Post-Work Won’t Work: The universal basic income is an idea based on dubious social and moral logic

Post-Work Won’t Work: The universal basic income is an idea based on dubious social and moral logic. By Aaron M. Renn. A review of Basic Income: A Radical Proposal for a Free Society and a Sane Economy, by Philippe Van Parijs and Yannick Vanderborght.

The notion of basic income with no strings attached::

A basic income — an annual, unconditional cash grant to every adult, regardless of need, and without a work requirement to obtain it — would be non-taxable and total about 25 percent of GDP. The amount of the grant could vary depending on the age of the recipient, but it would start at birth. It would supplement existing safety-net programs and replace only those whose benefits are less than the basic income amount; thus, the grant would establish a floor, but not a ceiling, on government income transfers. (Publicly financed health care would remain outside the system, for example.)

The overarching goal of the basic-income proposal is to ease economic distress stemming from the structural disappearance of work and declining real incomes for lower-skilled workers. Technology has eliminated countless jobs, and there’s no reason to believe that this process won’t continue. Researchers from MIT and Oxford have estimated that technology already in development, such as driverless cars, could eliminate nearly half of all current jobs in the United States. One does not have to accept this particular analysis to recognize the anxieties that exist — one reason why Silicon Valley supports the idea.

Another goal of the basic income is to redirect the negative incentives created by current welfare systems. When you pay people for being poor or unemployed, unsurprisingly, they’re often motivated to remain poor. Welfare benefits get phased out as income rises; the poor and lower-income workers can face effective marginal tax rates as high as 85 percent, according to the Congressional Budget Office. Working longer hours or seeking out a higher-paying but more difficult job doesn’t make much sense in a system that punishes good behavior and traps people at the bottom of the income ladder.

The problems:

Championing de facto unlimited immigration and the rights of illegal migrants is arguably the highest priority of a significant portion of the American political class. … Until America reestablishes control over immigration and limits the number of poor migrants it accepts, basic income will be completely unworkable. …

To illustrate the downside potential, consider the poor results from annual per-capita payments of casino revenues to American Indian tribes (not discussed in the book). Some tribes enjoy a very high “basic income” — sometimes as high as $100,000 per year — in the form of these payments. But as the Economist reports, “as payment grows more Native Americans have stopped working and fallen into a drug and alcohol abuse lifestyle that has carried them back into poverty.” The magazine contrasts this fate with that of more successful tribes like Washington State’s Jamestown S’Klallam, which eliminated poverty by investing in tribal-owned small businesses instead of handing out cash grants. …

Its intrinsic vision of society is morally problematic, even perverse: individuals are entitled to a share of social prosperity but have no obligation to contribute anything to it. In the authors’ vision, it is perfectly acceptable for able-bodied young men to collect a perpetual income while living in mom’s basement or a small apartment and doing nothing but play video games and watch Internet porn.

The obligation on taxpayers to provide all this largesse is frightening. A class of lazy non-workers might breed like crazy, and society would become unsustainable after a couple of generations.

hat-tip Matthew