Policy Prompt

Why Universal Basic Income is not the answer to jobs being automated

November 4, 2017 | Rishabh Srivastava | rishabhsriv@gmail.com


Would you like everyone to get a paycheck from the government every month?

If so, then you would be one of a growing number of proponents of Universal Basic Income (UBI). Giving everyone an allowance that is equal to a living wage would end poverty immediately.

This, however, will likely be too large a fiscal burden on the government. Eduardo Porto of the New York Times, and Matt Yglesias of Vox did the math for America and came to very different conclusions.

Make your own mind about the fiscal feasibility of UBI by changing the variables below.

Select Country

Select monthly amount to give ($1500/month)

$0 $2,500

Select who to give income to

How will you increase taxes?

Increase avg income & payroll tax by
Increase avg tax on corporate profits by
Increase avg social security tax by

How will you decrease expenses?

Decrease defence spending by
Decrease healthcare spending by
Decrease cash benefits by

Net impact of this policy

Additional US$ Billion (% of GDP)

must be raised in debt every year to make this policy possible

This is a very simplistic model, and there are plenty of problems with this it. For instance, it does not take into account the loss in incentive to work or the propensity of companies to relocate if taxes are increased. It also does not consider potential additional sources of revenue - such as taxes levied on robots into account. However, it does provide a reasonably accurate assessment of the fiscal landscape for UBI in the near future.

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