A look at the possible benefits and risks of Universal Basic Income

Within the last few years there have been multiple privately and publicly funded UBI experiments seeking to verify the viability and effect of providing people with a monthly stipend to cover their most basic needs. The amount varies from project to project as the cost of basic survival varies from location to location but the underlying question is the same. If people don't have to work to survive how will they react?

There are the optimists that believe that the offering of free money will issue in a new era of growth and entrepreneurship as people have a cushion to fall back on allowing them to feel more free to take risks. Others on the Pro-UBI side of the aisle believe that having a basic level of life provided will allow people to have a propensity to do work that they enjoy rather than just what will pay them the best due to the struggle to get by and pay bills and that this could lead to better parenting, more expansion of the arts, and lower issues of anxiety and depression among the populous.

However, not everyone believes that this is the path to enlightenment that many do. Many worry about the feasibility of such programs if attempted to be rolled out to country's full population. The issue of funding is a natural question that is an important issue. Do we provide for everyone by raising taxes? What taxes do we raise? Many in the financial sector worry that if you choose to raise taxes on the highest earners then you will actively work against their incentive to take action and produce. If taxes are not raised to pay for this and new money is just printed then an increased inflation of currency is an issue. Others believe that by providing people a minimum standard of living that you will dissuade people from working causing a lethargic population without the drive to succeed.
In my personal opinion, I would say that both viewpoints are valid and that some people will fall into both categories. It is true that some people just find themselves in a rough spot and have a hard time climbing back out while trying to survive. It is also true that some people will take it as an opportunity to be as lazy as possible and very well may use the funds towards deepening their dependence on drugs or alcohol and leave themselves in the same situation they may be in currently. The truth is however that with our current situation both of these things are true anyway.

One major concern driving the increasing interest in a UBI program is the idea of AI driven automation. We are in an age where weekly we are learning of new projects underway that promise to revolutionize life and what is possible. The idea that machines are coming to a point of being able to not only understand the words that people speak to them but to truly understand what is meant by these words and that they can then respond to them with a comprehensible response is an amazing feat. Where previous revolutions in industry have focused on production in physical means through more efficient machinery the current shift that we are experiencing is the ability of creation by algorithm allowing for the concern that even venues such as Art and the creation of new ideas are no longer a singularly human endeavor. Complex tasks that once only a human could ever be thought of completing such as driving a vehicle or holding a conversation is now possible to be completed by a machine and in many ways more effectively.

Customer service, cashiers, loss prevention, food preparation, product transport and delivery, stock market reports and predictions, storytelling, and many more jobs are all becoming possible to be completed with little to no interaction from a human past the initial programming of the system. While some will argue that jobs have always been lost and replaced with the evolution of industry the types of jobs, as well as the volumes of careers that are to be affected, is truly unprecedented in history.
When we look at these kinds of factors it is easy to see where a concern for the future would come from as well as the hope. Let's assume for a moment that this is the path before us. Let's assume that the future is one of near elimination of low training jobs that are able to be completed efficiently and properly with little to no human interference. Let's assume that the future is that of not having to worry about how you will pay for food or housing and that personal interest will be your guiding path.
What does it mean? Does that mean that innovation will stall? Does that mean that people will sit around and do nothing? Will the world devolve into nothing but the haves and have-nots?
It is my personal opinion that it will not. If we look at platforms such as Youtube, Steemit, Reddit, and Twitch what I see is that people have an innate desire to create when they see that there is an opportunity to do so. Yes, some do go into it for the desire to make money and to chase the dream of not having to work for someone else, but these same people would continue doing so even if their basic needs were already met. Also, it is not to be underappreciated that people do enjoy consuming these creators content and that these resources have become a new form of on the spot education for people seeking to learn and grow themselves as well.

So what does it cost?

(The following bullet points have been taken from BasicIncome.org)

*The net cost—the real cost—of a roughly poverty-level UBI is $539 billion per year, less than 16% of its often-mentioned but not-very-meaningful gross cost ($4.15 trillion), less than 25% of the cost of current U.S. entitlement spending, less than 15% of overall federal spending, and about 2.95% of Gross Domestic Product (GDP)

*This $539 billion UBI would drop the official poverty rate from 13.5% to 0%, lifting 43.1 million people (including about 14.5 million children) out of poverty.

*This UBI will be a net financial benefit to most families with incomes up to $55,000, making it an effective wage subsidy (or tax cut) for tens of millions of working families.

*The average net beneficiary of this UBI is a family of about two people making about $27,000 per year. The family’s net benefit from the UBI would be nearly $9,000 raising their income to almost $36,000.

*Lowering the marginal tax rate to 35% would spread the benefits of the UBI program to more of the middle class while increasing the cost to $901 billion.

*The cost of a UBI of $20,000 per adult and $10,000 per child is $1.816 trillion per year, less than 85% of total entitlement spending, less than 45% of total federal spending, and less than 10% of GDP.

Taking a look at these numbers we have a couple of things to think about. At the low end, they are placing the amount provided per adult at $13,500 a year or equivalent to the earnings of someone working a 40 hour week, for 52 weeks a year, at an hourly rate of $6.49/hour. Now many will look at that and say I can't possibly live on that. But let's think about it. What could you eliminate or drastically lessen if you didn't have to work? Here is a list of items just off the top of my head.

*Car – The average new car payment in the USA was $479. Let's half that and call it $240 a month to be conservative. (TheBalance.com)

*Car insurance – according to Progressive Ins. averages from $167 to $232 a month (Progressive.com)
Public Transportation – I live in Pittsburgh so you're talking $2.75 a ride. Twice a day 5 days a week, 4 weeks a month, you're looking at $110 a month

*Rent payment – While we all will still need a place to live, much of the cost is generated due to a desire to remain near urban centers where employment can be easily accessed and maintained. Without this requirement, the population may be able to become more widely dispersed reducing the competition for housing which fuels the high prices often seen for meager dwellings.

*Child care cost could be removed entirely which have an average weekly cost for one child of $196 (Time.com)

But isn't this just welfare?
In a word, no. Here is the thing with welfare it is generally allocated to the poor and as such receiving welfare payment, whether it be food stamps or cash assistance is viewed by many as something to be ashamed of. Also if one is receiving welfare and trying to work to better themselves they then often have to worry about starting to make just a little too much and losing their welfare benefits which may then put them back in to just as bad or a worse financial situation than they were in previously.
With the idea of UBI being that it is provided to everyone and that if you want to work and better yourself you without the risk of having the rug pulled out from under you as a penalty for achieving. Also as everyone is receiving the same funds there is no stereotype behind receiving and utilizing these funds. Now there may well be a social disdain for those who choose to receive the funds and not attempt to do anything else with themselves, but that is different than being made to feel guilty for receiving funds just to survive.

So what do you think? Is the idea of UBI a saving grace to the people of the world who may be affected by the uprising of Artificial Intelligence? Or is it just another form of socialist pipe dreams that should be abandoned.

Please let me know what you think and if you found this interesting please feel free to check out my blog AUXThoughts.com.