What Is Universal Basic Income?
Universal Basic Income, or UBI (we will refer to it using this acronym here on in), is exactly as it sounds: a minimum income for everyone—no strings attached and no qualifications. The purest form of UBI would be a certain above-poverty monthly payment given to everyone of the age of majority.
For example, if it is determined that the poverty line in America is $22,000/year, the government would give each citizen over the age of 18 (age of majority), $1,833.33 per month in income. It wouldn't matter if the person had no money or had millions in the bank—everyone would get the same amount.
There are other forms of UBI that are being discussed; such as UBI that is means-tested (a certain amount of benefit would be clawed back for every dollar earned), or UBI that is based on some make-work scheme. However, in this article, we will only be discussing the pure form of UBI.
UBI Pilot Programs
Although UBI seems like a revolutionary idea to many Americans, it is not such an alien idea to socialist countries, such as Canada and Finland. Keep in mind that Socialism does not equal Communism, and Communism does not equal authoritarianism/dictatorship: China, for example, is Capitalist AND authoritarian (it was Communist until Mao Tse-tung died).
Moving on, there are several UBI pilot programs going on and in the works (and several that have already been done). None of them are pure UBI programs, but they still provide a lot of valuable insight into how a pure UBI system would work.
- Ontario, Canada Proposes Basic Income (Nov. 2016)
- Mincome in Manitoba, Canada (1970s)
- Finland Trials Basic Income for Unemployed (Jan. 2017)
- Switzerland's Voters Reject Basic Income Plan (Jun. 2016)
- Moving Towards a Universal Basic Income (Apr. 2016)
- Charity Experiment to see Thousands of Kenyans given UBI (Apr. 2016)
- Indian Government Survey says UBI Could Combat... (Feb. 2017)
Benefits of UBI
Without a doubt, there are dozens of foreseeable benefits to a UBI, and there are even more unforeseeable benefits. Some of the benefits were predicted and took place as pilot projects predicted, and some of the benefits were a surprise after analyzing the effects of pilot projects. Let's take a look at some of the benefits we can be sure of.
1. It would save the government a lot of administrative costs related to social programs.
At the moment, governments run a myriad of social programs where administrators have to do a lot of fact-checking and work on the ground (and in an office) in order to make sure people qualify for the social program they are enrolled in. If UBI replaced all those programs, administration of UBI would be extremely simple, because everyone of the age of majority would qualify.
2. It would encourage population increase.
This is an obvious one, but if a family had an income that they could rely on, they would be a lot more willing to put down their income-producing activities and focus on raising a family.
If you've ever raised children (raised them properly, that is), you know that it is absolutely more work than even two full-time jobs. And yes, children are the future of our society whether you like it or not.
3. It would stimulate entrepreneurship.
All economies do better when a spirit of entrepreneurship is strong. For example, if there is a father working at a convenience store to support his family, he cannot stop to catch his breath, much less take the time to start a small business that he has an idea for. With UBI, however, he would be able to stop working and start working on his business idea, knowing that his family would not starve.
4. It would increase the level of education and the skill of those in the workforce.
Yes, that's right, UBI would allow people to stop working just to survive and allow them to go back to school to gain skills and training that would allow them to come back into the workforce and contribute even more.
5. It would all but stop sexual harassment and bullying in the workplace.
Oftentimes, those that are sexually harassed or bullied in the workplace have no choice but to continually face their assailants day-in and day-out due to fear of losing their jobs. With UBI, victims would not be afraid of losing income, because they would have enough to at least survive on, and they could remove themselves from horrible situations.
6. It would allow arts and design to flourish.
We've all heard the term starving artist and there's a reason not many people want their children to pursue higher education in art. With UBI, artists and designers whose creations may not contribute much economically can continue to create and contribute to our culture. Vincent Van Gogh died a pauper, yet his paintings are now worth multi-millions.
7. It would increase the overall health of society.
This may seem counterintuitive, but real-life studies have shown that when families are lifted out of poverty (for whatever reason), their health increases dramatically. This increase in health equals fewer hospital visits and less stress on the public health system.
