Also, UBI is often the cheapest and most efficient way to prop people out of poverty and (surprised?) to support their ambitions in education, starting business etc.
Instead of UBI as a bag of dollars, which landlords and merchants will immediately seek to plunder, you deliver highly-subsidized food, shelter, and rich public services. This is much harder to capture, and also has less of a ratchet factor.
Consider, for example, a universal health care component. The interest in more services and coverage wanes once it reaches a level of "good enough for most people." There may be some niche voters pulled in by "we'll also cover leeches", but most people will find those arguments uncompelling.
In the worst case, benefits do escalate, and you end up with more and more economic activity under government control, either as a direct UBI delivery system, or through ever growing tax rates to finance the subsidized programs. Which in and of itself may not be so bad. I know the entrpeneurship/free markets/self-directed mindset is very big in this community, but if the goal is maximizing quality-of-life metrics, this might be a viable way to deliver it. Ideally, we're all healthy, securely housed, and well fed, and our cultural-economic question becomes "how much of a discretionary hobby budget is $job_title worth?"
People like to pretend it doesn't, but it does.
UBI making shell games like that harder is a good thing if you ask me.
People need to get over the ... but but X got more than me.... if you're worried about that then move to SF and you'll get as much as they get, because it all goes to landlords anyways.
Also much bigger restrictions on housing is needed with an airbnb or hospitality tax for any short-term rentals. Something that makes it almost worth just converting to a long-term instead.
The fact that subsidies provided to improve affordability of rents generally increases those rent costs is long-recognised. Winston Churchill in 1906:
Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!
<https://www.landvaluetax.org/history/winston-churchill-said-...>
Providing a subsidy sounds appealing to economically-naive voters and is appealing to economically-sophisticated rentiers. Such policies are highly politically tractable (they have broad support) but economically nonsensical (they aggravate rather than solve the underlying problem).
Economically, the two dynamics in constant tension are the Iron Law of Wages (wages fall to, or below, subsistence level), and the Law of Rent (rents rise to consume all surplus value).
The solution is to address both:
- A UBI provides an income floor which serves as a credible BATNA (best alternative to negotiated agreement) for any individual, whether or not part of the work force. An employer must offer terms at least as attractive as leisure (or alternative, potentially noneconomic activity) to attract new hires.
- A tax on rents, with the classic case being a land tax, returns surplus value to the public sphere and motivates holders of rent-generating assets to apply those to their greatest economic value, rather than letting them sit idle. (I'd extend the rents past the traditional land, but it's a useful illustrative case.)
Both prongs can be extended. Government might step in as, say, both employer and housing supplier of last resort, as well as providing credits to businesses which are truly socially-beneficial but economically nonviable (the classic definition of a public good: education, healthcare, emergency services, child and elder care, etc.) permitting these to function under a regime of both UBI and rents taxes.
Besides, I see two serious problems:
1) There's always the political incentive to raise it. More people benefit than are harmed, thus it will bring votes even as it crushes the economy.
2) It's a trap. You'll end up with the lower segment of the population not having useful job skills. If for whatever reason you have to scale back/eliminate UBI you have a bunch of people who are effectively non-workers.
I used to support it but I've come to realize it's not a solution.
There's also the approach of a negative income tax, but to be at a useful level this would push a form of graft--fake jobs with kickbacks. (I'll hire you to sit in the office for $5/hr. You pay me $8/hr under the table from the tax rebate you're getting.)
I also dislike approaches like universal health care--from looking at the nations that have implemented it it has a major fox-guarding-the-henhouse problem: the same people decide what the standards are and spend the money to meet the standards. Oops, the route to getting votes is to lower the standards as that gets you more votes from low taxes than loses from people lacking treatment, especially if their doctors never tell them of the problem. (You're not likely to miss option X if your doctor doesn't tell you about it in the first place.)
Something I would like to see is to modify the ACA towards lower copays and a much lower *monthly* out of pocket max (perhaps tied to last year's AGI), then give everyone a subsidy equal to the cheapest plan they qualify for with a forced-placement system to that plan if you don't pick one. And I would like to put a time limit on the wait for service--for a routine matter they have say 30 days to provide service (first available appointment with the proper type of doctor) or they have to cover out of network as if it was in network--and once that's been triggered you can keep that doc regardless. The clock starts on the day the referral is made, or the service requested if referrals are not required.
It could just easily be the start of a spiral into an Argentina style socialist nightmare. The ability to vote for the party offering you a raise may be too dangerous.
There’s no real way to know, because it’s never been tried at enough scale, or real enough, to have any data one way or the other.