- Universal basic income.

It seems like a pretty simple concept, right?

A government gives every one of its citizens

no matter you who are, the size of your salary,

just enough money to afford the basics like food,

the electricity bill, maybe even rent on a cheap apartment.

In theory this guarantees that no one falls

into total abject poverty.

But would a universal basic income actually work?

Would it be a benefit to society,

or would it be so expensive and complicated

that it could never happen?

(record scratching) (upbeat music)

The universal basic income is getting a lot of attention

these days because some economists

and big name techies like Elon Musk

worry that robots might be taking our jobs.

- AI is a fundamental existential risk

for human civilization, and I don't think

people fully appreciate that.

- Artificial intelligence could fundamentally reshape

the nature of work by making millions of jobs obsolete.

For example, almost three million truck drivers in the U.S.

could lose their jobs to self-driving cars

once they fully become a thing.

But YouTube hosts are good, right?

We're in the clear?

Anybody?

This isn't the first time that there's been a major shift

in ye old job market.

Think back to the end of the 18th century.

We're all farmin', having a good time when BAM!

the Industrial Revolution happens

and the world gets turned upside down.

OK, now back to today.

A universal basic income could help soften the blow

for a lot of those people losing their jobs to the robots.

Now the amount of money you get would be, well, basic.

In the U.S. it would be something like $1,000 a month,

which puts you right at the federal poverty level,

meaning it's the bare minimum the government thinks you need

to scrape out a living.

Now here in the Bay Area that gets me like half a closet

and maybe three steak tacos, maybe.

A universal basic income is also, you guessed it,

universal, meaning every U.S. citizen would get the money.

Full stop, even Bill Gates,

although he would owe way more money in taxes

to the government that what he got from the government.

But most importantly, people could use the money

for whatever they want, period.

Want to use it to help pay for college

or get some new job skills, that's fine.

Wanna blow it all on Cheetos and Red Bull?

I wouldn't recommend it personally, but you know,

the government wouldn't stop you.

But actually making a universal basic income happen

brings up a bunch of complex questions.

How much money should each person get and for how long?

How would the government pay for it?

Do they raise taxes, cut other benefits?

And would it actually help to keep people out of poverty?

OK, so let's dive right into the main arguments

for and against universal basic income.

Giving people free money might sound

like a classic left-right topic

where liberals are for it and conservatives are against it,

but there are actually segments

of both groups that support it.

Some liberals think that it's one of the best ways

to fight what's been a losing battle: financial inequality.

The world's richest 1% owns half of the world's wealth,

and by 2030 it's estimated to increase to 2/3.

Now as the poor get poorer, and artificial intelligence

takes more jobs, a universal basic income

might provide enough cash so they don't have to choose

between buying food for the week

or paying the electric bill.

For people that still have jobs,

the extra money might allow them to pay for more education,

or put some money away for savings.

Now, it's important to point out

that the U.S. already has a welfare system

designed to help the poor.

Programs like Food Stamps, federal housing assistance,

and free and low-cost health care.

However, all of these programs require people

to be basically broke in order to qualify.

If you start making too much money, you can be kicked off.

With the universal basic income that money is yours

no matter how much you're making.

You won't be penalized for making too much.

Some conservatives like the idea of a universal basic income

because it could potentially replace

or significantly reduce the current welfare system,

which cost almost $730 billion in 2017.

That's almost 20% of the entire federal budget. Wow.

A universal basic income would make government smaller

and it would put the choice of how to spend the money

in the hands of the individual instead

of having the government telling you what to do with it.

Now, at this point, we haven't really talked about cost.

Spoiler alert: it's also really expensive.

And it's a big reason why a lot of people oppose it.

If the federal government gave every one

of the 300 million plus people living in the U.S.

$12,000 a year the total cost would be around $3.8 trillion.

And that's a hard sell considering

the entire federal budget for 2017

was a little over four trillion dollars.

To pay for it, one option is for the government

to bring in more money, which means raising taxes,

something most conservatives are firmly against.

Many are also worried that giving people

no strings attached free money would discourage them

from getting a job, which could hurt the economy

and make people even more dependent on the government.

The other option is to cut back on programs we already have.

Liberals worry that means killing programs

like Food Stamps and housing assistance

that directly target specific problems.

Like suppose someone gets the universal basic income.

They're budgeting the money well,

and then all of a sudden they get sick

and have to go to the hospital.

One day alone could cost $5,000 or more.

That universal basic income money

would then run out pretty fast.

Now, what's tricky about evaluating

all these different arguments

is that we don't have much real-world data to look at,

but that's changing.

There are some experiments out there.

Stockton, California is giving $500 a month

to 100 of its residents.

Finland is just about to end a two year trial run.

And just this year, Kenya will start giving its citizens

regular payments for the next 12 years.

So until we get some data to look at

the debate over universal basic income

is gonna stay theoretical.

All right, you all know the drill.

What do you think about universal basic income?

Good idea or bad idea?

Let us know in the comments below.

Also, there's a great show I want y'all to check out.

Two Cents is a PBS Digital Studios series

about money and you.

Financial experts and husband and wife team

Philip Olson and Julia Lorenz-Olson

guide you through the complex world of personal finance

from the kitchen table to the New York Stock Exchange.

You'll get practical knowledge about how to spend,

save, and earn, and insight into how your brain

is hardwired to react to economic problems.

Money might make the world go 'round,

but it doesn't have to make your head spin.

Check the link in the description below

and subscribe to Two Cents.

They also made a cameo in our episode about cryptocurrency

and the future of money, so make sure you check that out.

As always, I'm your host Myles,

and I'll see you guys next time, bye.