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?
