The issue of Universal Basic Income was thrust back into the spotlight in the last month by facebook founder, Mark Zuckerberg, who has been promoting the concept and sparking debate over whether it would harm or help the US combat poverty.
Universal Basic Income as proposed by libertarian author, Charles Murray, would fold up all Welfare and Social Security into one automated program (doing away with government employees which oversee existing programs) and send everyone earning under a certain income a check which at the least prevents the individual from dropping below the poverty line.
While the concept is titled as a universal program, most would agree that there should be income caps for reception of the funds. About 60 percent of US citizens earn less than $40k per year. I believe it would be best to begin tapering the UBI off after a person passes $40k (or a couple passes $80k). The tapering of payments could be constructed in a way that people are not refusing a new job or pay raise due to complete loss of their UBI. Additionally, retirees and the disabled could be given larger payouts to compensate for their inability to work.
Proposals range from an amount of $11k to $18k. It is also proposed by Republicans that a portion of the payment could be made available as a health insurance voucher (thus ending the seemingly endless redrafting of our healthcare infrastructure with each new administration). The exact amount of the UBI, the maximum income allowed before the UBI tapers off, and the degree of which it tapers off when passing that income threshold would have to be negotiated by Congress. But that is how politics are supposed to work — there should be a middle ground sought out.
Detractors of the UBI plan say that it will kill work ethic, but I ask, who cares about the people that won’t take advantage of this hand-up. If you are receiving $13k as a UBI, it enables you to engage in more entrepreneurial ventures. It would encourage more people to start their own business, it would allow people to relocate more easily when changing jobs, it would prevent job-lock and thus encourage more liquidity in the job market, and it would enable people with low income jobs to rise out of poverty overnight.
What the UBI would do for the economy at large is generate enormous levels of consumption. Poor persons spend every dollar they earn each year, and it can be expected that every dollar received in the program would go back into the economy, creating more demand for goods and services, and creating more jobs.
Increased spending means increased revenues for business owners, and if health insurance vouchers are tied into the UBI, then employers would no longer be involved in providing the service to employees (which makes it easier for small businesses to expand and hire more people).
