Analysis

Here's the easy way to make basic income much more reasonable

Let's start by making it less universal

How would you like $30,000, no strings attached? That's pretty much what Switzerland is voting for Sunday, when it decides whether to green light the first universal basic income in history.

By now you've probably heard of this type of policy: a check for the same amount made out to every man, woman, and child, regardless of household income, with no strings attached. The Finns are also prepping their own universal basic income (UBI) experiment.

Some left-leaning policy thinkers (and a few libertarian ones) have even stumped for a UBI here in America. But there are plenty of critics too, and not just on the right. Over the last few days they wrote a flurry of objections in The New York Times, Bloomberg, the Financial Times, and even a left-leaning think tank.

Some of these objections are silly. But some are worth grappling with. And doing so might suggest one simple but significant way UBI fans here in the U.S. could alter the policy.

First, critics worry a UBI would discourage work. And second, they worry it would be too costly. But these two concerns also sort of solve each other: Any UBI that actually provided enough money per person to make having a job unnecessary would be wildly cost-prohibitive. (One of the main reasons the Swiss proposal will almost certainly fail.) A realistic American version would be more modest: A $3,000 UBI would cost about $907 billion a year, which is feasible. Even a $10,000 UBI for adults and a $6,000 one for children would still put U.S. government spending well within the range of other advanced Western economies.

Crucially, this would all be on top of current government spending. Critics also worry a UBI could leave the poor worse off if it replaced current welfare state programs, because its per person benefits could be lower than what poor people received previously. But the solution is pretty obvious: Simply insist that a UBI absorbs existing programs only with great care, and only if total benefits to the poor either remain unchanged or rise as a result.

But if we're paring the UBI down from these radical ideals, why still use the UBI form? Because it isn't means-tested (i.e. there's no income threshold for eligibility), it's simple to administer, it doesn't risk creating poverty traps, and it can't be used to stigmatize the poor. That it's universal would also arguably make it a political winner.

So is there a way to preserve those strengths while minimizing weaknesses? I think so.

One really helpful way of thinking about poverty is that it's mainly a problem of people not being able to work, or of households with too many people who aren't able to work. Children are one obvious example; old people are another. Then there are disabled people, students, and adults who can't work because all their time is taken up by caring for a child or a sick adult family member. Now, they are probably, but not necessarily, part of households that do have one or more workers. It's just that these workers are put under a tremendous amount of strain from having all these bills to cover.

This suggests a system of what you might call "mini UBIs" — targeted at these specific vulnerable populations, but universal within those populations and not means-tested. So if you're an old person, your household gets its UBI for old people; if you're a child, your household gets its UBI for kids; if you're disabled, your household gets its UBI for disabled people; and so on.

In fact, we already have a UBI for old people! It's called Social Security, and it's been incredibly successful at reducing poverty among the elderly. A UBI for children would effectively be a universal child allowance, which other countries have and plenty of people have advocated here in America. We'd just need to add equivalent programs for the disabled, for caretakers, for students, etc.

Such a system of "mini UBIs" would still be pretty expensive. But not absurdly so.

Crucially, it would also laser in on the difference between a UBI as a replacement for work, and a UBI as a way to improve work. Mini UBIs would still give workers breathing room from the demands of the job market, as almost every household would get at least one. But they wouldn't be seen as directly competing with work.

That's a pretty good political argument — even if it means most people wouldn't get $30,000 a year, no strings attached.

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