The debate about Universal Basic Income (UBI) has been going on for a few years now.
Both sides make reasonable arguments.
On one hand, UBI proponents argue that it could reduce poverty and provide financial stability to many people who are struggling. It could even encourage entrepreneurship and economic growth.
Opponents say that this type of policy would be too expensive, devastating to middle-class jobs and the economy, and ineffective at addressing systemic inequality.
Can UBI be a game-changer or just a pipe dream?
What is Universal Basic Income?
UBI is an income provided by the government for all citizens, regardless of whether they are employed or not. Despite seeming incompatible with the America we know, the idea has gained traction in recent years. Presidential candidate Andrew Yang made UBI a central tenet of his bid.
Proponents argue that by providing a guaranteed minimum income, UBI can reduce poverty, improve financial stability and even encourage entrepreneurship.
Opponents of UBI claim that it could be a burden on taxpayers, create disincentives to work, and fail to fix inequality.
Why UBI Proponents Believe It Is the Answer
Proponents believe UBI could be a revolutionary way to tackle poverty and improve financial stability across the world. They argue that providing regular, unconditional payments to citizens, can help reduce inequality and bridge the gap between those who have and have not.
Not only would this reduce financial strain, but they suggest it could also create more opportunities for entrepreneurship and economic growth. With a safety net, people would be more likely to take risks and pursue their dreams, creating a ripple effect throughout the economy.
Proponents point out that UBI could actually be cheaper than the Federal Government we have now by potentially replacing many government social welfare programs, reducing bureaucratic costs while allowing people to better decide their future paths.
Artificial Intelligence and the Future of Work
One of the big unknowns regards what happens if Artificial Intelligence can redefine “work” as we knew it. If machines can do most of the work, how will people make money? What will we do all day?
“The idea is to put machines to work for us, but empower ourselves to seek out the forms of remaining work we as humans find most valuable, by simply providing everyone a monthly paycheck independent of work.”
– Scott Santens – “Jobs Are for Machines“
With UBI, people can still earn money to eat and pay rent, but they might not need a traditional 40/hour workweek. Instead, we could pursue creative or leisure activities, furthering our education or exploring new hobbies.
As the world becomes increasingly automated and the cost of living continues to rise, UBI is becoming an option for governments around the world. It is a potential solution to the problem of poverty and inequality.
For some, the idea of such freedom and financial stability could be a dream come true.
For others, it’s too good to be true.
Arguments Against UBI
Opponents insist that UBI would be too costly and lead to a rise in taxes, ultimately forcing low-income households to suffer the repercussions of such extra expenses.
“UBI is just a bedtime story Elon Musk tells himself to help the super-wealthy sleep”
Many suggest UBI would disincentivize work and weaken the motivation among individuals to contribute their labor. Why work if you don’t have to?
Additionally, those who challenge UBI believe it fails to provide a more effective solution to inequality.
Though seemingly ambitious, opponents argue that UBI cannot fully address systemic and cultural inequality due to its superficial nature of redistributing resources.
How Would UBI Work Practically in the Real World?
Despite theoretical debates about UBI, many are eager to explore how UBI might function in reality. What would UBI look like in a world filled with so many competing interests?
The cost of a UBI program would depend on several factors, including the amount of basic income, the number of people who would be eligible to receive it, and the funding sources.
There are several proposals for UBI in the United States, ranging from $1,000 to $2,000 per month per adult, and some proposals include additional payments for children. The cost of these proposals varies widely, but estimates range from $2.8 trillion to $4.5 trillion per year, depending on the details of the program.
Funding sources for UBI could include a variety of options, such as increased taxes on high-income earners, a financial transaction tax, a carbon tax, or reductions in other government programs or subsidies.
Some proponents of UBI argue that it could actually save money in the long run by reducing the need for other social welfare programs and by stimulating economic growth.
The feasibility and affordability of UBI in the United States is a subject of debate. Given that government doesn’t do much of anything, the chances of UBI becoming real anytime soon are pretty slim. But in another decade or so, it might be more realistic, particularly if artificial intelligence and robotics work out.
With careful planning and consideration (not Congress’ strong suit), it is possible that a UBI program could be designed to provide a basic level of economic security to all Americans.
UBI Experiments
Some governments are not just debating, they are experimenting in the real world.
- Finland – In 2017, Finland launched a two-year experiment in which 2,000 unemployed people received €560 per month. The experiment found that the UBI had a positive impact on mental and physical health, as well as employment rates.
- Kenya – In 2016, GiveDirectly, a non-profit organization, began giving unconditional cash transfers to 20,000 poor families in Kenya. The program has been running for five years and has shown promising results, including improved health, education, and economic outcomes.
- Oakland, California – In 2019, Oakland began a two-year experiment in which 125 low-income residents received $500 per month. The experiment is still ongoing, but early results have been positive, with participants reporting improvements in their financial stability, mental health, and overall well-being.
Although more research is needed, these countries’ experiences with UBI experiments will provide important information for governments considering similar initiatives in the future.
Romney’s Family Security Act
While UBI may seem like a Democratic Party pipe dream, 2012 Republican presidential nominee and Utah Senator Mitt Romney has proposed something similar. The Family Security Act is a proposal that aims to reduce child poverty in the United States by providing a monthly cash benefit to families with children. While it is not strictly a Universal Basic Income (UBI) program, it does share some similarities with UBI in that it provides direct cash payments to individuals or families.
The Bottom Line – Is UBI a Real Thing?
The concept of a Universal Basic Income (UBI) has been gaining traction in recent years. On one hand, those in favor point to its potential to reduce poverty, offer financial stability and create exciting opportunities for entrepreneurs. But at the end of the day, can UBI live up to these claims?
Those who oppose it argue that it’s too expensive, could ultimately discourage work rather than encourage it, and may not change living conditions for the least fortunate.
There s likely a way to make something like UBI work but unfortunately given how bloated, rife with fraud, and inefficient the other big Federal programs are there’s no reason to think UBI would be any different. Until we have a government that works better, UBI will likely stay a pipe dream.
UBI is a bold idea with tremendous potential if implemented with an understanding of reality.
Its ability to alleviate poverty and inequality depends on the circumstances of its implementation. Depending on how the whole artificial intelligence and robotics thing works out, we might need to figure something out soon.
Figuring out how to make UBI work in real-world scenarios will remain a challenge in the debate over whether or not it’s a viable option for our future.
What d you think, could UBI work? Write in the comments below.
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