Everyone loves the party game/icebreaker “two truths and a lie.”
With the upcoming 2020 Presidential elections, Universal Basic Income has resurfaced as an option to combat poverty and unemployment in the United States. Can you identify which of the following is NOT true about UBI?
A. UBI for the entire U.S. would cost 75% of the nation’s current budget.
B. UBI will not help reduce the gap between the rich and the poor.
C. UBI will help people find better jobs.
Let’s take these statements one at a time:
The U.S. has a current budget of $3.4 trillion. According to economists Hilary W. Hoynes and Jesse Rothstein, providing $1,000 a month to every American over 18 years of age would cost the U.S. $3 trillion per year. While a number of financing plans have come out, all relying on different targeted taxation, this remains a great barrier as it almost doubles our current government spending. Instead of handing out money to everyone, the government should work to strengthen the programs which actually help people who need it to get out of poverty and gain independence.
UBI has been claimed as a way to raise people out of poverty. In reality, however, it is simply a government handout that would go to rich and poor alike. Instead of government programming to support those truly needy and seeking work, universal basic income would be given to every American citizen, regardless of their economic situation. While the poor might live off of the UBI, the rich are simply provided with an extra source of income to multiply through investment; the gap between the rich and poor is only larger.
UBI does not help people find better jobs because it does not provide any incentive to look for work. Instead of being motivated to search for work, studies have found that people instead rely on the UBI and are not more likely to find jobs, much less better ones. Various opponents to UBI have pointed out that people want to work. Those without jobs don’t want to remain in that position but simply being given government dollars does not motivate them to change their situation. The Great American Dream isn’t government handouts, it is working for one’s own living.
A study in Finland found that while UBI reduced stress and overall the study participants were happier, they were no more motivated to find work. Not only does UBI not provide incentive to work, it further increases government spending without producing any product.
The U.S. economy is currently booming, with more jobs available than workers to fill them. Policymakers should focus on workforce development to help the unemployed find work, instead of promoting government handouts that will skyrocket government spending.