a Marxist viewpoint, one of the central conditions undermining autonomy and facilitating exploitation in the labor market is the double freedom discussed above. There is a clear parallel here with the historic conditions underwriting women’s subordination to their husbands. In a traditional marriage, without access to external means of subsistence, women remain economically dependent on male breadwinners. As a consequence, their power both inside and outside the context of marriage is constrained.

If double freedom is a stylized fact of capitalism, from the Marxist-feminist lens, what happens then when a social policy breaks the second half — the freedom to starve — of that dictum? The Marxist hypothesis is that power relations between workers and employers will be transformed. The corresponding Marxist-feminist problematic centers on the ways that social policy weakens or entrenches women’s dependence on their husbands. Basic income operates as an outside option that can modify the internal dynamics of marriages. If you have a viable exit option, your power inside a marriage can improve. If you have no outside options, you are more likely to remain a subordinate partner.

These issues were debated in the context of the American guaranteed income experiments. The debates played out in the pages of the American Journal of Sociology , and they were framed in an exceedingly narrow fashion — would the guaranteed income undermine “marital stability”? — but the implications for women’s power and autonomy lurked in the background. Some evidence appeared to show that women would leave their husbands because they could make do without them (this was termed the “independence effect”) and some evidence seemed to show that extra income would improve marital stability (the “income effect”). 39 The debate generated an immense controversy on empirical and methodological grounds, but a weakness of equal importance was that the core questions were undertheorized. At no point did researchers attempt to investigate the ways that an outside option would impact the power relations internal to marriages.

It was seldom acknowledged that if some marriages dissolved, perhaps they were bad or abusive marriages, formed and sustained in the context of limited alternatives. Likewise, if some marriages were stabilized — as others found — then perhaps it was because the guaranteed income ameliorated underlying financial stressors. There are, however, further hypotheses that were ignored. Rather than simply making exits more likely, basic income may impact the balance of power and decision-making within relationships by making the threat of exit credible. It may also mean that relationships prone to large inequalities in power were less likely to form and solidify. It may be hypothesized further that these changes in the positional power of women, their expanded capacity to realize their demands, have broader effects, including possible reductions in the risk of violence. This view shifts attention from the dissolution of marriage to changes in the power relations interior to them, from actual exit to the threat of exit, and poses a further empirical hypothesis: basic income could increase the bargaining power of wives vis-à-vis husbands and thereby reduce the risk of violence by making credible the threat of exit. In the Dauphin case, I find some preliminary evidence of a decline in domestic violence, and several mechanisms — actual exits from marriage such that exposure to potential violence declines, changing power relations due to the availability of the threat of exit, and a decreased risk of violence due to reduced financial stress — may have all played a role.

However, if the impact on power and autonomy is a net positive, what are we to make of the potentially negative implications for women? It is often argued that a universal basic income would disproportionately reduce female labor market participation and entrench a gendered division of labor. This itself might have implications for the reduced power of women inside relationships. Indeed, the experimental evidence from the 1970s shows that women reduced their labor supply a good deal more than men did. Would a contemporary implemented UBI have the same disproportionate effects?

While it may still be the case that women would reduce work more than men, it is highly unlikely that the effect will be as disproportionate as it was in the 1970s. With a far narrower gender wage gap, many women today will find the opportunity costs of work withdrawal to be too high, and thus decide, like most men, to continue to work. Even so, it is still possible that women would see a somewhat greater impact than men on this front, generating some negative empirical outcomes, including the entrenchment of a gendered division of labor. One response would be to say that while this might be true, on balance — and especially considering the evidence on power, autonomy, and violence — a UBI would have net gender-egalitarian consequences. A second response would be to admit that some outcomes might be negative, and like any social policy measure with unintended negative effects, it ought to be countered by other supplemental policies that bolster a more gender-egalitarian division of labor. A third response would emphasize the limits of the old strategy of replacing domination by husbands with domination by bosses. Such a substitution may have once had appeal under certain circumstances, but weakening economic dependence as such is preferable. However one falls on this issue, what has to be asked is whether these empirical and theoretical ambiguities should prompt us to surrender the freedom to quit. Again: do we wish to disallow a Walmart worker from quitting her job if she so desires?

Basic Income and the Socialist Project

With right-wing variants of basic income on the table, it is natural to see a flurry of left criticism. Nonetheless, it should be recognized that the UBI concept dovetails with a normative vision that has deep roots on the Left. The fundamental goals of the socialist left have long been fixed on emancipation, self-realization, and the satisfaction — and even expansion — of human needs. As Adam Przeworski writes, “Socialism was not a movement for full employment but for the abolition of wage slavery … it was not a movement for equality but for freedom.” 40 It was only when those goals appeared closed off by political and economic circumstances that we narrowed our horizons and settled for a productivist alternative, characterized by more rather than less work. Having found it unworkable in the medium-run to eradicate exploitation and alienation, socialists set out to universalize them.

Socialism lost something in the reorientation from a vision defined by the abolition of the wage relation to one that fastens us all to it. A generous basic income defined by a genuine exit option from the labor market ultimately has a real affinity with the socialist project. The moral question at the fore is whether or not we wish to retain the coercive and compulsory quality of the capitalist labor market. Fighting for an exit option ought to be a priority because, first, it gives people the power to confront their bosses or their spouses — the possibility of exit facilitates voice — and second, because it gives people real freedom to enact their life plans, unencumbered by the dull compulsion of economic relations.

Expanding people’s real freedom and eroding the background condition of market dependence are core features of basic income and at best secondary goals in the jobs-and-services strategy. The objective is to free workers not only from a given capitalist, but also from capitalists as a class. This is why a generous and truly universal basic income ought to be a plank in any broad socialist agenda. That said, social order is often secured through some measure of coercion, and forms of social organization that strive to reduce coercion and expand people’s freedom always run the risk of dysfunctionality. This is a danger baked into the socialist project. Likewise, the risk that basic income gets co-opted and turned in on itself is a problem facing any abstract policy proposal. It is a danger inherent in the move from theory to practice, and it presents itself whenever an idea narrows in on reality. Whether or not that happens is ultimately up to us.

More from this issue

Editors’ Note — Fall 2017

• James K. Galbraith

The Predator State

• Bernd Riexinger

Illusions of EU Exit

• Costas Lapavitsas

A Socialist Strategy for Europe

• Ching Kwan Lee

After the Miracle: Labor Politics Under China’s New Normal

• Richard Lachmann

The US Military: Without Rival and Without Victory

• Joshua Murray
• Michael Schwartz

The Dialectics of Class Conflict in the Auto Industry

• Adaner Usmani

Did Liberals Give Us Mass Incarceration?

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Universal basic income: the pros and cons.

Universal basic income (UBI) is an old idea introduced during the French Revolution by the English-American Thomas Paine. It is back in force today around the world. In its purest form, it consists of granting each individual, whether poor or rich, the unconditional right to receive the same amount of money on a regular basis.

In 2017/1 Volume 1

1 During the last French presidential campaign, the candidate Benoît Hamon made universal basic income (UBI) a part of his platform. This prominent part of his agenda was an old idea introduced during the French Revolution by the English-American Thomas Paine. It is back in force today around the world. In its purest form, it consists of granting each individual, whether poor or rich, the unconditional right to receive the same amount of money on a regular basis. The poor or rich stipulation is necessary because if UBI was exclusively for the indigent, it would be means tested and thus, according to its promoters, there would be humiliating administrative steps to take, tainted by delays and uncertainties. This astonishing idea, considered by many to be absurd, has been and continues to be as strongly supported by right-wing thinkers as it is by left-wing thinkers. On the right is the economist Milton Friedman, for example, and today the Frenchmen Gaspard Koenig and Guy Sorman. On the left, John Kenneth Galbraith and Martin Luther King, for example, and now the Belgian philosopher Philippe Van Parijs or the economist Thomas Piketty, who supported Benoît Hamon.

2 Included in this issue:

3 Stéphan Lipiansky, Jean-Éric Hyafil, Denis Clerc and François Meunier.

4 And also: Anton Monti, Philippe Warin, Yannick Vanderborght and Philippe Van Parijs.

5 Carte blanche given to Christopher Brooke.

Looking Back

Its genesis in europe: the 1970s.

6 Ten years before the current debate took center stage, the journal Connexions published a text by Stéphan Lipiansky that detailed the genesis of the revival of the idea in Europe. We see the first signs of it in Finland, Sweden, Denmark, and the Netherlands in the 1970s. The first author to advocate an unconditional income in Paine’s sense, i.e., one intended for all citizens without exception, was the Dutch doctor JP Kuiper (1975). The French economist René Passet followed suit in 1979. In his book Les chemins du Paradis (1983) [ Paths to Paradise: On the Liberation from Work, London: Pluto, 1985] , the French sociologist André Gorz advocated a universal income that would be in effect for one’s whole life but nevertheless conditional on a certain quota of work during one’s lifetime. The following year, another Frenchman, economist Yoland Bresson, published a book defending unconditional UBI. But it was Belgian philosopher Philippe Van Parijs who took the reins of the movement in 1984. He quickly acquired an international audience with the creation of the Basic Income European Network (BIEN).

8 Stéphan Lipiansky is a young associate professor of economics and management.

Carte Blanche Given to...

11 Christopher Brooke

“Shifting Our Focus from the Idea of Productive Labor”

12 The first thinker to express the core idea of a universal basic income was apparently Thomas Paine, in his pamphlet Agrarian Justice (1797). He specified: “It is proposed that the payments [. . .] be made to every person, rich or poor. It is best to make it so, to prevent invidious distinctions.” Was he defining a new human right?

13 I don’t think Paine thought he was defining a new human right, but rather working with a much older idea. The Bible says, “The heaven, even the heavens, are the Lord’s: but the earth hath he given to the children of men” (Psalms 115:16), and that verse was often interpreted to mean that God had given the earth to all of humankind to hold in common. One could of course use a thought like that to reject private property altogether. But Paine doesn’t do that; rather, he argues that nobody should be worse off in a world of private property than they would be, were they to live in this natural condition, enjoying their share of the common inheritance of humankind. So he’s not so much defining a new right, as proposing a policy which, he says, will be “in lieu of the natural inheritance” which belongs to all as a matter of right.

15 The universal basic income idea has been and is still promoted by thinkers from the right as much as from the left. Isn’t this quite rare in the history of ideas?

16 I’m not sure it is so unusual. It’s an idea that’s always floated around on the edge of the liberal tradition in political thought, and liberals can be found on both the right and the left: it’s the tradition of both Friedrich Hayek and John Rawls, for example. And Tom Paine has himself been inspirational for both the left and the right. For some on the left, he’s a great radical hero in three countries—Britain, America, and France—but his ideas also contribute to a powerful strain of what these days is right-wing paranoia about the malign intentions of government, and the need for the population to remain armed and vigilant.

18 Right-wing supporters favor freedom of the individual, left-wing supporters favor the reduction of inequalities and poverty. Two sides of the same coin?

19 Yes. I think it was George Bernard Shaw who first put his finger on the problem here, that the welfare state promoted by the ideology of New Liberalism in the early part of the twentieth century in Britain had a contradiction at its heart. On the one hand, measures taken for public health, social security and workplace safety were justified in terms of promoting citizen capacities for autonomous agency, but on the other hand, they were obviously massively paternalist. Just give people the money, he said—and if they want to use it to invest in healthcare and an old-age pension, then they can.

21 One major dissenter was John Rawls, the theorist of justice, who wrote: “So those who surf all day off Malibu must find a way to support themselves and would not be entitled to public funds” (1988). Isn’t this intriguing?

