03 May 2016

Basic Income: Not All It's Cracked Up to Be

Image obtained from Colorado Peak Politics

After I had published my previous post reacting to an article at FiveThirtyEight extolling some benefits of a Universal Basic Income, Michelle Ray (the same GaltsGirl) tweeted a link to an article at The Bloomberg View, by Paula Dwyer. Interestingly, the tweet for the article shows as something like “Basic Income might be the next big thing”, but the article is actually titled “A Basic Income Should Be the Next Big Thing” (emphasis mine in both cases). But I digress.

Dwyer begins with a short description of the idea of UBI, then talks about trials and studies around the world. She links to an article from Boxing Day, 2015, in the English publication The Guardian, that talks about a pilot program in The Netherlands. That program is limited to 20 municipalities, and will include only “small groups of benefit claimants”, to be qualified by their current income. It is not universal, and the amount is only around $950/month. It is apparently intended to be a supplement to whatever odd jobs they can get, rather than the envisioned substitute for a meaningless job while the citizen pursues education, training, or practice to follow a higher calling.

Dwyer then explains that some see UBI as a way to reduce poverty and inequality. But how can that be? If every citizen gets the same amount from the government, but is still free to have any other career and make any amount of money they can on their own, the same inequality of income will exist. And poverty? It will just be “defined upward”—the poverty level income will go from $12,000 to $25,000 to $40,000 and beyond. People receiving the UBI and nothing else will still be considered poor, and people who find a lucrative market for their skills and work hard to sell themselves will still be considered rich, and people who raise an outcry against this inequality will continue to cry out.

Dwyer also mentions the “about $1 trillion” of current US welfare spending, and admits to the approximate $3 trillion price tag I came up with (even with a US citizen population of only 322 million, rather than the 350 million I presumed). She then attempts to reduce the expense by eliminating segments of the population: Social Security recipients, households earning more than $100,000 annually, children. Now I agree with this last, because a “citizen” must be an adult who is capable of fulfilling the obligations of citizenship in order to partake in its pertinent rights and benefits. But when you start excluding other groups, even high earners, not only is it not universal, it is not equal. It is no longer something that every citizen can enjoy, but once again simply a wealth-transfer program. (Not that it ever was not intended to be.)

Dwyer does write about how a UBI program could be designed to eliminate the multiple, overlapping assistance programs at the federal and state levels, and acknowledges that some totalitarian collectivists—whom she calls “liberals”—object to it because of this. She says they “worry” that the bureaucrats currently administering all those programs could lose their jobs. I say, oh, but then they would be receiving the UBI, and maybe they could get better private sector jobs, or even become artists, writers, and the like! (But they would no longer be dues-paying public-sector union members, and the size of the bureaucracy, and some administrators’ domains, would shrink. I suspect those are bigger worries for some.)

In conclusion, Dwyer expresses hope that perhaps this isn’t so fantastic, this approach she calls “Social-Security-for-all”. Well, all but those evil rich folks.