Would UBI (Universal Basic Income) Work?
It's a topic that's been coming up a lot and something we needs to start to seriously consider. With AI and other tech rapidly advancing jobs will be replaced and most jobs will no longer be needed meaning a huge decline in jobs which never get filled.
Production would still be up if not higher however the amount of people working would be far lower to the point of where something would most likely have to be done.
Now there's also the idea that this is like the industrial revolution and while it seems like no one with have a job they actully will but they will just be different. Just like with any major advancement.
One of the ideas to offset this is what is known as UBI or Universal Basic Income. It's a set income that is paid to everyone that puts them above the poverty line. This would be paid out by the government and at the moment it would mean everyone at the current way things are would get roughly a little over $15,000 a year if you have a job or don't have a job.
The History
It's important to also note that this is not a new idea. Over 500 years ago a man named Sr. Thomas More a English philosopher and statesman mentioned it in his work Utopia.
Since then many people have proposed this in the 1700's 1800's and yes even the 1900's by James Meade as a social dividend and even the famous Martin Luther King. Jr. as guaranteed income in his book "Where Do We Go From Here: Chaos or Community?"
It's important to know the history so we can see this isn't a new idea and it's been rejected and the economy and people have been fine throughout it all. But will this time be different?
The Unknown
The biggest unknown and what creates I believe the most back and forth debate is if people have a UBI and could have the basics like food, water and shelter and be able to then spend more time doing the things they love would they become more lazy or would the world be in a better place?
It's a question and something I see both sides having good points to. On one hand someone that is lazy and not contributing to the wellbeing of everyone else why should they be able to have the same revenue as someone contributing. The absence of the financial struggle.
I'll be honest I don't know the answer to that and before AI and machines I would agree that a UBI just doesn't make sense and there needs to be a drive for someone to be and do better.
However with AI, machines and all that good stuff does all of this now change?
What Can It Do Now
If UBI was enacted today what would that look like? Well a test and theory was recently done on this which I'm going to summarize now.
The biggest thing UBI would or should fix is poverty. Nearly 38 million people in the USA are currently living in poverty. That's almost 12% of the USA population a country that is suppose to be the peak.
This would help all of these people to still work the jobs they are now but to have free money outside of just trying to make ends meet every month and most likely failing at it. It would allow them some room to breath, take up some new passions in life. OR it could replace what they are already making and they all just become lazy and never work again. That's the big catch here. Those that do work and get UBI would have more income which means they would spend more which would stimulate the economy and being that most things would be machined and AI generated there really wouldn't be that much in terms of expenses anymore.
The more I personally think about this the more I see it swinging two ways. Either the person making $15,000 a year becomes lazy and does nothing at all pretty much living the same life they were but with no need to work or two the person keeps working and buying more things which sounds great but all that UBI money now feeds into the already mega rich and wealthy companies to only fuel them that much more.
Tests
These tests have been also going on for years in smaller scales to see what would happen.
One such test was in Canada where a ton was given a UBI. What they found was that there was better healthcare in the town and higher graduation rates in the town then before. This was only a 4 year test.
Brazil on the other had has been running this for some time and is called "Bolsa Familia" This so far has been going rather well and reduced the poverty rate by over half.
Finland also has recently done this for two years. This test showed that people didn't increase or decrease their desire to work (maybe because they knew it would end?) but it did allow them to live more stress free lives.
Germany also tested this out for a fully year which helped a lot of people out as well. However again the factor here is that people do realize that the income will be stopping after a year so a vast majority of people focused on bettering themselves for the future.
Spain, Japan and many other countries also tested this out for about a year. But again the same factors played into this where people knew it wouldn't last forever and often used that money as an opportunity to get ahead.
The question that comes to mind now is what happens when people realize it's ALWAYS there? My theory is there will always be a small percentage of people that don't care and simply will live the life they are. However a vast majority would most likely take advantage of it and better themselves so they can setup their family for better because what good person does not want the best for their family or to have it better than they had it.
A recent test of this was done in the USA called Unconditional income study which ran for three years. It split people into two groups. Group A we will call them got $1,000 every month, group B "the control" was given $50 a month. These people also were around the same income levels of roughly $30,000 a year.
The results.... Drum roll please...
- People spent $310 more per month on Food, rent and their car.
- The average income went down by $125 a month
- The average work week went down by 1.3 hours
This would show us that people yes did work a little less but also freed up some time in their lives and I'd have to agree with this that a 40 hour work week in this day and age is bonkers and should be more around the 35 hour level maybe even 30 hours.
In this test blood work was also done on those participating. It was shown that there was no real noticeable improvement in physical health of these people.
BTW a quick mention here you can see the full details of this study at https://www.openresearchlab.org/studies/unconditional-cash-study/study
What was notable here is it allowed people more flexibility on how they spent or even saved their money. Instead of focusing on just food they were able to get better healthcare or do other things with it.
The Verdict
Well you can come up with it yourself but it's pretty clear that currently with the way things are a UBI simply does not work. It does help those at the very bottom but as soon as you start getting into the lower middle class or even almost lower middle class people it's just extra money for them to use and provides no real benefits to the person.
What are you thoughts on UBI?
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If the primary goal of UBI is to reduce/eliminate poverty, then why would UBI be a better idea than existing welfare programs? The primary difference being that existing welfare programs require you to be in poverty to get the benefit as opposed to being "universal".
For now, i think AI is just another new technology that will change the nature, to some degree, of the types of jobs there are. Until we have computers making all of the decisions and robots making and moving everything, etc. then this won't change. Realistically, why would there ever be a need for "universal" income? That should only be needed if there are 0 jobs. Otherwise, you are just going to drive inflation by increasing labor costs and demand. At least until AI, robots and other tech is so good that they can manage production to meet any demand. Then the need for money may be obsolete anyway. However, I think there are many jobs that AI is a long way from replacing.
It's a good point. As long as we are operating under a pure capitalism system, it's hard to see how UBI wouldn't just push up inflation. Everyone gets a UBI of $15k? Well the prices of everything adjusts so that the cost-of-living is $15k higher. A real UBI would have to involve more economic and social changes than just giving everyone a check every month.
I think for something like this to work a lot of the greed and corruption needs to be taken out of the picture first. Otherwise that is always going to throw the results out of whack. We need clean renewable energy or some other huge scientific breakthrough that shakes the foundation of what currently motivates us. That's my thinking anyway.
I don't think any tests can really show us how it would work. As you say, the knowledge that it will end is just going to motivate people to stockpile the money, ruining the test. I'm afraid this will remain entirely a theoretical exercise until we actually implement it. Even then, it's very likely that the first generation to be on the program would still stockpile, just in case. Just like the first generation when people become rich usually continues to live frugally the rest of their lives despite having the money. It's not until the second generation born into that wealth that we see the effect of it on their actions, and it would be the same way with UBI—we wouldn't really see the effect of it until the second generation. That in mind, we simply can't say if it would work or not. It remains entirely a hypothetical idea at this point.
I love to see people at the bottom helped out, but not if they don't use it to improve their situation. Drug addicts who don't want to quit, the lazy who just don't want to work, etc... The problem is always one, in the end someone has to pay for it. In Alaska every year everyone gets a check for oil royalties, sort of UBI. But they have a way to pay for it. In the end it would bankrupt most countries in the world today if they followed this route!