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  • What if the state covered your cost of living, would you still go to work?

  • Go back to school?

  • Not work at all? What would you do?

  • This concept is called a universal basic income or UBI

  • And it's nothing less than the most ambitious social policy of our times

  • in 2017, basic income is gaining momentum around the world

  • First trials are ongoing or on their way

  • and a growing number of countries are considering UBI as an alternative to welfare

  • How would it work and what are the key arguments for and against?

  • Right now people can't really agree. What universal basic income is or should be

  • Some want to use it to eliminate welfare and Cupp bureaucracy

  • Others want it as a free extra for existing programs, or even want it to be so high that work itself becomes optional

  • For this video we'll talk mostly about the minimum basic income

  • enough money to be above the poverty line

  • in the US this means about $1,000 a month or $12,000 a year

  • The money would not be taxed and you could do whatever you wanted with it in

  • In this scenario UBI is a way of transferring the wealth of a society

  • while still keeping the free market intact

  • But if we hand out free money will people just spend it on booze and stop working?

  • A 2013 study by the World Bank

  • specifically examined if poor people waste their handouts on tobacco and alcohol if they receive it in the form of cash

  • The clear answer, no they don't. The opposite is true

  • Other studies have shown that the richer you are, the more drugs and alcohol you consume

  • The lazy and drunk poor person is a stereotype rather than reality

  • What about laziness?

  • Universal basic income test runs done in Canada in the 1970s showed that around

  • 1% of the recipients stopped working, mostly to take care of their kids

  • On average people reduced their working hours by less than 10%

  • The extra time was used to achieve goals like going back to school or looking for better jobs

  • But if laziness and drugs are not a huge deal, Why doesn't our current welfare state solve poverty

  • Welfare or unemployment programs often come with a lot of strings attached

  • Like taking part in courses,

  • Applying to a certain number of jobs a month or accepting any kind of job offer

  • no matter if it's a good fit, or what it pays

  • Besides the loss of personal freedom, these conditions are often a huge waste of time and only served to make the unemployment statistics

  • Seem less bad

  • Often your time would be much better spent looking for the right job

  • continuing education or starting a business

  • Another unwanted side effect of many welfare programs is that they trap people in poverty and promote passive behavior

  • Imagine a benefit of $1,000 each month

  • in a lot of programs if you earn a single dollar extra the whole thing is taken away

  • If you take a job, that's paying $1200 you might not only lose your benefits,

  • but because of your taxes and another costs like transportation

  • You might end up having less money than before

  • So if you actively try to better your situation, and your total income is not improving or even a shrinking

  • welfare can create a ceiling that traps people in poverty

  • and rewards passive behavior

  • A basic income can never be cut and therefore getting a job and additional income would always make your financial situation better

  • Work is always rewarded

  • instead of a ceiling it creates a floor from which people can lift themselves up

  • But even if UBI is the better model, is it economically feasible?

  • What about inflation?

  • Won't prices just rise making everything just like it was before?

  • Since the money is not being created by magic or printers it needs to be transferred from somewhere

  • It's more of a shift of funds than the creation of new ones

  • Hence; no inflation

  • Ok, but how do we pay for it?

  • There's no right answer here because the world is too diverse

  • How well-off the country is, what the local values are,

  • Are things like high taxes or cutting the defence budget politically acceptable or not?

  • How much welfare state is already in place and is it effective?

  • Each country has its own individual path to a UBI

  • The easiest way to pay for a UBI is to end all welfare and use the free funds to finance it

  • Not only would this make a number of government agencies disappear, which in itself saves money, it would also eliminate a lot of bureaucracy

  • on the other hand cutting them could leave many people worse off than before

  • If the goal is to have a foundation for everybody there still need to be programs of some sort because just like countries,

  • People are not the same

  • The second way - higher taxes especially for the very wealthy

  • In the US for example there's been a lot of economic growth but most of the benefits from it have gone to the richest few percent

  • the wealth gap is rapidly widening

  • and many argue that it might be time to distribute the spoils more evenly to preserve the social peace

  • There could be taxes on financial transactions, capital, land value, carbon, or even robots

  • But UBI is not necessarily expensive

  • According to a recent study

  • a UBI of $1,000 per month in the US

  • Could actually grow the GDP by 12% over eight years

  • because it would enable poor people to spend more and increase overall demand

  • What about the people who do the dirty work?

  • Who will work in the fields, crawl through sewers, or lift pianos?

  • If you don't need to for survival, will people still do hard boring and unfulfilling labor?

  • UBI might give them enough leverage to demand better pay and working conditions

  • a study calculated that every extra dollar going to wage earners would add about $1.21 to the national economy

  • While every extra dollar going to high-income Americans would add only 39 cents

  • There would still be very rich and poor people

  • but we could eliminate fear, suffering, and existential panic for a significant part of the population

  • Making poor citizens better off could be a smart economic tactic

  • For some this isn't enough. They want a UBI large enough to live a middle-class existence

  • If we set the financial obstacle aside, this idea fundamentally challenges, how our society is constructed

  • By earning money, you earn the possibility to take part in society this determines your status and options

  • But it also forces many people into spending huge chunks of their time on things they don't care about

  • in 2016 only 33% of US employees were engaged at work

  • 16% were actively miserable and the remaining 51% were only physically present

  • Would 67% of people stop working if they could?

  • It would be unfair to portray work as just a chore

  • work gives us something to do. It challenges us

  • it motivates us to improve, it forces us to engage

  • Many find friends or partners at work, we work for social status wealth and our place in the world

  • We're looking for something to do with our lives and for many people work gives them meaning

  • There are other concerns with UBI

  • If all welfare programs were exchanged for one single payment, this gives the government a lot of leverage

  • individual programs are easier to attack or cut than a multitude

  • or populist smite promise drastic changes to the UBI to get into power

  • and a universal basic income doesn't tackle all problems when it comes to equality

  • Rents for example

  • while $1,000 might be great in the countryside, it's not a lot for expensive metropolitan areas

  • which could lead to poor people moving outwards and the difference between rich and poor

  • becoming even more extreme

  • and of course, for some people, the concept of work itself not being essential for survival is appalling

  • Conclusion

  • So is the universal basic income a good idea? The honest answer is that we don't know yet

  • There needs to be a lot more research more and bigger test runs

  • We need to think about what kind of UBI we want and what we're prepared to give up to pay for it

  • The potential is huge. It might be the most promising model to sustainably eliminate poverty

  • It might seriously reduce the amount of desperation in the world and make us all much less stressed out

  • This video was made possible by a

  • Universal basic income provided by you, our viewers

  • Ten thousand people around the world gift us a monthly income on patreon.com/Kurzgesagt

  • You enable us to pay salaries and buy new hardware you enable us to make more videos

  • And you enable us to spend more time on them

  • Kurzgesagt would truly not be what it is today without your help

  • You help us stay independent, and you give us the freedom to put quality before quantity

  • Thank you so much

What if the state covered your cost of living, would you still go to work?

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