Why a Universal Basic Income Won't Work

The massive U.S. income transfer system is rightfully criticized from both the left and the right. It often gives too much money to families who don’t need assistance and often gives too little to those that do. Worse, the system’s incentives encourage recipients to act against their long-term interests.

 

Some people think a universal basic income—a UBI—is an attractive alternative.  This program would provide a guaranteed income to all with no strings attached. Its supporters say a UBI would lift millions out of poverty and allow individuals more freedom to pursue their dreams.

 

But, in reality, a UBI would make matters worse.

 

To prevent a UBI from adding trillions of dollars in government spending and to fix the current system’s problems, the UBI must replace existing transfer programs.  Does anyone really believe that abolishing health care, housing, and nutrition programs for the poor, the disabled and elderly persons is realistic possibility, or even a good idea?

 

The UBI is a dangerous departure from centuries of welfare policy. Historically, charities, religious organizations, and governments have all required recipients to undertake efforts to improve their lives in return for aid. This requirement comes from the knowledge that assistance given without responsibility dampens the natural human desire for self-reliance and self-improvement

 

The UBI gives imposes no such obligation on recipients. It gives recipients less reason to work, improve their skills, or improve their situation in life.

 

At its core, the UBI wrongly presumes that it doesn’t matter whether individuals achieve material well-being through their own efforts, or from government-mandated payments from others. This presumption is dead wrong. An individual’s efforts and sacrifices to achieve their personal goals are crucial to living a fulfilled life. The UBI’s failure to understand this key aspect of human nature makes it a destructive policy for the very recipients it is intended to help.