When I first heard of the Universal Basic Income (UBI), I thought, “Oh no, not another entitlement.” But, the context within which I heard it got me thinking.
In a post last year (Advice to Give Your Kid in theAge of AI), I cited a 2013 Oxford University Study projecting that 47% of US workers would lose their jobs to automation over the next 20 years.
Many have already lost their jobs to industrial automation. Stationary robots producing perfect welds in an auto plant are now commonplace. The jobs lost to that phase of automation are a fait accompli. The next phase of job losses will come from self-driving vehicles, algorithms and the Internet of Things (See From Turing to Musk to Industry 4.0).
If the technologists predicting this future world of work are correct, a world of luxury awaits. Vast amounts of mundane work will be eliminated. We’ll see a dramatic increase in our national wealth as businesses become more productive. Our social welfare will improve as goods and services are produced more cheaply.
However, the elimination of mundane work means the elimination of income for a great mass of both skilled and unskilled workers.
And so, the concept of the Universal Basic Income was born. The idea is that everyone would receive a check from the government every month. Let that sink in for a moment. Everyone – rich or poor, working or not, able or disabled – would receive a check from the government every month!
Some proponents have suggested an amount equal to about 60% of median household income or about $30,000 per year.
This is an idea that liberals can get behind, right?
However, a conservative case can be made as well. I contend that the seminal thinking of conservative economists would support it. The idea of a “safety net” was proposed by Freidrich Hayek in his most read work, The Road to Serfdom. And, it was Milton Freidman who first floated the idea of a negative income tax.
Let’s pan out and widen the view a bit.
The UBI would replace all other social welfare programs – HUD housing, SNAP (aka food stamps) – as well as the need for other lightening rod government rules, such as the minimum wage.
Vast government bureaucracies would be shut down. After all, if there are no rules associated with who gets a monthly check, there is no need to fill out forms or for the bureaucrats who review applications.
What about concerns that people will just stop working?
Would you? Would you live on $30K per year if you could find meaningful work? Wouldn’t you want a job anyway?
There is another benefit to the UBI. Current programs intended to help the poor aren’t working. A working paper produced by the National Bureau of Economic Research concludes, in part, “the safety net is doing less to provide protection for the most disadvantaged. In the post-welfare reform world, TANF did not respond in the Great Recession and extreme poverty is more cyclical than in prior recessions.” And, 89% of those working for minimum wage are earning a second or third income for the household in which they live.
In other words, those initiatives are not working for the impoverished people they are supposed to help.
Getting Congress to pass the UBI would be difficult, to say the least. And, it must go hand in hand with other reforms. The tax code would have to be overhauled – egad!
However, if we could keep it simple… if we could remain true to the concept… if we could focus on the benefits, it just might work for everyone.
There are only two kinds of people who could screw it up… Republicans and Democrats.
WHO WILL LEAD?