If there’s one thing that Reddit loves, it’s a little bit of controversy with their morning coffee – and asking a question about Universal Basic Income is sure to do the trick.
If you’re curious what people see as the up- and downsides of this concept, read on – these 15 folks are ready and willing to share.
15. Haven’t we learned our lesson?
Haven’t we seen what happens when you give everyone a cheque each month for not working? Read: inflation.
More money is going for the same amount of goods, so prices increase. If more money is circulating in the economy but supply-side productivity hasn’t increased to make goods cheaper, you get inflation.
14. Define universal.
UBI does nothing if it’s actually universal. If everyone has money, no one has money. Give everyone $1000/mo, and rents will go up $2000/mo. Getting workers gets harder, so pay goes up. Rising pay makes all of your non-housing costs go up.
For any kind of social support system to work, you have to have a system in place to severely restrict the ability of the market to absorb the increases. You need universal healthcare, you need housing and food support that creates a fixed price point at the bottom of the market.
The problem with that is, at some point you’re just creating excess bureaucracy. If you give everyone $1000, and then set the base of the “necessities of life” markets (housing, food, healthcare) at an affordable rate, you might as well just make those the benefits, rather than UBI. UBI takes a big chunk of the benefit out in the form of profits to the providers, even if it’s a regulated market.
UBI is one of those things that looks good if you p-hack the results of it, ignoring that a positive test wasn’t “universal”, or stopping the analysis at the point you get positive results and not bothering to model the downstream impacts (like rent and other inflation).
13. The first rule of economics.
“Incentives Matter” is the first rule of economics as I learned it. You tax cigarettes to make people not want to do it. Taxing income simultaneously provides the government with funds to enact programs, but also makes it less interesting to work. You work and the government gets a piece. This matters at the lowest and highest earning levels.
Universal Basic Income (UBI) can’t be considered by itself, it needs to be considered among all the other incentives present. How is society paying for it? What is the incentive to keep working for stuff beyond what UBI supplies you with?
If everyone’s needs are covered by UBI, why should anyone go to work and add to society’s benefit? There needs to be an incentive to be productive amongst any UBI program.
I don’t see a sustainable system there. Some think automation can bring that about but I would be careful thinking that automation will solve all problems.
What I do think is a problem is how many of the revered aspects of life have become corrupt and out of control price wise. We wouldn’t care to have UBI if a simple job got a person a decent living. But people are becoming uneducated because of a broken education system and the cost of living is skyrocketed because of corruption (high taxes, wasteful spending, bad and costly projects & a system of red tape where nothing can be done).
Because of apathetic and uniformed voters, our leaders are more driven by special interest groups than care for us as the people. This goes for both parties. And this will continue until the internet opium and other numbing methods is not enough and we must pay attention.
12. The best bad option.
I prefer it to trickle-down economics. They said that putting more money in the hands of rich people would indirectly benefit poor people. It didn’t happen.
So let’s just put money directly into the hands of poor people. I’m not 100% sure whether basic income would do good, but it’s worth a try.
11. It’s all relative.
Breaking news: new UBI program gives all citizens a monthly stipend of $1000.
Breaking news: rent everywhere rises $1000 dollars
10. A good idea…
as an idea? it’s good. I just don’t foresee any practical way in which it could be manifested in a fair, effective, consistent manner.
9. A changed mind.
I use to support it but post pandemic I dont. I just saw too many people choosing unemployment extensions and deferrals over work that caused massive shortages and impacted the economy. People argue all the time “liveable wage!” and to an extent that is a huge part of it but it does not make sense if you are still only getting 60% of your previously low wage and still deciding to stay home and do nothing.
I think in theory like other fantastic fantasy ideas like communism its a fun theory but I think a lot of more people doing nothing is going to cause a huge SOMETHING to our economy and our ability to function as a society. Things like UBI, communism etc sound great on paper until human behavior like corruption, greed, lust for power and money shows up and pisses in our cheerios.
I also think UBI will just further the class divide the same way welfare, stimulus checks, bank bail outs, PPI loans, corporate welfare, subsidizing and college loan forgiveness effects the class divide but I think wealthy people seeing that they are directly paying for everyone else will have a lasting and negative impact on the work force.
We will have less people willing to work and more wealthy people doing what they can to replace that work force.
8. A deep dive.
Depends what you mean by UBI, but I’m not a huge fan of most of the proposals (wishful thinking) I’ve seen.
The premise of UBI is that everyone gets a basic income, but this is offset by those that can afford will pay more into UBI than they take out. In short, taxation. So let’s call it what it is, a new tax system.
In this vein UBI feels similar to flat tax proposals. An attempt to remove the complexity and myriad of support systems (welfare, EI, disability, income assistance, rent assistance, etc.) into one global system. The value proposition seems to be that this will be easier/cheaper and fairer. It’s also designed to overcome the assistance stigma as everyone will get the help, so no one needs to ask for it. On its surface that sounds a better system and Reddit loves to swim on the surface.
So let’s dive a little deeper:
What’s its purpose? I.e., what’s the use case where UBI is superior to other social programs? I’m sure some of you are going to argue that these current support services are inadequate and I would agree, but creating a new policy or program doesn’t create money, so you either raise taxes (yes yes tax the rich blah blah blah), or you cut other services. I can assure whatever program you’re planning to cancel to pay for this will cause harm and will cause blowback.
