The National Bureau of Economic Research (NBER) published a November 2024 working paper titled Household Responses to Guaranteed Income: Experimental Evidence from Compton, California.
This from libertynation.com.
From the Compton study, researchers learned:
[There was] weak evidence of reduced alcohol consumption, and moderately strong evidence of relative increases in tobacco consumption.
The paper concluded:
In sum, the cash transfers have a strong positive impact on the index of housing security, but no clear impact on the indices of psychological well-being, financial security, or food security.
But this was not the first study to find holes in the universal basic income premise. In July, the NBER published a working paper titled The Employment Effects of a Guaranteed Income: Experimental Evidence from Two U.S. States.
Eva Vivalt, a University of Toronto economist who co-authored the study, wrote on X:
You can think of total household income, excluding the transfers, as falling by more than 20 cents for every $1 received. This is a pretty substantial effect.
Not all hope was lost for the economists. They found that the younger recipients invested more in their education. However, this is a subjective conclusion since the United States has endured the consequences of the most highly educated generation in history as students study fields that contribute little to the modern economy.
Over the years, Liberty Nation News has reported on the various studies analyzing the effects of a universal basic income. They typically found that no-strings-attached free cash highlights the same trends:
– money mismanagement,
– little or no improvement to their financial well-being,
– reduced job satisfaction and incomes, and
– little difference revealed between those receiving small cash payments and large capital injections.
Damon Jones, a professor at the University of Chicago Harris School of Public Policy, summarized these discoveries on X this past summer:
So, free time is good & guaranteed income recipients use some of the money to free up time. The results are bad if you want low income people to be doing other things with their time, for example working.
Now, one question that remains unanswered, ‘How much more money will liberal think tanks need to piss away before finally accepting what Conservatism already knows?’
And another question, ‘What rationale is behind the search concerning whether or not to offer a guaranteed income?’
The answer to the latter question may be ‘the fear of a decreasing population.’ The United States and many advanced economies are witnessing the same frightening trends.
The U.S. population is poised to decline in 2080.
South Korea has one of the fastest aging populations and one of the lowest birth rates in the world. China abandoned the one-child policy, and the government is urging households to spur fertility rates.
Example: Historians have posed a variety of theories about the chief culprit behind the fall of the Roman Empire, from foreign expansionism to monetary debasement. However, the main contributor was the population collapse. In AD 400, Rome’s population was more than one million. A hundred years later, it cratered to about 100,000. Put simply, households were not having children. The upper echelons of society did not want kids.
Meanwhile, the artificial intelligence boom has sparked a tsunami of fears surrounding a robotic takeover.
Even if T-1000s are not enslaving mankind, there is consternation that AI will wipe out jobs or, at the very least, eliminate brain cells.
Would fewer employment prospects exist if more companies embrace generative AI, robots, and other technological advancements?
Conservative and libertarian economists have dismissed this concern, purporting that AI will produce new opportunities, expanding the pie like the automobile and computers.
Still, these may be generational challenges that could alter indebted civilizations.
Will universal basic income schemes be the panacea offered by governments?
Politicians will undoubtedly introduce these programs to complement the massive welfare state. Whether it will breed exceptional results or the same unintended consequences will inevitably require further studies—and the doubling down by statist officials and bureaucrats.
Final thought: I’m curious how I can sign up to be part of one of those guaranteed income studies.
