Four Arguments Against a UBI
From Universal Basic Income: What Everyone Needs to Know
In my last post, I discussed six arguments that are often made in support of a UBI. Here, as promised, is the next chapter from Universal Basic Income: What Everyone Needs to Know, which covers the four main arguments against a UBI. As before, the purpose of this chapter is just to lay the arguments out in relatively succinct form. We cover each of them in much more detail later in the book! (See this post for the full Table of Contents)
CHAPTER 6
WHAT ARE THE MAIN ARGUMENTS AGAINST A BASIC INCOME?
Not everyone thinks that a UBI would be a good idea. In particular, there are three objections that occur to almost everyone who considers a UBI. This section presents those objections, plus a fourth which, while less common, nevertheless raises an important issue.
1. Cost— How much is it going to cost? This is the first question almost everyone has about a UBI. And with good reason. Depending on how it is structured, a UBI could be very, very expensive. Let’s do some quick math. There are about 260 million adults living in the United States. Suppose we wanted to provide all adults with a UBI of $1,000 per month. That’s a decent amount of money, but not quite enough to clear the poverty threshold for a single individual (that would require just under $14,000 annually, according to 2022 US Census Bureau guidelines). The cost of such a program would be approximately $3.1 trillion— more than the Federal government spent in 2021 on Social Security, Medicare, and Medicaid combined, and almost half of the entire Federal budget for that same year! There are ways of reducing the cost of a UBI, as we’ll see in parts 2 and 6 of this book. Still, proponents of a UBI face a challenging dilemma. The amount paid by a UBI needs to be large enough to make a real difference in people’s lives, but small enough that its total cost is not overwhelming. Achieving both of these goals simultaneously is no easy task.
2. Work— The second objection that most people have to a UBI is that it will lead people to stop working. Unlike other social welfare policies like the EITC, a UBI gives people money whether they’re working or not. Won’t this cause people to work less, or even to stop working altogether? Early experiments with a Negative Income Tax initially seemed to confirm this concern, and some have argued that recent extensions of unemployment insurance during the Covid- 19 pandemic produced the same consequence, for the same reason. We will have more to say about this worry in part 6. Before moving on to the third objection, however, there is a related concern about the UBI and work that is worth mentioning. Most people have no problem with the state providing assistance to those who are genuinely unable to support themselves. But people’s attitude toward those who are able but unwilling to work is a different matter. Such people are often looked down upon as “free- loaders,” and many if not most people think that the state has no obligation to support them. But the UBI gives money to everybody— it does not attempt to discriminate between the “deserving” and the “undeserving” poor. And many people see this as a serious flaw. We’ll examine this specific objection in more depth in chapter 50.
3. Wasting Cash— A third common objection to a UBI is that people will just waste cash. If you give people money that they can use whichever way they want, won’t they squander it on drugs, alcohol, and gambling? This type of distrust is one large reason many welfare programs have traditionally provided in- kind or restricted benefits, such as food stamps or housing vouchers.
It is true that some people will fritter a UBI away, just as some people find a way to trade in- kind benefits like food stamps for drugs or alcohol. But evidence from existing cash transfer programs and UBI experiments suggests that this should not be a huge concern, as we’ll see throughout the book. And we’ll look at this specific objection more closely in chapter 51.
4. Making the Poor Worse Off— A final objection raises a less obvious, but deeply important concern: could a UBI actually make the poor worse off? As we have seen above, a UBI has the potential to be incredibly expensive. Those on the far left of the political spectrum might be comfortable with this added expense, but conservatives and moderates almost certainly will not be. As a political matter, then, the only way to attract sufficient support for a UBI is probably going to involve funding it (at least in part) by cutting other programs. And there’s the rub. As Robert Greenstein of the Center for Budget and Policy Priorities puts it, “If you take dollars targeted on people in the bottom fifth or two- fifths of the population and convert them to universal payments to people all the way up the income scale, you’re redistributing upward. That would increase poverty and inequality rather than reduce them.” We’ll talk more about this objection in chapter 53, and about whether a UBI actually redistributes upward in chapter 8.