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A universal basic income is far away–but it can still inspire new ideas

Give People Money examines the arguments for and against UBI–and argues that even without sending everyone a monthly check, there’s much about it that could inform government policy.

A universal basic income is far away–but it can still inspire new ideas
[Source Image: Sylverarts/iStock]

There’s a long list of arguments for a universal basic income, the idea of the government giving everyone a check–say $1,000 a month–with no strings attached. Robots will eventually take many or most jobs. Even before that happens, giving people money could help ameliorate inequality and extreme poverty. Employers would be forced to raise wages if their workers knew they could leave a job and survive. Because it’s a universal program, UBI can avoid the racism built into current aid (and because it’s efficient, some libertarians argue that it should replace welfare completely).

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In the new book Give People Money, Annie Lowrey, a reporter who covers the economy and economic policy, examines all of these arguments–and arguments against the idea–in detail. She explains that the U.S. could afford this type of program, though it would be expensive. She also shares evidence that UBI wouldn’t lead to a massive number of people choosing not to work, and those who do quit their jobs might do so for beneficial reasons, like going back to school or childcare. But she stops short of saying that it’s something that should actually happen in America.

[Source Image: Sylverarts/iStock]

Lowrey has covered universal basic income for several years, as the once-obscure idea gained more and more attention. While other books had made the case for or against it, Lowrey saw an opportunity to take a journalistic perspective and look at questions about how it could work and whether it makes sense, and related questions that the concept raises, such as whether all childcare workers should be compensated or how the robot takeover of jobs might happen.

“I’m not even sure that I think UBI itself is the greatest idea,” she tells Fast Company. “I think it’s really interesting, and I think it contains within it a lot of principles that are really interesting.”

[Source Image: Sylverarts/iStock]

Those principles include simplicity, inclusivity, unconditionality, and universality–all principles that are unusual in typical government aid programs. Someone trying to apply for food stamps or cash benefits has to make it through a gauntlet of paperwork, and sometimes be approved by algorithms designed to limit aid before they can get help. Racism has shaped programs like welfare; states that have large white populations offer better benefits. A universal program would avoid prejudice and make it easier for those who most need help to get it.

A universal program would also help people who are often overlooked, such as women who are currently unpaid or underpaid for taking care of children or the elderly. As Lowrey puts it, it would “cement every person’s place in society as having value.” If a program is universal, in theory, it’s easier to administer.

[Source Image: Sylverarts/iStock]

But there are also obvious problems: Do we really want to give extra cash to software engineers making a $250,000 salary? On its own, giving everyone $1,000 a month wouldn’t provide a full safety net for the poor, meaning other programs, like welfare, would still be necessary. And given the American obsession with work and pulling yourself up by your bootstraps–and the fact that some members of Congress are currently trying to reduce the number of food stamp recipients by introducing new work requirements–how likely is it that voters can be convinced to support a system that allows people to choose not to work?

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The story might be different in developing countries, where it may be easier to get support for a universal basic income, or at least a basic income for the poorest people–and where the idea shows its greatest promise to date. Direct cash transfers are already in place in more than 100 countries. In a village in Kenya where the nonprofit Give Directly transfers money to every villager, people have used the money to start businesses and improve their health and to let their children attend school instead of working. Because the program gives cash–instead of shoes or tablets or other donations of items that might not be particularly helpful–it’s an efficient way to let recipients decide the best way to help themselves. In the village, it makes sense that it’s universal, because everyone is extremely poor. Socially, cash transfers to the poor have more support in places like Kenya.

[Source Image: Sylverarts/iStock]

“These work really well to eliminate poverty,” Lowrey says. “They don’t require too much state capacity–you’re just getting the money out to people, you just need the infrastructure for that.” One study of a cash transfer program in Mexico, for example, found that children in families that participated in the program went further in school and had higher incomes as young adults.

“What’s kind of funny is we’re actually more resistant to them in the U.S. than a country like Ethiopia or India or Brazil . . . I think that it’s actually in higher-income countries where there’s a lot more judgment of the poor and you’ve got this kind of, ‘Well, we don’t want to give someone something for nothing,'” she says. “Whereas in a country like Kenya, it’s just really clear people are poor because they’re poor.”

In India, where the national government is considering the idea of a universal basic income and increasing the use of cash transfers, the shift could simplify the current complicated bureaucracy and system of subsidies, making anti-poverty programs easier and cheaper to run. Universality might make sense there, given that the country doesn’t have good income records for everyone.

[Source Image: Sylverarts/iStock]

In the U.S., partly fueled by tech industry enthusiasm for UBI, some small experiments are underway. Y Combinator, the startup accelerator, is funding one experiment in Oakland, California. Another is happening in Stockton, California. Hawaii is considering the idea of a statewide UBI. Lowrey thinks there may be more experiments, but that states are unlikely to be able to afford to offer true universal basic income without the federal government’s involvement. And a national UBI is even less likely.

But perhaps the benefit of UBI’s appearance in mainstream policy conversations is that it could inspire other, smaller policies that might still do wonders to end poverty. A program might be means-tested but could still be as universal as possible, with few requirements other than a specific income threshold. More government programs could give cash, offering families more freedom to spend money where they need it. Although a full UBI may be unlikely, Lowrey thinks it’s possible that the U.S. could offer something like a child grant–Canada, for example, gives families with children a certain amount of money each month–or a “negative income tax,” which looks at annual income and gives you money if the total falls below a certain amount.

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[Source Image: Sylverarts/iStock]

Universal basic income also points to the idea that government could be more creative and effective in choosing the policies that ultimately shape our economic outcomes. “We have a very limited sense of what we as a society or elected representatives could do to fix problems in the economy,” Lowrey says. “They could do a lot more.”

“I do think you see a deep need for stronger social insurance, for stronger anti-poverty measures, like a better designed safety net, and just more insurance for people who are worried that if Silicon Valley comes up with lots of amazing technologies, that they’re not going to get to particpate in that, and that their work is valueless,” she says. “Whether it’s through UBI or not, I feel like these are not intractable problems.”

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About the author

Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world's largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley.

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