The problem of poverty persists today in the world’s most wealthiest societies including the United States of America. If that isn’t enough, Oxford researchers have predicted that within two decades, machines might be able to do half of all U.S. jobs (Thompson 2015). While this economic dynamic is mainly attributed to exploitative labor markets and inadequate human capital, the curse of the poor is their poverty. The article, “A World Without Work,” published by the Atlantic suggests that the solution to the more prevalent issue would be for the government to pay their citizens to do something rather than nothing i.e. basic income.
Former president Richard Nixon famously said in his 1971 speech, “Address to the Nation on Labor Day,” that work ethic is well established in American society and “that is why most of us consider it immoral to be lazy or slothful-even if a person is well-enough not to work or deliberately avoids work by going on welfare.” As a man who adamantly believed in reinstating work ethic, he believed his new and controversial economic policy that he proposed a few years prior, the Family Assistance Program (FAP) which would replace the AFDC would alleviate poverty and encourage productive stability within society. So one must ask, would implementing universal basic income in effort of combating poverty and automation taking over almost almost all kinds of work, be a scalable solution to our future productivity? An analysis through historical/political, social, and economic angles show that basic income has the potential to indirectly influence productivity by improving working conditions and by changing the way we think about work.
Historically, making a decent living wage wasn’t an easy thing to achieve especially for those born between 1945 and 1960, around the time of WW2 and the Great Depression. Work-life balance wasn’t a main priority as the previous generations valued opportunity for employment and craved stability in the workplace since they were exposed to hardship early on. As a result, past generations were tied to doing what they had to versus what they wanted to do with their lives. It has been found that recent generations placed more importance on working conditions than past generations including the Silent Generation (Sverko 1999). Unlike past generations, the workforce could be in a position were they have more bargaining power than their employers if UBI is implemented.
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Hypothetically, if someone was receiving $1,000 a month from the government, they will be less inclined to accept a job with bad working conditions and bad pay. Employers would have to improve working conditions and increase wages which would then promote a more inclusive labor market with better opportunities for all to contribute productively. Researcher Tinuke Fapohunda from Lagos State University has found that employers can save money and maintain a healthier and a more productive workforce than that of past generations by prioritizing work-life balance. Universal basic income has been criticized by some because they worry that existing social programs that help those in need will be cut and it will give employers an excuse to even lower wages.
However, UBI in practice is an inexpensive way of letting individuals choose what to spend their money on by shrinking costly social welfare programs including food assistance and unemployment support. Also, going back to what was said before, employers will have no choice but to raise wages as those who choose to work won’t do so if the wages are low since there is no sense of urgency to accept the job offer like there was with older generations.
Charles Darwin acknowledged that he was able to go on the Beagle Voyage because he had “ample leisure from not having to earn my own bread.” Many of mankind’s innovative achievements had come from those who had a lot of free time like Darwin. As computers and automation take over more work, people across all incomes worry their about their survival in the near future. Universal Basic Income can provide people with economic security that allows them to pursue their talents and passions in a society that is liberated from wage slavery. With income no longer a restraint (courtesy of the UBI) for pursuing one’s talent and passions, people can use their guaranteed salary as basic venture capital to start up new businesses, explore new innovations, and contribute to society in other meaningful ways. As people get involved in activities they actually enjoy, the intrinsic motivation to work decreases and people will naturally put more effort into it.
For example, economist Evelyn Forgot explains in a 2011 paper published by the Canadian Public Policy that during the Canadian basic income experiment in a small town named Dauphin, more teenagers put off part-time jobs to focus on school and as a result, there was a noticeable decrease in high school dropouts. In essence, basic income can facilitate entrepeneurialship that will help the American economy to grow and thrive.
Furthermore, the introduction of basic income grants can indirectly impact productivity. In the article “A World Without Work” published by the Atlantic, it is asserted that UBI might do the most to preserve human capital in a time where automation will take over manual jobs. The article posits that to ensure a baseline of attachment to a productive workforce, the government could pay a flat rate in return for some labor participation but people could earn more by taking on more gigs. The Luxembourg Income Study reports that the countries that do the most to guarantee poverty-level incomes like the Netherlands and Sweden, do very well in terms of productivity growth. While countries like the USA that do the very least to help the poor have slightly below the average productivity growth rates (174).
However, programs that tested UBI consistently found that the number of hours worked were reduced versus the existing welfare system. Minicome, an experimental Canadian guaranteed basic income project that was introduced in 1974, has found that the modestly sized income ($19,500 for a four person family) generated a decrease of 11.3% in labor force participation among participants (Calnitsky, Latner 2017). From an economic standpoint, the reduction in labor participation could be attributed to the sense of income security the paycheck provided as people didn’t feel the urgent need to work since most of their basic needs were taken care of. Even if people stopped working, they may contribute in other meaningful ways and UBI provides a means of compensating this type of work efficiently.
Universal basic income could potentially be the scalable solution to our future productivity as time is becoming more and more automated. By improving working conditions and by changing the way we think about work it could influence productivity in indirectly in multiple ways. By shifting the balance from past generations being tied to doing what they had to do instead of what they want to do to income no longer being a restraint that holds someone back from pursuing their talent and passions, UBI could be more than a solution. Although UBI in theory is still questioned, it should replace existing welfare services. In fact, it almost was; President Nixon, the same man who was forced to resign after the Watergate scandal in 1974, had almost implemented unconditional income for all poor families in America as he believed it would correct the condition it deals with and it UBI has the potential to do so.
