In a new study, a reliable flow of free money prompted people to take easier, lower-wage jobs, which would hurt our youngest workers most.
It's a simple, utopian idea. If we give everyone a monthly check, we can eliminate poverty and do away with the inefficiencies of our cumbersome and flawed welfare state. Minneapolis is the latest city to give a “universal basic income” (UBI) a try. It's offering $500 a month for 18 months to 150 of its low-income residents with no work or spending restrictions.
But others worry it's not so simple. A universal basic income would be expensive, and what if it discourages people to work, which could inadvertently increase inequality and lead to social instability? A new paper suggests the skeptics may be right: UBI may cause more harm than good for a very high cost.
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
This piece originally appeared in Bloomberg Opinion