New York mayoral candidate and UBI supporter Andrew Yang. (Photo by Michael M. Santiago / Getty … [+]
When Andrew Yang ran for the Democratic Party’s presidential candidacy last year, he pushed for the idea of a Universal Basic Income (UBI). The scheme to provide a government scholarship to every American regardless of necessity went nowhere (as did Yang’s candidacy), although a number of journalists and prominent tech barons saw a significant UBI surge. Now Yang is campaigning for the Democratic nomination of the New York City Mayor. Although his platform contains many worthy elements and his candidacy is resonating on multiple levels, he continues to advance a form of UBI that remains a bad idea on multiple levels. The same goes for new UBI experiments in New York state, as well as in Stockton, California, and in that state’s affluent Marin County – a generally bad idea.
Candidate Yang has certainly weakened his UBI ambitions. As a presidential candidate, he wanted to give everyone in the country $ 12,000 a year for an estimated annual cost of $ 2.8 trillion. For New York City he wants $ 2,000 a year for citizens in “extreme poverty,” a lower price than last year, but perhaps less manageable for New York City than the trillions for the federal government. Candidate Yang says he knows where to get the money – by ending the tax exemptions that operations like Madison Square Garden enjoy. Even if there are enough such facilities to raise the funds needed, there are many better ways for the city to spend the money than UBI, by upgrading the subways or maybe cleaning the streets, filling potholes and much more of the basics the city is fulfilling its obligations better than it is now.
Whether at the city or national level, as some more libertarian boosters claim, UBI could not replace other entitlement programs. Certainly, Yang’s $ 2,000 a year proposal, even if focused on the most needy, would not meet the needs of the disadvantaged in New York City. An extended grant would still not recognize other important facts in life. Replacing welfare with a UBI or, as some have suggested, using a broad UBI as a substitute for social security at the national level would certainly meet political opposition. A broad UBI as a substitute for social security and medical care would be a partial transfer from old to young, and its use as a replacement for disability insurance would be a partial transfer from disabled to disabled. Such considerations, once generally understood, could dissolve any public support for UBI, except perhaps among students who would simply see more beer in it.
The vulnerabilities of the disadvantaged would also thwart the feasibility of using UBI, even if Yang is proposing it now in New York, let alone as a substitute for family support. Many of these people have trouble managing their finances. The preponderance of payday loan businesses in poor areas as well as leasing businesses for furniture and the like speaks not only for the residents’ liquidity bottlenecks, but also for their vulnerability to Hucksters. Noteworthy in this regard are statistics from the Census Bureau that 11 million American adults have poor basic literacy skills and about 30 million have difficulty filling out basic financial forms. Without the guidance and limitations of current welfare regimes, many less fortunate recipients of these grants would either feel dressed up or spend too quickly. Surely a Mayor Yang would refuse to tell financial incompetents who spent their allowance too quickly to tighten their collective belts and wait for the next review.
If these considerations weren’t enough to question the wisdom of a UBI system, the evidence from various studies isn’t particularly encouraging. For example, a Bureau of Labor Statistics study of people with unemployment found that they spent more time watching TV and sleeping than improving their work skills, as some UBI proponents say. A similar study of recipients of disabilities found similar patterns. Statistics from previous federal pilot programs on negative income tax, a variant of the UBI, are also daunting. Between 1968 and 1980 Washington conducted four controlled trials of negative income taxes involving thousands of people in six states. The working hours requested by all recipients fell 9% below those not included in the program. They fell by 20% for married women and by 25% for single female heads of household. Desired work among single men fell 43% among non-recipients. When those receiving negative income tax lost their jobs, unemployment lasted an average of two months longer than non-recipients and 12 months longer for married women.
There is an additional consideration that is less quantifiable but potentially more significant than any of these others. Even in a scarcity-free utopia, in which a UBI would probably be easy to grant, the transmission would harm people. Just giving people the means to acquire the bare necessities and material joys of life would effectively make every citizen a community of state or other giving entity. That’s good for kids. It binds them to dutiful parents. But it would undermine adult independence, stealing the sense of self-respect that underlies self-respect. It would create a nation (or city) of sheep and cause significant harm, perhaps even destroy, to people and society.