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The Pros and Cons of Universal Basic Income

Robert Dimuro

Posted on February 17, 2019 15:49

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Only time will tell if UBI can withstand its scrutiny and whether or not it will become a necessary solution to labor loss in an increasingly automated world.

In outlining the basis for a universal basic income (UBI), I examined some potential economic consequences of the rapid automation of labor and how moving to a UBI-based welfare system may be inevitable. Here, I will examine some of the pros and cons of implementing UBI in our current climate.

In my opinion, the most intriguing element of automation is the potential for a future utopia in which almost nobody in society is engaged in manual labor. Ideally, the workforce in this society would be comprised of mostly professionals and entrepreneurs. The mid-level jobs of today may become the entry-level jobs of the future. As a result, standard of living would increase, and people would experience better health, more recreation time, higher mental acuity, etc.

Of course, in transitioning to this type of society, many workers would need to be retrained and reintegrated into different economic sectors, and many would find jobs in emerging industries that do not yet exist. Even so, it’s quite possible that the labor force would shrink, causing many to be jobless. This is the context in which UBI can help those who are potentially left behind to keep afloat financially and enjoy a higher standard of living.

However, this argument ignores the fact that we’re not starting with a blank slate regarding entitlements. There’s already a plethora of social programs in place which, combined, are much more substantial than a safety net. Food stamps, welfare, public housing, and Medicaid are only a few examples of programs in our massive entitlement system.

Implementing UBI in addition to all of these programs would burden the economy and increase our national deficit. Unfortunately, in our current context, UBI wouldn’t make our entitlement system more efficient; rather, it would vastly increase the size of our government and be an additional burden on the taxpayer.

However, if UBI were to be the only entitlement program, albeit massively expensive, it would be a tremendous improvement to our current system. Since each person would have to decide how to budget his/her basic income, individual responsibility would be restored. As the sole entitlement program, UBI would eliminate a tremendous amount of overhead, greatly decreasing the size of our bureaucracy. It would also decrease the amount of lobbying and political feuding over which programs to support and cut.

Even in this context, UBI wouldn’t be a perfect solution to automation. One reason is the difficulty in assessing the amount of money that is sufficient for meeting each person’s basic needs, which would be subject to dishonesty and confusion. This system may also create a massive voting bloc that would continually lobby Congress to increase the UBI threshold until it becomes more than “basic income.” Over time, this would become unsustainable.

In the end, only time will tell if UBI can withstand its scrutiny and whether or not it will become a necessary solution to labor loss in an increasingly automated world.

Robert Dimuro

Posted on February 17, 2019 15:49

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