It's a simple, utopian idea. If we give everyone a monthly check, we can eliminate poverty and do away with the inefficiencies of our cumbersome and flawed welfare state. Minneapolis is the latest city to give a "universal basic income” (UBI) a try. It's offering $500 a month for 18 months to 150 of its low-income residents with no work or spending restrictions.
But others worry it's not so simple. A universal basic income would be expensive, and what if it discourages people to work, which could inadvertently increase inequality and lead to social instability? A new paper suggests the skeptics may be right: UBI may cause more harm than good for a very high cost.
Testing UBI is not easy. What makes UBI universal and basic is that everyone gets the money, and the flow of cash is predictable and long-lasting. UBI advocates point to a few experiments that show giving people checks doesn’t cause them to work less.