The concept of a universal basic income gets a new push from voices in Silicon Valley
Universal basic income (UBI) may well be the Swiss Army knife of policy proposals. Despite its basic label, advocates see it as an all-purpose solution for society’s biggest problems, from unemployment to hunger and homelessness.
The concept—regular monthly checks, courtesy of the federal government—is not as outlandish or as unprecedented as it sounds. It has been proposed in various guises—as a negative income tax, demographic grant or basic living stipend—nearly once a generation since the American Revolution, when Thomas Paine first suggested that a “ground rent” of £15 be paid to every citizen. At various points, UBI has won fans across the political spectrum, including Richard Nixon and economist Milton Friedman, who both saw it as a way to pare back complicated welfare and benefit programs.
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Now UBI is having a new moment, driven in part by voices from Silicon Valley, who have seized on the concept as a way to respond to rising automation and resulting job losses. Among those working to raise UBI’s profile are Andrew Yang (a tech entrepreneur, lawyer and—as of last year—ultra-long-shot 2020 Democratic candidate for President) and Sam Altman (president of the prominent tech incubator Y Combinator).
Yang says he’s seen what massive unemployment looks like from his work as founder of Venture for America, a nonprofit that matches college grads with startups in hard-hit cities. Nearly half the manufacturing workers in the Midwest who lost jobs postcrash never rejoined the workforce, Yang says, and suicide rates are surging for middle-aged Americans “to the point where now our collective life expectancy has declined for the past three years due to deaths of despair, which include not just suicides but also overdose deaths.”
The version of UBI he’s proposing—$1,000 a month for everyone ages 18 to 64, with no conditions or restrictions and no work requirements—is meant to address this dystopian reality on a door-to-door level. Yang points to findings by UBI trials from the ’60s to the present that show gains in everything from graduation rates to mental health.
Other evidence supports the case, including extensive trials and pilot programs from Finland, Canada, Namibia, North Carolina and Seattle. In 2012, four economics majors at MIT and Harvard began a cash-transfer program in rural Kenya, supplementing incomes with the equivalent of the average annual salary (roughly 75¢ a day). They discovered not only that the funds were not spent on “temptation goods” like tobacco and beer, but also that families increased their assets, raised their earnings and spent more on healthy food for their children. They have already documented improvements in education, nutrition, small business, long-term earnings, psychological well-being and life expectancy.
The principal objection to UBI—that free money would be a disincentive to work—hasn’t been borne out in trials, which show only moderate declines in hours at work (about 7%). And most of that comes from people working on college degrees and professional training, who use the funds to free up time to study, or from working mothers, who cut their hours to spend more time with their children.
The real sticking point is cost. Some estimates put the annual price for a U.S. program in the trillions, which would presumably be funded through some type of tax. Advocates counter that there would be offsetting savings as people opt out of restrictive welfare and food-stamp programs. Later, they argue, spending on prisons, emergency care and homelessness would decline.
More data is on the way. Altman’s Y Combinator has created a nonprofit research arm that plans a five-year trial in two states. “There are all sorts of in-the-interest-of-justice reasons why we should do it. I also suspect that it would be a net positive for the U.S. economy,” Altman says. “This level of redistribution would lead to more human potential getting unlocked.”