Magnify Money and Kalyn Wilson , KHOU 1:10 PM. CDT June 20, 2017
Photo: Thinkstock (Photo: Phekthong Lee)
Having a monthly, tax-free, no-strings-attached income that would cover the basics for life may sound too good to be true, but its no fantasy. The idea of universal basic income (UBI) already has been implemented in some regions, such as Canada, Europe, and even Alaska, and Facebook founder and CEO Mark Zuckerberg recently revitalized discussion about the concept.
Zuckerberg endorsed UBI during his 2017 commencement speech at Harvard University as a means of leveling the economic playing field and opening the doors of entrepreneurship to everyone.
"We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas," Zuckerberg told graduates. Now its time for our generation to define a new social contract.
What Is Universal Basic Income?
Zuckerberg, Facebook co-founder Chris Hughes, and other tech executives, including Tesla CEO, Elon Musk, have turned to this notion in response to the re-emerging concern about unemployment in the tech sector.
But the concept was originally developed hundreds of years ago as a way to lift citizens out of poverty.
Universal basic income (UBI) actually dates to the 16th century and the Renaissance, when the idea of a minimum income guarantee originated as a way to help poor people. Then in the 18th century, the idea of a basic endowment emerged to help alleviate theft, murder, and poverty in Europe.
The concept has changed through the years. When people talk about UBI today, theyre referring to an unconditional cash grant regularly distributed to all members of a community without any means test or work requirements, according to the Basic Income Earth Network. The concept means that everyone receives a set amount of money each period, no matter their circumstances.
Photo: Thinkstock (Photo: stevanovicigor, (C)2016 Igor Stevanovic, all rights reserved)
Despite its existence for even centuries, UBI did not take the stage like other social assistance programs, such as Social Security, food stamps, and unemployment benefits, which some critics believe would be outperformed by UBI, if implemented.
Jason Murphy, assistant professor of philosophy at Elms College in Chicopee, Mass., and U.S. Basic Income Guarantee Network (USBIG) coordinating committee member, says UBI would remove the conditions placed on existing social assistance programs that limit who receives help and how. The program would better target communities that are especially vulnerable and overlooked ensuring that no one has to go hungry and everyone starts on equal footing, he adds.
Still, with UBI in place, Murphy says he thinks not only does it give everyone a chance to cover essential needs, but it also opens the door for others to invest, start businesses, and create more jobs for the economy.
Critics argue that UBI could cause inflation, cause people not to work, or be an unfair tax on the rich, but research shows this isnt likely. A study by MIT and Harvard economists found that "no systematic evidence that cash transfer programs discourage work" in poor countries and, in some cases, encourage it.
Karl Widerquist, an economist, philosopher, Basic Income Earth Network board member, and visiting associate professor at Georgetown University-Qatar, says he thinks with a decent tax policy, the program would serve as an automatic stabilizer, alleviate income inequality, and help everyone financially.
The average worker is no better off than they were in the 1970s when you adjust for inflation, Widerquist says.
Some Places Are Already Benefiting
Regions around the globe including Ontario, Canada, and Finland, and, in the U.S., North Carolina, and Alaska are putting UBI to the test.
In the late 1990s, a tribe of Cherokee Indians in North Carolina began distributing some of the profits from the tribes casino to its 8,000 members, the New York Times reported. It amounted to about $6,000 per year for each member.
A long-term study on the tribes universal income experiment was published in 2016 by Duke University epidemiologist E. Jane Costello. She found that children in communities with a basic income experienced improvement in the education system, better mental and physical health, lower stress levels and crime rates, and overall economic growth.
Finland began a similar experiment in 2017, promising to give 2,000 citizens $600 per month through 2019. And Alaska has offered a basic income to its residents since the early 1980s.
With these small, pilot projects, social scientists and politicians are observing the effects of a basic income on the economic, social, and personal well-being of residents before launching large-scale programs.
Can UBI Really Level the Playing Field?
With a cushion, Widerquist says people will be less likely to settle for certain jobs and living arrangements, causing employers and property owners to cut better deals and prioritize clients, customers, and employers.
I think it will promote growth, Murphy says.
