57% of global jobs are at risk from automation. From self driving cars to the retail apocalypse, we are living in an age of widening economic inequality.
What is Universal Basic Income?
Basic income is simply a cash payment guaranteed to all individuals with no conditions or strings attached. In principle, it would be delivered to all with no ‘means-oriented’ testing or work requirements.
If free money sounds too good to be true to you, then you are not alone. However, the philosophies behind UBI date back to the 16th Century. Published by Thomas More from the Netherlands in 1516, he stated that UBI is a solution in stopping thieves and helping impoverished people.
How it Works
There are no restrictions on how it can be spent. According to the Y Combinator UBI Experiment taking place in Oakland, California, a basic income should be roughly equal to about $12,000/individual a year. There are other UBI experiments taking place in Canada, Finland, Kenya, and India.
In the Y Combinator UBI Research, half the participants are given a basic income of $1,000 a month for three to five years. Now, that’s not a whole lot of money, but to people living in extreme poverty, that’s serious cash flow.
Surprisingly, research from the University of Chicago suggests that unconditional cash transfers reduces the purchase of alcohol and tobacco.
3 Positive UBI Effects:
- Promotes freedom to live the way you choose, without worrying about basic necessities like food.
- Shows promise in ameliorating the threat of job takeover from increasing automation and AI.
- Promotes a more equal and just society by leveling the playing field.
What About the Cost?
If there are ~300 million people living in the United States, UBI would equate to approximately $3 Trillion dollars a year.
The main argument against UBI is that it would cost too much money. But if we take a deeper look into the budgets of other programs like social security(which is dwindling,) food stamps, and other welfare and social services programs; we realize that we are already spending an excessive amount on these programs.
What do we Already Spend?
- $916 Billion in Social Security
- ~ 1 Trillion in Medicare, Medicaid, CHIP(Children’s Health Insurance Program), and Affordable Care Act(ACA)
- ~600 Billion in Defense
- 366 Billion in providing aid to families and individuals facing hardship
- 240 Billion in Interest on Debt
Now, if we add all those Federal Tax Dollars up, we get ~3.122 Trillion. Approximately 2/3’s of the budget is ALREADY spent on providing financial assistance to citizens.
– According to AARP, there are 10,000 baby boomers retiring every day, how will the upcoming generations pay for their social security and medicare programs?
– We already have the largest military in the world, and other world leaders like Russia($45B) and China($161B) spend a fraction of their budget on the military. Are we that frightened of WWIII? Or are we continuing to fill the pockets of the DoD?
– We continue to kick the can down the road with massive tax cuts, which increases the federal deficit. “Within 10 years, the federal public debt will grow to nearly the size of the U.S. economy under the recent GOP Tax Cut.”
In addition, the rise of automation will save billions in manufacturing.
Minimum Wage is Everyone’s Problem
Why it Could Transform Our World
As we make strides in automation and AI, we need to rethink society’s ideologies towards work and purpose. We need to stop measuring our success on our levels of productivity. Yes, some participants will waste the money, but the vast majority of them would spend the money wisely and invest it.
When people are given a small safety net, and do not have to worry about the basic necessities, they are able to devote more time, energy, and effort into fulfilling their goals. In a sense, it would scale the leveling of the playing field for all.
Small business and entrepreneurial endeavors are the solution. Some statistics to put small business into perspective:
1. 64% of small business owners start with $10,000 or less and are primarily self-funded.
2. 50% of small businesses will survive 5 years or more. Approximately one-third will survive 10 years or more.
3. As of 2012, there were 8 million minority-owned businesses in the United States.
Instead of solely focusing on getting enough resources to survive, people can focus on spending more time doing things they want to pursue – whether that’s a job they enjoy/matches their skillset, starting their own venture, going back to school, or spending more time doing leisurely and fulfilling tasks.
Basic income is part of a large-scale strategy to eliminate material poverty and promote social and cultural participation in society. We can be more involved with one another at a micro and macro level.