Memo – UBI (Universal Basic Income) Already Exists In America, And It Has Disenfranchised Millions

But, this is not a new idea. You may not realize it, but UBI was enacted in the United States of America long ago.

Since the 1960s we’ve instituted programs that provide something very similar to a Universal Basic Income (Think Welfare, Food Stamps, Healthcare subsidies). Although well-intentioned, these programs have actually hurt multiple generations of Americans and disenfranchised entire communities across the country. We can see the result of these social programs in the reduced rate of marriage, the increase in fatherless homes and single mothers, and the great income inequality in the country.

As you know I like to define terms I am speaking about, so let’s take a look at a definition of Universal Basic Income. UBI is just a euphemism for someone getting money or other benefits that they have not exchanged equal value for, and that their employer or taxpayers were forced to pay for against their will. 

The minimum wage is a great example of Universal Basic Income as defined above. The minimum wage artificially inflates the amount that someone is paid beyond the actual value that they’re giving to a business. Let’s say that the minimum wage is $15 per hour, but the real dollar value someone provides is only $5.00 per hour. That $10 differential between the $15 and the $5 is a form of Universal Basic Income. The employee pockets $10.00 above the value they gave. That portion is UBI, or “getting money or other benefits that they have not exchanged equal value for.”

At the end of the day someone has to pay for this $10.00 per hour. It is borne by lower profits for the owner, and also higher prices to the customers.

In this way a minimum wage is clearly a tax on the business owner and society at large. It is a law that artificially reduces profits and artificially increases prices. This is a clear definition of a tax. Another way to describe this is coerced charity.

A minimum wage increases unemployment. In our example, the business owner should be able to hire 3 people at $5.00 per hour, but now he can only hire 1 person at $15.00 per hour. This hurts teenagers dramatically who cannot find a summer or after-school job which would provide them much needed real world experience. 

Other entitlements work the same way and “give money or other benefits that the recipients have not exchanged equal value for.”

Any “income” that is not tied to physical work, like Welfare, has a negative psychological impact on the recipients.

Although the entitlement systems put in place last century were well-intentioned, the economic and social devastation they caused is obvious. UBI, which is more far reaching than any program that came before it, will hasten these negative outcomes and dramatically increase the income gap which is already extremely high. 

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