Another collaboration with the chicken-fat-mad Mike Lawrence! That trap-filled hopscotch board was entirely Mike’s idea.
This is something I’ve suspected for a while—that the core reason many liberals don’t support a universal basic income (UBI) is that it just sounds too wonderful to happen. Especially when many of us have been conditioned, over the past decade or so, to expect nothing but the worst.
It turns out I’m not the first to have this thought (although I wonder if I’m the first to do a cartoon about it). In 2017, Alyssa Battistoni wrote:
The problem isn’t that basic income doesn’t sound good enough—it’s that it sounds too good to be true.
But James Surowiecki, writing in 2016 in The New Yorker, pointed out that utopian ideas sometimes surprise us by becoming mundane:
The most popular social-welfare programs in the U.S. all seemed utopian at first. Until the nineteen-twenties, no state in the union offered any kind of old-age pension; by 1935, we had Social Security. Guaranteed health care for seniors was attacked as unworkable and socialist; now Medicare is uncontroversial… It’s easy to imagine a basic income going overnight from completely improbable to totally necessary.
If you’re interested in the research on giving people money, a good overview is “A Summary of Existing Research on Guaranteed Income,” published by the University of Chicago Inclusive Economy Lab. The section on employment effects is on pages five and six. Generally, studies find “that cash transfers had either no effect or a positive effect on adult labor force participation,” although one study found a 2 percent-point decrease in labor market participation and a five percent decrease in earned income.
TRANSCRIPT OF CARTOON
This cartoon has four panels. Each panel shows two friends walking through a wooded park. One is a man wearing a baseball cap and an orange T-shirt, so I’ll call him ORANGE. The other is a woman wearing a red plaid shirt, so I’ll call her PLAID.
PANEL 1
Orange smiles as he reads something on his smartphone. Plaid looks interested.
ORANGE: Look at this! Another study found that basic income works!
PLAID: What’s basic income?
PANEL 2
Orange explains while Plaid hops through a hopscotch grid drawn on the path.
ORANGE: It’s the government giving everyone a basic income, so we’re all guaranteed enough to live on.
PLAID: That sounds amazing. But… if we had that, why would anyone work?
PANEL 3
Orange gestures emphatically with his free hand. Plaid walks with one hand thoughtfully against her chin.
ORANGE: That’s been studied so much… Over and over, when people are given basic incomes, they don’t stop working!
PLAID: Hmm… I’m still against it.
PANEL 4
Orange looks baffled. Plaid shrugs.
ORANGE: But why?
PLAID: I just can’t believe anything that good is possible.
CHICKEN FAT WATCH
“Chicken fat” is an obsolete cartoonists’ term for unimportant but fun details slipped into the art.
PANEL 1: A little gray alien is flying a flying-saucer-shaped kite.
PANEL 2: The hopscotch grid is full of traps, including a spider, tacks, a Lego brick, a mouse frantically waving its arms as if to say “Don’t step on me!,” a pile of poop, a whoopee cushion, a mousetrap, and a bear trap. A “wanted” poster for a raccoon with an eyepatch is nailed to a tree.
PANEL 3: A sasquatch and an Ewok are hiding behind trees; the sasquatch signals to the Ewok to be quiet.
PANEL 4: The raccoon from Panel 2’s “wanted” poster is hiding in the bushes.
CLOTHES: Orange’s T-shirt shows a smiley face in Panel 1, an alien smiley in Panel 2, the blood-spattered Watchmen smiley in Panel 3, and the Hitchhiker’s Guide smiley-faced planet in Panel 4.
Plaid’s T-shirt shows an ear of corn in Panel 2 and a human ear in Panel 4.
Orange’s cap has a picture of a fly (insect) in panel 1, and a picture of a fly (pants) in panel 2.
Oooh! Something I unreservedly agree with Barry on.
One of the communities I lived in when I was very young was Dauphin, Manitoba. Back in the 70’s, a version of universal basic income was instituted in the town as an experiment (it was called “mincome”). The project ended before it could be properly reported (there was a government change), but anecdotally, it seemed to have really good outcomes.
And the best part about it was that it really isn’t all that expensive as a program, because it functionally replaces things like welfare, which is already funded. More than that, as opposed to all the dicking around politicians like to do with welfare administration, it was a relatively simple annual calculation on your tax filings. So you’d actually be removing disincentives to work, cutting layers of bureaucracy, and improving quality of life. If explained properly, I think this is something that the left and right could both theoretically get behind.