The rich and well-off may use the extra money to invest, and possibly begin investing in low-income communities, which works in favor of those in both social classes, Murphy says. He also says it could revitalize local economies, because those who rely heavily on the cash grants are more likely to spend locally.
Whats the Catch?
Murphy says the tax reform needed to make UBI a reality must be progressive. That way, it will avoid a major concern for the middle class the upper class will evade taxes, and the middle class will have to fit the bill for the non-workers of the world.
Photo: Thinkstock (Photo: utah778)
Widerquist argues that implementing this program requires open minds that are willing to move away from an economic system where the upper class maintains control over the flow of cash through ownership and stringently structured government programs. Instead, he thinks the government and society should first focus on eradicating poverty, and the roads to economic prosperity will follow.
The con is that the devil is in the details, Widerquist says. There are some [programs] that want to redistribute less to the poor that would not be better than the programs we already have.
Is UBI Feasible?
The answer is yes, Widerquist says.
The net cost of a basic income, large enough to eliminate poverty in the United States, is $539 billion a year, Widerquist says. Thats only a fourth of what the government is spending on entitlements.
Although it would be a big item in the federal budget, Murphy says he thinks its even cheaper to implement and maintain than Widerquists projections suggest.
Its going to take a commitment, but some of the calculations that are out there are actually way too high, he says.
With no means testing, Murphy says, there is no need to hire people to interview citizens, which saves money compared to requirement-driven social assistance programs.
The money poured into a basic income program would represent about 3% of the gross domestic product, which would put everyone above the poverty line, Murphy says.
Also, Widerquist and Murphy suggest that while universal basic income is possible without drastically cutting other programs, like unemployment benefits or universal health care, there are other ways to keep costs down. Those include trading UBI for programs like food stamps (since it is a cash grant), or taxing items like pollution, traffic, and electronic financial transactions.
MagnifyMoneyis a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.
- 5 Psychological Forces That Turn People into Political Hacks | Aaron Pomerantz - Foundation for Economic Education - January 13th, 2020
- WAYNE YOUNG: Island voices must be heard - The Guardian - December 15th, 2019
- The Guardian view on Finlands new PM: a different type of leadership - The Guardian - December 15th, 2019
- Basic Income as 40 Acres and a Mule - Basic Income News - October 16th, 2019
- 'Most Americans Don't Want To Work for the Federal Government' Says Andrew Yang, Trashing Federal Jobs Guarantee - Reason - October 16th, 2019
- Democratic debate highlights: best and most substantive answers of the night - Vox.com - October 16th, 2019
- Sanders: 'Damn right we will' have a job for every American | TheHill - The Hill - October 16th, 2019
- Assembly Elections 2019: Why is the Congress evasive about NYAY scheme this poll season? - Moneycontrol.com - October 16th, 2019
- Letter to the Editor: Universal basic income is inevitable as we head toward a fully automated society - The Post - October 16th, 2019
- Democrats focus on some Midwestern issues at Westerville debate, a departure from past three forums - cleveland.com - October 16th, 2019
- New book reviews the Namibian Basic Income pilot - Basic Income News - October 1st, 2019
- Quick notes from Basic Income Guarantee Panel - falicon.com - January 28th, 2019
- 'Hartz reforms': how a benefits shakeup changed Germany ... - January 28th, 2019
- Basic income could end food insecurity - Upstream - January 3rd, 2019
- Basic Income Canada Network - November 17th, 2018
- Basic Income Guarantee - Your Right to Economic Security ... - November 8th, 2018
- The Ethics and Economics of the Basic Income Guarantee ... - September 18th, 2018
- Is a Basic Income Guarantee the Right Choice for Ontario? - June 27th, 2018
- Basic Income Now | It's time for dignity for all - March 17th, 2018
- 'Me too' and the basic income guarantee | Basic Income News - February 6th, 2018
