Bad News for Universal Basic Income

[Wingnut]

I think everyone here could have predicted the outcome of this study just by looking at what people did with their free Covid money.

The largest study into the real-world consequences of giving people an extra $1,000 per month, with no strings attached, has found that those individuals generally worked less, earned less, and engaged in more leisure time activities.

It's a result that seems to undercut some of the arguments for universal basic income (UBI), which advocates say would help lower- and middle-class Americans become more productive. The idea is that a UBI would reduce the financial uncertainty that might keep some people from pursuing new careers or entrepreneurial opportunities. Andrew Yang, the businessman and one-time Democratic presidential candidate who popularized the idea during his 2020 primary campaign, believes that a $1,000 monthly UBI would "enable all Americans to pay their bills, educate themselves, start businesses, be more creative, stay healthy, relocate for work, spend time with their children, take care of loved ones, and have a real stake in the future."

In theory, that sounds great. In reality, that's not what most people do, according to a working paper published this month.

The five researchers who published the paper tracked 1,000 people in Illinois and Texas over three years who were given $1,000 monthly gifts from a nonprofit that funded the study. The average household income for the study's participants was about $29,000 in 2019, so the monthly payments amounted to about a 40 percent increase in their income.

Relative to a control group of 2,000 people who received just $50 per month, the participants in the UBI group were less productive and no more likely to pursue better jobs or start businesses, the researchers found. They also reported "no significant effects on investments in human capital" due to the monthly payments.

Participants receiving the $1,000 monthly payments saw their income fall by about $1,500 per year (excluding the UBI payments), due to a two percentage point decrease in labor market participation and the fact that participants worked about 1.3 hours less per week than the members of the control group.

https://reason.com/2024/07/25/bad-news-for-universal-basic-income/

[LMAO]

So if you pay people to stay home and not go to work, they won’t go to work?

 No way!!!!!

[DefiantMassRINO]

No better motivator than desperation.

[Kamaji]

And in other astonishing news, the Sun continues to rise in the East, and set in the West.

[The_Reader_David]

The only bad news for a UBI here is that the economically illiterate regard a test of layering a UBI on top of existing means-tested benefits as somehow invalidating Hayek's point that a UBI as the only poverty-alleviation program is superior to mean-tested programs because it distorts the labor market less:  paying people whether they work or not (UBI) is different from paying people not to work (means-tested programs where benefits go away when you earn money).

The whole point of a UBI is for it to be the only means by which the poor are succored from tax revenues, so that loss of benefits is not a bar on taking a proper job or picking up a gig here and there.  What is more, Charles Murray ran the numbers and replacing all current welfare programs with a UBI of, if memory serves $1200 per month, plus universal high-deductible health (not universal pre-paid health-care like the left wants, just what Hayek though would be a good idea, an insurance program that prevents anyone from being bankrupted by falling ill, not one that pays for everything) would be cheaper than what we do now.