I don’t know of any such studies. Amp cites “A Summary of Existing Research on Guaranteed Income,” published by the University of Chicago Inclusive Economy Lab. The paper suggests that programs transferring relatively modest amounts of money to people on a temporary basis do not tend to cause the recipients to alter their labor-force participation much. If you embrace a Protestant Work Ethic, maybe you value that result. But in any event, the studies don’t seem to tell us how people would respond to permanent payments of more substantial sums—and they don’t tell us how people would respond to other aspects of a UBI.
According to the UChicago summary,
First, this definition of UBI invites the questions, “What is the basic cost of living?” and “How do we establish an individual’s basic needs?” I suspect any measure of “the basic cost of living” would depend on location—implying that a UBI payment would vary from place to place. If a person insisted on renting a palace in Hawaii, would a UBI require government to pay for that? Likewise, I suspect any measure of the cost of “an individual’s basic needs” would vary not only with location, but with the individual. Some people propose using UBI as a replacement for other aspects of the social safety net. This would have a net effect of transferring wealth from the sick to the healthy.
Second, none of the studies discussed the effects of the added taxes required to pay for a UBI. We might conclude that the benefits are worth the burdens—but I didn’t see where the UChicago paper estimates these effects.
Assuming we financed a UBI with a progressive income tax, I expect a UBI would have the net effect of shifting a lot of money down the income ladder. This might have the effect of depressing consumption of goods and services consumed by the affluent and increasing the consumption of goods and services consumed by more middle-class people. Rich landowners might discover that they can no longer command a huge price for their mansions. On the flip side, landlords might discover that they could demand more money to rent their four-family flats. Much as guaranteed student loans likely helped to inflate the price of a college education, a UBI can be expected to inflate the price of many things demanded by the middle class—thereby offsetting some of the policy’s intended benefits.
In short, there’s more to a UBI than just the effect on labor-force participation. Orange’s claim seems premature.
I think people saying things like this haven’t grappled with the idea that what this amounts to is a modified welfare program. We don’t need to study that, because we have examples of it the world over. In Canada, welfare rates vary by province, but the least a family of four receives is $34,000 and PEI’s rate is $53,000. Would you consider that a permanent payment of a substantial sum? I would. Hot damn! We have that data! What did that do to our workforce participation rate? Well, I don’t think there’s a single state in America where the welfare payouts are higher than they are in any Canadian province, and Canada’s workforce participation rate is higher than America’s.
Obviously yes to the former, but I think you’re trying to make this needlessly complicated with the latter. It’s not voodoo economics to be aware that the cost of living varies by state, and so yes, UBI should vary by state…. Again… Welfare varies by state. No one is particularly confused by that. There might even be an argument that we should vary by county, although… Again, that gets needlessly complicated, and maybe there’s a benefit in incentivizing people to move to places their income goes further… But granularizing it to the level of the individual is the kind of complexity one suggests when they’re trying to scuttle a program by making it unworkable.
It’s an interesting conversation, because my expectation would be that depending on the amount of UBI, it would probably be mostly offset by a decrease in things like welfare payments and benefits. What wasn’t offset by program cuts and related labor efficiencies would be offset by things like a decrease in crime, or increases in general health. Like I said before, the mincome experiment ended before it could be properly studied, but we can look at the data and draw inferences… there was a precipitous drop in physician usage as early as Q4 of the experiment. We may never be able to perfectly quantify the benefits, but my instinct is that these programs, if properly managed, would probably pay for themselves, indirectly if not directly.
Depends. Again… People are eating food to live. They have rooms to stay in. They’re receiving some kind of cash stream, or charity, or stealing, because they aren’t subsisting on air. Would this increase demand on some products to some extent? Maybe. Would that drive some level of inflation? Sure. But it wouldn’t be 1:1, and this really does feel like being threatened with a good time… People are doing better so they can buy more and support the economy? Oh no. No, don’t do it. /s
Yeah … but that’s Canadian money; it’s like Monopoly money, right? 😊
Thoughtful rejoinder, Corso. At a gut level, this sounds like a fair effort to rebut the “but it’s just a temporary program” objection. But I suspect that Canadian’s (need-based?) system penalizes people who reduce their working hours. A UBI would not. Ergo, I’m not sure that this comparison does the trick. I’ll think about it.
