UBI is a microeconomic fix for basic macroeconomic problems in our system. It does nothing to address the distribution of income, merely raising the present floor for some by giving everyone the benefit equally. Supply-side economists, such as Freidman, loved UBI because it kept the economy firmly pegged to capital, not labor and widens the distribution gap of comparative wealth.
UBI also caters to the myth of government efficiency. Given that the only net source of fiscal assets in the private sector is the red ink (deficit) of government spending anything that “pays for itself”, especially by way of cutting safety nets that are countercyclical to the business cycle, automatic stabilizers, limits our ability to recover from recessions.
Setting aside the gender equality issue for a moment, one can equate UBI to the move of females back into the workforce in the mid-’60s. At first, it was a considerable benefit to the lifestyle of many families, until its suppressing pressure on wages and its inflationary effect combined and soon “every” woman “had to” work to maintain the family’s lifestyle. The net economic effect of offering females more choices was to limit their choices.
A UBI that isn’t sufficient to provide a basic level of subsistence to those who can’t work, by their choice, circumstances, or market fluctuations, changes nothing in the labor/capital dynamics and might actually drive many into the workforce out of necessity, regardless of their ability. Those demographics presently first fired and last hired would feel even more downward pressure on their ability to provide for themselves or their families, widening all of the traditional gaps we need to erase.
Our present system of government finance that requires Treasury debt to be issued to match (not fund) deficit spending would add insult to the injury of the working class by making a guaranteed income available to the wealthy in the form of the welfare of interest paid on bonds. Bonds pay for nothing at the federal level and should be eliminated anyway, but doing so would be a necessary step in implementing any large federal spending program just to give everyone real “skin in the game” instead of providing payments to those who need them least.
A UBI has a place in our economy, but only as the primary income source for those who simply choose not to work in the private sector. We have a system in place for this, Social Security, only needing some rule modifications. A greatly expanded safety net should be still available to those who can’t work and the government should become the employer of last resort for those who are unemployed temporarily not of their choosing.
A federally funded, but locally managed, job guarantee available at the discretion of the worker that pays a minimum “livable” wage with generous benefits would serve as a floor for private employers to match and would provide countercyclical injections of federal money to preserve supply chains in business downturns. Such a program removes poverty and all of the stigma attached to that as a bargaining chip for employers.
It pegs the economy to the hour of labor, not capital, fulfilling the government’s obligation assumed when it created unemployment via taxation. There was no unemployment before taxation. It also provides a stable of “employed” workers for the private sector with their social and job skills intact, removing the stigma attached to unemployment.
A locally managed job guarantee would monetize many jobs now dependent upon volunteer labor and provide communities with labor and resources they now lack to provide many quality of life benefits for everyone. When the general population sees the benefits from that labor the falsehood of it being at “their” expense would evaporate along with the shaming of those who would choose the program as their career choice and still be able to participate in the economy with some pride for their effort.