The incredible unfairness of fair. For UBI to work you need one magical number, irrespective of age gender, disability, income situation, local prices etc. What’s the magic number? 3k a month might be plenty for a student and for other it wouldn’t cover the cost of medication. It’s impossible to create a ‘one size fits all’ solution and will more likely end up with a one size fits none outcome.
The likelihood of predatory and opportunistic pricing. It’s important to understand that, there’s no more houses on the market because of UBI, there’s no more food in the supermarket because of UBI (in fact there may be less), and UBI won’t stop OPEC from cutting production of oil.
My point here is the rules of supply and demand are fairly absolute and UBI has a high likelihood of causing extreme situational inflation. For example, let’s say that UBI leads to those at the margins earning more than double what they earned before. What we know is the second that happens the market responds and rent and food and other items rise in price. That’s means there’s a non-zero chance that the people who UBI will most benefit is slumlords and loan sharks.
We’ve tried it before. The indigenous peoples in Canada (which is my area of expertise), had a myriad of models of UBI throughout the history of Canada, most dictated by the Federal government, but many designed and implemented by the people at the local level. Not to put too fine a point on it, every model has been a fucking disaster. What’s worked is investing in infrastructure, investing in education, investing in opportunities. Yes, there’s plenty of other systemic issues, but when you correct for that, the data still unequivocally shows that UBI didn’t work. More than that, it led to higher depression and suicide rates, not a great result.
This would be a government program. I find Reddit funny for a lot of reasons, but the thing I find most humorous is that they expect the same government, who they literally don’t trust to do even the simplest tasks, but constantly insist on massive government projects that would cost in the trillions to implement and run.
Finally, UBI creates nothing, virtually everything that is sold requires human effort to bring to you. Anything that incentivizes people to stay home and not work has to be balanced against the needs of a society to encourage productivity. We need people to work. We’d prefer if they work because they want to, but at the end of the day we need people to do jobs, some of which are hard, long, dangerous and unpleasant. We’ve seen exactly what happens (again Canadian example) when we pay everyone to stay home for a while and that’s massive inflation that effectively wipe out any gains that programs like UBI create.
In spite of this I’m not completely against the idea, but I’m closer to condemnation then I am condoning.
7. There’s no point.
Negative income tax was a major component of Milton Friedman’s economic theories, the very theories our modern liberal markets are based off of, yet we have totally abandoned it in favor of more executive compensation.
Friedman stated that it would end poverty and increase upward class mobility. So, I think that negative income tax is probably a good idea, but UBI indiscriminately?
No. There is no point in giving UBI to a person who already earns more than they need.
6. It depends.
Depends on if you still believe the bank hasn’t broken the system. If the system is broken (which it is) then it would be better for the economy to show more active money in circulation and people that need to spend to have spending power.
If you believe that the system is based on earning a space in society based on working for it then (like boomers with silver spoons up their bottoms would have you believe) then no.
5. Good decision/bad decision.
It is a bad idea if you rely on the threat of poverty to keep your business fully staffed at the wages you currently pay, and a good idea if you rely on the wages you earn to keep you out of poverty.
It is also a good idea for people who may have to regularly interact with other people who are in poverty or on the verge of poverty. People tend to make better decisions when they have more financial stability.
4. More harm than good.
Yes but to effectively implement it is a big question. It’s good because it would effectively eliminate the need for food stamps, Social Security, disability, housing vouchers, bankruptcy, workman’s comp, unemployment insurance, kids being put into foster care because their parents can’t afford to take care of them, or people going into debt just to put food on the table.
The reason it could potentially do more harm than good, is because if we start UBI, but it isn’t good enough to solve those problems, all those government social programs will be eliminated regardless and people in desperate need will be told “you got your UBI, so why are you complaining you don’t get Disability?” Even when the UBI doesn’t pay enough to take care of them.
On the other side, half those solutions are run by private businesses, and UBI would put them out of business instantly. So they have more than enough incentive to lobby against even an effective implementation of it.
I hope it can happen someday, especially here in the US, but the US government at the moment would fumble the whole thing and people would starve.
3. As simple as that?
No, it ends up eaten by inflation.
2. Fair and square.
My acting buddy on Disability, despite now having acted enough to do a lot of paid work, turns down paid stuff almost always because if he makes too much not only will he be taken off Disability, they’ll also take away the money he earned fair and square.
You can’t own things if you’re disabled. You are forced to have a certain, tiny, income level. He would have to make so much money that he would be able to live off it entirely and pay for all his medical stuff.
And if UBI ended up the same? I would never want that for anyone. It should be a baseline to make sure no one gets buried, not a glass ceiling for the lower class.
1. Yes, but…
Yes, but with certain caveats.
It’s not a good idea with a deregulated market, or a lack of rent controls. Otherwise, UBI effectively becomes a subsidy for scumbag landlords and other corporate entities.
Case in point: in the UK, benefits like Working Tax Credit are supposed to cover costs such as childcare. What actually happened is that childcare costs became exorbitantly high, to the point where the full benefit can be awarded and yet a family still struggles to meet the cost.
This means families have to make the decision to forego an entire full-time income in order to save on childcare costs, or stick with a dual income but have a huge chunk of it eaten up by childcare costs which welfare payments likely don’t make up for.
These are mostly interesting points, if you care to hear them.
What would your opinion be? Let’s go ahead and keep the discussion going in the comments!