Exactly!
And here’s a fundamental question: Do we want this public policy to induce behavior change or not?
Some policies (e.g., excise taxes) are designed to change people’s behavior: We tax cigarettes and gasoline more because we want people to consume them less. But when we want to merely raise revenues for government, we seek out taxes that cause the LEAST change in people’s behavior. Part of the justification for a progressive income tax is that we expect that taxing the rich will cause less change in their lifestyle than taxing the poor.
Welfare programs are kind of the opposite of a tax: We want programs that will enable the MOST change in people’s behavior. Some moralists object if we give people money and those people reduce the amount of time they spend working. But a policy designer/economist would CELEBRATE that a policy is actually DOING SOMETHING. It is entirely normal for people to consume more of normal goods as they get richer—and leisure is a normal good. If the single parent really needs to cut back on working overtime at the McDonald’s in order to take care of that special-needs kid, and we give the parent some money, and the parent never changes any behavior, then WHAT WAS THE POINT?
What behavior would I expect a UBI to permit? It might let people move to that smaller town with lower incomes but also lower cost of living. This would help alleviate the housing crunch that urban America is experiencing and the housing glut that small-town America is experiencing, too. But we would not achieve this benefit if people’s UBI payments decreased when they leave Big City.
Maybe partially offset. I have doubts about how well we can finance a UNIVERSAL program (such as UBI) with savings achieved in NEED-BASED programs (such as Medicare/Medicaid).
Medicare/Medicaid collect money from the MANY and give to the FEW—often people with very great need. UBI would collect money from the MANY and give to the MANY, without regard to need. A UBI that would adequately provide for people who are currently receiving Medicare/Medicaid, while simultaneously providing the same payment to everyone, would be a wildly expensive program. I suspect any UBI—covering people’s “basic cost of living”—would still need supplementary need-based programs, too. So we should not count on using funds for Medicare/Medicaid-type programs to offset the cost of a UBI.
I like the idea of Universal Basic Income. But the objection that springs immediately to my mind is: “Wouldn’t that immediately cause inflation that ate up the benefit?” And if the amount of the benefit was tied to inflation, couldn’t that cause a hyperinflation ratchet? I’m sure this has been studied, too, but I’m surprised the lady in the cartoon didn’t bring that up immediately.
Nobody.really, if you’re interested, the guy who seems to be the most knowledgeable proponent of UBI is Scott Santens, who’s on BlueSky.
Grace
There’s a (relatively) famous book by Albert Hirschman called The Rhetoric of Reaction. It’s about the responses conservatives have to proposals for social change that would benefit most people. One is: It’ll never work! Another is: It’ll backfire and make things worse! There are others. They go back to the 18th century, maybe earlier, so they’re not just responses to the New Deal, and they respond to changes that even most conservatives now accept.
Now, this doesn’t prove that any given proposal will work, but it should make anyone skeptical when someone uses this rhetoric. As this cartoon reminds us, though, the problem isn’t just conservatives. It’s remarkable how ready many (not all) liberals are to listen to conservatives and their bad-faith arguments.
Not long ago I had a fun exchange on Twitter over this. Some person declared that liberal Democrats are proposing policies that ordinary people hate, and it’s why liberal Democrats are losing. I pointed out that popular policies today were dismissed in similar terms before, but are now embraced. He said I was arguing retrospectively. But the point is that “crazy,” supposedly alienating policies don’t always lose elections. Sometimes they win, and become so popular that they’re known as “third rails.” (Which doesn’t stop conservatives and their liberal allies from trying to get rid of them.) I might have pointed out too that it’s not clear that today’s crazy policies are that unpopular among “normal” people. Some, like universal healthcare, are very popular despite massive propaganda campaigns against them. The ground has shifted with others, such as support for Israel. “Socialism” turns out not to be as scary to most people as we’re often told – just to the usual elite suspects. But it does seem to be true that many people who favor those crazy policies are intimidated by the rhetoric of reaction: they’d like not to have to go into devastating medical debt, but maybe it wouldn’t work. And many people who should know better fuss about the terrifying 33% majority that keeps us from having good things.