22 If we look again at the eighteenth century, Rawls is much closer in spirit to Jean-Jacques Rousseau than to Tom Paine. Rousseau’s idea is that the modern republic is a community of people who work, to generate a taxable surplus, and the fact that every household contributes a bit to the public revenues gives the citizens an interest in supporting the state, so they can benefit from the public expenditures, and gives the state an interest in not undermining the livelihood of the citizens, so the flow of tax revenue can continue undiminished. From that point of view, paying people a guaranteed income, such that they might do less paid work, runs contrary to the fundamental interests of the political association itself. But some people who support basic income often do so precisely because they want to shift this idea of productive work away from the heart of our political thinking. Lots of people can’t work, or don’t want to work, and only certain kinds of work receive payment in wages, and so on, and so a guaranteed income that isn’t dependent on the performance of paid work is a way of decentering work in our political imaginations, and helping to promote a kind of equality of status between workers and non-workers. Whether or not it’s a feasible ambition remains to be seen.

23 Christopher Brooke is a lecturer in the Department of Politics and International Studies at the University of Cambridge.

Make Universal Basic Income Happen Now

26 Jean-Éric Hyafil is a young professor-researcher at the Centre d’économie [Center for the Economy] at the Sorbonne. He is a member of the Mouvement français pour le revenu de base [The French Movement for Basic Income] (MFRB).

The Case Against It

A dangerous plunge into the unknown.

29 Appearing at the same time as Jean-Éric Hyafil’s plea was a text in the journal L’Économie politique by Denis Clerc, who offered a systematic demolition of the concept of universal basic income. Referring to various generated figures, he denounced its financially unrealistic nature. Then he moves on to his fundamental criticism: it is really an “ultra-liberal” idea: “Behind the appearance of a generous society, which unconditionally pays everyone a decent or even sizable basic income, we find a world where everyone must fend for themselves. Some people could then discover, albeit belatedly, that collective welfare protection and employment may have certain advantages.” Not only will traditional social benefits be reduced, but employers will delight in the safety net that will consequently be provided to everyone and will take advantage of this to reduce wages and increase the number of “uberized” jobs. The article concludes with an ode to employment, “taking part in the collective opus, having a recognized place within the social system, and enhanced independence to be able to choose your way of life.” In a nutshell, universal basic income is a “plunge into the unknown.”

31 Denis Clerc , born in 1942, is the founder of the Alternatives Économiques group, which publishes L'Économie politique .

Not So Simple

The virtues of “care”.

34 In the journal Esprit , the financier François Meunier deliberately sidesteps the questions of financing and whether universal basic income could reduce the incentive to work. He focuses on two of the main arguments put forward by the supporters of UBI, unconditionality and simplicity. Against Milton Friedman—and also against Michel Foucault who drew upon the American economist’s ideas—he says it is necessary to “investigate the reasons for which one might fall into poverty,” which entails putting in place a battery of tests to determine entitlement to benefits. Faced with unconditionality, Meunier advocates “care.” He also contests the simplicity argument, because UBI will in fact not exempt authorities from the need to pursue various forms of assistance, notably housing, and taxation at source will continue to make income-testing necessary.

36 François Meunier is an associate professor of finance at ENSAE (École nationale de la statistique et de l’administration économique [National School of Statistics and Economic Administration]). Former head of the Coface credit-insurance group, he heads Alsis Conseil.

Further Reading on Cairn.info...

For a calm debate.

39 For a complete argument from universal basic income’s supporters, interested readers can refer to a small book by Philippe Van Parijs and Yannick Vanderborght, L’allocation universelle ( in French on Cairn.info ), published by La Découverte in 2005. The authors' aim is to foster “a calm and well-informed debate.” They trace the “prehistory” and the history of the idea, describe its variants, respond to the main objections, show that UBI is not only an economic and social project but a philosophical one, and, finally, outline the “political feasibility of the measure.” They point out that UBI differs fundamentally from the measures included in the Revenu minimum d’insertion [minimum integration income] (today the Revenu de solidarité active [minimum income for unemployed and low-paid workers]) in that it is granted to everyone, rich and poor, without examining resources, on an individual (not a family) basis and without any requirement of matching funds, especially when it comes to work.

41 Philippe van Parijs holds the Chair of Economic and Social Ethics at the Catholic University of Louvain. Yannick Vanderborght is a professor of political science at Saint-Louis University in Brussels.

The Case in Finland

42 In the magazine Multitudes ( in French on Cairn.info ), the Finn Anton Monti describes the project set up by the Finnish government to experiment with UBI with a target population. This involves providing 550 euros per month to a group of 1,500 people. If they are seeking employment, they will be able to receive other social benefits. If they are employed, they will be subject to an average tax rate of 43% on all their income. Monti analyzes in turn the project “as seen from the left” and “as seen from the right”—because it is a center-right government that is implementing it.

The Phenomenon of Non-Usage

43 Almost 70% of those entitled to minimum income for unemployed and low-paid workers (RSA) do not use it. Two-thirds of them are unaware of its existence and the remaining third refuses to take the necessary steps. In an article in the journal Après-Demain ( in French on Cairn.info ), CNRS [French National Center for Scientific Research] researcher Philippe Warin notably cites the analysis of the sociologist of law Evelyne Serverin, for whom this massive non-usage is the consequence of a “congenital defect” in a mechanism whose “ideological keystone” is the incentive to work. Something to chew on for the proponents of universal basic income.

...and Elsewhere

• Marc de Basquiat and Gaspard Kœnig, LIBER II : une proposition réaliste (Éditions de l’Onde/Génération libre, 2017). By an economist and a philosopher.
• Julien Dourgnon, Revenu universel. Pourquoi ? Comment ? (Les Petits Matins, 2017). By a consultant and adviser to Benoît Hamon.
• Laurent Geffroy, Garantir le revenu. Histoire et actualité d’une utopie concrète , (La Découverte, 2002). By a political science instructor in Lille.

Journal article

A new social perspective for europe: universal basic income.

• By Stephan Lipiansky

In Connexions (2005/2 No 84)

Can a Basic Income Be Universal?

• By François Meunier

In Esprit (2017/1 January)

A Few Thoughts on Universal Basic Income

• By Denis Clerc

In L'Économie politique (2016/3 No 71)

From Universal Basic Income Now to the Ideal Universal Basic Income

• By Jean-Éric Hyafil

In Multitudes (2016/2 No 63)

0"> This dossier is available in conditional access

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Home > CUNY Graduate Center > Dissertations, Theses, and Capstone Projects > 4321

Dissertations, Theses, and Capstone Projects

Essays on universal basic income.

Nana Mukbaniani , The Graduate Center, City University of New York Follow

Date of Degree

Document type.

Dissertation

Degree Name

Sangeeta Pratap

Committee Members

Randall Filer

Lilia Maliar

George Vachadze

Subject Categories

Macroeconomics

Universal Basic Income, Wealth Distribution, Precautionary Savings, Heterogeneous Agents, Inequality, Minimum Consumption Requirement

Universal Basic Income (UBI) is a program in which individuals receive a regular sum of money, usually from the government. The transfer amount is thought to be unconditional of income and enough to cover all subsistence needs. Such a system is easy and cheap to administer because the government does not need to check the eligibility of each applicant. UBI programs are growing as more cities, states and countries (Stockton, California, Newark, New Jersey, Ontario, Canada, Kenya, Finland, Germany, Spain, China, etc) implement experiments of such programs. The idea of a UBI is gaining ground in the U.S.. One of the main responses of the U.S. to high unemployment caused by the COVID-19 pandemic and quarantine was a modified version of a temporary country-wide UBI program in 2020 (CARES Act). 30 mayors across the U.S. created a coalition - Mayors for a Guaranteed Income - to explore cash payment programs and address the racial wealth inequality. UBI is actively discussed to be a potential policy that can mitigate adverse impact of accelerated automation on wages and employment. Thus, it is important to understand what we have learned from UBI experiments, what macroeconomic models predict in the UBI environment, and what is the best approach to implement such programs. This dissertation consists of three chapters. In the first chapter I review the literature on a Universal Basic Income (UBI) policy. I explore the UBI experiments that have been conducted worldwide, their limitations, and lessons that we have learned from them. I also review the macroeconomic models that address the idea of unconditional transfers, their limitations and the required future developments to evaluate how UBI works in a more complex and realistic environment. In the second chapter, I use general equilibrium model of heterogeneous agents to evaluate the impact of the UBI system, on aggregate levels and distributions of wealth, consumption, labor, and welfare. I contrast this with a targeted transfers system where people need to meet certain eligibility criteria (usually, income) to qualify for transfers. I find that in the UBI system with $1,000 monthly payments, the level of aggregate capital falls by 16% and the inequality of wealth increases no matter how the UBI system is financed: through taxes or through foreign aid. Guaranteed payments induce people to save less because of less precautionary needs. As precautionary savings motive is stronger for the asset poor, people in the lowest wealth quintiles reduce their savings more, which increases the inequality of wealth. Even though the welfare of the least skilled and the asset poor increases significantly because of unconditional transfers, the tax-financed UBI system requires a consumption tax rate to be equal to 43% that slightly reduces the welfare of the wealthier. Even though consumption tax rate is unrealistically high, the effective consumption tax rate (consumption tax net of transfers) decreases on average and aggregate welfare increases by 15.7% as measured by consumption equivalent variation. A hybrid model with both targeted transfers and partial UBI (monthly payments of $500) with low, 5% capital income tax rate (to encourage savings) is more efficient as it provides significant, almost 8% gain in welfare with only 22% consumption tax rate and without compromising output or welfare of the asset rich. In the third chapter, I study the impact of a Universal Basic Income (UBI) policy on aggregate output and welfare when there is an automation of production technologies. When the productivity of robots increases, robots substitute for labor and thus, the share of labor in value added decreases. I use general equilibrium models with heterogeneous agents who face idiosyncratic earnings risk and Cobb-Douglas technology with Traditional Capital and Labor Services. Traditional capital does not include robots and can be employed in production only with labor services. Labor services is a CES nest of robot capital and Human capital that can substitute each other. I calibrate the economy to match the evolution of the labor share in the last three decades. If the productivity of robots doubles, I find that output increases in the new equilibrium and the welfare of wealth poor households decreases significantly resulting in more than 6% decrease in aggregate welfare (measured as consumption equivalent variation, CEV). In such a setting, the transition to a UBI system increases welfare significantly, by more than 15%, however, reduces output by 12% because it reduces the precautionary savings motive. The hybrid system in which every household receives 50% of subsistence requirement and the eligibility threshold for targeted transfers equals 50% of subsistence requirement works well as it is less detrimental to output while increasing aggregate welfare by 4% as CEV. Further increase in output in the UBI and Hybrid systems can be achieved by a lower capital income tax rate.

Recommended Citation

Mukbaniani, Nana, "Essays on Universal Basic Income" (2021). CUNY Academic Works. https://academicworks.cuny.edu/gc_etds/4321

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From Idea to Reality: Universal Basic Income in Australia by 2030

Journal of Futures Studies, March 2020, 24(3): 97–104

Zara Durnan, Formerly of Jacobs, ‘Corunna’, Deniliquin, NSW 2710, Australia

Sohail Inayatullah, Unesco Chair in Futures Studies; USIM, Malaysia; Tamkang University, Taiwan; University of the Sunshine Coast, Australia

* Web Text version of each JFS paper here is for easy reading purpose only, for the valid and published context of each article, please refer to the PDF version. 

Keywords: Universal Basic Income, Automation, Causal Layered Analysis, Scenarios

This essay explores universal basic income in Australia. It uses causal layered analysis and scenarios to deepen and broaden the debate.

From Idea to Reality

The idea of the universal basic income (UBI) is gaining momentum in popular and political discourse, as it migrates from fanciful theory to a feasible welfare alternative in the face of a changing global labour market and rapid advances in artificial intelligence and automation.

