For the last week or so, I’ve been preparing to speak against a Universal Basic Income (UBI) motion at a debate club.  Here’s the Motion:

The Motion: This House Supports a Basic Income for All US Residents

Motion Summary:  Basic income recipients would include children and adults; the employed and unemployed; and citizens, permanent residents, and all other residents who could prove a residency duration of at least three years. The amount given would start at $1,000 per person per month and be pegged to GDP growth going forward. No programs in the existing social safety would be replaced by this policy.

So! We are going to ignore the cost and required tax revenue for the above UBI proposal. If interested, check Posts 1-4. Here we're looking at how the UBI would affect work incentives (micro-level) and labor market participation (macro-level).

With the proposed UBI, how many US citizens and residents would be tempted to stop working, reduce their work hours, take longer job breaks, or plan gap years from work? Consider, for instance, the results of a recent survey of older workers

  • 7% of men +16.9% of women want to retire between 50 and 55
  • 4% of men + 25.7% of women want to retire between 56 and 60
  • 3% of men + 42.6% of women want to retire between 61 and 65

Now, what if those guys and gals got a $1000/month UBI check (which is $360 less than the average social security check in 2017)?  I suspect many would consider the UBI as a ticket to early retirement.

How many US citizens and residents might be tempted to work less or not at all, thanks to the generosity of the proposed UBI scheme? Here are some possibilities* and the links that inspired them:

UBI - Likely Shirkers.png

Note that 66 million workers is about 41% of total civilian employment in the US.  Of course, not all of these individuals would quit their jobs or reduce their hours. But with a $12,000 a year basic income for themselves and each of their children, I bet a whole lot of them would. Which would collapse the economy and tear this country apart. Because:

GDP = Goods and Services = The Product of Labor...Less Labor = Lower GDP = Not Enough Money to Support the UBI = Civil Unrest

You get the picture.


Note: Miscellaneous young people refers to the multitudes who would likely take advantage of a UBI to pursue their non-work dreams – traveling the globe, exploring their creative side, volunteering, studying ancient civilizations… by taking a few years off, or doing just seasonal, temp, gig or part-time work. How many of this group would reduce their labor market participation if they could afford to? Who knows? But one survey noted that half the respondents under 30 reported they'd like to take a gap year and that financial considerations were the main reason for not doing so.

Further Note: The mathematical rigor behind the chart's estimates are somewhere between back-of-envelope and some serious spreadsheeting.