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What if the state covered your cost of living, would you still go to work?

Go back to school?

Not work at all? What would you do?

This concept is called a universal basic income or UBI

And it’s nothing less than the most ambitious social policy of our times

in 2017, basic income is gaining momentum around the world

First trials are ongoing or on their way

and a growing number of countries are considering UBI as an alternative to welfare

How would it work and what are the key arguments for and against?

Right now people can’t really agree. What universal basic income is or should be

Some want to use it to eliminate welfare and Cupp bureaucracy

Others want it as a free extra for existing programs, or even want it to be so high that work itself becomes optional

For this video we’ll talk mostly about the minimum basic income

enough money to be above the poverty line

in the US this means about $1,000 a month or $12,000 a year

The money would not be taxed and you could do whatever you wanted with it in

In this scenario UBI is a way of transferring the wealth of a society

while still keeping the free market intact

But if we hand out free money will people just spend it on booze and stop working?

A 2013 study by the World Bank

specifically examined if poor people waste their handouts on tobacco and alcohol if they receive it in the form of cash

The clear answer, no they don’t. The opposite is true

Other studies have shown that the richer you are, the more drugs and alcohol you consume

The lazy and drunk poor person is a stereotype rather than reality

What about laziness?

Universal basic income test runs done in Canada in the 1970s showed that around

1% of the recipients stopped working, mostly to take care of their kids

On average people reduced their working hours by less than 10%

The extra time was used to achieve goals like going back to school or looking for better jobs

But if laziness and drugs are not a huge deal, Why doesn’t our current welfare state solve poverty

Welfare or unemployment programs often come with a lot of strings attached

Like taking part in courses,

Applying to a certain number of jobs a month or accepting any kind of job offer

no matter if it’s a good fit, or what it pays

Besides the loss of personal freedom, these conditions are often a huge waste of time and only served to make the unemployment statistics

Seem less bad

Often your time would be much better spent looking for the right job

continuing education or starting a business

Another unwanted side effect of many welfare programs is that they trap people in poverty and promote passive behavior

Imagine a benefit of $1,000 each month

in a lot of programs if you earn a single dollar extra the whole thing is taken away

If you take a job, that’s paying $1200 you might not only lose your benefits,

but because of your taxes and another costs like transportation

You might end up having less money than before

So if you actively try to better your situation, and your total income is not improving or even a shrinking

welfare can create a ceiling that traps people in poverty

and rewards passive behavior

A basic income can never be cut and therefore getting a job and additional income would always make your financial situation better

Work is always rewarded

instead of a ceiling it creates a floor from which people can lift themselves up

But even if UBI is the better model, is it economically feasible?

What about inflation?

Won’t prices just rise making everything just like it was before?

Since the money is not being created by magic or printers it needs to be transferred from somewhere

It’s more of a shift of funds than the creation of new ones

Hence; no inflation

Ok, but how do we pay for it?

There’s no right answer here because the world is too diverse

How well-off the country is, what the local values are,

Are things like high taxes or cutting the defence budget politically acceptable or not?

How much welfare state is already in place and is it effective?

Each country has its own individual path to a UBI

The easiest way to pay for a UBI is to end all welfare and use the free funds to finance it

Not only would this make a number of government agencies disappear, which in itself saves money, it would also eliminate a lot of bureaucracy

on the other hand cutting them could leave many people worse off than before

If the goal is to have a foundation for everybody there still need to be programs of some sort because just like countries,

People are not the same

The second way - higher taxes especially for the very wealthy

In the US for example there’s been a lot of economic growth but most of the benefits from it have gone to the richest few percent

the wealth gap is rapidly widening

and many argue that it might be time to distribute the spoils more evenly to preserve the social peace

There could be taxes on financial transactions, capital, land value, carbon, or even robots

But UBI is not necessarily expensive

According to a recent study

a UBI of $1,000 per month in the US

Could actually grow the GDP by 12% over eight years

because it would enable poor people to spend more and increase overall demand

What about the people who do the dirty work?

Who will work in the fields, crawl through sewers, or lift pianos?

If you don’t need to for survival, will people still do hard boring and unfulfilling labor?

UBI might give them enough leverage to demand better pay and working conditions

a study calculated that every extra dollar going to wage earners would add about $1.21 to the national economy

While every extra dollar going to high-income Americans would add only 39 cents

There would still be very rich and poor people

but we could eliminate fear, suffering, and existential panic for a significant part of the population

Making poor citizens better off could be a smart economic tactic

For some this isn’t enough. They want a UBI large enough to live a middle-class existence

If we set the financial obstacle aside, this idea fundamentally challenges, how our society is constructed

By earning money, you earn the possibility to take part in society this determines your status and options

But it also forces many people into spending huge chunks of their time on things they don’t care about

in 2016 only 33% of US employees were engaged at work

16% were actively miserable and the remaining 51% were only physically present

Would 67% of people stop working if they could?

It would be unfair to portray work as just a chore

work gives us something to do. It challenges us

it motivates us to improve, it forces us to engage

Many find friends or partners at work, we work for social status wealth and our place in the world

We’re looking for something to do with our lives and for many people work gives them meaning

There are other concerns with UBI

If all welfare programs were exchanged for one single payment, this gives the government a lot of leverage

individual programs are easier to attack or cut than a multitude

or populist smite promise drastic changes to the UBI to get into power

and a universal basic income doesn’t tackle all problems when it comes to equality

Rents for example

while $1,000 might be great in the countryside, it’s not a lot for expensive metropolitan areas

which could lead to poor people moving outwards and the difference between rich and poor

becoming even more extreme

and of course, for some people, the concept of work itself not being essential for survival is appalling

Conclusion

So is the universal basic income a good idea? The honest answer is that we don’t know yet

There needs to be a lot more research more and bigger test runs

We need to think about what kind of UBI we want and what we’re prepared to give up to pay for it

The potential is huge. It might be the most promising model to sustainably eliminate poverty

It might seriously reduce the amount of desperation in the world and make us all much less stressed out

This video was made possible by a

Universal basic income provided by you, our viewers

Ten thousand people around the world gift us a monthly income on patreon.com/Kurzgesagt

You enable us to pay salaries and buy new hardware you enable us to make more videos

And you enable us to spend more time on them

Kurzgesagt would truly not be what it is today without your help

You help us stay independent, and you give us the freedom to put quality before quantity

Thank you so much