A recent World Development Report “asserts that 68.9% of jobs in India are at high risk – and that number remains at 42.6% even if adjusted for a lag in technology adoption.” (Verick, 2017). In the United States, economists Carl Frey and Michael Osborne concluded 47% of jobs are at high risk of automation. The International Labour Organization estimates that 137 million workers or 56% of the salaried workforce from Cambodia, Indonesia, the Philippines, Thailand and Vietnam are at great risk of losing employment in the next twenty years (Aravindan & Wong, 2016).

While retraining is the normal policy prescription, the scale of automation suggests retraining is unlikely to be enough. Automation strikes at the core of the capitalist economy, with the notion of work itself potentially under threat. Universal basic income creates a base from which other alternatives can spring forth leading to enhanced entrepreneurship, innovation, social stability, and cooperatives, for example. Of course, in Western history, debates on universal basic income go back centuries, with many considering Johannes Vives (pp. 1492-1540) the founder of the idea even though he resisted a preventive mode of economy, that is, the notion of providing income before the need arose (Basic Income Earth Network, n.d.).

Earlier, Bertrand Russell (1872-1970) argued that a new global economic model was required. He wrote: “Anarchism has the advantage as regards liberty, Socialism as regards the inducement to work. Can we not find a method of combining these two advantages? It seems to me that we can. […] Stated in more familiar terms, the plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income – as much larger as might be warranted by the total amount of commodities produced – should be given to those who are willing to engage in some work which the community recognizes as useful… When education is finished, no one should be compelled to work, and those who choose not to work should receive a bare livelihood and be left completely free.” (Russell, 1918) (Basic Income Earth Network, n.d.).

In the Asian context, philosopher P.R. Sarkar (1921-1990) argued – through his third way model, Prout (the progressive utilization theory) – that intellectual and spiritual progress was only possible if the basic needs of all humans (housing, education, clothes, food, and health) were met (Sarkar, 2018). Along with a minimum base there is to be a maximum ceiling that continuously moved as more wealth was created through spiritual and technological innovation. While in his preferred articulation this is accomplished to increasing worker purchasing power, full employment is increasingly becoming a challenge.

More recently, in ”1984, a group of researchers and trade unionists close to the University of Louvain (Belgium) published a provocative UBI scenario.” (Basic Income Earth Network, n.d.) which led to a gathering of UBI supporters.

But while many have imagined a UBI, concrete trials have been recent.

In 2017 – 2018, Finland became the first European country to trial the application of a UBI – a guaranteed and unconditional payment made to all adult citizens to allow them to meet their basic needs, which is not activity or means tested – with unemployed Finns receiving a guaranteed payment per month for two years, paid even if they find work during that period (The Independent, 2017). The nation has decided it not to continue the trial with the evaluation suggesting that participants were happier – less stressed – but jobs did not result. (BBC, 2019).

Since 2017, two cities in Ontario, Canada have been trialing basic income. One group receives a basic income and another does not. Barcelona has also has been trialing UBI since October 2017. Again one group of a 1000 receives income and the second does not. Scotland will provide 250,000 pounds for a trial as well (Reynolds, Matt, 2018). American presidential candidate Andrew Yang has called for a UBI of 1000 US$ for each American citizen (Darrough, 2019).

Along with political leaders experimenting, corporate thought leaders such as Elon Musk (Weller, 2017), Richard Branson (Chapman, 2017) and Mark Zuckerberg – have also stepped in suggesting that UBI may be an idea whose time has come. In May 2017, Facebook CEO Mark Zuckerberg called on the need to consider universal basic income in America during his Harvard Commencement Speech (Haselton, 2017). ‘Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract,’ Zuckerberg said. ‘We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.’

Of course, others argue that this must be more than about income, in fact, we need a system of universal basic assets. This would reduce inequity (Fosco, 2018).

Why the Interest?

While universal basic assets is a novel, UBI is not a new idea as argued above. For decades, if not hundreds of years, it has been promulgated by various economists and politicians. Yet it has experienced a fit of renewed interest in recent years. Along with experiments in the wealthier regions of the planet s mall scale schemes have been introduced in developing nations such as Kenya and India (The Economist, 2017), and a UBI trial is being considered in Uganda (McFarland, 2016). Namibia has seen its basic income program reduce poverty by 18%, average income beyond UBI increase by 29%, and malnourishment drop by 32% (Kingma, n.d.). The idea has also been explored in Australia over the years, including in a research paper published by the Australian Government’s Parliamentary Library in late 2016.

UBI’s re-emergence on the policy agenda is driven by growing concern about permanent mass job loss as a result of automation and technological change. Stemming from the Global Financial Crisis, the ‘growing polarization of labour-market opportunities between high- and low-skill jobs, … stagnating incomes for a large proportion of households, and income inequality’ (Manyika, 2017) is leading to a loss of confidence in the future labour-market’s ability to generate enough jobs to employ the majority.

With unemployment likely built into the future, alternatives are required. And, it is not just automation but the rising peer to peer economy which can create unemployment, as we are witnessing the taxi, hotel, and now even the sex industry (Fleming, 2019).

While it can be argued that the new technologies will create new types of jobs; for example, as Leah Zahidi (2019) playfully suggests: recreationists (using genomics, 4d printing, plus AI to create species gone extinct) or Reality Rehabilitators (bringing back virtual AI addicts to the ”real world”) or sex therapists focused on robotic sex for those addicted to sex with robots…or, as likely is that because of dramatic developments in Artifical intelligence ie the fourth industrial revolution, work as we know it will disappear since humanity will live in abundance. Blue and white collar jobs will disappear.

Indeed, Bank of England Governor, Mark Carney has warned “up to 15 million of the current jobs in Britain – almost half of the 31.8 million workforce – could be replaced by robots over the coming years… entire pro- fessions such as accounting would likely disappear (Duncan, 2016). And going further, Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, argues that” before long economists [will]be worrying about a global shortage of robots” (Sharma, 2016). In Australia, The Committee for Economic Development in Australia considers 60% of all jobs in rural and regional Australia are at risk by 2030 (Tuffley, 2015).

Does the Idea Have Merit?

A groundswell of advocates contend UBI is a viable policy response to the future world of work, providing a foundation to smooth working-life transitions in a gig economy (where there is a great degree of freedom to choose project work but little financial or legal support if gigs or health fails), foster creativity and innovation (Painter & Thoung, 2015), and provide an efficient alternative to labour-based, complex welfare systems that will become untenable as the labour market contracts.

Opposition to UBI contends it is a ‘dangerous idea’ (Foster, 2016), and typically centres on the high cost and economic impact of a UBI scheme, scepticism that technological change will result in the permanent, pervasive depression of the labour market, and anxiety that a UBI would be politically and economically unsustainable (Mather, 2017), particularly in a capitalist society (Foster, 2016).

The changing nature of work, increasing disparity in wealth distribution and rise of automation signals the advent of a different work and welfare environment in Australia. A UBI is unlikely to be a panacea for the future challenges of the labour market. However, if properly implemented, could a UBI be the foundation for a new social construct that preserves prosperity and equality?

What Could the Future of an Australian UBI Look Like?

Causal layered analysis (CLA) is used as a method in futures thinking to more effectively consider and understand potential futures particularly the underlying myths and metaphors that support policy and data (Inayatullah, 2015, p.2). A CLA considers four dimensions (the litany, the systemic, the worldview and the metaphor) and integrates these four levels of understanding to provide a coherent view of the future. Applying a CLA to the introduction of a UBI deepens the understanding of societal responses to develop future scenarios.

As part of an Melbourne Business School executive program at the University of Melbourne, a CLA was undertaken which contemplates a future Australia which experiences a net shift in the unemployment rate from ~6% to 30 – 40% as a result of automation, with the benefits of economic growth experienced almost exclusively by those with the highest income s rather than the community as a whole. The CLA was developed by the first author of this essay.

The CLA set out at Table 1 considered the introduction of a UBI in Australia from the perspectives of:

• Conservative government and companies operating within the current capitalist construct. For them, the litany is that we live in a society of dole bludgers. If we trusted the invisible hand of the market, we could easily traverse the forthcoming technological disruptions. Government policy will likely skew the needed dislocations, picking certain industries over other. Let the market innovate.
• A citizen who has the security of pre-existing financial wealth and/ or an occupation that has not, or is unlikely to be, mechanised or otherwise made redundant. For this group, UBI may be welcome to ensure their class safety, but the cost could be that they must work even harder. Their preferred story is that those who are being dislocated should work harder.
• A citizen who does not have security outside the welfare net; that is, a citizen who does not have pre-existing financial security and/or is unable to find gainful employment (though they may be able and willing). For this group, new technologies will reaffirm the scales of injustice. A UBI is an excellent way forward. And
• A ‘transformed’ perspective, which presents a worldview grounded in preserving Australia’s egalitarian precepts through the application of ‘contributory democracy’, where a UBI model is part of a system where citizens’ and corporations’ contribution to society is measured, and citizens who would otherwise be part of the labour force (but cannot gain employment) contribute to society by means other than private sector employment. In this future, we share the meal, small or large.

Table 1: Causal Layered Analysis – UBI in Australia by 2030

A successful strategy to introduce UBI in Australia thus must address the different narratives – it would need to be a broad based as strategy could be thwarted by any party This is further explored in the integrated scenario in Table 2.

Potential Future Scenarios

Scenario planning unpacks potential futures and provides a breadth and depth of analysis to inform policy responses. While there are numerous scenario methods, we use Inayatullah’s integrated approach as it seeks to link the long term with the short term, the vision with current political reality (Inayatullah, 2015).

Building on the perspectives of the CLA, four potential future scenarios of an Australian UBI emerge (sum- marised in Table 2). These scenarios are imagined versions of the future; ‘unlike predictions or forecasts, sce- narios are stories about possible futures, about what could happen, not what will or should happen’ (Inayatullah, 2015, p.66). These were developed by the first author of this essay.

Table 2: Potential future scenarios – UBI in Australia by 2030 (Australian UBI by 2030)

Preferred scenario – Share the meal

The preferred scenario envisages a future where the construct of capitalism is redefined and the welfare and tax system is radically overhauled, to enable a more equitable redistribution of wealth for all. This scenario envisages that with this redistribution, all citizens will have the opportunity to experience Zuckerberg’s ‘cushion for new ideas’, driving innovation, peace, true environmental stewardship and altruistic behaviours.

This scenario would likely rely on the introduction of analogous tax and welfare systems on a global scale, so corporations and wealthy citizens could not simply debunk to a country with a more advantageous system that enables disproportionate wealth generation.

Disowned scenario – Communism-lite

The disowned future depicts ‘Communism-lite’, where a balance is unsuccessfully struck between the preserva- tion of capitalist enterprise and the emergence of a socialist state with a false economy based on 100% make-work employment.

This scenario envisages a future where Australia transitions to a pseudo- socialist state, to ensure the population is occupied and civil unrest or widespread poverty is avoided. In this scenario, the state falls prey to the pitfalls of past socialist enterprises.

Outlier scenario – Hunger Games

The outlier scenario considers societal breakdown and unrest as a result of entrenched, interminable inequality, culminating in a civil war or revolution with an uncertain outcome at its conclusion.

This scenario envisages a future where citizens have little agency or prospects, where wealth resides with increasingly powerful corporations that generate and control profit through automated processes and robot- performed functions. Those with jobs or assets (shares, property etc.) have security; the majority subsists on welfare or contract-based employment. Without reliable, paid work for the majority, poverty or subsistence becomes endemic. There is an aching gulf between the haves and have nots, with an apparent failure of wealth redistribution (through tax systems or welfare systems), leaving the populace little prospect of social mobility and the emergence of an entrenched class or caste system.

