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.