The Case Against a Universal Basic Income

The financial dislocations of the novel coronavirus pandemic and the unprecedented cash benefits that policymakers implemented in response have sparked renewed interest in an old idea: a universal basic income for all Americans.

Last proposed and debated seriously in the 1970s, UBI would provide every adult in the United States with a cash payment every year with no requirement to work. While this unrestricted handout often scores high in polls, it would be a terrible idea for both idealistic and practical reasons.

Perhaps most important, severing the connection between work and income would create the illusion that the benefits received are somehow automatic and natural, rather than financed by working taxpayers. All spending and consumption is financed by someone’s work.

When we’re children, it’s our parents. In adulthood, it’s generally ourselves.

In the case of income from social welfare programs, it’s other current taxpayers. In the case of deficit spending, it’s future taxpayers.

UBI supporters often argue that its universality — it is given to everyone, regardless of need — produces benefits ranging from administrative cost savings to improved mental health, as current welfare program beneficiaries can feel ashamed to be receiving benefits. But this puts the entire history of social welfare spending on its head.

The vast majority of programs target specific groups — children, the disabled and the elderly — that have the greatest need. Under the current system, shame felt by an able-bodied adult capable of working is a feature, not a bug.

That common sense approach to work and responsibility poses a big obstacle for any UBI proposal. Despite the UBI’s approval ratings when Americans are asked about it, actual legislation to implement it would be highly controversial. In the 1970s, presidents Richard Nixon and Jimmy Carter — who had famously divergent political views — both endorsed UBI proposals that went down to defeat when the public was confronted with the details.

Many recent UBI proposals have called for a new benefit to replace much, if not all, existing social welfare spending. This radical simplification, often called a “grand bargain,” would theoretically ally conservatives, who want to reform the system’s cost and complexity, with progressives, who want to avoid anyone “falling through the cracks” of the many different current programs. But anyone who thinks that such a bargain is likely has spent too much time in political theory seminars and not enough time on Capitol Hill.

In order for such a bipartisan effort to work, policymakers would have to wipe enough current spending off the books to finance a universal benefit. That means that many programs that anti-poverty activists currently cherish would be permanently eliminated.

Say goodbye to Temporary Assistance for Needy Families, the Supplemental Nutrition Assistance Program (“food stamps”) and Supplemental Security Income for people with a disability.

The version advanced by conservative policy analyst Charles Murray, a frequently cited advocate, would abolish all of Social Security, Medicare and Medicaid as well.

There are plenty of reasonable — even radical — arguments for reforming current welfare spending, but any plan to do so must reckon with reality. A plan that would eliminate current anti-poverty programs and replace them with a single UBI is simply not politically feasible.

Any attempt to repeal longtime anti-poverty programs would be attacked as an attack on vulnerable people, while any effort to create a UBI system that would maintain current benefits would break the bank and undermine the compromise with those who want a smaller, more affordable plan. We would likely end up with a UBI on top of existing programs, which would be both more complex and more expensive.

Finally, many of the alleged advantages of life under a UBI are at odds with statistical evidence. Proponents would have us imagine a utopia where recipients are free to become artists, community volunteers and health care helpers. But as the American Enterprise Institute’s Nicholas Eberstadt finds, most men who are currently neither working nor in school spend the overwhelming majority of their free time on “socializing, relaxing, and leisure.” There is little evidence, beyond wishful thinking, to imagine that most of the people “liberated” by a UBI would spend more time on community improvement or anything constructive than on TV, video games, and smartphone apps.