Integrated scenario – the new ‘Fair Go’

The integrated approach contemplates a new ‘Fair Go for all’, a future in which the best intentions of the preferred and disowned futures are applied to the practical realities and constraints of democratic capitalism to engineer a reimagined state of ‘contributory democracy’, where a UBI is introduced that re-orients individuals and entities (citizens, government and private enterprise) to measure and value their contribution to that society distinct from wealth creation.

This scenario envisages a modified UBI which is not unconditional but rather, is contingent on those who could work (but cannot secure work) delivering a social contribution of some kind. An approach like this could balance the preservation of capitalism (and the agency, innovation and social mobility it enables) with a reformed welfare system that retains a measure of agency while redefining the dominant basic values that underpin Australia’s current society. It could reconcile the tension between those who work and those who don’t, by having those that do not work contributing to social progress in other ways. Redefining social constructs and values could help navigate a path to preserve Australia ‘s relatively flat class structure and its egalitarian traditions.

Here Be Dragons

On medieval maps, dragons or sea monsters represent uncharted areas or dangerous waters. Realising the inte- grated future described above would require a nuanced, comprehensive policy response to navigate a course that treads new ground, preserving the benefits of capitalism yet pursuing wealth redistribution and a progressive form of social contribution.

The introduction of a successful, sustainable UBI model would be dependent on its design, as well as the design of the wider policy landscape in which it operates. Sweeping change requires foresight and anticipation. In this case, futures thinking assists in shaping the desired future by forecasting socio-political change s and the necessary repositioning of societal value. It illustrates that effective UBI introduction would require policy intervention to cast wider than welfare, education, tax and banking structure reform; policy levers would need to go further, to support the evolution of the Australian value set from foundational capitalist principles to social contribution and betterment.

Would the Australian government be able to develop a UBI prior to the foreseen dramatic job losses likely to occur through automation and developments in the peer-to-peer economy? If the response to climate change is an indicator, then most likely Australia will lag far behind other regions. The fear of dragons will overwhelm the imperative to create and innovate.

Aravindan, A., & Wong, J. (2016, July 7). Millions of SE Asian jobs may be lost to automation in next two decades: ILO . Retrieved January 14, 2019, from Reuters: https://www.reuters.com/article/us-southeast-asia-jobs/millions-of-se-asian-jobs-may-be-lost-to-automation-in-next-two-decades-ilo-idUSKCN0ZN0HP

Basic Income Earth Network. (n.d.). History of basic income . Retrieved January 14, 2019, from https://basicincome.org/basic-income/history

BBC (2019, Feb 8). Finland basic income trial left people happier but jobless. Retrieved 18 December 2019 from BCC https://www.bbc.com/news/world-europe-47169549

Chapman, B. (2017, August 25). Richard Branson backs universal basic income joining Mark Zuckerberg and Elon Musk . Retrieved 18 December 2019 from The Independent: https://www.independent.co.uk/news/business/news/richard-branson-universal-basic-income-mark-zuckerberg-elon-musk-virgin-ceo-a7911866.html

Darrough, C. (2019, December 12). Andrew yang belives in UBI. here’s what his plan would really do for America. Retrieved December 18, 2019. https://www.mic.com/p/andrew-yang-believes-in-ubi-heres-what-his-plan-would-really-do-for-america-19437397

Duncan, H. (2016, December 6). Robots to steal 15million of your jobs, says bank chief . Retrieved December 10, 2016, from Daily Mail Online: https://www.dailymail.co.uk/news/article-4003756/Robots-steal-15m-jobs-says-bank-chief-Doom-laden-Carney-warns-middle-classes-hollowed-new-technology.html

Fleming, P. (2019, January 14). Sugar daddy capitalism: even the world’s oldest profession is being uberised . Retrieved18 December 2019 from The Conversation: https://theconversation.com/sugar-daddy-capitalism-even-the-worlds-oldest-profession-is-being-uberised-109426

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Universal Basic Income Concept and Its Implementation Essay

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Introduction

Works cited.

Universal basic income (UBI) is a non-contingent and non-withdrawable form of social security that establishes “income floor below which no eligible individual is expected to fall” (Wispelaere 17). UBI schemes guarantee that all citizens of a country will regularly receive an established sum of money regardless of whether or not they have other sources of income provision. UBI is delivered as a matter of right; therefore, it is radically different from modern welfare schemes. Finland has recently announced that it launches an experimental UBI scheme that is going to replace other forms of welfare benefits (Graham). Therefore, it is necessary to discuss the validity of the claim that UBI can alleviate poverty. This paper will argue against the implementation of UBI and will provide philosophical and economic arguments opposing this concept.

By stating that UBI is a right, the proponents of the concept go against the grain of the foundation of Libertarianism, which emphasizes on liberty (Gordon). This philosophy is based on the beliefs of Aquinas, Pufendorf, and Locke who were ardent proponents of natural rights (Allahyar 14). In the framework of the natural rights law, it is illegal to coerce people to pay taxes; therefore, anyone who advocates for UBI should realize that such a scheme would break the non-aggression principle.

UBI proponents are also wrong on the economic grounds. It is important to understand that by providing people with guaranteed income, governments will disincentivize them to work, thereby instead of alleviating poverty, they will substantially exacerbate it. Therefore, those who see the provision of UBI as a feasible approach to redistributing wealth should consider that by forcing those who are at the top of the income ladder to pay for net receivers of benefits, it is possible to create more people in a low-income bracket.

Another economic argument against UBI schemes has to do with the fact the provision of eligible citizens of a country with non-conditional income will lead to the growth of non-productive activities among the population (Sheahen 23). A functioning marketplace, on the other hand, does not support individuals whose endeavors are not considered valuable by consumers. In short, UBI will subsidize the existence of individuals who do not generate substantial value; therefore, such a system will make every citizen of a country that has implemented it less wealthy.

UBI schemes have gained a significant level of support from different political groups, based on the assumption that such a system is capable of eliminating a substantial drawback of current welfare programs—a disincentive to earn a higher income (Sheahen 27). Some proponents of UBI even believe that this form of social security can increase employment rates “because the financial cushion provided by UBI will help people in the transition from unemployment to employment” (Keeble). However, as has been demonstrated above, UBI is inferior to the unhampered market; therefore, such systems can only impede the process of wealth creation, which should be generated before it can be redistributed.

Even though UBI has gained substantial support on both ends of the political spectrum, the implementation of such a system cannot be considered feasible. Philosophical and political arguments provided in the paper show that UBI restricts liberty and impedes the process of wealth creation. Therefore, both downtrodden and well-to-do groups will not benefit from living in a society that uses unconditional cash transfers for the alleviation of poverty.

Allahyar, Joy. “Universal Basic Income: Could it Be Introduced in the UK?” Dissertation, The University of Sheffield, 2014.

Gordon, David. “ A Libertarian Argument for the Welfare State .” Mises . Web.

Graham, Luke. “ Finland Experiments with Universal Basic Income Scheme .” CNBC . Web.

Keeble, Nathan. “ The Dangers of a Universal Basic Income .” Mises . Web.

Sheahen, Allan. Basic Income Guarantee. Palgrave Macmillan, 2012.

Wispelaere, Jurgen. “An Income of One’s Own?” Dissertation, University of Tampere, 2015.

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January 6, 2023

The U.S. Could Help Solve Its Poverty Problem with a Universal Basic Income

A universal basic income wouldn’t lead to adults leaving their jobs and could lift millions of children into a brighter future

By Michael W. Howard

Thomas Fuchs

When the child tax credit, first established in 1997, was expanded for a year in 2021, it was a major political and social win for the country. At a time when the pandemic had worsened many families’ financial distress , the Biden administration’s decision not only added to the amount of the tax credit and converted the payment from a year-end lump sum to monthly payments; it also abandoned the work requirement for parents. This immediately affected one third of all children in the U.S. , including 52 percent of Black children and 41 percent of Hispanic children, whose families were formerly excluded because the parents earned too little to qualify for the tax credit. The tax credit expansion lifted  3.7 million children out of poverty by December 2021 without significantly reducing parents’ work participation .

Then in January 2022, the expanded tax credit expired, which plunged 3.7 million back into poverty , with higher percentage increases in poverty among Hispanic and Black children. The credit showed us that cash assistance could help families stay afloat and, contrary to some political beliefs, parents would not leave the labor system because of it. Even so, the failure to renew the expansion should not negate this important political milestone: Congress came within one vote of abandoning parental work requirements as a condition to get cash assistance for their families.

The child tax credit expansion is one step toward a universal basic income that could eliminate poverty without increasing unemployment. There are 37.9 million people in poverty in the U.S., according to 2021 Census Bureau figures . Providing a government-funded monthly payment to every individual would broadly lift them out of poverty, while providing millions of children a better chance at a good education, improved health and higher future earnings. With 11.6 percent of people in the U.S. living at or under the poverty line, this payment would benefit millions and save hundreds of billions of dollars by reducing the social costs of poverty . The question becomes: Can we convince our elected officials that poverty is not a moral failing, but a social condition that can be addressed by establishing an income floor below which no one falls?

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A universal basic income, or UBI, is defined as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement,” according to the Basic Income Earth Network . The child tax credit isn’t quite the same, because it is only for families with children; it also phases out at higher income levels and essentially still forces people to prove they are “poor enough” to need help—a means test. A more ambitious bill  approaching the idea of UBI introduced by Representatives Rashida Tlaib and Mondaire Jones, would eliminate the means test, thereby creating a universal child allowance. Universal benefits have several advantages over means-tested benefits. They avoid divisions between “us” and “them,” removing the stigma associated with targeted benefits. Uptake by the needy, a persistent problem with targeted benefits, is improved when stigma and bureaucratic hurdles are removed. Universal benefits  tend to be more popular and hence are more politically secure and better funded. And universal benefits, dispensing with means testing, are easier to administer. The universal child allowance would enroll all children at birth so no child would be excluded.

No country has yet introduced a universal basic income sufficient for essential needs. But in the U.S., Alaska has enacted its Permanent Fund Dividend , which is an annual cash payment, averaging around $1,600 , that goes to every resident without means test or work requirement. It contributes to poverty reduction and has no negative effect on people’s willingness to work .

In the U.S., a universal child allowance and Social Security for seniors would mean that the two most vulnerable age groups in our population would have near-universal and unconditional income guaranteed. But of course, extending a basic income to the remaining adults faces serious hurdles. First, no one expects children under the age of 18 to work, and keeping them in poverty is costly for everyone; according to one estimate, social benefits outweigh fiscal costs of universal child allowance by 8 to 1 . But there is a widely held expectation that able-bodied adults should work for their income. Empirical evidence from the means-tested minimum income experiments of the 1970s in the U.S. and recent analysis of a similar experiment in Manitoba , among other research, support the idea that few people actually stop working when they are simultaneously receiving a guaranteed income. Such research also shows that those who stop working for wages do so for good reasons, such as finishing high school or taking care of young children, and that a modest guaranteed minimum income can enable people to work who otherwise could not. Even if a few people would take the cash without contributing to society, the benefits may substantially outweigh the costs.

The norm that every abled person receiving cash payments should be seeking a job can also be challenged. First, holding a job is not the only form of work. Taking care of children and elders is work—work that is performed mostly by women without compensation. A basic income is a way of supporting and recognizing that work without intrusive state monitoring and reinforcement of gendered division of labor .

Second, research by Belgian political theorists Philippe Van Parijs and Yannick Vanderborght reveals that a significant part of individual income, or the lack of income, results not from labor but rather from luck. This is obvious in the case of income from inherited wealth, but no less true of income connected to jobs in capital-intensive industries or income involving inherited knowledge and technology. On the negative side, many people with unrecognized disabilities fall between the cracks of targeted cash transfer systems. A basic income is one way to equalize such morally arbitrary luck. Universal basic income does not give people something for nothing so much as equalize everyone’s share of the luck. Fair giving and taking would then take place on the basis of a more equitable starting place.

