“You get a car… and you get a car … and you get a car!” Those were the famous enthusiastic words from Oprah Winfrey when she gave a car away to every member of the audience of her TV show. She was celebrating the end of a very successful syndicated television program, which made her one of the wealthiest women in the country and around the world.
I remember how happy the audience members were when they heard those famous words and saw the cars in the parking lot. You would be too if someone just gave you a brand new car for free. After that program aired I remember hearing grumblings online from some of the recipients of Oprah and the car manufacturers generosity. They received the car for free but were responsible for paying the tax on the car. Many people felt Oprah should have covered the tax as well and given the vehicles with no financial strings attached. I guess you can’t make everyone happy even when they’re happy.
Why do I bring that up when discussing the socialist dream of universal basic income? Well, for one it’s a perfect case study of seeing how people react when you give them something for free and they are unsatisfied with what you gave them. If you’re not following along let me dissect the social experiment further. The value of the free car, which was somewhere around $20,000 was diminished and even resented by the sales tax due which might have been $2,000 +/-. The people that complained did not see that they made $18,000 or that they got a brand new car for only $2,000. All they saw was they now had to pay sales tax and were upset.
How does that compare to universal basic income you might be thinking. Glad you asked. It’s human nature for people to not be satisfied. There’s an old saying, ‘beggars can’t be choosers.’ The people that received the free car did not ask for it but once they were given it they felt they should have been given more. If you provide a universal basic income of $500 a month to unemployed people or those making an amount that is below the poverty line they will be happy with it but then say they can’t live on that and demand more. Let’s go one step further. What about people who are not living below the poverty line but, are right above it and barely making ends meet. Don’t they deserve some help too? Of course they do. What about children under 18? They can’t work full time because they go to school. Shouldn’t they be included in the program?
Universal basic income is similar to that of Pandora’s box in Greek mythology. When used as a noun it is defined as a process that generates many complicated problems as the result of unwise interference in something. Democratic Socialists claim the program would help those in need most and is the moral thing to do. Whenever a politician starts preaching morality my first thought is who is going to pay for it. To paraphrase Oprah’s jubilation, ‘you get to pay for it … and you get to pay for it … and you get to pay for it!’
Putting my natural cynical instincts aside, the concept of basic income was tried in Finland for two years on a limited basis and recently concluded. The government selected 2,000 unemployed adults at random and gave them a flat monthly payment of $634. A BBC article summarized the program and concluded the following. The people that received the basic income were ‘happier’ but it did not improve unemployment. In some cases, it resulted in people not searching for work. The cost of the program was 20 million Euros and the unemployment rate was 8.1%.
Social welfare programs are nice in theory but, rarely ever work out as planned and never cost what was originally slated. Just like Social Security, which was designed to help senior citizens live a life of dignity, you now have many other categories of people in all age groups that are beneficiaries of monthly payments. A recent report by the Social Security board of trustees stated that unless changes are made only 75% of the programs scheduled benefits will be able to be paid by the year 2035. What do you think adding universal basic income will do to the program’s resources? Whether it’s administered by that program in a similar fashion to the Social Insurance Institution of Finland or you create an entirely new department to dole out the funds you will all but certainly see a universal tax increase that will be paid by everyone.
The best things in life are free and universal basic income is not one of them. There will always be people who need financial support. The best way to support them is thru a public/private partnership that creates work-training programs. Rather than giving them a handout give the people the skills they need to pull themselves up out of poverty. State unemployment benefits have a defined end date for good reason. Its to help people in their times of need and motivate them to not to be in need forever. Creating a society of people who are dependent on the government to provide for all of their needs does a great disservice to those in search of dignity, the kind of dignity that can only be found thru work. As the old saying goes, ‘give a man a fish and he can eat for a day. Teach a man to fish and you will feed him for a lifetime.’