What would happen if you gave everyone enough money to live, no strings attached?
That's the premise of "universal basic income." By giving people unconditional payments to cover key living expenses, the model provides a financial floor—a minimum level of economic security for everyone in society. People remain free to work and earn any amount above it.
The idea has become popular across the globe. In Finland, the government is planning to test a basic income model for all it's citizens. In the Netherlands, several cities have already begun basic income programs. In Canada, the governing Liberal Party voted in favor of basic income.
The movement has come to the States. In Silicon Valley, famed startup incubator Y Combinator announced a long-term study into the questions: given a basic income, "do people sit around and play videogames, or do they create new things? Are people happy and fulfilled? Do recipients, on the whole, create more economic value than they receive?"
Why is it important?
In a world where technology is replacing existing jobs at higher and higher skill levels, many believe basic income may become necessary to meet people's fundamental needs and society's financial health. On the other hand, critics point to high costs and disincentives to work as concerns about the model.
Should we implement universal basic income?
Basic income is deeply impractical as a tool for fighting poverty. Worse, it removes important incentives for those who are able to work.
If we create a system in which everyone gets equal handouts, we will be redistributing wealth upwards—moving money that would go to poor populations and spreading it across everyone, no matter whether they need it or not. As budget expert Robert Greenstein put it, basic income "rests on an approach that would increase poverty, rather than reduce it."
The cost is also prohibitive. Even if we only gave people $10,000 per year (less than the amount a person at the poverty line currently earns), we would be spending nearly 100% of the tax revenue collected by the federal government.
Even if we could afford it, we wouldn't want to. There are plenty of ways to alleviate poverty without removing the incentive to work in the first place—like subsidizing wages, for example.
As former Secretary of the Treasury Larry Summers put it, “a universal basic income is one of those ideas that the longer you look at it, the less enthusiastic you become.”
Basic income is one of the most promising ways to increase quality of life now—and maintain societal stability in the future.
We have a wealth of evidence that shows direct giving is better at increasing quality of life than many welfare programs. For one, people spend it in surprisingly responsible, effective ways—often in developing skills necessary to get a better job. Studies also quash the claim that receiving this income leads people not to work. In fact, in one study involving unconditional grants, "recipients of grants actually report 17% more hours worked."
To quote Y Combinator partner Sam Altman, "50 years from now, I think it will seem ridiculous that we used fear of not being able to eat as a way to motivate people." It's also not necessary. Technological advances will likely bring down the cost of living, making the amount each person would need much lower than it is now.
It is a very real possibility that we face a world with widespread long-term unemployment. In that future, basic income may be a very important tool to maintain stability and reasonable quality of life in our society.