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The Tufts Daily
Where you read it first | Thursday, March 28, 2024

Anita's Angle: Universal but not so basic

anita

Elon Musk, Milton Friedman and Bernie Sanders walk into a bar. They’d argue all night, but there is one idea they’d likely agree upon: universal basic income (UBI). It has been widely touted as a preemptive solution to the looming threat of automation and a means to fight poverty. It sounds like a catch-all fix, and makes for a great sound bite. Many localities, from cities in Canada to U.S. states like Alaska and even the nation of Finland, have debuted their own UBI experiments, which will be evaluated in the coming years for their efficacy. The idea is no more than an early-stage solution to the challenges facing neoliberal capitalism, but it certainly seems a promising start. The impetus for implementation is more than just economic or political — it is personal. A past UBI experiment has shown“statistically significant gains in mental health, education, employment, and [physical] health.” Unfortunately, it is not as simple of a solution as many believe.

Firstly, implementation of a UBI could prevent more fundamental reform in the future, as it would only guarantee basic living necessities to those living in poverty while allowing wealthy capital owners to accumulate profits without sharing them with the workers instrumental in generating them. But even more important in the short-term is the challenge of figuring out who would bear the cost. As with any policy that attracts widespread political support from different actors, UBI can easily become a vehicle for those actors’ divergent long-term visions.

On one hand, Andy Stern, former president of the Service Employees International Union, cautions that a tax-the-rich approach would be politically unpopular and thus ineffective. He endorses a visionof a UBI funded by cashing out welfare programs and imposing a consumption tax, both of which would disproportionately affect poor people in the first place, thus diluting the effects of the policy. This approach seems to run counter to the fundamental purpose of UBI as a poverty reduction mechanism. A system that requires the wealthy to contribute the most to UBI is not as unfair as it sounds — after all, even the rich would receive a UBI, and pay it back in the form of taxes if they remain wealthy enough. But if a rich individual lost a significant sum of their money, they would be able to fall back on the UBI payment as their tax bracket moves lower. An effective UBI may need to be rolled out in tandem with an innovative taxation strategy, perhaps shouldered by companies that benefit from automation. Like any shared public good, everyone pays and everyone benefits, a phenomenon that becomes even more undeniable when one considers the positive externalities that come with combating poverty.

The experiments so far have been met with mixed sentiment. This is partially due to their lack of a unifying ideology. The question, in my view, is not whether UBI should be implemented; the benefits of providing poor people with a living wage are undeniable. What we should ask ourselves instead is how we will actually fund and distribute it. As with all policymaking, the devil is in the details.