We need a better and stronger social safety net. We need ways of combating inequality. We need to create a fairer society. Why not, then, sign up for Universal Basic Income (UBI), which would give a basic income to all citizens who are all adults, for example, $1000 a month for every adult American?
Yet, UBI is a flawed idea.
This is for two basic reasons.
First, a better social safety net means a better-designed social safety net. UBI misallocates funds. Rather than transferring to people in need — for example, those requiring financial help because of poverty or unemployment — it pays out to the rich and the middle class as well.
Its advocates might say this is by design: when we transfer to everybody, we make everybody a stakeholder in UBI. I fear that’s wishful thinking. Billionaires will not become fans of redistribution programs because they are getting $1000 a month.
A combination of moderate minimum wages (like the $15 an hour being debated in the US now), earned income tax credit (which augments the take-home pay of low-earning workers), universal health care, and a decent level of transfers to people temporarily or permanently out of a job would improve the income distribution much more, while costing much less.
Second, UBI is the wrong solution to the wrong problem. Many, like the former Democratic presidential hopeful Andrew Yang, advocate it because they think the future will be one without jobs.
There are several layers of misconceptions in these claims. There is little evidence that jobs are disappearing en masse, even if automation, led by robots and algorithms, is displacing workers from some of the tasks they used to perform. However, the problem they are creating isn’t one of joblessness, but one of an acute shortage of good jobs — jobs with decent wages, security, career-building opportunities and a sense of purpose.
UBI doesn’t deal with this underlying problem and is defeatist. We should and can create good jobs for a larger fraction of the population — not just those with elite college degrees and postgraduate certification, but for all workers. To do this, we need to redirect technological change away from automation, reduce the hold of large corporations, especially of the big tech, on the future of technology and work, and increase the protection for and the bargaining power of workers. UBI doesn’t do any of this. Rather, it’s like bread and circus were to ancient Romans. Handouts and diversions for the people left behind.
UBI isn’t just flawed. It is also politically precarious. Some of its advocates, from the left, view it as a way of increasing redistribution. Yet to many of its advocates on the right — in Silicon Valley and libertarian circles — it is a way of paring down the safety net. This is a marriage made in hell.
Rather than being distracted by the chimera of UBI, we should try to build a better future for workers, which starts with a focus on good jobs, an effort to slow down and counteract excessive automation, and a commitment to building a stronger and better-design social safety net.