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Robert Ramos

Jack Visnaw

WRTG 121

November 6, 2018

Project 2: Research Essay Revision

Imagine for moment, what if the United States covered your cost of living? Would you

still go to work? Go back to school? Not work at all? What would you do? This concept is called

Universal Basic Income or UBI, gaining popularity as one of the most ambitious social policies

of our times. I’m curious what would the country become if this policy became reality. In short

terms Universal Basic Income is a no-strings-attached monthly stipend to every resident. No

means test meaning no method for determining whether someone qualifies for financial

assistance to obtain a service or good. In my essay I will explore Universal Basic Income (UBI)

and whether it could be successful in the United States, or would it foster predominantly negative

economic and social consequences.

I first began getting interested in Universal Basic Income when one of my favorite

YouTubers I’m subscribed to, Bürgerkrieg, did a video essay about the topic about a month ago.

Bürgerkrieg is a German YouTuber who does video essays commonly over obscure history

topics and thought experiments over mostly controversial ideas. In his video he delves into

several different nuances revolving around the controversy like replacing the United States

welfare programs and other governmental expenses with UBI, explaining how inflation and cost

of living works in conjunction, etc. This made me try to think of ways that Universal Basic

Income could possibly work as in helping the economy come back together for more people to

reduce the income inequality that became rampant in the United States, raising the floor of
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people in poverty to increase participation in the economy, and increase innovation and

entrepreneurship between more people. “A recent study by PricewaterhouseCoopers estimates

that 38 percent of U.S. jobs could be lost to automation in the next 15 years.” (Sri-kumar) The

future might come to the point where technology will put people out of work. I’m also concerned

about current welfare programs like Social Security which its trust fund is currently shrinking

more than it is growing due to our population living lives longer than ever. The Social Security

Trust Fund predicts that they will grow broke by year 2034 and as the issue has been sitting the

prediction has been getting closer and closer. I know the repeal of Social Security will come

sooner than I’ll ever get to draw for it but there have been talks of ideas like the Universal Basic

Income could be the solution. Then against UBI, I’m concerned that just like how people game

the welfare systems we have now that would UBI also be used to get around working and

weaken the US economy.

Universal Basic Income isn’t a new topic, but it has been gaining a lot of new press in

recent years. There are several countries in which pilot projects of UBI have already been

launched in places like Namibia, India, and Finland with currently varied results (Lant). We’ve

had also had trial in the US and Canada back in the 60s and 70s but was not a fully realized to

the extent it would be today. A Universal Basic Income is a type of program in which citizens or

permanent residents of a country may receive a regular sum of money from a source such as a

government. It also is an unconditional basic income means it has no means test, as in it has no

determination on eligibility based upon whether the individual or family possesses the means to

do without that help.

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So far recent trials have been muddying the waters on whether UBI has been a feasible

plan. Two of the most recent pilot programs, currently both closing as of this year, have been one

in Ontario, Canada and the one in Finland. I’ll start going over the one from Canada.

“The program provided payments to 4,000 low-income people in several Ontario

communities, including Hamilton, Brantford, Thunder Bay and Lindsay. Single

participants received up to $16,989 a year while couples received up to $24,027. Every

dollar earned from a job would result in a clawback of 50 cents from the benefit.”

(Gollom)

This was the program in placed to test the workings of UBI in the public. For the experiment

they had planned for the Basic Income Group their monthly basic income payments for up to a

three-year period. Then as a control they monitored a Comparison Group of 2,000 people outside

the original 4,000 participants who did not receive monthly Basic Income payments, but actively

participated in the research study. Both groups were regularly asked about their health,

employment and housing through surveys. In the case for the participants from Lindsay, they

were not assigned to a comparison group. In Lindsay, the pilot will measure the community-level

outcomes of a basic income, e.g. hospital usage. Participants were chosen by the requirements of

being 18 to 64 years old for the duration of the pilot, residents to the selected regions for at least

12 months, and living on a low income (under $34,000 per year if you're single or under $48,000

per year if a couple). The payments were to ensure a minimum level of income provided to

participants. People with a disability will also receive up to $500 per month on top. Participants

were able to go to school to further their education or begin/continue to work while receiving the

basic income. To help balance the cost to benefit between the state and the participants the basic
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income amount will decrease by $0.50 for every dollar an individual earns through work.

(“Ontario Basic Income Pilot.”)

Now the Ontario Pilot wasn’t without its shortcomings that may have significantly

skewed the experiments results if it was allowed to complete the length of the project. Earlier

this fall, Premier Doug Ford decided to scrap Ontario’s basic income pilot for failing to help

people become “independent contributors to the economy.” (Gollom) A researcher who spoke

with CBC, who did not want to be identified because the team is bound by confidentiality

restrictions, simply says there isn’t enough data to know whether it was working or not. Some

economists argue that the program's flawed implementation would have limited any insights

from the data anyway. One of the issues posed by economist, Stephen Gordan, an economics

professor at Laval University, was a serious sample-selection issue. Gordan said that especially

since the pilot projects were explicitly temporary, participants might act differently in a three-

year program than if they knew they were receiving money indefinitely. With this drawback

participants would have an interest to keep working as to afford the cost of living after the trial’s

end. Another problem was the way the project was financed which did not include increasing

taxes in the sample cities, essentially “free money that fell from heaven”, said Gordon.

