But actually, the concept of UBI is older than our great nation. And it's not just a crazy theory, it actually has some teeth and solid evidence behind it. Below are some of the biggest arguments I've heard against UBI, and what the evidence and experts actually say about those arguments. My intention here is not to necessarily convince you that UBI is the right solution, because there's actually a lot more content out there to do that. My intention is to show that it's not just some crazy idea that will never work in reality, to prompt further questions and challenges, and to ultimately learn together if this is a feasible idea to implement in the US.
Landlords will just increase rent by $1000 per month / UBI will cause inflation and the number will just have to keep increasing
Actually, we're in a deflationary period in terms of consumer goods. Technology has delivered the goods on improving our lives and making things more affordable. Remember, there was a time when only the richest households could afford a refrigerator or a car. Those things are much more commonplace now, taken for granted by most households. Clothes are cheaper, you can buy fruits and vegetables from all over the world instead of just what is in season in your local area, and the list goes on. The reason these things have become more affordable is competition. Housing is also subject to competition; if one apartment complex, or let's say even most apartment complexes in a given area, decide to increase the rent because their renters now have $1000 more in their pockets, the prices will go up initially. But all it takes is one complex to not price gouge, or even undercut the price gouging by just enough, and that introduces competition. Then the other complexes would eventually need to lower prices until they are once again at a place where they are competitive. With an additional $12000 per year, renters can choose to live further away if that makes sense to them, perhaps spending a little more on their commute but saving substantially more on their rent. Or, they could choose to just get up and move to a more affordable place and get a different job altogether. Yang calls his UBI the "Freedom Dividend" because it gives people the freedom of choice. People will be "less stuck" and more free to make the decisions that want to make about their lives. Ultimately, UBI is capitalism where the bottom isn't zero. So no, there is no evidence or logical argument that supports a long term rise in rent increases that would negate the UBI.
The two bills in our lives that are most shielded from competition are college education and healthcare. These are also the two places where we see inflationary growth in prices. These are big hairy issues, so I'm only going to scrape the surface here and go in a couple different directions.
First of all, college is overprescribed in this country. We have been telling the last few generations that they have to go to college to be successful. That may have been good advice when college was more affordable and college graduates were more rare, but now students are racking up 2.5 times more debt in student loans, and graduating with fewer job prospects. This idea that everyone can and should go to college is toxic, and creates a stigma around the good work done by mechanics and technicians and other high-skilled labor fields. The irony is that some of the highest-paid college graduate jobs are some of those being targeted first for automation: legal work, examining x-rays, even surgical operations are seeing technology excel beyond human capability. Even journalism (yikes!!) is being automated. Hey, as a college grad, I will say that college was great - it was fun, I learned a lot, I expanded my mind and horizons, had valuable experiences - but I also saw a lot of my peers fall by the wayside; it was tough and it's not for everyone. Bernie Sanders came up with this free college scheme, and that sounds great if you believe that college is the way to a better life. Unfortunately, it's just not the right path for 100% of our people, so sure, maybe a free a college education would benefit some really smart but underfunded young people, but all in all, it addresses only a portion of our society. UBI addresses 100% of adults in the US, period. Now, there's nothing stopping a motivated student to spend their $12000 on college courses, so the trick is getting college to be affordable enough that the UBI can pay for most or all of it, if that's how a person chooses to spend it. College affordability, then, needs to be addressed, and I'll leave it at that, except to say that the UBI proponent Andrew Yang has a really well-thought-out plan for this on his website here: https://www.yang2020.com/policies/controlling-cost-higher-education/
Healthcare is another whole bag of worms. I've been blessed with healthcare tied to my job for my entire adulthood, and was on my father's work's healthcare before that, so I've only seen that side of things. But I can tell you, it is infuriating at times. A recent example comes to mind: I have exercise-induced asthma, and so from time to time I take a hit off my rescue inhaler. I recently realized my inhaler was out of pumps, so I called my Teledoc, which is a neat service where you talk to a doctor on the phone, no travel needed or waiting in the lobby for your appointment, and if they can diagnose or assist you over the phone, they do. You still a pay a copay for it ($40 does seem like a lot for what amounted to about 45 seconds of discussion), but it is exponentially more convenient than going to a regular doctor. It was Sunday. I hadn't used this Teledoc yet because I just started my job back in July, so I had to go through a few extra steps to set up my account. It took maybe ten minutes or so. But once we got to actually scheduling the appointment, I was informed that my insurance was not eligible for Teledoc. I thought to myself, "Hmm, I guess I should have paid attention to the changes they said were coming to our healthcare this year…" So I had the option of paying the non-insured price, or hanging up and sorting it out with my insurance company. I ended the call and attempted to call my insurance, but it was Sunday and they didn't answer the phone. Frankly, a couple weeks went by because I can never remember to do these things during working hours, because I'm, you know, working. I finally carved out some time at work and called my insurer. They assured me I was qualified for Teledoc, so I asked them to make a call and clear it up. They did and got Teledoc back on the phone, and they kept asking me why I wasn't allowed to set up my account before. I don't freaking know, you guys were the ones telling me I wasn't qualified!! Deep breath. I forged on, asked them to go ahead and set me up my account (again), so I could have a call with a doctor that day. I spent 40 minutes on the phone in total on that day, before getting the call from the doctor. So now I've spent close to an hour on the phone just to establish that I can talk to a doctor. I set the call up for asap, and the doctor called me just a few minutes later. The conversation went like this:
"Hi, I'm Dr. [So-and-So], how can I help you today?"
