UBI & I

April 13th, 2017 at 2:09 pm

A few weeks ago, Jason Furman and I participated in one of those Intelligence Squared debates on the premise that the Universal Basic Income is the safety net of the future. We were opposed and that has surprised some of my friends and colleagues who figured I would be for a UBI.

We’re hoping to write up our thoughts one of these days, but in the meantime, I wanted to quickly jot down a provisional answer to those who ask me about this.

For the uninitiated, a UBI is a plan by which the government sends checks to people, a sort of guaranteed, minimum income. Some conservatives and libertarians (Charles Murray was on the other team at the debate) like the idea of replacing the “welfare state” with it because it targets everyone, not just the poor, and it moves the government out of the business of running big programs like Social Security and Medicare, and into the business of just writing checks.

Some liberals like the redistributional aspects of the UBI, along with the non-paternalism implied by replacing support for specific needs with cash. (“Instead of a housing voucher, here’s some money which, if you so choose, you can spend on housing”.) Some progressives are also motivated by the belief that automation is increasingly replacing work and so we’d better get something like a UBI in place before what Keynes called “technological unemployment” whacks a lot more people than it does today.

To cut to the chase, my view is that the conservative version of UBI would be a huge, poverty-inducing step in the wrong direction. Our social welfare programs devote most of their resources to low- and moderate-income people, so to sum up those expenditures and divide by the population would definitionally dilute the resources currently going to those who need them most. It would surely raise, not reduce, poverty.

The progressive UBI version leaves most of what we have in place and builds on top of it. This approach poses good questions for progressives and this version is closer to the vision of Andy Stern, our other “opponent” (“ ” because I can’t think of Andy, a friend and lifetime labor activist, as an opponent). As Furman and I argued, some of what I’ve seen in this space implies increasing what we now raise in taxes by 50-100 percent. I’m a firm believer in suspending political constraints in the interest of thinking outside the box, but not that far outside. In the most accommodating political context I can envision over the next bunch of years, the risk that the UBI would be closer to Murray’s version than Stern’s strikes me as too high.

Moreover, even if we could raise some more tax revenues to push back on poverty and inequality—a good e.g. of a fight outside of today’s box in which I’m actively engaged—I still worry about the dilution problem. A relevant question here is: are the good, effective anti-poverty programs currently in place fully funded? I’m quite certain they’re not, and thus the question for progressives is what gets us the bigger inequality-and-poverty-reducing-bang-for-the-buck: a dollar to UBI, or a dollar to things like quality pre-school, the EITC and CTC (wage subsidies for low-income, working families), expanding Medicaid, SNAP (food stamps), and housing supports?

That’s not an arbitrary list. Each one of those programs has been shown to not just help less advantaged families today, but to have lasting effects on health, educational attainment, employment, earnings, and mobility. The reason I’m skeptical of even a Stern-like UBI is that I’m afraid that such a program would inevitably take from these sorts of programs, reducing their actual and potential impacts.

To be fair, I’ve encountered some quasi-UBI advocates who are actually, or maybe additionally, advocating that we devote more resources to programs like those listed above. Some consider a much-expanded EITC, for example, to be a version of UBI. To me, that’s playing fast-and-loose with the concept, but so what? Like the old Chinese saying: 不管白猫,黑猫,逮住老鼠就是好猫 (“black cat, white cat; as long as it catches the mouse”).

As for the techno-unemployment piece, there’s just not evidence that it’s happening. If anything, the numbers point firmly in the other direction (exhibit A: productivity growth, which has slowed rather than sped up, the latter being the implication of “the robot people”).

That doesn’t mean technologically-induced employment displacement can’t happen on a larger scale than we’ve seen in the past. But based on the risks I’ve identified and my belief that the marginal dollar to some (not all!) or our existing programs would be more equalizing and opportunity-inducing than a dollar to a UBI (which I readily grant you is an unproved assertion), I would not take the chance of going down the UBI pathway anytime soon.

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3 comments in reply to "UBI & I"

  1. Smith says:

    Yes a much expanded EITC is similar to a UBI, and both are poor anti-labor, anti-liberal, anti-freedom policy that substitutes corporate welfare and government sponsored poverty in place of labor power and progressive taxation.
    Stop saying safety net programs like EITC, medicaid, SNAP and housing support reduce poverty. They don’t. Those are measures that counter the effects of poverty to temporarily prevent people from starving, freezing, or dying of untreated health conditions. The bigger they are, the greater the failure of society to provide opportunity and a guaranteed minimum measure of success for those willing to work.
    Bread and Circuses, and UBI, just like EITC, money for nothing. I can speak with some authority because the $15/hour minimum being phased in for California and New York, covering 18% of the country, dwarfs anything expanding EITC would produce. The difference is the minimum does come out of the taxpayers pocket, especially the middle class, since the upper class are the owners paying the higher minimum. Yeah, part of my argument against expanded EITC was raising the minimum was a better idea, this when the $15/hour seemed a pipe dream.
    Republicans favor EITC, and likewise you see unexpected support for UBI for the same reason. Democrats wouldn’t face distractions like UBI or robots if they could end their corruption and collusion with business and champion workers rights and a restoration of the New Deal.


    • Smith says:

      Error : minimum DOESN’T come out of taxpayers pocket, not “does”
      Some taxpayers may pay higher prices for some goods. EITC is funded solely kby taxpayer, and we do have progressives rates, even if a shadow of their former levels. What would a study show, cost of EITC vs higher minimum, would my intuition hold true? Their are other factors than direct cost that favor minimum as benefit to middle class including ripple effect nudging everyone’s wage. EITC pulls in opposite direction, and hurts any employer offering a fair wage.


  2. Serene says:

    You and Him?????!!!!!!

    Ok, I’ll watch.


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