PS. In Theory: Universal Basic Income

PS. In Theory: Universal Basic Income


The threat that technological innovation will destroy more jobs than it creates has spurred a wide variety of proposals for ensuring that workers aren’t left out in the cold. One such proposal is universal basic income. The idea is simple: citizens or permanent residents receive a fixed sum of money, giving them the security and flexibility to participate in reskilling or higher education programs, to start their own businesses, to engage in less lucrative but socially valuable activities, or simply to spend less time working. As the so-called gig economy grows, and unions’ capacity to protect workers weakens, a UBI would be a powerful economic stabilizer. And, because it would be universal, a UBI would lack the stigma or means-testing that often weaken political support for existing welfare programs. The most obvious question is how to pay for it. One option is taxation of corporate profits, though any tax-based financing scheme would almost certainly face powerful – and possibly fatal – political resistance. Another option, advanced by Yanis Varoufakis, seeks to avoid this problem by giving the public a share of returns on capital. For example, a percentage of capital stock (shares) from every initial public offering could be channeled into a Commons Capital Depository, with the dividends funding what would amount to a universal income scheme. But financing UBI is just the first step. The concept challenges traditional ideas about work, success, and human fulfillment. On the right, critics worry that a UBI would give rise to mass dependency, with a large share of the population no longer bothering to work, leading to a drop in labor supply and falling productivity. Critics on the left, meanwhile, worry that the UBI could be used as a Trojan horse for cutting other social programs that are meant to target disadvantaged groups. In any case, UBI is not the only potential solution. For example, in the United States, some advocate the expansion of the earned income tax credit, which benefits low-income workers based on how many hours they work and children they have. Some also advocate a guaranteed jobs program. The federal government would guarantee employment, with benefits and a living wage, to every citizen or permanent resident willing and able to work. Among other things, a job guarantee, like a UBI, would boost workers’ negotiating power throughout the economy by removing the fear of unemployment. None of these proposals has yet been implemented, at least not on a scale large enough to assess them properly. And, for now, the political will to test bold solutions is lacking in much of the world. But with the specter of technological unemployment closing in, governments may soon have no choice but to test novel ideas.

5 Comments

  1. lostintashkent says:

    I don't understand why this channel isn't more popular?

  2. Furrowed Brow says:

    Its a
    Universal Business Income.

    Take money from those that might otherwise invest or save it and give it to those that will spend it on consumer goods.

  3. Furrowed Brow says:

    How about a ………

    HAVE A PLAN IF YOU PLAN TO HAVE

    ……….program.

    People need to take responsibility for their lives, not draw an allowance from the government like some child.

  4. Macarthur Louissaint says:

    We need welfare reform

  5. Erik S says:

    You guys should get in touch with Andrew Yang!

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