UBI: What’s the Alternative?

As expected, the UBI post generated a lot of feedback.  I have appended a handful of the emails I received below (without identity). I agree with naysayers the UBI solution is far from perfect, but I continue to respond with, “What is your alternative?” There is a high probability millions of jobs will be eliminated, so what do we do?

One factor to consider is overall federal, state and local government safety nets. The 13 federal safety net programs such as food stamps, earned income credits, and other direct subsidies to those in poverty, plus Medicaid, cost $971 billion in fiscal year 2018. Including state and local subsidies, it was more than a $trillion. The cost to give everyone in poverty an amount to bring them just above poverty would cost $172 billion. In 2019, taxpayers spent more than double that to help families and individuals below the poverty line. Could it be the cost of administering the 13 federal programs and dozens of state and local programs is excessive? Is it possible a UBI would be less expensive? Following is the feedback from people I know to be very smart and thoughtful.

John, 
UBI.  There is more and more being written about this approach to a social parachute.  Some years ago I actually listened to a businessman and a labor leader agree on the subject. Now with thousands of evictions looming, UBI may be arriving on a broad scale in 2021.

Hi John,
I think a UBI makes sense although it makes less sense for people earning
say, >75.000/yr.  I would like to see more money spent on rebuilding this
country’s infrastructure and on attempts to mitigate the impending
catastrophe of climate warming   That would include, of course, eliminating
the use of fossil fuels for all energy needs….increasing solar, wind and
atomic (see small atomic devices for individual cities, increased
battery storage, etc.  The problem could well be the lack of necessary
workers.  All these projects should pump a huge amount of money into
the economy and tax revenue.

John, you are right that something has to be done here. I’m not sure either. I know my dad was writing about this in the 50s!  He was a speechwriter for Henry J Kaiser and could see that automation was the future of manufacturing, but what about customers if there were many fewer workers to earn a wage?  And he worried about the leisure time. Many social aspects of this besides the economic impact. Keep beating the drum. Thanks again,

Very interesting blog!!! Unfortunately you only gave the PRO side of the discussion and not the CON side.

    1) Very inflationary.. costing 2-4 trillion a year ….. Every year not just the COVID years. Bringing into play the Law of Unintended Consequences
     2) Lack of incentive to work which is very important to people’s psyche.( results of 2 Negative income tax trials( Seattle and Denver). Owen Cass a senior fellow at The Manhatten Institute says it would make work seem “optional”.
     3) you quote some proponents (Branson)  how about opponents  Bill Gates” we are not rich enough to give up work incentives”
     4) We’ve done a pretty good job being a capitalistic country to take up such a socialistic and communistic approach! Where we can name failure after failure ( Cuba, Venezuela etc)
     5) Has been tried in some studies ( besides Denver and Seattle) like Finland that showed “Disappointing results from the Finnish Basic Income Experience”
As Michael Sykes states ” In a UBI world ,those who choose to work will support those who choose not to- not those who can’t work but those who won’t… that’s not a world I want to live in”. Enjoyed the blog but very one-sided. Of coarse I guess that’s the purpose of blogs! 

John , thanks for your piece on the UBI. I believe the combo of AI and the pandemic will make the jobs and poverty problem serious as soon as we get tired of the current bailout programs. I worry that the UBI proposals for the most part are another simple solution to a very complex problem and don’t think many proponents are studying the results of todays safety net programs. Would love to see you do some writing on the secondary problems of what can we do to deal with the resulting lack of need for individuals to be productive members of society and dependent on the government for their livelihood. Thanks for your articles and best to you.

As always, a very thoughtful blog. I just posted this entry based on a recent essay by two of the co-leaders of MIT’s Work of the Future task force, whose final report comes out later this year.  One of the co-authors, David Autor, is one of the world’s leading labor economists.

Never thought I could support something like UBI but I’ve been thinking more positively about it recently.

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