Why I’m against Universal Basic Income
Recently the idea of a Universal Basic Income (UBI) has gained a lot of traction in Left circles in the UK, with calls for Jeremy Corbyn to adopt it and try and make it Labour party policy. This morning, I saw an article on Medium by Frances Coppola, Why the changing nature of work means we need a Universal Basic Income, which suggests that we cannot and shouldn’t try to turn the clock back to a time when there were plentiful jobs in manufacturing because they were “mind-numbing, repetitive jobs”, but rather we should embrace the automation that got rid of them: “bring on the robots, and let the humans go to the pub”. I think this is a rather naive view of both the problem and of UBI as a solution.
To begin with, automation is only one of the reasons why jobs have been destroyed. The other major reason is that manufacturing has been exported to third-world countries which can simply supply labour cheaply, in the case of China without the impediments of democracy or free trade unions, which goes a long way towards explaining why the cost of most manufactured goods, but especially technology, has stayed the same or come down since the late 1980s. A country which prides itself on high standards, in which well-paid workers manufacture high-quality goods, needs to resist unfair competition from sweatshop economies. Automation often does not free up human beings to do more interesting, creative work; it often destroys skilled craft jobs and replaces them with tedious and repetitive ones. In recent months there has been much talk of driverless cars and trucks replacing ones driven by human beings; even when the safety implications are ironed out (which will take a long time; even trains still have human drivers, except on a few closed systems such as the Docklands in London), the result will be the removal of an easy entry-level job (taxi driving) and a job that is often enjoyable without the stress, as some people would see it, of constant social interaction. So automation does not free people up to “go down the pub”.
The problems with UBI start with what it is: a guaranteed, unconditional basic income, presumably paid to everybody by the state. This means that people in work would be taxed to pay for an unconditional monetary gift to everyone else, regardless of the payers’ or recipients’ existing means or need. Unless other benefits were reduced or abolished at the same time, it would mean a huge increase in taxation for everyone at every income level, and possibly the removal of tax-free allowances. Assuming it is politically possible to institute it in the first place at all, the level would be a constant source of contention (which may delay its introduction, or keep it at a minuscule level, rendering it pointless). It would likely not be increased with inflation, ultimately reducing it to a token amount in real terms. Although, unlike with other benefits, everyone would receive the payment, the fact that a flat payment benefits the poor more than the rich would mean that any increase would be unpopular with upper to middle income earners, and these are the people more likely to enjoy their jobs.
UBI would become an excuse to deny funding or work to almost anyone. People would think it more acceptable even if it’s illegal. A boss would feel justified in denying extra working hours to someone who had caused him annoyance on the grounds that “he gets his UBI, doesn’t he?”. The same excuse could be used to refuse accommodation to disabled potential employees, deny disability benefits, funding for adaptations or disability-related equipment, funding for social care, legal aid or a host of other things. It would be an excuse to refuse wage increases, or even cut them. The fact that UBI would not be enough to live on would not change any of this. As the payment would likely only be made to citizens, not immigrants, it would fuel the perception that immigrants are harder workers because they have to work to get paid, unlike poorer citizens (citizens in highly-paid and professional occupations would be less affected by that stigma) — consider how British workers are already stereotyped as being inferior and lazy compared to “hard-working” Poles. This might be an incentive for industrialists to prefer immigrants or even ship jobs out, resulting in tension and resentment; it would be used as a pretext to make acquiring citizenship more difficult.
And we might also consider that not everyone has the means to receive and look after the money. I don’t mean spend it wisely (some people will squander it, but this can apply to people of any economic class and to any money, earned or otherwise); I mean physically look after it. A rough sleeper might be just as entitled to the money as someone with a three-bedroom house, but if he has no bank account, he would have cash on him and would be an easy mark for a thief when asleep (or for robbery when awake), particularly if there was a regular date for the money being distributed.
So, I do not believe that UBI would alleviate poverty or make the country a more generous place. On the contrary, it would reduce the perception of need without reducing need itself, and make the country a meaner place and make people feel justified in their meanness. The plain fact is that there is no such thing as a free lunch, that food, clothing etc have to be paid for, and that the money for UBI will have to come from ordinary taxpayers, who will understandably resent paying for it. Part of this may be down to our commercial press, which stokes envy and resentment about such things, but the same papers will have to be challenged if any fair or rational welfare system is to be established. UBI will mean that a payment (or tax rebate) to people who do not need it will take funding and benefits from where they are needed and result in underpayment of already low-paid workers.
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