Matt Yglesias has an extended take on the recent findings
https://www.nber.org/papers/w32719
https://www.nber.org/papers/w32711
of UBI experiments in which employment fell somewhat among beneficiaries These have been widely interpreted as the death nell of the idea, “Bye Bye, UBI” in Matt’s title.
As Matt says, "But the larger problem [more than the negative employment effects] is that the cash injections did not have any big benefits — there was no improvement in physical or mental health, for example."
This criticism of a UBI is wrong. It might be nice if we had seen improvements, but a UBI is an _income redistribution_ policy, not social insurance. [Yes, I know, some "conservatives" claim to support a UBI as an _alternative to_ assisting people in specific life situations -- old age, unemployment, child rearing, sickness, hunger, homelessness -- (and Libertarians support UBI because it is more efficient) but that's just a stalking horse for reducing net transfers to poorer people so more can be transferred with tax cuts to richer people.]
A nice exposition of the income transfer case for UBI is reflected in this exchange from an NPR segment:
ELIZABETH RHODES: One person just finished beauty school, but she couldn't afford the cosmetology license. Another person had totaled the car, and they couldn't afford another one.
LUDDEN: So many different needs, she says, and only cash could meet them all. Rhodes says this study, like dozens of shorter ones in recent years, finds people mostly spent the extra money on basics - food, transportation, rent.
RHODES: We see a large increase in people actually paying for housing. So, a lot of people were doubling up with other people, and they were able to move out on their own.
LUDDEN: Many also put money in the bank and even helped others. And when the pandemic hit...
KARINA DOTSON: The cash gave more people agency in their employment decisions during the most turbulent time in modern history.
The reason to oppose UBI is that it is INFERIOR as _income redistribution_ to a more generous EITC. As income redistribution, it IS a downside that a UBI causes some people to substitute more leisure for earned income. It's the same argument against minimum wages instead of the EITC; an EITC transfers income to low wage workers w/o discouraging employment.
On grounds of simplicity Matt rather supports a modified, age specific UBI, but I think even that is just wrong. Administrative simplicity is good, but the Tinbergen Rule, different instruments for different objectives, is better.
It is a very good thing to have social insurance to transfer income from people who are NOT in specific need of additional income to those who are: old age, sickness rearing children, unemployment, disability with specific criteria of eligibility for benefits and funded by a VAT. See: https://thomaslhutcheson.substack.com/p/socia-insurance-20
It is also a very good thing to somewhat equalize consumption among people with an EITC that does not discourage employment as part of a progressive consumption tax.
It is also a very good thing to discourage net CO2 emissions with a tax on the same with a "carbon dividend" as one possible use of the revenues thereby generated.
And it can also be a good thing to tax goods and service -- booze, gambling, some kinds of foods and drinks -- that are not "good for" (in a paternalistic sense) those who consume them.
All of these, however, are _separate_ good things and it is not a good idea to try to combine trying to accomplish all of them with a single policy instrument.
Image Prompt: Split image one side people at work, (That’s a working cat. :)) On the other side people at leisure.
[Standard bleg: Although my style is know-it-all-ism, I do sometime entertain the thought that, here and there, I might be mistaken on some minor detail. 😊 I would welcome comments on these views.]
The best arguments I have seen for a UBI is as an insurance policy against rapid, technologically-induced unemployment. Anton Korinek (https://www.korinek.com/) makes a persuasive case - as in a scenario worth hedging against, not Road to Damascus conversion experience - that the capacities of modern AI systems may displace human cognitive, and soon physical, labour faster than human beings can be reskilled. You lose your job as a tax accountant, reskill as a barista, then find that robots are serving better lattes than you will ever be able to make, and only the most swanky coffeeshops employ the (Olympic athlete-equivalent skill level) humans anymore. So then you'd probably want UBI to cushion the transition to whatever you are going to do with the rest of your life. Korinek's proposal, however, is to just have a biweekly income transfer system in place that could be rapidly dialed up as it became apparent such a displacement was happening. In such a scenario a work deterrent effect is not relevant, as there is no point in having unemployment insurance for classes of people who will probably never get gainful employment ever again.
My only issue with Korinek's proposal - and I am someone who finds the rapid work displacement within 10-15 years scenario plausible - is the political difficulty of creating and maintaining such a minimal system without using it. The rapid work displacement scenario at least has the benefit that there would be superabundant profits to tax. Right now it would just be another drain on the treasury for little additional - and if the studies are to be believed actually employment disincentivizing - effect.
As a supplement or replacement to the current social insurance and EITC systems, I agree it's superfluous or a solution worse than the kludge of current programs.
Unfortunately the link to Matt's piece appears to be broken - and when I found it (through Google) it turned out that despite the title the only publicly available part of his post was about LNG and the anti-UBI stuff is behind a paywall. But I am inclined to believe you that it is wrong.
My own reaction to the results of the Altman-funded study is similar to (but less polite than) that of Scott Santens (at https://www.scottsantens.com/did-sam-altman-basic-income-experiment-succeed-or-fail-ubi/?ref=scott-santens-newsletter).
I don't have any objection to your idea of implementing (or is that just increasing?) the UBI by means of an enhanced negative income tax such as the US's EITC. That does seem like a practical way to do it and I don't really see why you don't consider them the same thing.
But however it's done I don't see it as justifiable only on the basis of GDP enhancement but rather on moral grounds as per Gar Alperovitz (eg at https://medium.com/@GarAlperovitz/technological-inheritance-and-the-case-for-a-basic-income-ded373a69c8e )