8. It would prevent future revolution and anarchy.
Yes, you read that right. It is predicted by many mainstream media sources (which are usually the last to pick up on information) that up to 40% of today's jobs will be replaced by technology. And no, it won't be like the industrial revolution where new jobs were created... today's jobs will just disappear, never to be replaced. Obviously, governments and the rich elite are scared of what might happen if too many regular folks are unemployed.
Arguments Against UBI
As with any revolutionary idea, there are always detractors. When the self-propelled carriage (i.e. the car) came out over 100 years ago, people were not comfortable with horseless carriages. Let's look at some of the arguments against UBI.
1. People won't work anymore!
Society will collapse because everyone will stay in their basement playing video games and watching porn.
While this fact may be true for a certain segment of the population, in general, it is not true at all. Yes, there will certainly, undoubtedly be people who take UBI and do nothing with it other than live a meager life, enjoying video games and weed in their basement apartment. However, most people (just think of yourself and the people around you) would take their UBI and use it as a tool to better themselves or pursue healthy interests.
2. People will take drugs and drink alcohol all day.
Again, like with the previous point, this may be true for a certain minute segment of the population, in general, it is not true. Studies from previous UBI experiments show it not to be true - in fact, spending on vices goes down once people are given guaranteed monthly incomes. A lot of times, drugs and alcohol are escapes from a harsh reality; a UBI makes reality not so harsh.
3. You can't trust people with free money. They need to work for their money; otherwise, they'll waste it.
Actually, there is already a form of UBI that we have today—it is old age benefits given to retirees and seniors. Yes, old-age benefits, guaranteed income supplements and retirement income are all forms of UBI. Retirees and seniors certainly don't have a hard time handling this "free" money, do they? Nowhere do you see seniors going crazy at the bingo hall.
4. The government won't be able to pay for it. Where will the money come from? They'll raise taxes on all the hardworking people!
This isn't true, contrary to "logical" thinking. Firstly, governments all around the world are already hugely indebted and the most indebted economies (e.g. the USA and Japan) actually did not spend their money on offering people a monthly income. Most, if not all, countries in the world run huge budget deficits every month and are hugely indebted.
So, if these countries have to go into a little more debt or run their deficits a little longer to offer UBI, it wouldn't be something unprecedented. Taxes certainly would not have to be raised.
Furthermore, after the initial spending on UBI programs, governments would see huge returns within a decade; fewer hospital visits, increased economic input from entrepreneurs and a more highly-educated workforce, a larger population, etc.
5. Rents will go crazy high as landlords absorb all the extra income from UBI.
This is another fear that is unfounded. At the moment, rent (and buying homes) in big cities is quite high and sometimes unaffordable due to all the demand. However, a lot of this demand comes from the fact that people have to live in the big city due to work—and not necessarily work that they enjoy doing, just work they have to do to survive (and there are fewer jobs or no jobs outside the city).
With the increased mobility due to UBI, people would be able to move to where they really want to be, with fewer work considerations. Not everyone wants to live in a big, crowded city.
6. Hyperinflation will definitely occur! There will be new money chasing limited goods and prices will be raised such that everyone would be back to where they started.
Essentially, hyperinflation occurs when money is created out of thin air, like in Zimbabwe when the government just kept printing money. However, minimal inflation (if any at all) occurs when money is simply moved from one area of the economy to another. UBI would not be money printed and then given out; it would be money moved from one government coffer into the people's hands. In other words, it would be money that the government had saved via the decreased need for services in one area or increased tax revenue.
7. People don't deserve handouts.
If you can successfully argue that some people deserve to eat while others do not, then this argument may be valid.
8. People should work for a living. Those who do not work are lazy and useless.
What is the purpose of work, exactly? That is the first question that needs to be answered. For most people, work is simply a means to an end: to put food in your belly and shelter over your head. No matter what you believe about life, do you believe that our purpose in life is to toil and labour?
To address the second part of this statement; those that have the greatest impact on this world today succeed despite the fact that they have to work just for money. Think of your very own mother! Was she ever paid to raise you? Economically, raising you made absolutely no sense, but she did it and it's hard to argue against raising a child properly.
What Are Your Thoughts on UBI?
