I think a good case can be made that a UBI [universal basic income] would be more helpful to the disadvantaged than the patchwork of frequently intrusive, infantilizing, bureaucratic, and wasteful means-tested programs that presently constitutes the American social safety net. So if I could wave a magic wand and replace the policy status quo with a UBI, I would do so. That said, my reading of the available evidence convinces me that a social policy that channels benefits through work and thereby encourages paid employment has important advantages over a UBI in helping the disadvantaged to live full, happy, productive, and rewarding lives.
…a UBI cannot be recommended as sound social policy. The great challenge at present is to arrest and reverse the slide of less skilled Americans into a permanent underclass – even as automation and globalization continue to marginalize the role and value of low-skill work. But as the celebrated negative income tax experiments of the late 1960s and early 1970s made clear, unconditional income support reduces labor supply. Perhaps not dramatically, but still the impact is going in the wrong direction. By contrast, wage subsidies in the form of graduated payments to employers of low-skill workers can increase the attractiveness of work and boost labor force participation.
1. I think it is important to distinguish adding a universal benefit to the existing means-tested programs from using it to replace existing means-tested programs. I doubt that the negative income tax experiments give us any idea of how the latter would work, particularly today. (a) I don’t think that the experiments replaced existing programs and (b) today’s programs are much more generous than they were when the experiments were done.
2. Accordingly, I hope Brink would support an effort to wave the magic wand and replace current programs with a universal flexible benefit.
3. Why have wage subsidies on the one hand and payroll taxes on the other? Why not instead introduce a graduated payroll tax, which is lower for low-wage workers, possibly even zero below a certain income level?
4. There are going to be people who simply cannot work. You don’t want to force them to live on minimal resources just because you are afraid of giving other people the incentive to loaf. My solution would be to have the universal flexible benefit, which would come from taxpayers at the national level, provide minimal resources. However, state and local governments as well as charities might supplement these benefits on the basis of needs.