Introduction
“Because We Couldn’t Pay the Bills”
“Why do we have to move?” I asked my mother at 9 years old. We have been waiting awfully long on this line in an open space facility somewhere in the Bronx – it’s about 1 or 2 am if I had to guess. There are families all around the facility; some are sitting, standing, but all look tired. “Because we couldn’t pay the bills” my mother replied. We have spent the night in a processing center for the Department of Homeless Services. We left our childhood home in 2010; it was a $900 two-bedroom apartment in Fordham, Bronx – a relatively inexpensive area in the Bronx at the time – even now. My father always worked like an animal as he routinely works more than the typical 40-hour work week; however, he could not pay the relatively cheap rent in an inexpensive neighborhood that used to be one of the poorest congressional districts in the country just a few years prior. Bringing in the only stream of income for a family of five was difficult to say the least. Reflecting on this day makes me wonder if a basic income would have negated this experience that my family went through, and thousands of other families go through every year.
What is it?
Universal Basic Income (UBI) is an unprecedented, controversial, and radical alternative to the current welfare system. It is well known by its two flagship features: universalism and unconditionality. The universalism feature is self-explanatory; everybody enjoys the benefit, regardless of income or age. The unconditionality feature of the program takes away any work to be done by the citizens to enjoy the benefit; no registration or application to be endured. Advocacy for UBI is founded on the failure of the current welfare system as many people who need support the most are slipped through the bureaucratic cracks of eligibility, applications, etc. The two flagship features eliminate the sunken administrative costs and the less-than-efficient bureaucratic process the prevents the current welfare system to maximize its ability to help those most in need. In addition, proponents claim a basic income would revolutionize work by separating work and income, which would fundamentally change our relationship to work and with our employers. Lower income people would no longer be subject to as severe poor working conditions because the basic income can be used as leverage against employers.
Nooks and Crannies
Is UBI Really All Dat?
Academic UBI research can be at time disappointing because of the conflicting findings partially due to data limitations like short term pilot runs and small sample size. For example, a 2022 theoretical paper uses a comprehensive model to claim a basic income “can disincentivize precautionary savings and work”, while an experimental study published a year prior claim “ample evidence suggests that basic income does not lead to a sudden increase in dependence or negative behaviors”. The lack of a basic academic consensus on relatively simple issues like this is troubling for proponents and policy makers of UBI. This is evidence why UBI is not an appropriate welfare program to be implemented, as of now. UBI is a welfare niche for specific welfare needs, which is why it is not a good alternative to the current welfare system.
How Does It Compare to Other Systems?
We must examine and test different welfare systems with one another to develop a better understanding on which systems may be more effective in achieving different outcomes. Despite many conflicting findings, studies conclude a basic income does alleviate poverty, but by how much? The authors of a study that compares UBI to unemployment insurance claim “our results show that an optimal UBI is feasible. Nevertheless, the UI policy is socially robust to the introduction of UBI in the presence of idiosyncratic shocks” by testing and comparing their efficacy in rough labor markets in years like 1990 and 2011. When the rough gets going, UBI perhaps shouldn’t be the welfare system to maximize welfare surplus.
Proponents claim UBI increases mental health/life satisfaction because the cash alleviates financial pressure for those who are/close to destitution. This is an important claim, through an individualistic perspective, because UBI could alleviate the harmful psychological stressors caused by poverty. Unfortunately, a 2021 meta-analysis study that incorporates 15 studies found that “reducing poverty amongst recipients, although aspirational, was not found to exclusively mediate UBI’s mental health benefits”. In other words, other welfare programs would achieve similar mental health benefits; UBI does not seem to have something intrinsic that increases mental health when compared to other welfare programs.
Furthermore, it is appropriate to test UBI against universal education/healthcare because these welfare programs share features of universalism. Furthermore, support for universalism-based welfare programs lean towards universal education/healthcare rather than UBI. A potential reason for this could be that the methodology of universal education/healthcare to combat poverty seem more robust that UBI’s. Universal education would eliminate the leading cause (38%) of people deciding not to go to college – the cost. It is well established that college graduates significantly out earn their high school grad counterparts, some studies stating by 84%. In fact, the implementation of UBI may even stunt the opportunity for low-income earners to attend college and increase their income because it would require gutting many welfare programs such as the PELL grant. Overall, UBI does not seem to be as dynamic and robust as other welfare systems with established history of efficiency and helping those most in need: low-income earners.
Conclusion
UBI is a simple, revolutionary, and controversial alternative to the current welfare system by distributing hard cash to everyone. Proponents claim it will be incredibly more efficient than the current welfare system because of the minimization of sunken administrative costs and the maximization of helping those most in need by the unconditionality feature. However, UBI does not seem to significantly produce more positive outcomes when compared to other established welfare programs such as UI. Sample size and lack of pilots seem to cause many conflicting findings for the academic research done on the welfare program. As of now, UBI’s welfare niche and shaky research findings makes it inviable to be seriously considered as an alternative to the current welfare system.
Sources:
Lee, S. (2021). Politics of universal and unconditional cash transfer: Examining attitudes toward universal basic income. Basic Income Studies, 16(2), 191–208. https://doi.org/10.1515/bis-2021-0013
Perkins, G., Gilmore, S., Guttormsen, D. S., & Taylor, S. (2021). Analysing the impacts of universal basic income in the changing world of work: Challenges to the psychological contract and a future research agenda. Human Resource Management Journal, 32(1), 1–18. https://doi.org/10.1111/1748-8583.12348
Drury, C. (2022, October 11). Free money for all: How universal basic income entered the political mainstream. The Independent. Retrieved October 30, 2022, from https://www.independent.co.uk/news/uk/home-news/universal-basic-income-pros-cons-b2198531.html
Wilson, N., & McDaid, S. (2021). The mental health effects of a universal basic income: A synthesis of the evidence from previous pilots. Social Science & Medicine, 287, 114374. https://doi.org/10.1016/j.socscimed.2021.114374
Fabre, A., Pallage, S., & Zimmermann, C. (2014). Universal basic income versus unemployment insurance. IZA. https://doi.org/10.20955/wp.2014.047
Hamilton, L., Yorgun, M., & Wright, A. (2021). “people nowadays will take everything they can get”: American perceptions of basic income usage. Journal of Policy Practice and Research, 3(2), 77–95. https://doi.org/10.1007/s42972-021-00035-0
Edelson, D. (2022, October 13). How does a college degree improve graduates’ employment and earnings potential? Association of Public & Land-grant Universities. Retrieved November 28, 2022, from https://www.aplu.org/our-work/4-policy-and-advocacy/publicuvalues/employment-earnings.html#:~:text=Sixty%20percent%20of%20bachelor’s%20degrees,is%20a%20high%20school%20diploma.
Gates Foundation probes college enrollment decline. College enrollment decline and student opinions. (2022, September 28). Retrieved November 28, 2022, from https://usprogram.gatesfoundation.org/news-and-insights/articles/gates-foundation-probes-college-enrollment-decline