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February 24th, 2018

Insight

What could possibly be wrong with a Universal Basic Income?

 Peter Cove

By Peter Cove City Journal

Published Feb. 13, 2018

What could possibly be wrong with a  Universal Basic Income?

Last month, Canada became the latest country to experiment with a "basic income," offering up to $13,000 to selected low- and middle-income citizens with no strings attached. These trials have spread as developed nations search for ways to cope with stagnant wages and joblessness—problems likely to worsen as globalization and automation increase over the coming decades.

While writing my most recent book, which examines poverty in the twenty-first century, I consulted the work of Charles Murray. For decades, Murray has blazed a trail for thoughtful commentary on poverty, beginning in 1984 with Losing Ground, an early critique of the welfare state. Given Murray's sterling record on the subject, I was surprised to find that his latest work, In Our Hands, recommends implementing a universal basic income—effectively extending welfare to every American.

Murray's version of the UBI would eliminate all government transfer programs, including those involving cash, food, and health care, and replace them with an annual $10,000 grant to everyone 21 or older—whether they're poor or not. Within the United States, the concept has found support from a varied bipartisan crew, including techno-progressives in Silicon Valley and conservative libertarians like Murray. Despite its rising profile among many sharp thinkers, however, this particular approach to welfare reform would create many more problems than it would solve.

The fatal flaw of the universal basic income is the same one that hampers most existing anti-poverty programs: a lack of emphasis on encouraging work. Instead, these programs have sought to provide directly whatever poor people happen to lack. The result has been more than 50 years of massive public outlays, with little benefit other than making recipients dependent on government. The ongoing rise in worker's disability claims follows a long string of recent expansions of welfare programs, such as food stamps, housing assistance, and even free phones to boost the standard of living among poor citizens.

In the long run, this transfer-focused approach to welfare does more than create a disincentive to work. In his book The Welfare Trait, British neurobiologist Adam Perkins argues that dependence on welfare creates work-resistant personalities, which are often passed on from one generation to the next. As one review of Perkins's work puts it, the welfare state "becomes a production line for damaged kids" and encourages parents in unemployed households to have more children than families led by breadwinners.

More and more men have become absorbed in an entrenched lifestyle of joblessness, with bleak consequences. Male joblessness exceeds 20 percent in six states—Alabama, Kentucky, Louisiana, Mississippi, New Mexico, and West Virginia—and the number of fatalities from drug overdoses is well above the national average in each. According to economist Allan Kreuger, 44 percent of men who have left the workforce use pain medication—the fastest-growing form of substance abuse in the nation today.

Even many federal lawmakers have begun to realize the costs of welfare and our joblessness epidemic. Welfare for single parents has undergone a series of reforms, and the addition of work requirements has returned many recipients to the job market, reducing welfare enrollment by more than 60 percent. These results demonstrate the value of making self-sufficiency the ultimate goal of government support, rather than expanding dependency with the "no-strings" approach of UBI.

For Murray, as for many in Silicon Valley, the need for a basic income lies in the crisis that they believe automation and globalization will soon bring to the job market, leaving millions of unskilled workers without employment prospects—at least, as is commonly believed. But plenty of evidence suggests that the projections of future mass unemployment may be greatly exaggerated. Eamonn Kelly, a futurist at Deloitte Consulting, points out that forecasts of tech-driven unemployment have been made for over a century but have never panned out because emerging technology has always eventually created more new jobs than it has destroyed. In every era, new types of machines and production methods converge to enable what Kelly calls "a new art of the people." With this new art comes new forms of work.

Our future depends on a robust future for work, because work does so much more than provide for our basic needs. Work draws us into the public square and instills in us a sense of personal responsibility. It allows people to feel the pride and self-respect that come with supporting their spouses and children. Any policy that trades work for public dependency—especially when justified only by shaky futuristic projections—should be rejected.

Peter Cove is the author of Poor No More ((Buy it at a 41% discount by clicking here or order in KINDLE edition at a 65% discount by clicking here)  and the Founder of America Works and The Work First Foundation. It first appeared in City Journal.

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