After reading all that I've presented here, I welcome you to comment—all opinions are welcome! Are you for or against UBI?
A lot of people "believe in work" and while that is one point of view, don't forget that it is a philosophical point of view. Question yourself! Why do you believe in work? What is work? Is work that is paid better than work that is unpaid? Should children work rather than play?
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.
win-winresources from Colorado on February 07, 2017:
I'm not sure what point you are making. If you are asking if I contribute to Hub Pages, I did for several years on subjects from haiku to statistics to solar, to cooking until they started censoring my hubs, at which point I unpublished many of my hubs. At that point I chose to only make an occasional comment.
If that's not what you are saying, bully for you too.
threekeys on February 07, 2017:
Its wonderful win win resources that you aren't elitist or too sophisticated to come here and share. With every area in life we can only wear so many hats. Bully for you your hat is here.
S Chon (author) from North America on February 03, 2017:
@win-winresources - Thanks again for your thoughts!
There are honestly a lot of factors in a system such as UBI that no one can predict - because it's never really been done on a permanent and wide scale - but I am hopeful! I actually updated my hub with a link to someone who can hopefully allay the concerns you've mentioned (under Arguments Against, #6). He does a really, really good job of it!
And hey, if the positives about UBI are really true, wouldn't our world be better off for it?
win-winresources from Colorado on February 03, 2017:
Standard macroeconomic theory speaks directly to the balance between goods/services (supply) and cost (demand). You flood the market/economy with money (from wherever it comes from) and the suppliers will raise prices to achieve a new equilibrium - and absorb the newly available dollars (inflation). Even worse for financially unsophisticated people.
Also, don't forget that a key part of the economic puzzle is the velocity with which money moves (how many hands does a single dollar touch, and how quickly does it move from hand to hand). A single dollar that touches 10 hands will look like $10 to the economy.
I guess I don't see the UBI as a viable policy.
S Chon (author) from North America on February 02, 2017:
Thanks for your reply @threekeys ! In regards to what you mentioned, "I do worry about too many people becoming idle as trouble more often results from these situations. With only living off a bare minimum, you may never have enough resources to become a entreprenuer and build yourself a better quality of life. Stuck in the treadmill, for instance." - receiving a basic income does not mean you don't have to work! You would be encouraged to work as much as you want, thus adding to your income and your ability to become entrepreneurial. With a guaranteed minimum income, those that are entrepreneurial could take a lot more risks.
Great thoughts, @win-winresources ; I guess I should mention your concern in my article. But for now, basically, hyperinflation occurs when money is just printed (i.e. money created out of thin air), that is without a doubt. A Universal Basic Income, however, would not be new money - it would just be money moved from one area of the economy to another area.
Consider government deficit spending, for example; even with billions pumped into the economy, it sometimes fails to create the inflation the government had intended!
win-winresources from Colorado on February 02, 2017:
Oh my, Shawn-
I must have missed your discussion of inflation as it would certainly apply to UBI (or any sudden influx of money).
More dollars (yen, yuan, shekles, pounds, rials - you name it) chasing the available goods and services will absolutely drive up the costs until the extra monies are absorbed. Add this to the fact that many of the recipients are going to be financially unsophisticated... and , well you get the picture.
You did mention payments to seniors as some sort of similar transaction. Please remember that to collect Social Security, a worker had to pay in to the fund for 40 years. Social security (and Medicare) are not freebies, hand outs or anything else other than a distribution of monies the worker already paid in (maybe along with some accrued interest).
A hand up is way better than a hand out.
threekeys on February 01, 2017:
Interesting read! Im not in a position to comment however, my first thoughts were:- yes, those who are wealthy and/or in control positions when jobs collapse due to AI etc, are putting measures in to protect themeselves from the potential anarchy that would result from worldwide joblessness. I do worry about too many people becoming idle as trouble more often results from these situations. With only living off a bare minimum, you may never have enough resources to become a entreprenuer and build yourself a better quality of life. Stuck in the treadmill, for instance.
With that said, you did make some interesting points that makes the UBI system sound appealing in that it could provide more time and ease for loved ones, living where you prefer and contributing aesthetically to the soul of your society.