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HAT Forum - "Universal Basic Income - Pros & Cons"

  • The 519, Room C101, Glass Lobby Room 519 Church Street, Toronto, ON Canada (map)

What is UBI? Essentially a fixed income given to everyone automatically whether rich or poor, working or idle. It can either replace or supplement existing government assistance programs. 
In April 2017 the ONTARIO Liberals set up a 3-year pilot project to test this concept in Hamilton, Thunder Bay and Lindsay. The Ford government has recently killed these pilots saying they are bad policy, not working, cost too much, and that the focus should be on jobs. 
The outcry has been considerable. But who is right? What are the pros and cons? 
PROS
-a way to replace myriad assistance programs that are bureaucratic and discriminatory. How do you get assistance if you are homeless? 
- because it applies to everyone there is no loss of dignity, no stigma
-protection against the economic hardships being faced now and in the future because of things like globalization and robotics that are no one’s fault
-allows people to go back to school, find better housing, pay off debts, stop using food banks, start a small business. 
CONS
-a prosperity drain
-disincentive to work
-keeps wages low
-moral hazard:people behave more profligately when there are no consequences
-model of waste and unearned rewards
- not fiscally sustainable
-do we want to give addicts, alcoholics or scam artists, or for that matter the wealthy who don’t need it, money

The July 9 & 16 issues of The New Yorker magazine carried an interesting article on this issue that shows that this argument goes back to at least 1795

https://www.newyorker.com/magazine/2018/07/09/who-really-stands-to-win-from-universal-basic-income

And what happened in Finland? In 2017 they launched a pilot UBI project; this spring they decided not to extend it beyond a year. 

https://www.economist.com/finance-and-economics/2018/04/26/the-lapsing-of-finlands-universal-basic-income-trial

Listen to an excellent presentation on UBI by entrepreneur Andrew Yang on The Waking Up podcast with Sam Harris.

https://samharris.org/podcasts/130-universal-basic-income/