In addition to the belief that people will quit their jobs under a basic income, the idea faces another hurdle: apparent cost . A basic income of $1,000/month for every person in the U.S. would have a gross cost of about $4 trillion a year. A means-tested minimum income guarantee, which phases out as earned income increases above a threshold, could raise incomes by the same amount for perhaps one sixth of the gross cost of a basic income. However, the net cost to the taxpayers is no greater for basic income than for a means-tested minimum income, because the higher taxes some will pay are offset by the basic income they receive.

To the extent that the mere fact of “churning”—money going out to everyone, only to be taken back in taxes from some—is an obstacle to political support, the means-tested guaranteed income may be the more politically feasible policy, but it would lose some of the advantages of universal programs.

In the meantime, if a truly universal child allowance is eventually adopted, that could tip the scale in favor of a basic income further down the road.

This is an opinion and analysis article, and the views expressed by the author or authors are not necessarily those of  Scientific American.

A version of this article with the title “Universal Basic Income Evidence” was adapted for inclusion in the April 2023 issue of Scientific American.

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No strings attached: an argument for universal basic income.

Technology, globalization, and a rapidly changing economic landscape are leaving behind many workers and feeding the flames of populism worldwide. Could the solution to mitigating this economic displacement be to just give everyone money?

That’s the idea being pushed by advocates of Universal Basic Income (UBI) in recent books like Give People Money by Annie Lowrey and organizations like The Economic Security Project . A Universal Basic Income is a cash-benefit given to everyone — no strings attached — designed to alleviate financial burdens of the modern economy. The idea is simple, provocative, and slowly creeping into mainstream policy debates.

The biggest obstacle in successfully enacting a UBI is how high-income countries view work and the social safety net.

Across high-income countries, especially in the United States, our work is a part of our individual and national identity. Everyone’s answer to the question “what do you do ?” defines how we see ourselves. The earliest European settlers in America were Puritans and Quakers who believed idleness to be a sin. Upon visiting the United States during the 19th century, French historian Alexis de Tocqueville observed a unique industriousness and honor surrounding work in America.  Sociologist Max Weber’s concept of the “Protestant work ethic” additionally projected an ethos of societal value being equated with toil that is deeply embedded in our national fabric. When American politicians of any stripe talk about the struggles of a constituency, the group almost always has a modifier of “working.” In contrast to Europeans, Americans significantly believe that the poor can improve their lot with the right amount of effort.

Too often, what it means to “work” is narrowly defined as “market labor for wages” and is increasingly out of sync with the needs and dynamics of modern society. For example, as our population ages more people will spend their time taking care of parents and volunteering at senior centers, earning no wage but surely providing value to society. Eternal chores like housework and parenthood are also essential to existing but are not typically thought of as “work.”

Simon Kuznets, the economist behind measuring economic growth in terms of Gross Domestic Product (GDP), always admitted the shortcomings of using GDP to measure the value of an entire economy specifically because it ignored household work. By focusing on GDP as an indicator of economic health, and therefore societal health, there continues to be a stigma against non-market labor. Child-rearing, elderly familial care, and household chores are ignored by these national statistics, implicitly valueless without an obvious market price. Those who give their time to community organizations or creative endeavors with insufficient market value are not given compensation that can be reflected on tax returns.

The existing safety nets across high-income countries are almost all based around the old-fashioned definition of work as labor that is valued by the market. Social security in the United States is close to a universal transfer system, but getting benefits requires working at least 40 quarters — 10 years — before retirement age. Taking care of kids at home for 30 years does not count. One must be earning a wage in the traditional labor market to qualify for social security benefits. Unemployment insurance, too, is only for people who were working for wages but find themselves suddenly without a paycheck because of layoffs.

The modern American safety net is ostensibly designed to be means-tested. This theoretically allows governments to target those most in need. Yet the ethos of rugged individualism and pulling one’s self up by one’s bootstraps underlies the American welfare system and requires burdensome proof of qualification to the point of shutting too many people out entirely. The architecture of the modern American welfare state has its beginnings in the New Deal, where cultural attitudes more common in the 1930s subtly linger today. Means-testing allows governments to be discretionary and, consciously or subconsciously, these allocations end up being racially skewed. Through various hoops and clauses, the Social Security Act passed in 1935 with enough initial conditions that it excluded two-thirds of black workers in the South from receiving benefits. Of the 3,000 loans guaranteed in Mississippi in 1947 by the Veteran Administration, only two went to black mortgage recipients.

The very myth of welfare queens and those who leech off the state have deep racial undertones. Programs designated to help low-income families and disproportionately used by blacks — though used more by whites in absolute terms — are labeled “welfare.” But government assistance embedded in the tax code that is overwhelmingly used by white families — like the mortgage interest deduction — is rarely thought of as a handout. Many of these beneficiaries, of course, do not see themselves as being recipients of a government handout.

Government assistance comes in a combination of state- and federally-funded programs. But the discretion left to certain states can explain a lot of the difference. Racial heterogeneity itself may be to blame for a lack of willingness to provide assistance to people of color. A seminal paper by Alberto Alesina et al found that “Within the United States, race is the single most important predictor of support for welfare. America’s troubled race relations are clearly a major reason for the absence of an American welfare state.” A state like Vermont (which is 95 percent white) covers 78 percent of its impoverished families, while in Louisiana (which is 32 percent black) only four percent of impoverished families are covered.

Despite the welfare queen caricature, every part of the American safety net is based around means-testing and/or age requirements and are almost never in perpetuity. There is no such thing as a general “welfare check” that anyone can just go to a government building and pick up. Programs like TANF — Temporary Assistance for Needy Families — give financial assistance to families that demonstrate need according to different states’ requirements. SNAP — Supplemental Nutritional Assistance Program, best known as “food stamps” — provides low-income households with vouchers that can be exchanged for certain categories of food. Even unemployment benefits are subject to their own conditions and have an explicit sunset date. These obstacles, whatever their intentions, are so prohibitive that it’s hard to defend perpetual poverty as the inevitable result of people just “falling through the cracks.” In 2015, just five percent of children living in poverty in Wyoming were covered by TANF.

Tying government assistance to incentives is not totally outlandish. There are instances where government benefits can be counter-productively generous to the point of disincentivizing work. But basing government assistance on conditionalities comes from a distorted view that poverty is usually a choice caused by bad decisions. If only we could give people better incentives, they’d be able to escape poverty. This idea is the impetus behind work requirements for government assistance and drug-testing beneficiaries. But requiring work for those who can’t find it is more likely to exclude those in need than provide a spark for the lazy. Imposing drug tests in exchange for food stamps isn’t going to snap a drug abuser out of his/her addiction and back onto a career trajectory. Women and racial minorities, who are discriminated against in the labor market, have even more difficulty finding employment and therefore accessing government assistance. And what about the people who cannot work because of disabilities, or whose time needs to be spent taking care of elderly parents or young children?

There is no settled UBI policy in the political discourse but all proposals share the same foundation. A UBI is Universal: every citizen takes part, regardless of need or age. Universality ensures that the program does not develop resentment effects and does not disincentivize work by disappearing when a recipient goes above a certain income threshold. There is no paperwork needed to prove you’re unemployed or too poor. Universality ensures it runs smoothly; experience shows programs targeted towards the poor like Medicaid operate far less efficiently than near-universal programs like Social Security and Medicare. A UBI is Basic: it is meant to be a cushion against times of financial duress and supplement other income to liberate people who do nonwage labor or want a cushion alongside entrepreneurial endeavors. A UBI is income: it is not a voucher that you can exchange only for eligible food items. It is not payment assistance for housing. Every recipient spends in the way he or she deems is best. A UBI takes the discretion away from the government and gives it to every individual, decreasing the bias of the existing system and eliminating the prohibitive bureaucratic nightmares that prevent more extensive coverage.

It’s difficult to know exactly how a massive redefinition of our national safety net would look, but there’s encouraging evidence already found within the United States.

The Alaska Permanent Fund gives up to $2,000 dollars a year to each Alaskan citizen, essentially as a dividend of oil revenues. The program lifts three percent of the state’s population out of poverty every year. A striking takeaway from the state’s project is how much the universality gives a sense of togetherness that other government transfer schemes do not. Alaskans feel like they are all a part of their state’s success, and no one resents a fellow citizen getting the check. A UBI in America could instill a sense that every citizen is a part of the country’s success, regardless of his or her income.

Internationally, Iran enacted a UBI scheme in 2010 by replacing previous food and energy subsidies with cash transfers. Data from the Economic Research Forum found that the policy change reduced poverty and inequality while preventing a feared mass exodus from the labor market.

These instances point to positive results for cash transfers and, perhaps most importantly, debunk the idea that it will incentivize people to stop working. Evidence throughout studies from low- and high-income countries consistently suggest most people who leave the labor market do so for beneficial reasons like furthering education or taking care of family members. The strong connection between working and self-worth remains even when we’re given money.

Evidence from high-income and low-income countries also disproves one of the most common points of skepticism about UBI: the concern that people will squander their allotment on indulgent consumption. Inevitably some money will go towards less-essential items, but it’s clear that what most of those in poverty need is a financial boost, not a realignment and paternalistic dictation of their economic decision-making.

A UBI is no panacea for the woes of the modern displaced worker. A cash transfer will not alleviate the pains of rust belt workers unable to fill the meaningful void left by lost employment. Instead, UBI should be seen as a cushion for the massive economic disruptions from the digital revolution, disruptions that we have previously only seen during the agricultural and industrial revolutions.

The prospect of a UBI is not as farfetched as it seems. Hillary Clinton was close to adding a basic income policy into her 2016 Presidential platform but ultimately “decided it was exciting but not realistic.” Democratic candidates for 2020, like Kamala Harris and Chris Murphy, have expressed openness to the idea. The success of state-by-state marijuana decriminalization proves that smaller state-based UBI experiments could eventually lead to a more convincing national campaign.

People from across the political spectrum can find something to like in UBI, albeit with differences in its enactment.  For economic conservatives, the attractiveness of the UBI would be its ability to replace much of the clunky bureaucratic features of the American welfare state. For economic liberals, UBI would not replace the existing welfare state but instead complement it. These are not trivial details to work out: It means that UBI could range from adding nothing to the Federal budget to adding $3 trillion . But before a greater UBI context is considered, the essential task is to convince the public that unconditional cash transfers for every citizen are feasible and beneficial. Redefining society’s view of what “work” is and what it means to contribute to society is no easy feat. Yet we are beginning to be engulfed by the seismic winds of societal and economic change from a globalized digital age. We need a paradigmatic shift in how we view these things in order to ensure a broad-based peaceful prosperity for the future.

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An Argument for the Universal Basic Income

With growing income inequality and struggles to end poverty in the developed world, governments will need to consider new strategies to support their people. The idea of the universal basic income involves providing a minimum income to all citizens of the state, regardless of employment. This solution has had advocates stretching back hundreds of years and may be the solution to growing inequality, the rise of underemployment, and unemployment due to technological advance. This essay develops the history of the basic income, current economic problems, an explanation of a basic income explanation, and experimental evidence dispelling myths about such a system.

