The idea of a Universal Basic Income or UBI has been gaining wider attention, both good and bad. Of course, some claim it would be a panacea of sorts, while others claim it would destroy the job market and the economy. Not many examine it from a neutral standpoint and look at both sides. Here I will try and postulate what would happen if it were implemented, both good and bad.
Full disclosure, I am in favor of UBI. There have been limited experiments with it in other countries, with varying results depending on the interpretation by sources who have an existing bias. I would be very much in favor of a large scale experiment in the US involving an entire city or state. I don’t find it likely that would happen because of capitalists who fear the results.
Any such experiment would have to be at least a full fiscal year, though two years would be more valid to eliminate attempts to manipulate circumstances and give a more clear image of what adjustments would be needed and true end results determined.
What it is. To recap, UBI is a proposed system whereby each citizen would be provided with a basic income. While we call it universal, it would prove no benefit to offer that income to those above a certain income level, such as those earning above $100,000. Determination of benefits should include a person’s income from all sources, not just wages. Above a certain income level, that money does not benefit the individual or the economy. So it would only serve to remove money from the economy and increase the flow of wealth to the top.
It should meet basic needs to be considered a basic income. A UBI should offer an income level high enough to provide for all basic needs. Housing, food, clothing, transportation and medical care. Not entertainment.
We’ve heard these arguments before. The major criticism of UBI is that it would encourage those already at the low end of the income spectrum to stop working. This argument is something I find equivalent to the objection to ending slavery. Slaves did not object to ending slavery and it is not those living below the poverty line who object to having a secure income which provides stability.
Decreased work hours. Many people would stop working entirely or scale back hours voluntarily. Those most likely to continue working full-time would be those in positions and careers they enjoy or pay which allowed them to rise above basic subsistence.
This would lead to wage increases across the board as employers were forced to compete for employees with higher wages, a more hospitable environment and better benefits. THIS is the biggest reason that the mere mention of the term UBI sends capitalists and corporatists into shivers of terror.
Job market effects. What this would mean to the job market would be a decrease in unemployment numbers as fewer people would be seeking employment. This would be followed by a further increase in available positions as those previously employed by companies would have the opportunity to branch out on their own.
Effects on society. What this would mean for society would mean increased life satisfaction, decreased stress, lower levels of drug abuse, increased health and longer lifespans.
Effects on militarism. A society under less stress and less ruled by fear would be less prone to wage war on other countries. Another reason that capitalists loathe the idea.
Effects on general economy. For the general economy, it would be beneficial, as more people would have an increase in disposable income, spending more and investing more. Problem is, major investors don’t really want the average consumer to invest. The greater percentage of a lower number of stocks available the rich control, the greater their profits, the greater their grasp on the economy as a whole.
Effects on consumer spending. As is obvious, consumer spending would increase. Not only in purchasing but on tourism, education, entertainment, you name it. The negative? Value menus would meet their demise.
Explosive growth. If UBI were implemented, we would see a period of explosive economic growth which would level off after a short period of years but end with sustained stability. I have covered how growth is a myth, here. Growth cannot continue indefinitely, the entire idea is ludicrous and unsustainable.
Like I said, we’ve heard these arguments before. Many of the same arguments being used against UBI have been used previously against Social Security, welfare, TANF, WIC, food stamps and the minimum wage, both when it was first implemented and with every single minimum wage increase ever. In no case did these things destroy the job market or the economy. In fact, the exact opposite is true. They improved the job market and the economy.
Effects on environment. The effect on the environment would be positive in the long term. When people are not running in fear of being unable to meet their basic needs, they would have more consideration for the environment. Right now, people are fed a diet of fear leading some to place more concern for income than the future of the planet their children and grandchildren inherit to live in. Capitalists place no concern on the environment in the first place, unless they can profit from it.
Effects on inflation. Now, here we do see a negative. Perhaps. Yes, implementing UBI would result in inflation. The biggest question is whether that inflation would be a damaging level. The answer lies not in UBI itself but in how much capitalists would continue to insist on a continued unlimited increase to their profit margin above and beyond the increased profits they would experience as a direct result of UBI itself. Because capitalists are never happy with simply increasing profits, they want to increase their percentage of profit over cost. Even if they had to pay higher wages and offer more benefits, they would already experience more profits by consumer spending. So inflation would not be organic, it would be a forced component. That should be no surprise, it’s what we have been enduring for decades. So legislation would likely have to be implemented to limit profit percentages or for direct cost control. The difference between us and Venezuela on that? Nobody is going to invade us.
Effects on taxation. Some may claim that UBI would result in less income tax revenue. Any initial loss of income tax revenue would be offset in the longer term by higher wages and business profits (assuming cities and states don’t give it all away, which they probably would). Of course, sales tax revenue would skyrocket with no increase in the tax rate being charged. Federally, we all know the tax cut for the rich is a disaster and should be repealed.
The Revolution will not be televised. Of course, none of this is going to be discussed on corporate media. Look who their advertisers are. The same companies that thrive by keeping wages down, keeping people terrified. Including the MIC. How would they convince you we need more bombs or convince young people to die in foreign countries if there was nothing to fear? If there were no enemy raging at the gate “taking away your living”, you may realize there never was an enemy, other than those at the top.
Lastly, with automation expanding with no end coming, UBI is the only way that capitalism is going to survive. If people have no income, they have nothing to spend and capitalism will collapse.