"Hi, I have exercise-induced asthma and my inhaler is out. I'd like to get it a new prescription for it."
"Ok, what inhaler do you use?"
"I use [Pro-Air]."
"Do you have any other symptoms?"
"No."
"Has your asthma gotten worse?"
"No."
"Do you want two refills or three?"
"Three would be great."
"Ok, I will send three refills to your pharmacy."
"Ok thank you."
"Good bye."
Brilliant, right? Now I don't have to make an appointment with a doctor, carve out time in my day to go over there, drive the distance to the doctor, wait in the lobby, check out, drive home, etc. This is something all Americans should have, really. It's amazing. But then, I went to my pharmacy, and after waiting several minutes for someone to talk to me (there was no one in line ahead of me) I was told it wasn't filled yet, and to come back in 10 minutes. I did some shopping at Target and came back. Then I was told they thought they had had the inhaler but they were out. I waited another 10 minutes or so for them to find an inhaler at a different pharmacy. I had an appointment to get to, and didn't have time to drive over to that pharmacy before it closed, so I had to go the following day. I got there, waited in line behind one person, they were swamped, they had a line at the drive thru, people waiting in chairs, and were barely acknowledging the people in line. An overhead voice chimed every 10 seconds or so, "Call on the pharmacy line," but nobody picked up the phone. The person ahead of me in line finally was greeted and talked with the pharmacist, got what he needed and was on his way. Another few minutes passed, and I was greeted. I got my inhaler and was on my way. It took about a half hour to get home from that pharmacy, not because it was far, but because of the spring break traffic that has set in on my area. So all in all, I spent about 2 hours getting my inhaler, and the most critical step, the doctor prescribing it, lasted less than a minute. If there was better competition, these inefficiencies would be knocked out. The Teledoc agent I first spoke to should have recognized that I was qualified for the program, that would have eliminated the additional 40 minute phone call. The inventory of inhalers should have been accurate, that would have eliminated the need for me to go to a second pharmacy. In fact, something like an inhaler, which doesn't need to be measured, could be just as easily shipped to me, or alternatively, at least picked automatically and made available in a vending machine type device for me to retrieve with my insurance card or something similar. We can get cupcakes out of "Cupcake ATMs" but we can't figure out how to get people the medicine they need in an efficient manner. Besides the doctor, there really was no need for any interaction with a human, it's all just red tape. And really, a robot could have asked me the same questions that the doctor did, too.
That was a long-winded story to show why competition is needed in healthcare. I’m an advocate for applying the same technological advances Amazon and Google use to healthcare. The problem is how to get everyone to comply. Frankly, I don't know the answer here. Yang's answer is Single-Payer Healthcare, and I can't say whether I'm for or against it, it makes a lot of sense, but I just don't know. The point is, the healthcare system is broken. What's neat about UBI is that it gives people a minimum income no matter what they do, a backstop against poverty. With such a cushion, it is possible that more people will become entrepreneurs, because the risk is reduced. I think some really brilliant people working low-paying jobs in healthcare might take that UBI and address the problems they see in healthcare, and could come up with some brilliant solutions. We don't need to legislate it necessarily; I believe in the American ingenuity, and when you remove or reduce the barriers and risk, you open up a world of possibilities.
This looks like socialism, it will never work in AmericaActually, this is a very American idea, dating back to Thomas Paine in 1796, and was passed by the House under Nixon's administration before failing to pass the Senate because they didn't think it was enough money. It's not taking over the means of production and giving everyone an equal amount of the total pie. It's capitalism where the bottom isn't zero, plain and simple. Yang proposes we fund it with a VAT tax, which is something that has been implemented in every advanced economy except the US, and he's proposing it at about half that of the European VAT level. People will have more money to spend on what they need, and there are no strings attached like there is with food stamps, housing subsidies, disability and other welfare programs.
