There's been many discussions in the political arena these days about Universal Basic Income. The ideas and talks behind this topic are quite romantic. However, the way it's largely being suggested by many politicians is less than ideal from many different people.
From Andrew Yang and Bernie Sanders in the USA, to Justin Trudeau in Canada, the idea of UBI has taken on a mutated form that has become to be known as "Mincome".
Let's first look at the concept of UBI. It's rather simple really. UBI is a guaranteed income from the government, free of any obligation from the recipient. That means, even if one doesn't want to work, one still gets a cheque from the government each month.
There are probably just as many people for UBI as there are people against it.
One of the many pro arguments is made from researchers at the Roosevelt Institute in the US. They created 3 models and under every scenario, UBI would grow the economy, increase output, employment, prices and wages. Alaska is the example they draw on, where the implementation of the Alaska Permanent Fund, increased the purchasing power of the recipients and created 10,000 jobs. The other most popular example in North America is from Dauphin, Manitoba. In the 1970's, for 5 years, the Canadian government under Pierre Trudeau tested "Mincome", where in the recipients were guaranteed their annual income wouldn't fall below a certain amount. Manitoba University Economist, Evelyn Forget found that hospital visits for mental health declined by 8.5%, along with a slight decline in work related injuries.
Of the information I have come across, the 2 above pro arguments are most applicable to North America. However, they have many points that are faulty. But before, I go over those points, I will go over a few con arguments.
In 2016, Switzerland government opposed implementation of UBI because they said it would entice fewer people to work, thus exacerbating the current labor and skills shortage.
In 1960's - 1970's UBI tests in the US found that recipients worked fewer hours.
UBI's are less effective than targeted welfare because people in poverty lack more than cash. UBI does not address addictions, poor health, lack of skills or other factors that contribute to poverty.
With some pros and cons laid out, let's examine them.
First the pros: The Roosevelt Institute models definitely seem to be much more static. It would appear the "human" aspect wasn't likely considered. Understanding human nature objectively even remotely would allow one to know that as humans, we need incentive to work, to better our situations. If we're comfortable, we don't typically want to, or try to do more. Three similar models were created by Luke Martinelli, PhD, Research Associate at the University of Bath in the UK. He found that across all 3 models, significant amount of individuals and households would be worse off, noting "these losses are not concentrated among richer groups; on the contrary, they are proportionately larger for the bottom 3 income quintiles."
The conclusions of Evelyn Forget: It would appear that the areas of decline were more correlating factors rather than causation. I was unable to find the rates of mental illness from 1970 - 1975 and from 1980 - 1985. We'd have to see if the mental illness rates went up after the UBI test was completed to have more compelling proof between UBI and the areas of decline.
It would be fair to counter this observation with "what other factors could have and would have contributed to those declines?"
If we examine the cons, we find that they reflect much of what we see in human nature. Our lives become stagnant if we're given what we need. This is due to the fact that everyone needs incentives to do things. That incentive could be empathy, sympathy, idealistic, but the most common one that universally works, is monetary. Even if we like a certain subject or activity, we will typically not pick the one that doesn't have a monetary reward, because we all need to live and eat.
If we look at the chain of events that are most likely to happen: People will lose incentive to work, with that comes the lack of improvement in skills and ability which in turn fuel the lack of progress. But even with these logical negative outcomes, there is one thing that's perhaps the worst idea of all, which is also why I've titled this post "an illusion?"
This is taking Universal Basic Income and turning it into "Mincome".
Universal would mean everyone, old, young, rich, poor, male, female would all get this income. This would be the fairest representation of UBI. However, converting it to "Mincome" means it's specifically applicable to one group only, and that's the poor. We already have many programs in place for people in this category. Welfare already does what "Mincome" proposes to do. The problem is that "Mincome" as it's being pushed now, is an addition onto the current Welfare programs. That's not UBI, that's a "Welfare Addon". Hiding it under the guise of UBI is actually quite disingenuous. Not to mention that taxes will have to be raised which typically hurt middle class people who are the economic driving engine of the country. What makes this is even more unreasonable is that as the people, we don't get to vote on this.
Giving more money to people who don't make good decisions isn't going to help them, that money will just return to the pockets of the "Capital Overlords." I feel the solution is in teaching and training people to make better decisions, to want to better themselves because it helps them and everyone else around them. We can start by passing on the idea that luxury isn't a right, it's a privilege, and we have to work hard to gain those privileges. Once we've worked to gain those privileges, self-confidence, self-assurance and purpose all follow along, and in turn brings happiness and allows us to treasure and appreciate the fruits of our labor. Being handed these things only make for people who can't appreciate what they have, who then act and feel in an entitled manner.
Luke Martinelli, "Exploring the Distributional and Work Incentive Effects of Plausible Illustrative Basic Income Schemes," bath.ac.uk, May 2017
Evelyn L. Forget, "The Town with No Poverty," public.econ.duke.edu, Feb. 2011
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