Basic Income — Part Four: The Case for Universality

It’s bureaucracy all the way down

Fullerton DMV by Micah Sittig is licensed under CC BY 2.0

There are a number of paradigms for basic income, multiple ways that the program could theoretically be implemented. As discussed last week, programs could demand that participating families meet a number of requirements or conditions before receiving any money. Programs can also differ by how they distribute the money: for example, through monthly checks, pre-filled debit cards, or some sort of tax return. Basic income could be funded entirely through the government (taxes), or in part through shares of stock that have been set aside for a public fund. Programs could give money to all adult citizens, or they could implement a means-tested structure that only gave money to those most in need.

All of these options should be considered and discussed. Today, I want to focus on the last point: I want to make the case for a basic income paradigm that is truly universal.

To start, let’s talk bureaucracy. Sociologist Max Weber wrote that bureaucracy is the organization of human activity in order to achieve a purpose with maximum efficiency. It’s the system, The Man. It’s the reason there are so many forms at the DMV — it’s the reason there is a DMV at all. We don’t just hand 16-year-olds the car keys and tell them to be safe; they need to learn the rules, practice the techniques, and pass the test before they’re allowed out on their own. Love it or hate it, to some degree our democracy requires bureaucracy.

If we establish a national basic income program, it will naturally add to our bureaucracy. And it depends on how complex this program is as to how much red tape we’ll have to manage.

For our purposes, let’s say that the basic income program will be run within the Department of Health and Human Services. So let’s set up an imaginary Basic Income Division. What will it need to accomplish? It will need to A) figure out who is eligible for basic income payments, B) distribute basic income payments, and C) deal with any issues such as lost checks or changes of address.

The latter two tasks aren’t too complex, requiring only an organized mailing system and an experienced customer service center. But figuring out who is eligible for basic income payments would be a monumental task for anything that’s less than universal.

Let’s imagine that the basic income program was only open to individuals earning below $30,000. The Basic Income Division would need to sort everyone’s tax returns and separate out only those who are eligible. This would need to happen every year in order to note any change in status — those who earned less than the previous year and suddenly qualify, or those who earned more than the threshold amount and need to be dropped from the list.

But would this just be an annual task? If someone who was eligible at the beginning of the year suddenly began making $35,000, would the government require that they give back all of their basic income payments on their next tax return? If someone lost their well-paying job in February and didn’t qualify for unemployment, would they have to wait all year before they could expect to receive any sort of help from the government? What about those who don’t earn enough to pay taxes?

Maybe the program would be similar to the means-tested programs that exist today, with offices in each town where people could sign up for the benefit. Because this would be an opt-in program, there would need to be a huge outreach effort — otherwise, not everyone who qualifies will be aware that it’s available.

Whether it’s based on taxes or requires an opt-in, a means-tested program would wind up overlooking a large number of people. Why? Because differentiating between a person who makes $30,000 and a person who makes $31,000 is, at its core, a complex task. The more complicated the system, the higher the likelihood of mistakes. In this case, mistakes mean that many people who should receive payments will not get them.

Is that what we want to strive for? If only 70% of the people eligible for basic income payments actually received them, would we consider the program a success? Why not aim for 100%?

In order to handle such complexity, the Basic Income Division would require more manpower. An increase in staff would help the program to run more efficiently, but only at a price — literally. The government would need to make a financial investment in order to hire more bureaucrats, who would spend their time determining who is eligible for money from the government and who is not.

At the risk of spelling out the irony, let me sum this up: When it comes to a means-tested basic income program, the government will spend more money in the pursuit of not spending money.

A universal system, on the other hand, would have simplicity on its side. The government would still need to keep track of certain qualifications, but pretty much if you’re a US citizen over 18 and you aren’t currently imprisoned, you’d get money. There would be no need to scrutinize tax records or check employment status, no need to make appointments or prove your income. The likelihood of falling through the cracks would decrease.

I realize, of course, that my entire endeavor here is an exercise in imagination. The previous two essays were heavy on theory but perhaps light on reality. Practically and politically, though, the universal paradigm has a lot to offer.

Let’s start with an obvious statement: Not everyone agrees with redistributive policies. For our purposes here it doesn’t matter why, whether it’s an ethical argument or an economic argument or something else entirely. Not everyone wants what they’ve earned to be given to someone else who didn’t earn it. It’s a fact. A universal program would still technically be redistributive, but significantly less so than a means-tested one.

From a political standpoint, a universal system is the only thing that we could possibly agree on while keeping the program in any way effective. The moment one side decides that no one who earns over X amount of dollars should be eligible is the moment the other side declares that ex-felons and the chronically unemployed don’t deserve the assistance. And then we’re right back to where we started.

Our current welfare system has too many rules and caveats and limits to be truly useful for the most amount of people. Can’t find a job? Sorry, the continuation of your TANF benefits is contingent on employment. Earn just enough money to live on? That means you don’t need food stamps anymore. No longer qualify for Medicaid? Let’s hope you can afford your insurance premiums. If basic income had a financial cutoff, it would only serve to shift the welfare gap, not eliminate it. Instead, a universal program would help people at all levels of poverty. By providing for people at every step of the way, individuals trapped in a gap could find a way out.

Sure, many people receiving basic income payments through a universal program may not technically need the money, but we shouldn’t assume that the money would just disappear forever. Even by calling it “income” instead of a refund or rebate would encourage people to put it back into the market instead of squirreling it away. If the check came every month without fail, people would change their behavior to utilize it, whether with a monthly donation to their favorite non-profit or just an extra scone at their local coffee shop. Maybe some people would quit their jobs and do nothing all day, but others would use the income as incentive to start a business or go back to school. And with the health benefits that come from no longer worrying about money, it’s a net win all around.

Part One: Introduction

Part Two: Poverty and Health

Part Three: Conditions and Motivations

Part Four: The Case For Universality

Part Five: How UBI Will Disrupt Poverty