Reference: https://basicincome.org/basic-income/history/
Poor people will just spend it on stupid things
This is a misconception that we've had engrained in our heads, and I’m not entirely sure why or where it came from. Perhaps it is just wealthy people's way of rationalizing why they are better off than the homeless beggars on the street. If I'm fundamentally superior to them, then I don't have to pay attention to them or try to help them. The thing is, the overwhelming evidence is that this is simply not true. Giving poor people free money with no strings attached has led to reduced homelessness, reduced crime, better mental and physical health, and so much more. I am not sure I can speak to it better than Rutger Bregman in his TED Talk that first changed my mind about it, so I'm going to say that if you have any inkling that poor people will spend the UBI on stupid things, you need to take the 20 minutes to watch this video. Like, seriously, stop reading this blog and go watch it, I'll wait.
Rutger Bregman: Poverty isn't a lack of character; it's a lack of cash
People will quit their jobs and be more lazy
Again, this is where we have actual data that proves this to be incorrect. $12k is just enough to get every American adult above the poverty line. If Joe Smith is making $50k and the government says, hey, I'm going to give you another $12k on top, Joe's probably not going to quit his job and live off that $12k. But, if Sue Banner is working two jobs for a net of $24k and has a kid at home, and can't seem to find the time to go back to school to make a better life for herself, she might take that $12k, quit her second job and either spend more time with her child or start night classes, or both. UBI gives people choices. It gives minimum wage earners more bargaining power - when you are at a negotiation table and you have no alternative, then you don't have leverage. But now everyone has the option of quitting their jobs and spending time finding better jobs or better ways to spend their time, which means employers will have to pay what the market demands because people won't be so desperate for the jobs. The two groups of people that are shown to quit jobs when given a UBI are people who will stay home to spend time and take care of kids or elderly relatives, and young people who go to school.
You should just make college free
I've already addressed this above, that college isn't for everyone, and it's not the answer to long-term technological unemployment or underemployment. Making college free would only help a subset of the country in the short term, which would be great for those people for that timeframe. UBI is for everyone, and makes college that much more affordable for those who do want to go.
It doesn't fix the inequality
This is a fair argument, and I agree to an extent. But I would actually say, fixing inequality shouldn't be the goal. If you want everyone to have exactly the same amount of everything, you're no longer talking about a capitalist society, and you're not talking about America. We want people to innovate and create and excel, and to be motivated with rewards for doing so. That is what has made America one of the most (if not the most) creative and innovative countries in the world. If we said to those creators and inventors that what you do won't make a big difference in your life, merely that it will subtly improve the lives of everyone, they may not be interested in spending their time, energy and effort on creating and inventing. People who create amazing things should be rewarded! But, we have enough wealth in our country that we don't necessarily need people in poverty in order to reward innovation. So UBI actually just fixes the very fringes of inequality. Under a UBI plan with the VAT that Yang is proposing, nobody would be under the poverty line, and the people at the top reaping the benefits of the amazing technology they developed would have a thin slice shaved off. But it does even more than that, because it gives people more choice.
Government can't be trusted (to not take it away)
This may be the most compelling reason a UBI may not be successful. The idea that we could be promised $1000 per month, make adjustments to our lives with that cushion in mind, and then have the UBI program cancelled because a new administration decides it doesn't work is even more terrifying than not addressing the need for the UBI in the first place. So perhaps this is more of a caution than anything else: we need to make sure we do it correctly so that it can't be removed. But, I don't think that's an impossible task, and the data supports it. Social Security, while not being properly funded for years and being the flawed system that it is, has continued well beyond its feasible life. We also have an example of something much more closely related to UBI to use as a model: the Alaskan Permanent Fund Dividend, which is funded by oil. This has not only succeeded many changes in government, it has done so in a very deep red state.
$12000 per year isn't enough
My response to this rebuttal is, "Enough for what? Enough to make you rich? You're right!" Look, the $12k wasn't plucked out of the air, it targets the poverty line directly. The thing about UBI is that it is not contingent. It does not keep people down at the $12000 wage line, it lifts people out of poverty and boosts people by $12k. If you're making $6k, then you're now getting $18k. If you're making $20k, then you're now getting $32k. And if you're making $100k, you're now making $112k. It's elegant in how simple it is. It doesn't get taken away from you at some level. It doesn't require that Taco Bell pay high school students a livable wage. It allows the market to work, but ensures that nobody is suffering from poverty.
