Perspective: Bucking Ellenberg's views, universal basic income a “terrible tool” for income disparity

Amidst Ellenberg and Cortese's pro-UBI PR parades, the Business Insider's Melissa Kearney and Magne Mogstad spell out why indiscriminately awarding citizens' payouts is wasteful and unhelpful. Gov't welfare programs should consider income, able-bodiedness, and other circumstances, or risk further expanding wealth discrepancies.

The premise of UBI is to provide individuals with an unconditional income guarantee from the government regardless of personal circumstances or family income. For instance, a version of UBI popularized by labor leader Andy Stern, journalist Annie Lowrey, Yang, and others would distribute a $1,000 check once a month to every adult in the US.

Advocates suggest that UBI would address rising income equality, insulate households from the effects of globalization and technological innovation, and be more efficient than the complicated set of existing transfer programs targeting different populations or types of need.

While elements of UBI may be appealing in the abstract, in practice it's an inefficient, extremely expensive, and potentially harmful policy that would solve none of those three challenges.…

If the goal is to design a progressive policy that better redistributes income, UBI is a terrible tool. Unlike programs crafted to specifically help people with low income and those with disabilities, a UBI program would, by design, spread payments across the widest possible base.

This means that while the economically vulnerable would receive support, so too would middle- to upper-income families. Why give some money to everyone, rather than offer dedicated assistance to those who need it?

Even if UBI payments were phased out and then capped for earners above a certain income, the program would still end up giving able-bodied working-age adults subsidies alongside families with low incomes, regardless of relative need.

UBI by design fails to account for the elements of life that make families more or less in need of government support — such as having a child with a serious illness or a work-limiting disability oneself — and as such would result in a highly inefficient allocation of resources.

This article originally appeared in Business Insider. Read the whole thing here.

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