A universal basic income won’t do everyone good

What if there isn’t enough work to go around?

Alejo Jose G. Sison | Jun 20 2016 | comment

“Wealth without work” is one of seven blunders that lead to violence, Gandhi was supposed to have said according to a Facebook post. This addresses the core of why a “universal basic income” (UBI) won’t do everyone good.

UBI, the direct payment by government of money to all citizens, to top up or instead of wages, is an old idea that dates back to the Enlightenment. In recent times, it has enjoyed resurgent popularity and support, even among political groups supposedly at opposite ends of the spectrum, such as libertarians and socialists. Early this June, for instance, Switzerland held a referendum on a constitutional amendment that would pave the way for it. The proposal was finally rejected. However, in 2017, Finland aims to put one such policy into effect, providing citizens with up to €800 a month. Some cities in Holland are considering doing something similar, albeit in a more limited scale.

For advocates, the main reason behind UBI is that with the current state of technology, there is less work to go around. At the same time, most of the work still available consists of low-end jobs which no longer pay enough. The solution therefore is for government to step in and make up for the shortfall. The financial crisis which began in 2008 has only served to emphasize this urgent need. Even fiscal conservatives seem to have bought in because they find UBI less intrusive than other measures which expand the welfare state.

The majority of opponents, on the other hand, would prefer a “wait and see” attitude on the real effects of technological change on labor. Indeed, lots of people lost their jobs when horse-drawn carriages became obsolete, but there were many more who found new and higher paying ones in the automobile industry. Perhaps UBI is too drastic a cure for a temporary problem that will sort itself out in due course. Others insist that these direct and unconditional government transfers are just too costly for their intended effect and unsustainable in the long term.

What hardly anyone refers to is the intrinsic value of work for human dignity and wellbeing. Discussions have mostly focused on work as a source of income and ignored other perhaps even more important benefits. Not only does work prevent us from engaging in harmful, antisocial activities, but it also furnishes our lives with meaning and a sense of identity, as well as order and structure to our families and societies. This is not something that UBI can supply, even if economists figured out a way to afford it. Work is the universal, time-tested method through which human beings learn, acquire skills and develop all sorts of distinctive excellences or virtues. That is something no government dole-out can replace.

The author teaches Business Ethics at the University of Navarre. His latest book is “Happiness and Virtue Ethics in Business. The Ultimate Value Proposition”.

Will there be enough work? That’s the basic question facing developed economies with flat growth as employment shifts from agriculture and manufacturing to services. It appears that there might not be jobs for the uneducated and unskilled.

One response to this is the idea of a universal basic income: the government gives everyone, rich and poor alike, a monthly stipend just for showing up for lunch. As a solution for unemployment, it has pedigree. Back in 1516 Thomas More mooted it inUtopia. One of his characters observes: "Instead of i[hanging thieves by the dozen], it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming, first a thief, and then a corpse."

One American journalist has called the UBI the “world’s simplest plan to end poverty” and the idea is gaining traction in the media. Finland is considering it. However, Swiss voters rejected it overwhelmingly in a referendum earlier this month. In our lead story today, Alejo Sison argues that a key question is missing from the debate: the dignity of work.