Related Papers

University of Belgrade Faculty of Political Science

Miroslav Budimir

The main objective of the research is the analysis of the universal basic income as an instrument of social policy, a basis of real freedom for all, and a basic human right. The analysis of universal basic income proposals is conducted on the basis of several criteria: (1) interrelationship between universal basic income and the other two models of social protection: public assistance and social insurance; (2) the effects of the UBI on (un)employment and work incentives; (3) possible legitimate ways of financing the universal basic income: (a) through fiscal public revenues like taxes and other charges; (b) through non-fiscal public revenues from public capital funds; (4) the question of the universality of basic income: is it an universal human right of every human being or a right limited to citizens of a country, federal state or province. Unlike two other models of social protection, public assistance and social insurance, universal basic income is not based on charity toward the poor (like public assistance) where “the hand that gives is always above the hand that receives”, or state-supported solidarity among employees and their employers (like social insurance) which is selective and limited to those who are already privileged enough to be employed, but on a human right to dignified life, work, health, well-being and free development of every person, regardless of their work or property status. However, a reform that introduces an universal basic income could either increase or decrease social security and freedom of people in the worst social position. If the introduction of universal basic income implies abolishment of the existing social benefits and services, for the most deprived persons of the community it would be a worse scheme than the existing one. Only in sensible combination with the other universal and conditional components of the social protection system, universal basic income can increase the income and property, powers and prerogatives, and social bases of self-esteem of the people in the worst social position. In its constructive function, universal basic income is a floor beneath the overall income distribution that includes wages and conditional social benefits and services as well as universal health care and universally accessible education. Universal basic income would allow all people to move more freely between more or less paid work, lifelong education and training, and voluntary activities in the community, because they could at any time decide to quit job or shorten working hours, without losing the right to a basic income. The combination of three unconditionalities of the universal basic income – an individual basis, no means-test or work requirement – would eliminate the unemployment trap or exclusion of the poor and marginalized part of the population from working and social life, and the employment trap or exploitation and burnout of people in work. The Finnish national UBI experiment (2017–2018) proved that basic income increases work motivation and overall life satisfaction: the experimental group of unemployed people who received a basic income during the experiment were mentally healthier, felt more self-confident, had less stress and more autonomy in life, did more meaningful work, and had more trust in other people and social institutions compared with the control group. It is a proof that universal basic income is not an instrument of a passive welfare state that would be introduced so that some people would choose to do nothing for the rest of their lives, but an instrument of an active welfare state by which people can freely choose a meaningful way to best contribute to society. American economist and Nobel laureate Herbert Simon estimated that approximately 90 per cent of the salary of an employee in the formal economy is not earned by personal effort, but is a gift from accumulated social wealth to which current employees have contributed nothing. Thus, the introduction of an universal basic income is only a way to distribute a part of that natural, social, cultural and technological heritage of humanity among all members of society. Therefore, a fairly legitimate way of financing the universal basic income is to ensure the property right of every person over an equal part of social wealth that is created due to natural resources and scientific, technological, organizational and cultural achievements of previous generations of mankind. However, in the absence of such public capital fund, the universal basic income would have to be financed by fiscal public revenues. A compromise solution would be a sensible combination of fiscal and non-fiscal public revenues for the financing of basic income. Macro-regional or world basic income is necessary for a fairer distribution of the inherited social wealth of humanity, which is now distributed in extremely unequal proportions between and within states. World or macro-regional basic income is one of the necessary social and economic preconditions for the safe opening of borders between countries at the European and global level. The wider the supranational level at which the universal basic income is introduced, the weaker would be the motivation for selective opportunistic economic migrations which is now significantly boosted by national transfer programs in the affluent countries of the Global North. Moral law is obviously on the side of universal basic income. Just as slavery, racial and gender discrimination have been finally recognized as the intolerable infringements of the basic human rights, so the non-recognition of a right to basic means of subsistence or the conditioning of that right by economic extortion and coercion based on illegitimate ownership and control over the labor and social wealth will finally be recognized as an unbearable violation of a right to dignified life and freedom of every individual and family regardless of their work or property status. Humanity is unstoppably moving towards the realization of that natural right. Universal basic income would only partially restore or compensate people for the enormous social wealth that some individuals and groups illegitimately appropriated for themselves as exclusive private property, while the state confirmed and protected that illegitimate private appropriation with its coercive apparatus and legislation. It is impossible to restore the dignity and freedom of the individual, family and work without reclaiming the natural right to basic means of subsistence. Key words: universal basic income, social policy, social protection, social security, social insurance, public assistance, social model, social state, work incentives, means test, social wealth.

Politics & Society

Philippe Van Parijs

Journal of Development Innovations

Ramesh Shrestha

The global economy has created an unprecedented amount of wealth. The top 10% of wealth holders own 82% of global wealth, while the bottom-half account for less than 1%. Such wealth disparity may be attributed to the dominant economic model’s focus on accumulating profit over providing equitable and secure lives for all. This lack of basic income security and extreme poverty is a violation of economic rights of citizens in many countries. The global spree of technical automation further exacerbated this situation through job loss. The provision of universal basic income could possibly serve as a moral and sustainable solution to ensure that no one is denied the basic income requirement for food, shelter and medical care. It is the right political choice for governments and those in authority to ensure that every citizen has the opportunity to live in dignity and economic freedom through progressive realization of basic income security. JEL classification: I31, J08, J38 Keywords: economic insecurity, human rights, economic freedom, universal basic income, safety nets, basic income security, leaving no one behind

Scholarly Journal of Mathematics & Science | Published by: Dama Academic Scholarly & Scientific Research Society

Dama Academic Scholarly & Scientific Research Society , David Ackah (PhD)

In recent months, there has been much discussion worldwide about a concept or an idea known as Universal Basic Income or UBI. This term that captures the provision of a basic income to all citizens of a country irrespective of their income or nature of work is thought to be the answer to the increasing concern about automation taking away jobs as well as the solution to the ever-widening inequalities and disparities between the top wealth earners and those at the bottom of the income and wealth pyramid. Indeed, while the concept of a UBI has been around at least in the West since the end of the Second World War and the advent of the Welfare State in Europe, it has gained traction in recent years so much so that countries such as Norway, Sweden, and Finland or the Scandinavian countries have either held referenda to gauge popular support or have already implemented it in some basic form on a trial basis in some cities and towns. Economic growth (or GDP growth) should not be considered the only barometer to gauge the well-being of a state. How much wealth a society generates is no longer the only important parameter. How this wealth is distributed amongst the different strata of the population is also equally important, if not more. The question of distribution of wealth has been present since the time of Adam Smith himself. However, during that time there wasn’t enough data available to understand the magnitude of problems that social inequality causes. The data and tools for analysis have been made available to the economists of late. The results have only affirmed that social equality is a desirable characteristic of an economy. This feature is a fundamental ingredient in creating a society which provides a good standard of living to its individuals.

Elias Kuhn von Burgsdorff

Nuevas Tendencias

Alexia Tefel Escudero

Federico Chicchi

Jurgen De Wispelaere , Karl Widerquist

Basic Income: An Anthology of Contemporary Research presents a compilation of six decades of basic income literature. It includes the most influential empirical research and theoretical arguments on all aspects of the Basic Income proposal. * Includes six decades of the most influential literature on Basic Income * Includes unpublished and hard-to-find articles * The first major compendium on one of the most innovative political reform proposals of our age * Explores multidisciplinary views of Basic Income, with philosophical, economic, political, and sociological views * Features contributions from key and well-known philosophers and economists, including Atkinson, Simon, Friedman, Fromm, Gorz, Offe, Rawls, Pettit, Van Parijs, and more * Presents the best theoretical and empirical arguments for and against Basic Income

Since the late 1970s, massive and longlasting unemployment is the primary problem for the social-economic policy in welfare states. Especially long spells of unemployment, and the socalled'modern poverty', are not only corrosive for the persons concerned but also for society at large. Governments try to attenuate the consequences of unemployment and poverty by providing social benefits conditionally, and, in so far as in its power, to take employment-promoting measures.

International Journal of Management (IJM)

IAEME Publication

This paper introduces the idea proposed for the Universal Basic Income (UBI) for countries which are at their emerging state. Is it necessary for developing countries to provide for everyone financially? In recent years, this topic has received perceived notions amid growing concerns about COVID-19, and other tragedies including ones related to technology which has led to unemployment in mass. UBI has its supporters just as rivals and each side make them force hypothetical contentions with respect to its usefulness (why UBI will or won't work).

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Universal Basic Income (UBI) – Top 3 Pros and Cons

Universal basic income (UBI) is an unconditional cash payment given at regular intervals by the government to all residents, regardless of their earnings or employment status. [ 45 ]

UBI remains largely theoretical and, thus, does not have much of a history.

Pilot UBI or more limited basic income programs that give a basic income to a smaller group of people instead of an entire population have taken place or are ongoing in Brazil , Canada , China , Finland , Germany , India , Iran , Japan , Kenya , Namibia , Spain , and The Netherlands . [ 46 ]

In the United States, the Alaska Permanent Fund (AFP), created in 1976, is funded by oil revenues . AFP provides dividends to permanent residents of the state. The amount varies each year based on the stock market and other factors, and has ranged from $331.29 (1984) to $2,072 (2015). The payout for 2020, during the COVID-19 pandemic was $992.00, the smallest check received since 2013. The most recent payment was $1,312 for 2023. [ 46 ] [ 47 ] [ 48 ] [ 49 ] [ 58 ]

UBI popped up in American news thanks to the 2020 presidential campaign of Andrew Yang whose continued promotion of a UBI resulted in the formation of a nonprofit, Humanity Forward. [ 53 ]

Some consider the stimulus payments from the federal government during the COVID-19 pandemic to be a sort of “emergency UBI.” Those payments, however, were not unconditional, but instead were calculated based on individual or family income. [ 59 ]

Should the United States Implement a Universal Basic Income?

Pro 1 Universal Basic Income (UBI) reduces poverty and income inequality, and improves physical and mental health. A UBI set at $1,000 per adult per month and $300 per child per month would eradicate US poverty entirely, according to Scott Santens, Founding Member of the Economic Security Project. [ 12 ] Case in point: the poverty rate in Brazil fell to the lowest level in 40 years in just six months in 2020 after $110 (600 reais) a month was distributed to about 25% of the population as pandemic relief program called Bolsa Família. [ 51 ] Namibia’s UBI program trial, the Basic Income Grant, reduced household poverty rates from 76% of residents before the trial started to 37% after one year. Child malnutrition rates also fell from 42% to 17% in six months. [ 7 ] Participants in India’s UBI trial said that UBI helped improve their health by enabling them to afford medicine, improve sanitation, gain access to clean water, eat more regularly, and reduce their anxiety levels. [ 14 ] Mincome, a trial UBI in Manitoba, Canada, found that hospitalizations for accidents, injuries, and mental health diagnoses declined during the trial. [ 1 ] Kenya’s ongoing UBI trial has reportedly led to increased happiness and life satisfaction, and to reduced stress and depression, proving UBI could improve a range of mental health concerns and stressful situations proven to deteriorate mental health. [ 2 ] “Recent research has linked the stress of poverty with inflammation in the brain… UBI could be set at a level to ensure that everyone’s basic needs are met. This would reduce much of the stress faced by the working poor or families on benefits… UBI would also help people, usually women and children, to leave abusive relationships. Domestic abuse occurs more often in poorer households, where victims lack the financial means to escape. Similarly, UBI might prevent the negative childhood experiences believed to lead to mental illness and other problems later in life. These include experiencing violence or abuse, or having parents with mental health, substance abuse and legal problems. Behind these problems are often poverty, inequality and social isolation,” says Matthew Smith, professor in health history at the University of Strathclyde. [ 50 ] Read More