- Food shopping at dollar stores | Brantford Expositor - Brantford Expositor - August 24th, 2017
- How Cities Can Rebuild the Social Safety Net - CityLab - August 24th, 2017
- After lifting minimum wage, NDP government prepares to consult public about reducing poverty - Straight.com - August 16th, 2017
- Universal Basic Infrastructure to help decrease India's poverty - Economic Times - August 14th, 2017
- New Zealand Fabians host Basic Income panel - Basic Income News - August 13th, 2017
- Hashtag Trending Battery-free phone, Apple's China backlash - IT World Canada - August 10th, 2017
- Universal basic income proponent to speak in Boise - Idaho Press-Tribune - August 7th, 2017
- Let's talk about a supplemental income - The Hindu - August 7th, 2017
- Is a Well-Paying Job the next Entitlement Program? - Big Think (blog) - August 5th, 2017
- DON PRIDMORE: Be careful what you wish for... - The Guardian - August 1st, 2017
- EDITORIAL: Island needs dollars, not data, to cope with poverty - The Guardian - July 29th, 2017
- Renfrew County dietitian recognized by board of health for provincial award - www.insideottawavalley.com/ - July 27th, 2017
- More Calgarians struggle to feed their families over the summer months - CBC.ca - July 26th, 2017
- NEW ORLEANS, LA, US: Local basic income group begins to hold monthly meetings - Basic Income News - July 25th, 2017
- Value in using tax system for basic income: Report - The Sudbury Star - July 21st, 2017
- Does Basic Income Solve Anything? Grasp the Arguments for and ... - Futurism - July 21st, 2017
- NDP leadership candidate visits Guelph (8 photos) - GuelphToday - July 18th, 2017
- UBI is just a bedtime story Elon Musk tells himself to help the super-wealthy sleep - Quartz - July 14th, 2017
- Basic Income Guarantee program moving forward for 2000 Lindsay residents - Kawartha Media Group - July 8th, 2017
- Net incomes under a Basic Income system - Basic Income News - July 1st, 2017
- Should all Americans receive a guaranteed income? - 9NEWS.com - June 21st, 2017
- Should all Americans receive a guaranteed income? - KPNX 12 News TV - June 21st, 2017
- Should all Americans receive a guaranteed income? - First Coast News - June 20th, 2017
- Study of Iran's basic income shows it did not harm employment - Basic Income News - June 7th, 2017
- Basic income plan doable: Northern study - The Sudbury Star - June 6th, 2017
- About That Universal Basic Income Idea - FITSNews - June 6th, 2017
- Universal basic income: guarantee pay as way to improve quality of life - WatertownDailyTimes.com - June 6th, 2017
- Letters: Guaranteed income guarantees sloth - The Province - June 6th, 2017
- Basic-income guarantee is way to end poverty - Times Colonist - March 11th, 2017
- Basic Income in Argentine News - Basic Income News - March 10th, 2017
- Industry body bats for universal basic income for women - Times of India - March 8th, 2017
- A guaranteed income isn't the solution to widespread unemployment - Acton Institute (blog) - March 1st, 2017
- Australia Needs A Universal Basic Income, And We Should Start ... - Huffington Post Australia - February 24th, 2017
- VIDEO: Basic Income presentation at Meeting of the Minds Summit - Basic Income News - February 22nd, 2017
- Ben Wray: Why both the right to work and the right not to work can set us free - CommonSpace - February 20th, 2017
- Expert: We Can Have Universal Basic Income and Jobs - Futurism - Futurism - February 18th, 2017
- World Economic Forum blog: Canada's basic income experiment will it work? - Basic Income News - February 16th, 2017
- Guaranteed basic income proposed. - Bayshore Broadcasting News Centre - February 15th, 2017
- Left-Wing America Steps Up Calls For Free Money, Jobs Guarantee - Daily Caller - February 10th, 2017
- OPINION: Human rights, basic needs - The Guardian - February 10th, 2017
- Ebay founder backs universal basic income test with $500000 pledge - Mashable - February 9th, 2017
- A response to 'The dangers of a basic income' - Basic Income News - February 7th, 2017
- CANADA: Over 10000 people have signed to support Basic Income - Basic Income News - February 7th, 2017
- Basic income is superior to the job guarantee - Basic Income News - February 7th, 2017
- Basic Income as All-inclusive Democratic Subsidy - Basic Income News - February 7th, 2017
- Income inequality in the United States - Wikipedia - January 5th, 2017