Slating Basic Income: a starting point for a WM New Economics discussion?
Posted by admin
First, UBI is financially irresponsible. Universal means everyone gets it. Even in the richest societies, if UBI was set at a level to provide a modest but decent standard of living it would be unaffordable and lead to ballooning deficits. To close the UBI budget black hole, much higher taxes or reallocation of resources from other areas such as health and education would be needed.
Second, UBI will lead to higher inequality and poverty. It typically aims to replace existing unemployment and other benefits with a simple universal grant. As the OECD has shown, by reallocating welfare payments from targeted transfers (such as unemployment, disability or housing benefits) to a generalised transfer to everyone, the amount that goes to the most deserving is lower. Billionaires get a little more.
Third, UBI will undermine social cohesion. Individuals gain not only income, but meaning, status, skills, networks and friendships through work. Delinking income and work, while rewarding people for staying at home, causes social decay. Crime, drugs, dysfunctional families and other socially destructive outcomes are more likely in places with high unemployment, as is evident in the drug pandemic in the US.
Fourth, UBI undermines incentives to participate. Stronger safety nets are vital. No decent society should tolerate dire poverty or starvation. But for those who are able, help should be designed to get individuals and families to participate; to help people overcome unemployment and find work, retrain, move cities. Wherever possible, safety nets should be a lifeline towards meaningful work and participation in society, not a guarantee of a lifetime of dependence.
Fifth, UBI offers a panacea to corporate and political leaders, postponing an urgent discussion about the future of jobs.
The demographic pressures in rich countries, and the deep challenge artificial intelligence poses to development prospects in poor ones, adds to the need for this conversation.
There must be more part-time work, shorter weeks, and rewards for home work, creative industries and social and individual care.
Forget about UBI; to reverse rising inequality and social dislocation we need to radically change the way we think about income and work