What are the pros and cons of universal basic income?
Pilot studies have shown that universal basic income (UBI) can lead to small reductions in work hours, but the effect is often modest and can be offset by improvements in health, education, and entrepreneurship.
Alaska has had a form of UBI since 1982 through its Permanent Fund Dividend, which provides an annual payment to all state residents.
Studies have found this has had little impact on employment rates.
In 2017, Finland ran a two-year experiment providing 2,000 unemployed people with a monthly unconditional payment of €560.
While it did not increase employment, it improved participants' wellbeing and financial security.
A 2020 study in Stockton, California, found that providing low-income residents with $500 per month led to increases in full-time employment and decreases in anxiety and depression.
Economists estimate that a national UBI in the US providing $1,000 per month to all adults would cost over $3 trillion per year, requiring major tax increases or spending cuts to fund.
Some research suggests UBI could help address the rise of automation and job displacement, by providing a buffer for workers whose jobs are taken over by machines.
Critics argue UBI could reduce the incentive to work, though studies have found only modest reductions in work hours, with larger impacts seen for new mothers, elderly, and disabled individuals.
UBI has received support across the political spectrum, with libertarians seeing it as a way to simplify the welfare system, and progressives viewing it as a way to provide a basic standard of living.
Existing social welfare programs often have complex eligibility requirements and administrative costs.
UBI could potentially reduce these overhead expenses.
A 2016 study found that a modest UBI of $10,000 per adult and $5,000 per child could lift nearly half of those in poverty above the poverty line in the US.
Opponents argue UBI could be an inefficient use of resources, as some recipients may not need the additional income.
Targeted programs may be more cost-effective at reducing poverty.
Several countries, including Canada, Iran, and India, have experimented with more limited forms of UBI, providing targeted payments to specific demographics like new mothers or the rural poor.
The COVID-19 pandemic has renewed interest in UBI, with some governments providing emergency cash payments to help offset economic hardship during the crisis.
Proponents suggest UBI could give people more freedom to pursue education, start businesses, or care for family members, potentially boosting long-term productivity.
Critics argue UBI could lead to inflation if not properly designed, as additional cash in the economy could drive up prices for goods and services.
Studies have found positive impacts of UBI on mental health, with recipients reporting reduced stress and improved life satisfaction.
The level of UBI payment is a key consideration, as payments that are too low may do little to alleviate poverty, while payments that are too high could significantly impact labor markets.
UBI experiments have shown that recipients tend to spend additional income on necessities like food, housing, and healthcare, rather than frivolous purchases.
Advocates argue UBI could help address the rise of precarious, "gig" work by providing a stable income foundation, though critics contend it may further entrench such employment models.
The practical implementation of a UBI system, including eligibility criteria, payment amounts, and funding sources, remains a subject of intense debate among policymakers and economists.