Tuesday, March 19, 2019

Universal Income Again

Universal Basic Income is back in the news. A recurrent theme of this blog has been the ever increasing impact of artificial intelligence and robotics. The world of work is changing, and that is affecting us all. The evolution of the working world will impact what we consume, how it is produced and delivered, and more. 

For background, read How Will Attorneys (or any of us adapt). About a year later, I broached the topic of Universal Income in Universal Income, A Reality Coming? That focused upon technologists who had begun to float the idea that in a world of technological utopianism there would be little if any work, and thus a need for people to received money from some source in order to engage in economic exchanges, that is to buy the goods their lives require. 

Last Labor Day, I penned Let them Eat Brioche. The discussion there focused significantly on the recent end to an experiment in Finland regarding Basic Income. That attempt involved 2,000 Finnish being paid "$685 a month whether they found work or not" There were various perspectives expressed regarding whether that experiment was a success and even about whether it was even of sufficient size and scope to make such conclusions. 

In February 2018, the British Broadcasting Company (BBC) reported some analysis of the results of Finland's foray in to UBI. It concluded that Finland basic income trial left people 'happier but jobless.' In what was seemingly a surprise to some, handing people almost $700 per month with no strings attached somehow made those people happier. Conversely, there is surprise that the UBI program did not result in those recipients finding work. 

Those who advocate for UBI are convinced that such a program of free and unconditional support will benefit recipients. They contend that payments like this will free people to undertake education or training opportunities in order to adapt to an evolving economy. They believe it would alleviate the impact of technology on the workforce. 

Since the Finland experiment ended in December 2018, officials there have been measuring the impact of their foray into UBI. The contention or theory was that "a guaranteed safety net would help people find jobs." In many systems that provide support for "unemployment" or "underemployment," there are requirements that a recipient looks for work. And, the obtention of work and income may result in a decrease or elimination of the support payments. 

Not so in the UBI experiments. In the Finland effort, the monthly payment remained guaranteed regardless of any attempt to find work or absence thereof. There was apparently some conjecture that people were disinclined to accept some types of work in an unemployment benefit setting, "insecure gig economy work," because that might impact receipt of benefits. Thus, the guarantee of UBI might mitigate that fear and lead to more robust participation in the workplace since working would not reduce government benefits. 

That contention appears unsupported by the data from Finland. The BBC reports that "employment levels did not improve." It notes that the beginning of this effort "attracted international interest." However, the Finland results "have now raised questions about the effectiveness of such schemes." The BBC outlines various other experiments underway in places like Kenya, Italy, and the Netherlands. 

The BBC notes Finland's researchers are "still trying to work out exactly why" more people did not become employed through this UBI experiment. They expect to publish a report in another year, detailing their findings. There are some who contend that the UBI focus is "too heavily on individuals' personal wealth and buying power." Instead, they advocate focus on "companies wasting resources by producing far more stuff than people need, and over-working their employees in the process." That is, a seeming advocacy for market controls that would exert more control on what is produced for consumption.

Coincidentally, Business Insider recently reported on the Green New Deal. The legislation that would begin that proposal apparently includes some reference to wages and work. However, a website maintained by the sponsor apparently included a statement describing the bill as striving to support "economic security to all those who are unable or unwilling to work." That was also included in document about the proposal, published by National Public Radio (NPR). This was The "unwilling" wording created some controversy. 

That sentence is included in a topic labelled "overview." This section also includes "guaranteeing" everyone "a job" with significant benefits, "higher education," "healthy food," "adequate housing," and "economic security." In the Business Insider story, the bill sponsor's chief of staff was quoted explaining that this "unwilling to work" refers to "pension and retirement security," as well as to individuals who may be unwilling to "switch (careers) this late in his career." That description could perhaps apply to various individuals who are displaced by the technology, artificial intelligence, and robotics discussed in the various posts linked above.

Meanwhile, a major U.S. city is apparently poised to venture down the UBI path. The Daily News reports that New Jersey's largest city, Newark, will "create a task force and pilot program to study" UBI. The Mayor has expressed belief in the concept and contends that it is necessary because many essentially live under a consistent threat of a financial setback and much of the population lives in poverty. While the city is reportedly committed to UBI, no plan is in place regarding how to fund such a program. The News article references recent suspensions of similar experiments in Finland and Canada, as well as one recently instigated in California for 130 people in a city of 300,000 (some might find that .04% less than "universal"). 

While UBI is not identical to the Green New Deal, there are potentially similar underpinnings. Where UBI seeks to encourage engagement and productivity through decreased stress and flexibility, the Green New Deal seems focused on both mandating a job for everyone that wants one and providing income replacement to those who do not care to. 

Thus, there is evidence from Finland regarding how such programs affect employment. There is evidence from Canada that UBI is "expensive" and "not sustainable." Despite these conclusions from small scale experiments, however, proponents remain and they are striving to implement UBI elsewhere on perhaps an even broader scale.  

What remains, however, is for someone to explain how such programs can be economically feasible. Remember in school when finding the answer was not sufficient on the test? There were those teachers that simply insisted "show your work." Where is the math? How can government, dependent upon tax payers for revenue, support everyone ("universal")? If everyone is an income recipient, then no one is seemingly a taxpayer. 

While the socialistic Green Deal seems less than "universal" the reality of funding it seems as challenging nonetheless. When will someone show the math of how everyone ("universal") can have as much of everything that they want, and no one has to pay? Or, perhaps the facts and figures can be ignored and it will work if everyone just believes?

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