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Universal Basic Income Is Not The Utopia You Think It Is
The Washington Post reported on Chicago being on the verge of creating one of the nation’s largest ‘guaranteed basic income’ programs. Here’s a quote…
The Chicago City Council is poised to vote this week on what would be one of the nation’s largest basic income programs, giving 5,000 low-income households $500 per month each using federal funding from the pandemic stimulus package enacted this year.
Mayor Lori Lightfoot (D) has proposed the more than $31 million program as part of her 2022 budget, which the city council is scheduled to consider on Wednesday. The one-year pilot program, funded by the nearly $2 billion Chicago received from the Biden administration’s American Rescue Plan, is supported by most of city’s 50 aldermen. But it has received pushback from the 20-member Black Caucus, which has urged Lightfoot to redirect the money to violence prevention programs.
Lightfoot has said the pilot program is motivated by her own childhood memories of hardship while growing up in Ohio. “I knew what it felt like to live check to check. When you’re in need, every bit of income helps,” she wrote in a tweet announcing the plan earlier this month.
Free money with no strings attached sounds good from the onset but, recipient beware. Free money from the government can have its drawbacks in the long-term, especially on society overall. Let me explain a few things about Universal Basic Income (also known as “Guaranteed Basic Income”).
Sigh.
Universal Basic Income is loosely defined as free money from the government without having to meet any requirements. The intent of Universal Basic Income is to help people on the verge of poverty or, to help people who are already in poverty, to get by. Its not a new idea. The concept was first explored in the 15th century by the author Thomas Moore, who after witnessing how capital punishment failed to keep people from stealing, said in his book – Utopia, the following…
“…Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming, first a thief, and then a corpse.”
Universal Basic Income has been in and out of vogue ever since. In fact, in 1969, President Nixon lobbied for a type of Universal Basic Income when he pushed the “Family Assistance Plan” which eventually died in the Senate. Now, I’m not sure, but I think President Nixon’s inspiration came from another public figure – the Rev. Martin Luther King, Jr.
I have the utmost respect for the Reverend Martin Luther King, Jr. and have a deep appreciation for his life’s work. However, on this issue, I must disagree with him. Universal Basic Income has actually been tried in Finland and it failed. Let me share with you some quotes from the Business Insider article – “Finland is killing its world-famous basic income experiment.”
Since the beginning of last year, 2000 Finns are getting money from the government each month – and they are not expected to do anything in return. The participants, aged 25–58, are all unemployed, and were selected at random by Kela, Finland’s social-security institution. Instead of unemployment benefits, the participants now receive €560, or $690, per month, tax free. Should they find a job during the two-year trial, they still get to keep the money. While the project is praised internationally for being at the cutting edge of social welfare, back in Finland, decision makers are quietly pulling the brakes, making a U-turn that is taking the project in a whole new direction.
The Universal Basic Income experiment in Finland began in 2017, ended in 2018 with results published in 2019. Spoiler alert, the report said people “showed positive effects on health and stress, but no improvement in work status.” So, what spurred on this experiment in the first place? Here’s another quote from the aforementioned Business Insider article.
“The existing unemployment benefits were so high, the Finnish government argued, and the system so rigid, an unemployed person might choose not to take a job as they would risk losing money by doing so – the higher your earnings, the lower your social benefits. The basic income was meant as an incentive for people to start working.
But in December last year, the Finnish parliament passed a bill that is taking the country’s welfare system in quite the opposite direction. The new ’activation model’ law requires jobseekers to work a minimum of 18 hours for three months – if you don’t manage to find such a job, you lose some of your benefits.
The reason for the turnaround in Finland is simple, the working population of Finland did not like the idea of giving away tax money to people capable of working. The news of the failed experiment did not reach Stockton, CA obviously. Nor was it brought to the attention of US Senator Kamala Harris or US Senator Cory Booker, who considered programs along the lines of universal basic income in 2018. That being said, and just to be fair, allow me to share with you some arguments people have made over the years for, and against, universal basic income. First, some of the pros…
- Universal Basic Income would be a security net for the millions of people who will be left jobless by the tech revolution. Research shows that the longer you are unemployed, the longer it takes to find employment. If the jobless had a small source of income to help them back on their feet, they could find new jobs and start contributing to the economy sooner. [source]
- There are lots and lots and lots of government organisations responsible for helping those in poverty, handing out unemployment benefits, food stamps, subsidised housing, etc. Universal Basic Income would replace all of those programs and thus, significantly cut a country’s spending. [source]
- Universal Basic Income would discourage low wages by giving employees bargaining power. After all, why work for $7.25 an hour when you have a guaranteed monthy income paying so much more?” [source]
- Universal Basic Income would end extreme financial poverty and enable people to stay in school longer and participate in training to improve skills or learn a trade. [source] [source]
Considering those reasons, it would seem that universal basic income is the way to go. If you think that, take a moment to ponder the arguments against. Here are just a few…
- A universal basic income program would likely come from programs that already fight poverty like food stamps and child assistance programs. So, in effect, UBI would be taking money from the poorest people and spreading it to all citizens (even those who don’t need it). Wouldn’t that increase poverty and inequality rather than reduce them?” [Source]
- Giving people a guarantee of money, each month will not incentivize them to work or necessarily improve their lives for the long-term. President Barack Obama addressed this issue in a 2011 Townhall address. He said,
“I think we should acknowledge that some welfare programs in the past were not well designed and in some cases did encourage dependency.… As somebody who worked in low-income neighborhoods, I’ve seen it where people weren’t encouraged to work, weren’t encouraged to upgrade their skills, were just getting a check, and over time their motivation started to diminish. And I think even if you’re progressive you’ve got to acknowledge that some of these things have not been well designed.”
- In 2016, Swiss voters overwhelmingly rejected a proposal to introduce a guaranteed basic income for all. The reasons why they rejected it? Well, according to BBC News – “Critics of the measure said that disconnecting the link between work done and money earned would have been bad for society.” (For the record, I agree with that.) They also said, if you give away free Swiss money to everybody, you would have billions of people trying to move into Switzerland.” The general thought they had was, free money would make people lazy, devalue work and (most importantly) where would all this free money come from? Eventually, it would run out and people would no doubt rebel. That is, unless, Santa Claus is real. And if Santa Claus is indeed real, then, universal basic income is a great idea.
I don’t agree with the concept of Universal Basic Income for the same reasons the Swiss laid out. To paraphrase, money for nothing is bad for society. And I will add one more caveat, it makes you a slave to whomever is giving it. How does it not? If you grow dependent on the government giving you money you don’t have to earn then, you will tend to do whatever you are told. Now imagine, in this age of vaccine mandates, what else could the government compel you to do?
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