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How Universal Income Programs Could Impact The Future Of Work

There are many proponents and opponents of a universal income and much controversy around the subject. Some say a guaranteed minimum income has the potential to lift communities out of poverty, while others believe it would hike up the federal debt.

Emma AscottbyEmma Ascott
February 17, 2022
in Workforce
Reading Time: 6 mins read
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How Universal Income Programs Could Impact The Future Of Work
  • To many, the idea of a little extra government-funded income per month would be a dream come true. The question is: Does it work? 
  • A two-year study in Finland found that a randomly selected group of people who received a sum of money from the government every month worked no less than a control group.  
  • Some tech entrepreneurs have proposed a universal basic income as a solution to the job losses and social conflict that will be brought on by automation and artificial intelligence. 

To many, the idea of an extra government-funded income of $500, $1,000, or even more per month would be a dream come true. The question is: Does it work? 

The cities of Los Angeles and Chicago are rolling out new universal basic income pilot programs following the successes of a privately funded initiative in Stockton, California. Stockton’s program ran for two years and they found that participants’ anxiety and depression levels decreased and their full-time employment increased. 

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According to USA Today, 60,000 people applied to L.A.’s pilot, which will provide $1,000 a month to more than 3,000 people next year; Chicago will provide $500 stipends to 5,000 low-income households for one year.  

Dozens of other cities are considering implementing their own versions of this monthly basic income.  

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In 2017, Finland launched a two-year plan giving monthly payments to 2,000 unemployed citizens. In Canada, the government of Ontario announced a similar three-year program that was cut short. There have also been pilots in Iran, Spain, the Netherlands, and Germany.  

What is universal income?

The idea of a basic income delivered directly by the state was first proposed by philosophers in the 1500s.  

The idea of guaranteed income isn’t about handouts; it’s about giving everyone a chance at a fair shot.  

A universal basic income would be life-changing for many, and would provide the relief necessary for people to work towards long-term education and career goals that impact economic status on a generational level. 

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There are many proponents and opponents of a universal income and much controversy around the subject, but it is yet to be seen if it will ever be widely implemented.  

Why are some people advocating for universal income?

Progressives argue that a guaranteed minimum income has the potential to lift communities out of poverty. Some people leaning conservative see universal basic income as a cost-effective alternative to existing social welfare systems.  

When people are given a universal income, research suggests there is almost no impact on the rate of employment, meaning that people don’t quit their jobs just because they’re being given an extra $1,000 or so a month – one of the common concerns voiced by critics. 

Instead, this extra income has led to improved outcomes in education, mental health, and crime.  

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The idea of simply giving people money to survive has been in and out of the news since becoming a favored idea by many high-profile Silicon Valley entrepreneurs, including Twitter’s Jack Dorsey, and Facebook cofounders Mark Zuckerberg and Chris Hughes.  

These tech entrepreneurs have proposed a universal basic income as a solution to the job losses and social conflict that will be brought on by automation and artificial intelligence—the very technologies their own companies create.  

According to Elon Musk, in the age of automation, “I am not sure what else one would do.” 

Why are some people against a universal basic income?

A few reasons: GDP could potentially fall significantly and federal debt would skyrocket.  

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The Roosevelt Institute estimated that a deficit-financed payment of $500 a month to every adult in the U.S. would increase consumption, thereby raising the gross domestic product by up to 6.8% by 2027.  

However, Wharton economics and public policy professor Kent Smetters used a more thorough model to estimate the same universal income plan would increase the federal debt by more than 63.5% by 2027, while GDP would fall by 6.1%.  

By 2032, the debt would grow by 81.1% and GDP would fall by 9.3%.  

The only solution to this would be for universal income to not be government-sponsored, in order to avoid hiking up federal debt. 

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Universal basic income is also resoundingly unpopular among labor leaders, who argue that it undermines the average worker. 

“This concept of universal basic income is a surrender to a kind of grim Dickensian view of the future, frankly, in which people are robbed of the dignity of work. It’s naive to think universal basic income is going to pay the bills. It’s going to at best give people a poverty wage,” Barry Broad, chair of the California’s Employment Training Panel, said in an interview with the Los Angeles Times.  

Here are some potential implications of universal income for the future of work: 

Stockton’s program can be used as an example for what the future of work would look like if a basic income was established. Participants in this program saw their full-time employment increase. 

Critics of a universal income worry that the extra income could disincentivize work, cheating economies out of productivity, but this has been disproven. Studies have shown that being guaranteed an income makes people less worried about money, which means less stress and healthier lives — and doesn’t seem to affect productivity. 

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A two-year study in Finland found that a randomly selected group of people who received a sum of money from the government every month worked no less than a control group.  

This isn’t to say that this would always be the case in every given situation, but it is valuable to weigh the implications that a universal income could have on the future of how we work.  

While the merits of universal basic income continue to be disputed, it’s clear that the conversation isn’t going away. 

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Emma Ascott

Emma Ascott

Emma Ascott is a contributing writer for Allwork.Space based in Phoenix, Arizona. She graduated from Walter Cronkite at Arizona State University with a bachelor’s degree in journalism and mass communication in 2021. Emma has written about a multitude of topics, such as the future of work, politics, social justice, money, tech, government meetings, breaking news and healthcare.

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