Nationwide Basic Income’s Effect After Six Years

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The results surprised skeptics.

In recent years, spurred by advances in workplace automation, researchers and industry titans like Elon Musk have espoused the necessity of a universal basic income, payments made by the government to all citizens regardless of their employment. The general idea started picking up steam from a policy perspective in the 60s, when Milton Friedman proposed a negative income tax which would guarantee all Americans a minimum income. Proposals for a basic income generally receive familiar pushback from opponents, who say giving people free money will disincentivize them from working.

In 2011, in response to heavy cuts to oil and gas subsidies, Iran implemented a program that guaranteed citizens cash payments of 29 percent of the nation’s median income, which amounts to about $1.50 every day. (In the U.S. such a measure would translate to about $16,000 per year.) Now, six years later, the results of that measure were released in a report by economists Djavad Salehi-Isfahani and Mohammad H. Mostafavi-Dehzooeifrom for the Economic Research Forum.

The report found no evidence for the idea that people will work less under a universal income, and found that in some cases, like in the service industry, people worked more, expanding their businesses or pursuing more satisfying lines of work.

The researchers did find that young people — specifically people in their twenties — worked less, but noted that Iran never had a high level of employment among young people, and that they were likely enrolling in school with the added income.

The evidence presented in the paper is compelling, but the anecdotal belief that handing people money will make them lazy is hard to shake. “The findings in this paper do not settle this question,” the report’s authors point out. “What we have accomplished is at the very least to shift the burden of proof on this issue to those who claim cash transfer [sic] make poor people lazy, and to show the need for better data and more research.”

  • DHFabian

    The problem is that American ideology, regardless of the facts, directly contradicts the very basis of the guaranteed income. How would Americans react to a universal basic income guarantee of $16,000 per year? Think about it. Former welfare recipient families had incomes in the $4k to $5k range (depending on state, etc.). It came to roughly 6% of the federal budget at its highest, back in the 1970s. Our middle class found this to be an intolerable expenditure, a “grievous taxpayer burden.” They maintained that the poor were using this money to purchase luxury cars and designer clothes (?), “living better than the middle class.”

    This is why any argument based on logic and statistics is likely to fall flat in today’s America. Obviously, we know that not everyone can work (health, etc.) and that there aren’t jobs for all, but have agreed that the jobless poor should be denied the most basic human rights (UN’s UDHR) of food and shelter. They are (regarded as) mere surplus population, not of current value to the economy. It’s easy to see that a basic income guarantee would result in increased consumer spending, increasing the demand for more products, thereby increasing the need for more workers — more jobs, more opportunities to pursue those things that interest us. On “causing laziness,” no, most understand that a job is more than a means of earning money. It’s our primary source of social interaction — where people meet and talk. Our jobs are what give us a sense of place in society, purpose in life, even our sense of self.

  • Robert Hodge

    Didn’t (and don’t we still?) we give the bankers a “guaranteed basic income” in 2008 when they crashed the global economy? They were handing out “bonuses” the very next quarter. Sounds like a “Guarantee” alright, one for the uber rich at the expense of the “average Joe”. I say, if THEY get a ‘guarantee’, then so should every OTHER human living. GO! Guaranteed Basic Income!