Should we have Universal Basic Income?

Should we have Universal Basic Income? I'll gather up-to-date evidence on its pros, cons, and trial results to weigh the case for you.

Universal Basic Income (UBI) is an unconditional cash payment given at regular intervals by the government to all residents, regardless of their earnings or employment status.

More precisely it is defined as a universal, unconditional cash payment that is made regularly, is sufficient to live on, is not means tested, carries no work requirements and is paid on an individual basis. It is intended to create a financial floor or base, for reducing poverty and income inequalities and for ensuring that everyone has the resources to acquire basic needs.

UBI remains largely theoretical and, thus, does not have much of a history, though pilot UBI or more limited basic income programs have taken place in many countries including Brazil, Canada, China, Finland, Germany, India, Kenya, Namibia and others, and many U.S. cities including Chicago, Stockton, Cambridge, Los Angeles and Denver.

Whether a country should adopt it depends on how you weigh its potential benefits against costs and design challenges. The main arguments are:

Arguments For UBI

1. Reduce poverty, inequality and improve health
Proponents argue UBI reduces poverty and income inequality and improves physical and mental health. Examples cited:

In general, the pros include providing a safety net for everyone, helping to reduce poverty, and potentially boosting the economy.

2. Positive effects on work and education
Proponents argue UBI leads to positive job growth and a better educated citizenry.

3. Reduces gender inequality
Proponents argue UBI reduces gender inequality by making all forms of work, including child care and elder care, equally deserving of payment, and on average the payment will represent a higher share of women's income. Reviewing the trial in India, SEWA Bharat and UNICEF concluded that women's empowerment was one of the more important outcomes, noting that women receiving a UBI participated more in household decision making.

Arguments Against UBI

1. Poorly targeted and may increase poverty for the most needy
Critics argue UBI increases poverty by giving to everyone instead of targeting the poor. If you take dollars targeted on people in the bottom fifth or two-fifths of the population and convert them to universal payments to people all the way up the income scale, you're redistributing income upward.

Research by the Organisation for Economic Co-operation and Development (OECD) in Finland, France, Italy and the U.K. concluded UBI would not prove to be an effective tool for reducing poverty, and UBI does not cure addiction, poor health, lack of skills, or other factors that contribute to poverty, making it less cost-effective than targeted welfare programs.

It could also subsidize employers who pay low wages and help normalize precarity.

2. Cost and funding
Critics argue UBI is too expensive.

In general, the cons include that it could incentivize people not to work, be difficult to implement and be expensive to fund. Counter-arguments center around the economic burden placed on the State, which can be a major issue, especially for developing economies.

3. Removes incentive to work
Critics argue UBI removes the incentive to work. The argument is that if we pay people, unconditionally, to do nothing, they will do nothing, enticing fewer people to work and exacerbating labor shortages. Guaranteed income trials in the 1960s and 1970s found that people who received payments worked fewer hours.

What Do Experiments Show?

Results are mixed and limited by small scale and short duration:

Alternatives and Design Questions

If the goal is to reduce poverty, some economists argue targeted programs (food stamps, medical aid, child assistance) are more efficient than universal payments, while others argue UBI's simplicity versus complex benefit safety nets is an advantage and that funding differences matter: the difference between gross (upfront) and net (real) cost, after taxes are recouped from higher earners, is key to understanding real cost.

Common funding proposals include progressive taxation, consolidating existing welfare programs, carbon or wealth taxes, and in Alaska's case oil revenue.

Bottom Line: Should We Have It?

There is no consensus:

Many researchers suggest that instead of a full, permanent, nationwide UBI, a more feasible path might be a guaranteed minimum income, negative income tax, or expanded targeted guaranteed income pilots for vulnerable groups, evaluated over longer periods and at larger scale before a universal commitment.

If you are forming an opinion, consider which trade-offs matter most to you: universality and simplicity vs. targeting and cost-effectiveness; unconditional security vs. conditional incentives; and how it would be funded in your specific national context.