Pro 2 UBI leads to positive job growth and a better educated citizenry. The guarantee of UBI protects people from sluggish wage growth, low wages, and the lack of job security caused by the effects of the growing gig economy, as well as increased automation in the workplace. [ 42 ] [ 5 ] [ 10 ] Researchers from the Roosevelt Institute created three models for American implementation of UBI and found that under all scenarios, UBI would grow the economy by increasing output, employment, prices, and wages. [ 44 ] Since implementation of the Alaska Permanent Fund, for example, the increased purchasing power of UBI recipients has resulted in 10,000 additional jobs for the state. [ 6 ] UBI would also give employees the financial security to leave a bad job, or wait until the good job comes along to (re)join the job market. People won’t have to take an awful job just to pay the bills. [ 54 ] Further, UBI enables people to stay in school longer, reducing drop-out rates, and to participate in training to improve skills or learn a trade, improving their chances of getting a good job. Uganda’s UBI trial, the Youth Opportunities Program, enabled participants to invest in skills training as well as tools and materials, resulting in an increase of business assets by 57%, work hours by 17%, and earnings by 38%. [ 8 ] The Canadian Mincome trial found that participants of the trial were more likely to complete high school than counterparts not involved in the trial. [ 1 ] The Basic Income Grant trial in Namibia (2007-2012) enabled parents to afford school fees, buy school uniforms, and encourage attendance. As a result, school dropout rates fell from almost 40% in Nov. 2007 to 5% in June 2008 to almost 0% in Nov. 2008. [ 7 ] Read More

Pro 3 UBI reduces gender inequality. UBI makes all forms of work, including childcare and eldercare, “equally deserving” of payment. “Almost definitionally, a properly designed basic income system will reduce gender-based inequality, because on average the payment will represent a higher share of women’s income,” says Guy Standing, professor of development studies at the University of London [ 25 ] [ 56 ] A UBI also allows working parents to reduce their working hours in order to spend more time with their children or help with household chores. [ 26 ] [ 27 ] Reviewing the UBI trial in India, SEWA Bharat (an organization related to women’s employment) and UNICEF (a children’s rights organization) concluded that “women’s empowerment was one of the more important outcomes of this experiment,” noting that women receiving a UBI participated more in household decision making, and benefited from improved access to food, healthcare, and education. [ 14 ] The Basic Income Grant Coalition trial in Namibia found that UBI “reduced the dependency of women on men for their survival” and reduced the pressure to engage in transactional sex. [ 7 ] Mincome, the Canadian UBI trial, found that emergency room visits as a result of domestic violence reduced during the period of the trial, possibly because of the reduction in income-inequality between women and men. [ 28 ] Read More

Con 1 Universal Basic Income (UBI) increases poverty. Universal Basic Income (UBI) takes money from the poor and gives it to everyone, increasing poverty and depriving the poor of much needed targeted support. People experiencing poverty face a variety of hardships that are addressed with existing anti-poverty measures such as food stamps, medical aid, and child assistance programs. UBI programs often use funds from these targeted programs for distribution to everyone without regard for need. [ 15 ] “If you take the dollars targeted on people in the bottom fifth or two-fifths of the population and convert them to universal payments to people all the way up the income scale, you’re redistributing income upward. That would increase poverty and inequality rather than reduce them,” according to Robert Greenstein, President of the Center on Budget and Policy Priorities. [ 15 ] Luke Martinelli, research associate at the University of Bath, created three models of UBI implementation and concluded that all three would lead to a significant number of individuals and households who are worse off. He notes, “these losses are not concentrated among richer groups; on the contrary, they are proportionally larger for the bottom three income quintiles .” [ 37 ] “Rather than reducing the overall headcount of those in poverty, a BI [basic income] would change the composition of the income-poor population” and thus “would not prove to be an effective tool for reducing poverty,” concludes Research by the Organisation for Economic Co-operation and Development (OECD) in Finland, France, Italy, and the U.K. [ 39 ] UBI does not cure addiction, poor health, lack of skills, or other factors that contribute to and exacerbate poverty, making UBI less cost-effective than targeted welfare programs. [ 19 ] [ 24 ] There is “the danger of UBI entrenching low pay and precarious work. It could effectively subsidise employers who pay low wages and – by creating a small cushion for workers on short-term and zero-hours contracts – help to normalise precarity,” explain Anna Coote, of the New Economics Foundation, and Edanur Yazici, PhD student. UBI could become another American tipping system in which employers pay low wages and count on customers to fill in the gap with tips. [ 52 ] Read More

Con 2 UBI is too expensive. A $2,000 a month per head of household UBI would cost an estimated $2.275 trillion annually, says Marc Joffe, Director of Policy Research at the California Policy Center. Some of this cost could be offset by eliminating federal, state, and local assistance programs; however, by Joffe’s calculation, “these offsets total only $810 billion… [leaving] a net budgetary cost of over $1.4 trillion for a universal basic income program.” [ 23 ] A 2018 study found that a $1,000 a month stipend to every adult in the United States would cost about $3.81 trillion per year, or about 21% of the 2018 GDP, or about 78% of 2018 tax revenue. [ 57 ] The UBI trial in Finland provided participants with €560 ($673 USD) a month for two years. Finland’s UBI model is “impossibly expensive, since it would increase the government deficit by about 5 percent,” explains lkka Kaukoranta, Chief Economist of the Central Organization of Finnish Trade Unions (SAK). [ 20 ] [ 21 ] Former U.K. Minister of State for Employment Damian Hinds rejected the idea of UBI during parliamentary debate, saying that the estimated implementation costs ranging from £8.2 billion – £160 billion ($10.8 billion – $211 billion USD) are “clearly unaffordable.” [ 38 ] Economist John Kay, Research Fellow at the University of Oxford, studied proposed UBI levels in Finland, France, Germany, Switzerland, the United Kingdom and the United States, and concludes that, in all of these countries, UBI at a level which can guarantee an acceptable standard of living is “impossibly expensive… Either the level of basic income is unacceptably low, or the cost of providing it is unacceptably high.” [ 41 ] Read More

Con 3 UBI removes the incentive to work. Earned income motivates people to work, be successful, work cooperatively with colleagues, and gain skills. However, “if we pay people, unconditionally, to do nothing… they will do nothing” and this leads to a less effective economy, says Charles Wyplosz, professor of international economics at the Graduate Institute in Geneva. [ 33 ] The Swiss government opposed implementation of UBI, stating that it would entice fewer people to work and thus exacerbate the current labor and skills shortages. [ 34 ] A strong economy relies on people being motivated to work hard, and in order to motivate people there needs to be an element of uncertainty for the future. UBI, providing guaranteed security, removes this uncertainty, according to economist Allison Schrager. [ 36 ] UBI would cause people “to abjure work for a life of idle fun… [and would] depress the willingness to produce and pay taxes of those who resent having to support them,” says Elizabeth Anderson, professor of philosophy and women’s studies at the University of Michigan. In fact, guaranteed income trials in the United States in the 1960s and 1970s found that the people who received payments worked fewer hours. [ 9 ] [ 17 ] “The daily routines of existing work-free men should make proponents of the UBI think long and hard. Instead of producing new community activists, composers, and philosophers, more paid worklessness in America might only further deplete our nation’s social capital at a time when good citizenship is already in painfully short supply,” according to Nicholas Eberstadt and Evan Abramsky, both at American Enterprise Institute (AEI). [ 55 ] Read More

Discussion Questions

1. Should the United States implement a Universal Basic Income? Why or why not?

2. Should cities or states implement Universal Basic Income? Why or why not?

3. What other economic polices to reduce poverty would you enact? Explain your answers.

Take Action

1. Investigate the World Bank’s report, “Exploring Universal Basic Income: A Guide to Navigating Concepts, Evidence, and Practices.”

2. Explore Stanford University’s Basic Income Lab .

3. Examine where a basic income has been implemented and the results at Vox .

4. Consider how you felt about the issue before reading this article. After reading the pros and cons on this topic, has your thinking changed? If so, how? List two to three ways. If your thoughts have not changed, list two to three ways your better understanding of the “other side of the issue” now helps you better argue your position.

5. Push for the position and policies you support by writing US national senators and representatives .

ProCon/Encyclopaedia Britannica, Inc. 325 N. LaSalle Street, Suite 200 Chicago, Illinois 60654 USA

Natalie Leppard Managing Editor [email protected]

© 2023 Encyclopaedia Britannica, Inc. All rights reserved

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The pros and cons of universal basic income

The events of recent years have renewed calls by some economists and politicians across the world for UBI schemes. Here's a guide to what this might mean, as well as some book recommendations to dig even deeper.

Major social and economic changes brought about by the pandemic renewed discussions around – and calls for – a universal basic income. In the UK, the government introduced a furlough scheme during the first pandemic; companies forced to close because of coronavirus restrictions could get the government to cover 80% of the pay for employees, instead of laying people off.

Scottish Liberal Democrat politician Christine Jardine told CNN she was not a fan of Universal Basic Income, but the pandemic “has meant that we've seen the suggestion of a universal basic income in a completely different light”.

Some countries have trialled UBI already. Iran ran a scheme in 2010 giving citizens transfers of 29% of the median income each month. Poverty and inequality were reduced, and there was no sign of large amounts of people leaving the labour market. In fact, people used it to invest in their businesses, encouraging the growth of small enterprises. And in Canada, a UBI trial in Manitoba in the 1970s showed a modest reduction in workers, along with fewer hospitalisations and mental health diagnoses. 

If you want to know more about universal basic income, here’s our guide to the pros and cons, and the authors and books you can turn to for guidance. 

What are the benefits of Universal Basic Income?

Ending poverty

Advocates for UBI say that it could help bring everyone’s income above the poverty line. Annie Lowrey , author of Give People Money , said in an interview with Vox: “We have just tons of experimental data from the US, from other countries, from Iran, from all around the world that shows that if you give people money, it reduces poverty. Just really straightforward.” 

Discouraging low wages

UBI would give employees enough security to have bargaining power, say fans. Lowrey has said: “Why take a crummy job for 7.25 an hour when you have a guaranteed 1,000 dollars a month to fall back on?”

Redistributing wealth

The economic growth of high-income countries is making the rich richer, but having very little effect on the working classes. Economist  Thomas Piketty  has spoken about the idea of an “inheritance for all”. 

Talking to the  London School of Economics  in 2020, he said: "If you look at today’s situation, the average wealth in France or Britain is about 200,000 euros per adult and the median wealth will be closer to 100,000 euros per adult, but the bottom 50% owns virtually nothing. Around 5% of total wealth is owned by the bottom 50%, which means that they have on average, one tenth of the average wealth – about 20,000 euros instead of 200,000 euros. They own very little and this is true within all age groups. It’s not that the young are poor and are about to become rich. Some of them are about to become rich, but on average, the concentration of wealth is just as large within each age group."

A universal basic income could help to balance this  inequality. 

Fighting technological unemployment

With advanced technology taking over more and more blue and white collar jobs, proponents of UBI say it would act as a sort of security net for the millions of people who will be left jobless by the tech revolution.  Research for the Federal Reserve Bank of New York  showed that the longer you are unemployed, the longer it takes to find employment. If the jobless had a small source of income to help them back on their feet, they could find new jobs and start contributing to the economy sooner.

Helping victims of domestic violence

Those who suffer domestic abuse, mainly women, become trapped in violent situations because they don’t have the means to leave them, research by Women’s Aid shows. UBI would make leaving an abusive partner easier from a financial point of view, at least. Writing in  The Independent , Amelia Womack, deputy leader of The Green Party, which is in favour of UBI, said: "By giving everyone financial independence, UBI would ensure no woman is ever dependent on her partner to meet her basic needs. And for those in abusive relationships, one of the barriers against leaving would be removed.”

Supporting unpaid care workers

Those with ill or differently abled relatives are often forced to quit their jobs to care for them full-time. UBI would allow care-workers to support themselves, encouraging care work within the home and relieving pressure on public services that provide care to the sick and elderly.

Eliminating the need for social security

There exist countless governmental organisations responsible for helping those in poverty, handing out unemployment benefits, food stamps, subsidised housing, etc. UBI would cut a country’s spending by eliminating these organisations.

