The idea of a UBI (Universal Basic Income) has been around for centuries, and championed by numerous powerful and well-respected people, here are just two examples:
Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth distribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality
Stephen Hawking, October 2015
I am now convinced that the simplest approach will prove to be the most effective—the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.
Where Do We Go from Here: Chaos or Community? (1967), Martin Luther King Jr.
There have been a number of hindrances to the adoption of a UBI:
- Cost, which is extraordinary if everyone gets it at the beginning (we should consider a subset of society getting it first to prove it works)
- Trials – all have been too narrow and too short-lived
- How much? All trials have used arbitrary amounts, not based on actual needs
- Focus on employees
While I have significant thoughts on all the above, I want to focus on the focus on employees. One of the un-proven issues with UBI is that if people have enough to live on, they won’t go to work, and employers/businesses will suffer.
Not considered, from what I have read, is the impact of the UBI on the self-employed. Even more so, how it would affect the self-employed who barely make a living?
We are all well aware that large corporations (example: Walmart) have robbed us of small “Mom and Pop” stores. While this is a consequence of efficiency and economics, that doesn’t equate with being good. In the USA there are now food deserts, where the best solution for some – a corner store a block away that costs a bit more – has been replaced with a big box store 10 miles away that you need a car to get to. Numerous times I have seen poor people taking taxis to and from supermarkets…
“Mom and Pop stores” aren’t motivated by profit. They are motivated by pride and community and survival. Many such stores would not survive if the owners paid themselves a fair wage, but they persist because it gives them an identity and purpose in society. It is not uncommon for people to buy a business as a way of buying a job.
Pure capitalism works on averages. Whatever works best on average will win, regardless of the people on the margins is doesn’t work for. A fast food franchise won’t stock a beverage that only 5% of society will order, because it is less efficient. Those 5% feel left out. Efficiency is not necessarily optimal, especially when only averages are considered.
“Mom and Pop stores” serve a very real need, both for the proprietors and the customers. Capitalism and averages mean that they are dying off, and Walmart-type businesses (which most people would consider to be soulless) are taking their place.
With a UBI, everything changes at the lowest level of retail, the “Mom and Pop stores”. With the UBI they can operate without staff wages being a factor. In poorer outer suburbs, where rent is less of an issue, this can be a significant advantage. Big Box Stores will still need to pay employees. Nobody receiving the UBI will work for free for Walmart (although I can envisage some kind of Walmart intern scheme as they scramble to survive…). But those people who run a business based on ideals of being useful, providing service, and getting by will thrive.
I do not think we can underestimate the ability of a UBI to counteract the advantages corporations have had in destroying small businesses.