There’s nothing that unites and divides people quite like money. They say you can’t have too much of it; a theory I imagine many would be more than willing to test. Some people inherit it, some people win it, but most people have to work for it. In fact, many people work hard and still barely make a living wage. What if things were different? What if the government helped you get closer to a living wage and you didn’t even have to work for it?
This may sound like a communist fairy tale, but it is a real economic theory. It’s called Universal Basic Income. The short explanation of UBI is that the government would give every citizen (potentially limited to adults) a relatively substantial amount of money (this figure can vary wildly, for the purposes of simplicity, we’ll be using $1000 as an example) simply for being a citizen. Do you remember the stimulus plans of the previous decade; where everyone got an extra couple hundred dollars on their tax returns to promote economic growth? UBI is kinda like that, only on an exponentially greater scale. Sounds crazy, right? It might not be as ridiculous as it seems.
The most obvious criticism of (effectively) supporting the entire country financially is that it would be too expensive. Fun fact: giving every adult in America around $1000 a month would be cheaper than our current welfare system. Now, this isn’t a perfect solution, as it’s unlikely we’d swap one for the other, but it does go to show that the idea itself is not as far-fetched as it immediately appears.
The next biggest criticism is that it would promote laziness and bring our country to a standstill. The thought is, “If people are getting money for nothing, why would they work?”
There are two problems with the logic there. Firstly, $1000 a month is just plainly not enough to live off of a single source of income. Not much more to it than that.
The second reason that line of thinking is faulty is a bit more complicated. History has shown that that’s not how people think. Remember those stimulus plans I was talking about? In theory, if you give people some extra cash, they will spend it, revitalizing the marketplace. Well, that’s not really what happened. Many people used the extra money to pay off debts or build their savings. The idea that people would just go out and blow their UBI on alcohol and drugs is a vicious, yet virulent myth.
While that explains away one criticism, it creates another. If people aren’t going to put their money back into the economy, what’s the point in the first place? While it could be argued that the very point of a government is to make the lives of its citizens better; that’s not an opinion everyone shares.
With a stable UBI, we can get rid of minimum wage. Unless you’re a business owner, that probably doesn’t sound like a good thing; but hear me out. If the purpose of a minimum wage is to ensure that every working citizen makes enough money to live off of, then the concept of a minimum wage has been an abject failure. You need only look at the poverty statistics to see that. The national minimum wage is about $7.50. I’ll save you the calculations, it’s not enough to get by. It’s actually not even close.
UBI take the burden off of wages as the singular source of income. If you’re afraid that, without a minimum wage owners would only offer employees peanuts, don’t be. Competition would take care of that. If employers aren’t offering a fair wage, no one will take the job. Employees are in a stronger bargaining position with UBI. It gives them a fallback position where otherwise they would have nothing.
Don’t Quit Your Day Job
Universal Basic Income may not be as far-fetched as it sounds when you initially hear it, but we are nowhere near it ever becoming a thing in the US, especially considering our current political landscape. There are, however, places around the world playing with the idea, testing its feasibility. The outlook is promising. Though we might not see it in America any time soon, it may be a future to look forward to.