Think of it like Monopoly

Most people intuitively think that jobs lead to financial wealth, but the reality is that having money actually leads to jobs. Without the privilege of wealth, it is more difficult to build a life that makes landing a job easier. In order to get a job, you need to have a house with a shower, a set of appropriate interview clothes and the funds to cover the cost of transport and food during the working day. If you want to contribute to the economy on an even greater scale and start your own business, you’ll need even more money. In the game Monopoly, everyone starts off with a little bit of money – without it, the game wouldn’t work and no one would be able to become rich or successful. UBI is like Monopoly – everyone starts off with a little bit of money, and uses it to fuel a thriving economy.

Successful implementation of UBI would mean improvements in food security, stress, mental health, physical health, housing, education, and employment.

What are the possible disadvantages of Universal Basic Income?

Universal basic income would be just that: universal. That means that everyone, regardless of how poor, or rich, they were would get the same amount of money. Political columnist Stephen Bush wrote in 2020 that he was more open to the case for UBI, but added: "Most of the time, when we talk about a universal benefit going to people “who don’t need it”, we’re talking about sufficiently small numbers that it doesn’t really matter either way...

"To give higher earners an extra £960 a month, however, would hand them serious financial firepower to entrench their advantages, whether in saving to buy property, paying for private education, or any number of other socio-economic advantages."

The cost of implementing UBI could be huge. In the United States it's estimated to be about $3.9 trillion per year, and in the UK some estimates have put the cost of reworking the tax and benefits system at £28 billion . The idea is that UBI would take pressure off health services and make social security institutions redundant, but these are nevertheless enormous numbers for a government to budget for.

Motivation to work

One concern is that UBI would incite millions of workers to stop working. If people aren’t working, there is less taxable income. However, people may choose to stop working for reasons that benefit society as a whole, such as getting a better education or caring for a relative in need.

Philosophical counterarguments

Is money a birthright? Capitalist countries are built on the ideological foundation that money is something we earn – UBI would completely change this. Some believe that community service should be a requirement for receiving UBI.

Further reading on UBI and economics

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Three reasons for universal basic income

Subscribe to global connection, shantayanan devarajan shantayanan devarajan nonresident senior fellow - global economy and development.

February 15, 2017

From Mongolia to Finland to India , we are seeing heightened interest in the idea of a universal basic income (UBI)—an unconditional cash grant given to every citizen, regardless of their employment status or wealth. The idea is controversial, receiving criticism from many quarters including Future Development . I happen to be an advocate. To sharpen the debate, it’s useful to distinguish three separate arguments for UBI. 

• Efficient use of natural-resource rents. Most of the oil-rich countries in sub-Saharan Africa suffer from poor public-spending outcomes. Gabon and Equatorial Guinea, with per capita incomes of $10,000 and $20,000, have some of the lowest child immunization rates in Africa. The leakage rate for non-salary public spending in health in Chad is 99 percent . One reason is that oil revenues go directly to the government without passing through the hands of the citizens. As a result, citizens may not know the magnitude of oil revenues. Furthermore, they may not have an incentive to scrutinize how the government spends the money since they don’t think of it as “their money” (even though it is).

If instead the oil revenues are transferred directly to citizens, with government having to tax them to finance public spending, at least two changes happen . First, citizens will now know the magnitude of oil revenues. Second, they have a greater incentive to monitor how their tax money is being spent. Even without these changes, a simple transfer of 10 percent of oil revenues could effectively eliminate poverty in several oil-exporting countries.

For the high-income countries of the Middle East such as Saudi Arabia and Kuwait, the argument is slightly different. They are currently transferring oil revenues through subsidies and public-sector employment (about 95 percent of the male labor force in Kuwait works in the public sector). This has to be one of the most inefficient ways of transferring oil revenues. The subsidies, especially energy subsidies, distort incentives and corrode the economy. The large public sector means that most of the labor force is engaged in low-productivity work. A program that reduces or eliminates subsidies, cuts public sector employment, and distributes oil revenues as cash transfers—something Saudi Arabia is planning to do—would enhance efficiency while still sharing oil revenues with the population.

• Improving the welfare of the poor. Countries like India have a host of subsidies and transfer schemes aimed at helping poor people. Many of these programs fail to reach the poor. The leakage rate of India’s Public Distribution System has been estimated at 40 percent . Replacing these inefficient subsidies with cash transfers would ensure at the very least that the poor are getting the intended monetary benefit. But it could also be empowering . Subsidizing food or fuel or water implies that the poor have to consume these commodities, even if the quality is very low, to receive the benefit. By contrast, a cash transfer means that the poor person can choose how to spend the money. If the quality is poor, they have alternatives. There is also the question of whether the transfer should be universal or targeted to the poor.  While targeting is preferable in principle, in practice there are so many problems in identifying the poor that a universal scheme may do just as well . Finally, thanks to technology, these cash transfers can be implemented at low cost. India’s Aadhaar program, which issues universal ID cards that also serve as cash cards, covers a billion people, including 93 percent of the adult population .
• Adjusting to labor-saving technologies. Advances in artificial intelligence, robotics, and other technologies have called into question the future of work . The dilemma is that with these technologies productivity will increase but many people will lose their jobs (self-driving trucks are an example). Managing this transition is difficult from an economic, political, and moral viewpoint. A system where part of the increase in productivity is taxed, and then distributed as cash transfers to all citizens, whether they are working or not, could help resolve some of the tension. The programs being piloted or proposed in Finland, Switzerland, and New Zealand are essentially aimed in this direction. They challenge the basic notion that you earn your income by working in a job. While this notion has been around at least since the Industrial Revolution, perhaps it needs to be revisited in light of rapid changes in technology. We could envision a society where productivity is high enough that everyone receives a basic minimum income, and people choose to work on whatever they’re good at (including not working at all).

When three, separate arguments lead to the same conclusion, perhaps universal basic income is an idea whose time has come.

Global Economy and Development

India Sub-Saharan Africa

Robin Brooks

April 11, 2024

March 6, 2024

Jonathan Wilkinson

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Universal Basic Income Essay | Essay on Universal Basic Income for Students and Children in English

February 13, 2024 by Prasanna

Universal Basic Income Essay: A program where each citizen, regardless of whether they are working and earning an income or not, receives a flat monthly payment. A negative income tax was proposed by economist Milton Friedman.

The low income fell below a minimum level. They would receive a tax credit. The tax payment would be equivalent to for the families earning above the minimum level. An unconditional basic income can improve the marketability by going back to school and would enable workers to wait for a negotiate better wages or better job.

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Long and Short Essays on Universal Basic Income for Students and Kids in English

We provide students with essay samples on a long essay of 500 words and a short essay of 150 words on the topic Universal Basic Income for reference.

Long Essay on Universal Basic Income 500 Words in English

Long Essay on Universal Basic Income is usually given to classes 7, 8, 9, and 10.

Universal basic income is a program where each citizen, regardless of whether they are working and earning an income or not, receives a flat monthly payment. Different programs outline who exactly receives the income— may only give it to those who fall below the poverty line while other programs provide all citizens from some state would get it regardless of what they make.

A guaranteed income would abolish poverty, which means reducing income, as well as inequality, was said by Martin Luther King Jr in 1967. A negative income tax was proposed by economist Milton Friedman. The low income fell below a minimum level. They would receive a tax credit. The tax payment would be equivalent to for the families earning above the minimum level.

Hughes would work through a modernization of the earned income tax credit and guaranteed plan of income, which is financed by taxes on the top 1%. Hughes said that the employment market got destroyed by automation and globalization. Globalization created a lot of contracts, part-time, and jobs that are temporary. Such job positions cannot provide a decent standard of living. That isn’t enough. A guaranteed income is inevitable was consider by Sir Richard Branson.

The fundamental structure of the U.S. economy got changed by automation. Elon Musk said robotics would take away most people’s jobs, so a universal income is the only solution. An unconditional basic income can improve the marketability by going back to school and would enable workers to wait for a negotiate better wages or better job.

The problem with existing welfare programs would be removed, especially for the people living below the poverty line. Welfare recipients will lose food stamps, housing vouchers, and medical care if they make too much. The poor are prevented from building their wealth to better their lives due to the form of inequality in the structure.

Administrators and Recipients get complicated by Current welfare programs. Other programs like housing vouchers, food stamps would be replaced by a universal income.

Some countries are concerned about the falling rate of birth and population, and young couples will be provided with the confidence to start a family if they are provided with a guaranteed income. It would also provide workers with the confidence to bid up wages. From a macro viewpoint, it would give society a much-needed ballast during a recession.

There are certain disadvantages, too, like it would create inflation if everyone suddenly received a basic income. The demand drives up as most people would spend the extra cash immediately. Manufacturers would try to produce more as the retailers would order more. But they would raise prices if they couldn’t increase the supply.

Eventually, the basics will be unaffordable to people from the bottom of the income pyramid due to higher prices. A guaranteed income would not successfully do a raise in people’s standard of living in the long run. Work skills or a good resume would not be acquired by them. The Universal Basic Income can prevent them from ever getting a good job in a competitive environment and can also reduce an already-falling labour force participation rate.

Short Essay on Universal Basic Income 150 Words in English

Short Essay on Universal Basic Income is usually given to classes 1, 2, 3, 4, 5, and 6.

Universal Basic Income (UBI) is a program by the government under which every adult citizen will be receiving a set amount of money from the government regularly.

As an increase in automation replacing workers in manufacturing and other sectors of the economy, in the U.S., the idea of universal basic income gained momentum. The idea of providing a guaranteed, regular payment to citizens, regardless of their need, has been around for centuries now.

A universal basic income was made a key pillar and helped shine a national spotlight on the issue by Democratic presidential candidate Andrew Yang when addressed in his campaign in the year 2020.

Yang plans to provide every American adult $1,000 per month from the federal government, although UBI proposals varied in size. Some plans representing more than half the entire federal budget become one of the core criticisms of basic income.

The goals of a proposed basic income system should be to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.

10 Lines on Universal Basic Income Essay in English

1. Universal Basic Income brings one argument which mentioned the job we have today would be automated in the future. 2. Basic income is not a new idea as Martin Luther King also advocated for basic income in the 1960s. 3. In the U.S. and also abroad, there are already basic income pilot programs and support. 4. Universal basic income does not require a necessary payment for a daily living wage. 5. The Permanent Fund Dividend program in Alaska may currently be the closest the world has come to basic income. 6. The world’s leading start-up accelerator, is running its basic income pilot with one hundred families in Oakland, California. 7. Currently, we are in a situation when technological progress and globalization seem to break the connection between productivity, growth, and human well-being. 8. Basic income is not an application to save the industrial society, but it could be the start of a new operating system for the post-industrial society. 9. A desperate need of a forward-looking and unifying vision to save us from the tyranny of what “majority politics” has suddenly turned into. 10. UBI concept is not new to India. We had our own named schemes like NOAPS, IGNWPS, IGNDPS, RythuBandhu scheme, DBT scheme, etc.

FAQ’s on Universal Basic Income Essay

Question 1.  Do any countries have a universal basic income?

Answer:  Currently, no country has a universal basic income in place. Mongolia and the Islamic Republic of Iran had a national UBI for a short period.

Question 2.  Does Sweden have a universal basic income?

Answer:  UBI has been debated in the country Nordic since the 1970s. However, Finland conducted a basic income pilot who got international attention.

Question 3. How much is the minimum wage in Finland?

Answer:  Finland’s yearly minimum wage is $2600 in International Currency.

Question 4.  Does Norway have a universal basic income?

Answer:  Norway is the country closest to universal basic income as the country has access to certain fundamental goods, including access to education, health care, and income in the form of social security or benefits.

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