Should we have Universal Basic Income?

Should we have Universal Basic Income? I'll examine the arguments and evidence for and against it.

Universal Basic Income (UBI) is a regular, unconditional cash payment made by the government to all citizens regardless of wealth or employment status. Whether "we should have it" depends on what you prioritize — poverty reduction and simplicity vs. cost, inflation risk, and work incentives — and the evidence so far is mixed.

Arguments In Favor

1. Simplicity and dignity:
Proponents argue UBI is less cumbersome to administer than means-tested programs, which often don't reach intended beneficiaries due to social stigma and administrative burden. Stanford historian Jennifer Burns notes UBI can "underwrite market participation, in contrast to other welfare programs that essentially require people to not be employed to receive the benefit" and which kick in only when people have hit rock bottom.

Other cited advantages include an improved social safety net and access to food and healthcare and potential to reduce childhood poverty.

More broadly, UBI is presented as reducing poverty and income inequality by providing a guaranteed income floor ensuring basic needs. One 2022 University of York study cited by advocates found a UBI model could cut poverty by more than half.

2. Health, well-being and opportunity:
Financial stress is a known determinant of poor health, and by providing income security UBI can reduce stress and improve access to nutrition and healthcare. It is also argued to offer freedom to pursue education, vocational training, entrepreneurship or caregiving, potentially stimulating new forms of economic activity.

3. Response to automation:
The current renewed interest is largely fueled by fears surrounding job displacement due to automation and AI, with UBI proposed as a buffer against economic dislocation and a way to share benefits of automation more broadly and to prevent mass poverty if full-time stable employment becomes less available.

Arguments Against

1. High cost and feasibility:

2. Inflation:
A widely expanded money supply would increase demand for goods and services and could exacerbate inflation. If a significant amount of new money is injected without a corresponding increase in goods and services, prices could rise, negating the benefit.

3. Work incentives:
Critics worry an unconditional income could reduce motivation to seek employment, leading to a shrinking labor force and reduced productivity. Opponents also list that UBI could create a disincentive to find work for some individualsand that higher-income people who don't need assistance would still receive payments.

4. Funding mechanisms are unclear:
Proposed funding sources include a wealth tax, carbon tax, or a tax on automation (a "robot tax"), but all would require substantial tax increases that critics argue could stifle growth.

What Experiments Have Actually Shown?

There is no large-scale permanent universal program, only short-term pilots:

Alternatives and Middle Ground

Because of cost and political hurdles, some economists support targeted alternatives that capture UBI's benefits without universality:

Questions to Help Decide

If you are evaluating whether to support UBI, consider:

There is no expert consensus. Supporters see UBI as a simpler, more dignified safety net that improves wellbeing without reducing work; critics see it as prohibitively expensive, politically difficult, and potentially inflationary with uncertain long-term effects on work.