Next, we have Finland which has opted to end their limited UBI trial past as originally

scheduled at the end of the year. Finnish government had the possibility to expand the trial for a

third year instead of the original two, but they are currently examining other schemes for

reforming the Finnish social security system. (Peter) A researcher at the Social Insurance

Institution (Kela), Miska Simanainen, said "reforming the social security system is on the

political agenda, but the politicians are also discussing many other models of social security,

rather than just basic income". In good news the pilot in Finland will be able to complete an
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analysis of the results compared to the Ontario Pilot. Unfortunately, the data on the pilot will not

be available till the end of 2019. Currently for their trial, 2,000 randomly selected, unemployed

Finns are receiving a flat monthly payment of €560 ($685) as basic income.

Although again, just like Ontario, we run into similar setbacks to a full implementation.

Jonathan Brun with the Basic Income Earth Network writes:

“The purpose of these pilot projects was to gather meaningful scientific data on

the effects of basic income and use that to convince the public, bureaucrats, and

politicians that basic income was a feasible and logical idea. However, scientific

reasoning rarely works in the public sphere. Instead, basic income projects are at risk of

ending prematurely. The reason Ontario’s experiment was canceled and Finland’s pilot

program was not extended was not due to financial or scientific concerns, but rather

because of politics.”

The efforts of the current trials are being cut short reducing the ability to learn from longer term

experiments in today’s economy. Truly I excited to hear the findings from Finland’s pilot

program, good or bad. At the moment most research pulls mostly speculation as towards

Universal Basic Income’s full implementation with implemented funding by society.

I was able to pull a survey for a dozen of my peers to help determine how familiar the

topic of UBI was to them and get their general reactions to its implementations to society. I

asked 12 people, 8 male and 4 female mostly within the ages 21-24, here on the campus of

Eastern Michigan University 5 questions about UBI and this is what I found. My first question

was whether they were familiar with the concept of UBI and I found that it was about even

between people that agree and disagree with having a UBI at 33% each while only 1 person was

unsure and a majority of 5 people (41.6%) never heard of it before. After introducing the concept
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as, an unconditional weekly payment for every adult, regardless of income or circumstances,

designed to support an individual’s basic needs, I asked if they would support the idea in

principle and I got: 7 yeses, 4 noes, and 1 unsure. Now next I asked regardless if someone was

for or against UBI a list of which potential benefit they find find most attractive and the highest

result was tackling poverty by raising the income floor by 6 people followed by providing

income security by 3 people. Then to get the other side of the issue I asked what peoples biggest

concerns about the policy and 4 people were concerned that people would stop working and

another 4 were concerned on how to solve the financial cost. And then lastly, I asked if by

receiving a monthly stipend as a student of around $1,000 I had a couple say they would work

the same hours, 3 would work a bit less, 2 would work a lot less, and 5 would stop working

completely.

I felt a lot of the results aligned with how I thought for benefits and concerns but how

they generally thought about Universal Basic Income as a principle I thought was interesting as

most agreed with the idea. The question that surprised me the most is how few people were

familiar with the concept of UBI. After conducting a couple of the surveys, I had the chance to

pick their brains about what they favored and whether they thought society was ready for a UBI.

Both people I talked with were familiar with UBI but were concerned whether it could be done at

this point. One brought up mentions on how billionaire tech titian Elon Musk and Facebook

founder Mark Zuckerberg are finding Universal Basic Income as a necessity in the near future

but not in our current job climate. We feared that the future of automation will bring the need for

some sort of change to aid the cost of living but not at this time.

In conclusion, whether Universal Basic Income could be successful in the United States,

or would it foster predominantly negative economic and social consequences, we are not sure
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yet. There honestly not enough experimentation that has been put into the problem to determine

one way from the other. UBI has been a couple centuries long argument so far but it is still

unclear that we need to implement it yet. For the revolution of automation and artificial

intelligence we are a couple decades away from coming to a definitive answer.

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Works Cited

TheBurgerkrieg. “That’s not how inflation works.” YouTube, commentary by TheBurgerkrieg,

12 Sept. 2018, https://www.youtube.com/watch?v=7k5ND1P0ZuI.

Sri-kumar, Komal, and Masood Sohaili. "An Economic Case for Universal Basic Income." The

Milken Institute Review: A Journal of Economic Policy, July 2017. Opposing

Viewpoints in Context,

http://link.galegroup.com/apps/doc/A534956546/OVIC?u=lom_emichu&sid=OVIC&xid

=f6b32f59.

Lant, Karla. Universal Basic Income Pilot Programs. Futurism,

https://futurism.com/images/universal-basic-income-ubi-pilot-programs-around-the-

world/

Gollom, Mark. “Ford government ditched basic income pilot project before any data landed,

researcher says.” CBC News, 3 Aug. 2018, https://www.cbc.ca/news/canada/basic-

income-pilot-project-ford-cancel-1.4771343.

“Ontario Basic Income Pilot.” Ontario, https://www.ontario.ca/page/ontario-basic-income-pilot.

Peter, Laurence. “No plans to expand Finland basic income trial.” BBC News, 23 April 2018,

https://www.bbc.com/news/world-europe-43866700.

Brun, Jonathan. “The problem with basic income pilots.” Basic Income Earth Network, 10 Sept.

2018, https://basicincome.org/news/2018/09/the-problem-with-basic-income-pilots/.