Last week we introduced the Universal Basic Income by outlining the various philosophical perspectives of its odd coalition of supporters. We also made clear that the need to think seriously about a UBI is established by our current failure to address the dramatic misalignment of economic growth, wealth, and employment we described in Vol. 85.

Take America’s service sector as just one example. As numerous labor economists have shown, declines in manufacturing have been offset by substantial growth in the service sector—more and more blue collar workers, in other words, are becoming “pink collar” workers. But if automation technologies continue apace, many service sector jobs may suffer the same fate as the manufacturing jobs they replaced. While predictions vary as to just how quickly this will happen, there is good reason to think we may be on the cusp of what Derek Thompson calls an era of “technological unemployment”—and it may well begin in corners of the labor market that are already compensating for recent losses.

Enter the current wave of interest in the UBI. In a time when massive increases in wealth coexist with pervasive economic insecurity and an abiding lack of confidence in centralized institutions, why not address the problem of poverty by taking the most direct route—by simply distributing cash directly to citizens?

 

When evaluating the UBI it is crucial to recognize it as a broad concept that takes shape in a diverse set of policy proposals. So, even though Andrew Stern and Charles Murray both defend the UBI (and, in fact, will argue on the same side of the question in an upcoming public debate for Intelligence Squared), they defend different proposals and provide different reasons for their views. Generally speaking, this is because defenders of the UBI must balance two concepts that are typically associated with differing political ideologies: efficiency and equity.

For Murray and other representatives of the Libertarian Right, government should bear the burden of proof in debates regarding the most efficient means of redistributing wealth and providing the services required for a functioning, humane society. Murray’s UBI begins with a negative assessment of the vast majority of public services—which have, in his judgment, proven ineffective—and proposes replacing them with cash. This is not to say that equity has no place in Murray’s proposal; on Murray’s reckoning, the equity principle is met by ensuring that every citizen is included. By contrast, Stern and others on the Social Democratic Left preference claims of equity over efficiency, and so position the UBI as an extension of the welfare state, not its replacement.

This means that the standard criticisms of the UBI land differently on different policy proposals. Those criticisms fall roughly into two groups: concerns about effectiveness of the UBI in practice, and concerns about cultural spillover effects likely to challenge the high moral status of work in a society like ours.

The most common criticism of the UBI is that for it to be effective, it has to be big enough to make a meaningful difference in the lives of poor and working-class Americans. And not only is this very expensive, there is little to no political will to achieve such a dramatic policy shift. This is the essence of Oren Cass’s argument against the UBI from the right, published in the National Review as “Why a Universal Basic Income is a Terrible Idea.” Cass argues that since the current social safety net allocates disproportionately more to the poor than the wealthy, the UBI must either be means-tested or funded by a significantly increased federal budget. In the first case, the UBI is not truly universal; in the second, it is not truly efficient. In either case, it cannot deliver on the promise it makes.

Critics from the left have said something similar. A recent piece for Jacobin called “The UBI Bait and Switch” tracks recent proposals out of Finland, noticing a trend away from the equity concerns UBI supporters on the Left have long held and toward a tamer and less effective UBI. As they put it:

It is technically possible to create a broad-based UBI that increases worker bargaining power and leisure while decreasing inequality and poverty, especially in a wealthy country like the United States. But it is just as possible to redirect the energy behind a liberatory UBI into implementing a conservative one — forcing unemployed workers into bad jobs while undermining organized labor, earnings equality, and the welfare state. Indeed, it is even possible to pull off such a bait-and-switch while convincing the rest of the world that you are engaged in progressive policymaking.

What these critics from both the right and left represent is a recurring and justified worry that politicians will lose their nerve when the chance to implement a UBI presents itself. From the right, the concern is that politicians will cave to pressure to retain elements of the welfare state and thereby grow the state; from the left, it’s that politicians will give in to calls to offset cash contributions with substantial cuts to the welfare state. In both cases, however, the UBI fails to deliver what it promises precisely because what is implemented is insufficiently radical. There is no way, in other words, for the UBI to survive the messy legislative process without losing its elegant simplicity. It is not, as Chesterton quipped about Christianity, that that UBI has been tried and found wanting; it has not been tried at all.

 

But even if a pristine UBI doesn’t seem politically feasible any time soon at any real scale, the basic moral question still remains: is it desirable? Here, the second and most widespread criticism of the UBI claims that redistributing cash directly to citizens will disincentivize paid work in a non-trivial proportion of the American populace. And, moreover, this disincentive is bad.

Let’s imagine, for example, a part-time low wage worker, Fred, who is accustomed to living off of roughly $18,000 a year. While Fred has worked in any number of trades in the construction industry, steady employment has always been hard to come by. As a result, his work is typically seasonal—lawn care or carpentry in the warmer months, machine repair and some plumbing work during the winter. Let’s say that after a particularly successful summer with a growing tent-rental company, Fred is offered a full-time job year-round. He could continue to work seasonally and increase his income a bit—maybe up to $20,000/year—or he could forego some of the freedom of having multiple gigs and go full-time with the tent-rental company. The salary is $25,000/year. The hypothetical question then becomes: Would a UBI of $10,000/year encourage him to turn down that full-time gig?

Critics of the UBI argue that yes, Fred would be incentivized not to take the position and, moreover, that not taking the job is an abdication of personal responsibility. Some also argue that this is an abandonment of an essential feature of American life. As Cass puts it, the UBI runs directly contrary to a crucial principle of the American social contract: “if you are able to work, you should work.” No matter how mind-numbing, undignified, or poorly paid, this principle means that “those who work to provide for themselves and their families know they are playing a critical and worthwhile role.”

But it is at this point that UBI backers ask, “wait, but why?” In the first place, Fred may well accept the full-time gig and the $10,000/year he stands to gain from the UBI. Perhaps, in fact, he sees the combination of these two sources of income as precisely the ticket he needs to get into the middle class. But even if he declined the full-time offer, assuming Fred is a responsible citizen who has taken appropriate measures to care for himself and his dependents, why would the decision to work less be worthy of social disapproval? Perhaps Fred has been working on a young-adult novel he’ll now have time to finish. Or, maybe he’ll finally have the resources to take the two classes required to complete his undergraduate education. Perhaps he has an elderly parent that he’d simply like to eat lunch with a couple times a week. Perhaps he recognizes that he is lonely and wants time to develop deeper friendships. All these endeavours are both admirable and unpaid. Or maybe Fred’s body is just worn down after years of manual labor. So yes, the UBI may well disincentivize Fred from further work and Fred may choose to fill his schedule with any number of activities or events—some we may approve of, others not. But the tent-company can presumably find someone else to pick up Fred’s hours. And, after all, why do we think that more (paid) work is always and everywhere laudable?

The macroeconomic drivers of our current employment crisis transcend any discussion of the relative merits of a UBI. As we’ve mentioned previously, the shift to flexible capitalism means that an increasing number of able-bodied citizens are likely to find themselves made redundant through automation and technological development. The UBI is one policy proposal for ensuring a baseline level of economic security for those on the wrong side of disruption. But, beyond that, the UBI also provokes thought by threatening one of our most deeply held convictions: Why are we so quick to consider our jobs (or lack thereof) as essential features of our identity? How should we value some of the most important tasks of our daily lives (tending to children, checking in on an elderly neighbor, preparing dinner, and so on) for which we are not paid? In this, considering the UBI proves that our contemporary crisis of labor is not just that; it is also a profound crisis of meaning.

 


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