The technological unemployment thing is a myth - we'll have new and different jobs to replace the ones that are lost to automationThis goes back to the rationale of why we need UBI. It's true that history has shown us a fear of technological unemployment that hasn't come true in past revolutions. In those instances, jobs we couldn't have imagined were created, like Social Media Manager and Airbnb host. The argument is that this time is fundamentally different, because the robots and AI and automation are no longer enhancing humans, they're replacing them. And it's not people on the fringe of society crying wolf and then crawling back to the rock they live under, these are the intelligent entrepreneurs, technologists and job creators who are saying this is going to happen: Warren Buffett, Bill Gates, Elon Musk, Mark Zuckerberg, Andrew Yang. Andy Stern's book called "Raising the Floor" has some good insights on this topic, as do "The Future of the Professions", "Four Futures" and "What To Do When Machines Do Everything". There's a great fiction book, also, that's a quick read and so completely out there it's a little crazy, but I like it for the way it lays out paths to dystopia and utopia that are near-real, and I've been referring to it because I think it's a great thought exercise for this kind of discussion; it's called "Manna: Two Visions of Humanity's Future".
Yang talks about this a little more urgently. He says we're in the third inning of this automation revolution already! Self-driving trucks are being tested, and truck driving is the most common job in 28 states. Food service and checkout counters are being automated, we see those things already, and retail and food service jobs make up a huge portion of the population currently. The typical response from nay-sayers, then, is we'll just re-train them to be programmers. There's some logical fallacy here, and then there's some numerical problems here. First, re-training programs have shown to be 0-15% effective, meaning some are 0% effective, and at best, 1 in 10 people would be successful. Second, truck drivers likely started driving trucks because they weren't really big fans of school to begin with, what makes you think they'd want to go back to school 10 or 20 years later? Third, only about 8% of jobs are in STEM fields, where we put a lot of value. If 100% of the population tried to go for those jobs, somewhere around 90-92% would fail to find employment. And technology will only worsen this problem - AI is getting better at writing code. Finally, programming is hard! I consider myself to be a pretty smart person, and I've learned basic coding, but at some point, it gets too confusing to me. Programming is not something everyone can do, and I include myself in that, so as to say I'm not belittling the intelligence of non-programmers.
The truth is, nobody has a crystal ball, not even Musk or Zuck. Maybe they've got it all wrong, and it will be a laughable mistake akin to when the president of IBM said in 1943, "I think there is a world market for maybe five computers." 80 years from now we may just as well laughingly say, "Ha ha ha, Elon Musk, thinking that AI was going to take our jobs away. We have more well-paying jobs now than we could ever fill! Silly Elon!" Even if that were to be the case, there's nothing inherently wrong with having a UBI to usher us in to this new unforeseeable age. Afterall, if its good enough for Alaska, why can't the whole country benefit?
On the other hand, the benefits of UBI are amazing, and evidence that shows these benefits will happen whether or not technology drives us all out of jobs. Yang lists many in his book, and I'll summarize what hits home most for me: UBI reduces financial stress, allowing people to make better decisions based on an abundance mindset instead of a scarcity mindset. UBI supports parents and caretakers which will mostly lift up women. UBI will help maintain order, protecting us against riots and chaos from mass unemployment. UBI reduces mental health issues, suicides, drug addiction and incarceration. A side note here, did you know that the life expectancy of Americans has dropped for the last three years? I didn't realize this fact until recently. Suicides and overdoses have overtaken the previous number one cause of deaths: car accidents. You know who is prone to suicide and overdosing? Middle-aged men who have lost their jobs and feel societal pressure to provide for their families. So even if today is the absolute worst case scenario for the country as a whole, and we'll get back to a higher labor participation rate.
We can't afford it
The affordability is a big issue in UBI. The neat thing is that a lot of people have been working on this, and the same books that I've referenced above will tell you a lot about some proposals. Google just about any video of interviews with Andrew Yang, and he talks about it very simply. In essence, he says, the headline figure is about $2 trillion, against an economy of $19 trillion and a federal budget of $4 trillion. But it starts to become much more affordable when you realize that some welfare programs could be replaced by the UBI, which could mean up to $500 billion already being spent would just shift into UBI. The big game changer is the Value Added Tax, or VAT, which is something that every developed country has except the US. At just half the VAT of the European level, we would generate $800 billion in additional tax revenue. This is like the oil dividend in Alaska, except its taxing the technology and automation, which is the oil of the 21st century. "The beauty" of UBI that Yang talks about is how much we spend on homelessness, hospitalizations, incarceration, healthcare for people falling between the cracks that adds up to hundreds of billions of dollars also. Once a UBI is provided, health and education increase and incarceration and crime decrease. This isn't theoretical, these results have been proven out in real cases. Finally, by putting $1000 per month into the hands of every American, it grows the economy. "The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $500 – 600 billion in new revenue from economic growth and activity." When every other developed country is utilizing a VAT, and caring for their people's health, it feels like, actually, we can't afford NOT to implement a UBI.
These are the arguments against UBI and the counterpoints I've found. What other downsides, pitfalls or problems are there? Let's keep the conversation going, let's vet this thing, and if the benefits outweigh the negatives significantly (VAT tax at half the standard of other advanced countries), as it seems like they do right now, let's implement this thing.
