Universal Basic Income

The...model has also been around in Alaska since 1976. Most recently, the Alaska Permanent Fund paid a dividend of $1,100 to every state resident, or $4,400 for every family of four. Lauded by some as “the most popular program in the history of the US,” it is an important source of income for Alaskans, particularly for single and Native women. Bruenig argues we could do the same nationally.
In addition to reducing wealth inequality, the promise of social wealth funds is that a significant share of the economy could, from a technical standpoint, be brought under public ownership within a relatively short period of time. If successful, this would massively extend our capacity to exercise democratic control over US capital. The whip of “business confidence,” while still present, would become less of a threat.

because a basic income would make the decision to work more voluntary, women would no longer choose to remain in toxic jobs solely because they can’t afford not to. In this way, a UBI could address gender-based mistreatment in workplaces. By freeing women of their economic dependence on employers, a UBI would also improve women’s bargaining positions, enabling them to negotiate for more flexible hours or better conditions.

The key to understanding the real cost of UBI is understanding the difference between the gross (or upfront) and net (or real) cost. Here’s a simple example: imagine a room with 15 people who want to set up a UBI for the room of $2 per person. The upfront cost of the policy would be $30. The ten richest people in the room are asked to contribute $3 each towards funding it. After they each put in $3, raising the total $30 needed, every person in the room gets their $2 universal basic income. But because the ten richest people in the room contributed $3, and then got $2 back as the UBI, their real, net contribution is in fact $1 each. So the real cost of the UBI is $10.

The average net beneficiary of this UBI proposal is a household of an average household size of two people making about $27,000 per year, the professor adds.

The couple’s net benefit would be nearly $9,000, which raises their net income to almost $36,000. “

This UBI scheme is a net financial benefit to most households with incomes up to $55,000 annually,” he says. “This would be an effective wage subsidy (or tax cut) for tens of millions of working-class families.

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Widerquist says the $539 billion per year that is 2.95 percent of America’s GDP is about one-sixth of the cost of commonly circulated estimates, and that this amount is less than 25 percent of current entitlement programs.

The study used U.S. Census Bureau data for 2015 to examine an estimated poverty-level UBI of $12,000 per adult and $6,000 per child.

Widerquist’s research also found that some 43.1 million people (including 14.5 million children) would benefit from this increased income, reducing the poverty rate from 13.5 percent of the population to zero.

“A NIT is like giving someone $50 and asking for nothing back, and a UBI is like giving someone $100 and asking for $50 from their next paycheck. Both result in the person getting an extra $50. The question of which is better depends on the details involved and how the person feels about them.”

[D]espite the wide range of treatments and evaluation methodologies, the results are remarkably consistent. On average, husbands reduced labor supply by about the equivalent of two weeks of full-time employment. Wives and single female heads reduced labor supply by about the equivalent of three weeks of full-time employment. Youth reduced labor supply by about the equivalent of four weeks of full-time employment. Estimated income and substitution effects are quite similar to those obtained from nonexperimental studies.

The main difference appears to be that with a UBI, due to its universality, the cost is shifted more, and this has the potential to affect behavior. But due to all the ways in which this cost can be shifted, it can be a more or less of a net good depending on taxation specifics and intended policy goals. A poorly designed UBI can result in worse outcomes than a NIT, but a well designed UBI can result in better outcomes.

A UBI can also potentially draw more support and maintain it in the long term, whereas a NIT might be actively fought against by those not receiving it, and could lose support over time.

A NIT can only be considered vastly superior if one subscribes to the idea that all taxation is evil, and therefore should always be minimized in all possible cases it can be minimized.

A UBI can only be considered vastly superior if one subscribes to the idea that equality of distribution is of utmost importance and that anything that does not give equally is inherently flawed and/or morally wrong.