In recent years, several countries, and more than a few municipalities in the United States, have experimented with universal basic income (UBI) under the assumption that unconditionally sending people a government check every month will reduce poverty, decrease income inequality, increase happiness, and allow people to pursue their artistic and creative endeavors without having to worry about working for a living.
Some, mostly on the Left, believe that a UBI is unavoidable, and needs to be implemented sooner rather than later given that automation, artificial intelligence, quantum computing, and other emerging technologies are revolutionizing the workplace and making many traditional jobs nearly obsolete.
Many on the Right think differently about a UBI, arguing that it is not a poverty cure-all, and that it would be too costly and introduce more perils than benefits.
Since the launch of the War on Poverty in 1964, the United States has spent an estimated $22 trillion on anti-poverty programs. And what have Americans received in return? A cottage industry of welfare, bloated government bureaucracies, cronyism, corruption, and a large increase in those dependent on the dole. Incredibly, since 1965, the poverty rate has barely changed.
Evidence shows UBI programs similarly fail to achieve their primary stated goal of alleviating poverty.
Consider the example of Finland, which abandoned its UBI experiment after it failed to reduce unemployment and placed a big burden on Finnish taxpayers. In 2015, the Finnish government launched a UBI program that gave 2,000 unemployed Finnish families $658 per month after the unemployment rate reached a 17-year high of 10 percent.
While the UBI was in effect, Finland's unemployment rate decreased less than 1 percentage point. To this day, it remains among the highest of all the Nordic countries. Additionally, only 35 percent of hard-working Finns supported the UBI when told they must pay more in taxes to keep the UBI program afloat, according to a study by Finland's Social Insurance Institution.
Canada also recently pulled the plug on its three-year UBI pilot program, which lasted less than a year. Under the program, 4,000 Ontario residents were given a maximum of $16,989 per year for a single person or up to $24,027 per year for a couple. The program's initial budget was $150 million.
When Lisa Macleod, Ontario's minister of children, community, and social services, announced the abrupt end of the UBI program, she noted it was "quite expensive" and "clearly not the answer for Ontario families." MacLeod also said the UBI program "was certainly not going to be sustainable" and "spending more money on a broken program wasn't going to help anyone."
After the UBI program was terminated, Canadians were asked what they thought about it. According to Ipsos, 60 percent of Canadians said UBI makes people more reliant on the state and discourages employment. Furthermore, 52 percent said a permanent UBI program would increase taxes to unaffordable levels.
Aside from the fact that UBI programs are expensive, ineffective, and breed government dependence, they also undermine people's dignity, adversely affect the economy, and remove the incentive to work.
By simply giving people money with no strings attached, UBI advocates eliminate their incentive to earn an income and their natural inclination to pursue a fulfilling career. UBI conditions a generation to abstain from entering the labor force, thereby exacerbating the existing shortage of skilled workers while curbing their social and emotional development.
As anyone who has been in the work force for many years knows, having a career brings satisfaction. Yes, work can be tedious. It can be draining. It can even be frustrating at times. But work is also inherent to the human condition. It is where we learn to set and achieve goals, overcome obstacles, cooperate with others, communicate effectively, among many more life lessons.
UBI is a dubious policy, not only because it has failed to produce the intended results in places where it has been tried, but also because it rewards idleness and begets dependence on government. There are currently more than 8.8 million unfilled jobs in the U.S. economy. As a nation, we would be much better off preparing the next generation to thrive in these jobs and the jobs of the future than throwing in the towel and resorting to a universal basic income.
Chris Talgo is editorial director at The Heartland Institute.
The views expressed in this article are the writer's own.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
