Is the idea of cash handouts for everyone, no strings attached, a breakthrough solution for unemployment and social inequality, or a road to profligacy and idleness? Attracting left, right, and center, the idea of a Universal Basic Income (UBI) is the perfect Rorschach test in the public debate over “the future of work.” For Americans, the universal benefits just might outweigh the universal costs.
The UBI model is radically simple: a basic payment designed to cover basic expenses. After giving to each according to need, people are freer to give according to ability. UBIvangelists argue that automatically providing for basic nutritional and shelter needs liberates people to ascend the hierarchy of needs and focus on more valuable activities, like developing social relationships and civic and cultural engagement. Others hope a UBI would foster a more harmonious, cooperative post-work society simply by countering scarcity and selfishness.
The idea of free cash has inherent public appeal. Surveys by the Economic Security project show that 46 percent of respondents favored giving every individual “a base income,” especially among youth and people of color, while 35 percent were opposed.
So far, researchers have primarily focused on UBI pilot projects in the Global South. Now the Roosevelt Institute has probed the question of how the system might work in a rich, but fiercely unequal, capitalist society: Could Americans be trusted to give, as well as receive, universally?
According to a comparative analysis of programs by Ioana Marinescu of the Roosevelt Institute, the data from several UBI pilots in North America show the complex and, overall, positive impact of a social wage. The studies analyzed included the Alaska Permanent Fund Dividend, which redistributes oil revenue through an annual payment to every resident—about $1,000–$2,000 annually; the Eastern Band of Cherokees casino-dividend program, which divides income generated from the reservation’s gambling industry and issues payments of several thousand dollars to each member annually; and “negative income tax” programs piloted in select Canadian and US communities in the 1960s and 1970s, in which local authorities provided taxpayer-funded household rebates that covered basic living expenses.
Defying the stereotype of beneficiaries spoiled by a nanny state, generally, the RI analysis finds “no effect on labor market supply,” and concludes that “evidence does not suggest an average worker will drop out of the labor force when provided with unconditional cash, even when the transfer is large.” The negative-income-tax experiments did result in some reduction in work hours, though the effect was marginal. Moreover, it’s unclear what people are doing instead—whether they’re enjoying more leisure, taking care of family, going to school, or researching new job opportunities. Similarly, reductions in employment levels appear to be a product less of lack of motivation than of earlier retirement, reflecting an enhanced sense of economic security toward the end of life—something all seniors deserve. Some speculate that job quality and productivity ultimately improve when workers are happier and bosses have incentives to offer more rewarding work or better labor conditions.
Not surprisingly, people live better when they’re less hungry. The families receiving negative-tax payments saw nutritional improvements, “suggesting an increase in spending on food.” Alaskan households with the state-oil payout boosted consumption during the month of the payment, which indicating greater purchasing power to meet immediate needs that could stimulate the economy.
Across generations, UBI may provide holistic educational paybacks for families: Canadian children receiving the income-tax rebate experienced improved “school attendance, grades, and test scores” and lower dropout rates. For Cherokee children, the casino payment was tied to “more positive interactions with parents” and less criminal activity, and lower cannabis or alcohol-use or -dependency rates.
And contrary to expectations that poor people can’t resist temptations to blow extra cash on beer and cigarettes, they get healthier when they’re given the means: Long-term tracking of Canada’s basic income program revealed that “recipients experienced an 8.5 percent decrease in hospitalizations compared to the control group, especially for mental health, accidents, and injuries.” The casino community saw improved mental-health outcomes linked to supplementary income, countering widespread patterns of social instability among indigenous populations.
The studies are only a partial window into UBI’s potential. The study populations have been relatively small, each with distinct social and historical circumstances. The methodology of the study also drew distinctions between a so-called “full” UBI, which covers basic living expenses—this type of UBI was previously tested in 1970s income-subsidy programs in Canada and the United States—and the smaller-scale programs that involve just a subsidy. The older programs, while difficult to analyze on a comparative basis, offered subsidies up to nearly $50,000 (adjusted for inflation), which complicates any comparison with a casino-based subsidy of just a few thousand. One critical question for UBI going forward will be adjusting subsidy levels to be a meaningful economic support for communities.
And Marinescu stresses that every UBI-financing concept carries fiscal costs and spending substitutions: Does the supplemental wage come out of heavy income-tax revenues? Will it give lawmakers a justification for scrapping pensions or health-care programs? Because of the potentially negative “interaction effects” between basic income, essentially privatized state funds, and public spending, citizens will need a direct say in policies that balance cash transfers against the state’s social-welfare responsibilities.
Finally, not every state is blessed with favorable casino laws or oil reserves, so how would UBI work nationwide? One idea might be creating a more redistributive welfare structure based on taxing pollution. According to Marinescu, a comprehensive tax on carbon pollution is both highly progressive and helps correct environmental harms that disproportionately burden the poor. “Carbon taxes tax richer people more heavily,” she notes, “because they have higher energy use…so it’s kind of a double whammy.”
But the universal questions UBI presents to society are what we would be doing with our lives if we didn’t have to work as much, and is it fair to ask workers to accept money in exchange for a labor system that is killing their livelihoods?
Neither neoliberalism nor democratic socialism have fully grappled with a post-work future. Robots might not take all our jobs, but technological developments push us to rethink how we’d make ourselves useful when our labor becomes redundant.
“It’s hard to know how people will find meaning in their lives in the future…. It’s a matter in part of ideology and philosophical values, which the research can’t tell you much about,” Marinescu argues. “But also on the more empirical level, how important work is to people’s psychological well-being depends on prevailing social norms, and those things could change.”
A UBI makes basic survival less dependent on a job, but it opens up a new, and confounding, social challenge: how to spend our lives more wisely, if we don’t have to work just to live, but still want to work toward a better life.