What Would Happen If Everyone Got $1,000 a Month? (UBI Theory Explained)
Summary
TLDRThis video delves into the concept of Universal Basic Income (UBI), exploring its history and potential impact on society as automation threatens jobs. It reviews various experiments worldwide, revealing mixed results on UBI's effectiveness in alleviating poverty and improving well-being. The discussion also touches on the philosophical and practical challenges of implementing UBI, including funding and its effect on work ethic, concluding that while UBI may not be a magic solution, it remains a crucial topic for future societal and economic discussions.
Takeaways
- 🤖 Automation and AI are predicted to take over 40-50% of jobs, prompting discussions on Universal Basic Income (UBI) as a potential solution for future unemployment.
- 💡 The concept of UBI, where the government provides a base income to all citizens, has been debated for centuries, with early mentions by Sir Thomas More in 'Utopia' and later by figures like Thomas Paine and Milton Friedman.
- 💰 UBI is seen as a way to combat poverty and provide a financial safety net, with the potential to allow individuals to focus on skills and careers rather than basic survival.
- 🌐 Various countries have experimented with UBI, showing mixed results in terms of its impact on work motivation, mental health, and overall well-being.
- 📊 Studies have shown that UBI can lead to increased spending on essentials like food and rent, which could stimulate economic growth, but also raises questions about the sustainability of funding such a program.
- 💼 The idea of UBI is controversial and complex, with concerns about its cost and the potential for it to disincentivize work, despite evidence suggesting only a modest reduction in work hours.
- 🧘♂️ The psychological benefits of UBI, such as reduced anxiety and increased happiness, have been observed in some studies, highlighting the potential for improving quality of life beyond just financial stability.
- 🏥 Access to healthcare improved in UBI experiments, with recipients visiting medical professionals more frequently and spending slightly more on healthcare.
- 📉 Physical health improvements were not significant in UBI studies, with any benefits being small or temporary, suggesting that the impact on health may not be a primary outcome of such programs.
- 🏛️ The historical close call for UBI in the U.S. in 1969, with a bill nearly passing, illustrates the recurring interest in and political challenges of implementing a national UBI program.
- 💭 The presenter's personal perspective on UBI reflects a nuanced view, acknowledging the potential benefits while also recognizing the limitations and complexities of the concept in practice.
Q & A
What is the concept of Universal Basic Income (UBI)?
-Universal Basic Income (UBI) is the idea that the government pays every citizen a base income that is above the poverty line, regardless of their employment status or other income sources, to ensure a minimum standard of living.
When was the concept of UBI first introduced?
-The concept of UBI was first introduced by Sir Thomas More in his book 'Utopia' published in 1516, where he imagined a society that provided a basic income to all its citizens.
What was Thomas Paine's contribution to the idea of basic income?
-Thomas Paine, one of the founding fathers of the United States, proposed the idea of basic income in his pamphlet 'Agrarian Justice' in 1797. He suggested paying every citizen some amount of money to compensate for the loss of their natural inheritance, which refers to the idea that every person should be entitled to some part of Earth's natural resources.
What was Milton Friedman's variation of UBI known as?
-Milton Friedman proposed a variation of UBI known as the negative income tax. His idea was to provide cash payments to anyone whose income fell below a certain level.
What was Martin Luther King Jr.'s stance on UBI?
-Martin Luther King Jr. supported the idea of UBI. In his book 'Where Do We Go From Here: Chaos or Community' published in 1967, he stated that the solution to poverty is to abolish it directly through a guaranteed income.
What was Andrew Yang's proposal during his political campaign?
-Andrew Yang, during his political campaign, proposed a flagship policy called the Freedom Dividend, which involved giving every American adult over the age of 18 $1,000 a month.
What were the findings of the most comprehensive randomized study of UBI conducted in the United States?
-The study found that on average, people receiving UBI spent $310 more per month on essentials like food, rent, and car expenses. However, their average income went down by $125 a month, and the average work week decreased by 1.3 hours. The study also found no significant improvements in physical health but noted that recipients visited medical professionals more frequently and spent more on medical care.
How did the UBI experiments in different countries affect people's willingness to work?
-The experiments generally showed that while UBI recipients worked slightly less, it was not to the extent that they became lazy. The reduction in work hours was relatively small, indicating that the provision of UBI did not significantly deter people from working.
What was the main benefit of UBI according to the United States' unconditional income study?
-The main benefit of UBI, as concluded by the study, was that it allowed people to prioritize their spending. Recipients were not constantly forced to prioritize necessities like food, giving them more financial flexibility and reducing financial stress.
What is the 'Easterlin Paradox' mentioned in the script, and how does it relate to UBI?
-The 'Easterlin Paradox' suggests that happiness increases with income up to a certain point, after which further increases in income do not significantly affect happiness. This paradox is relevant to UBI as it suggests that the impact of UBI on happiness may be limited to those below a certain income threshold, beyond which additional income has diminishing returns on happiness.
What is the speaker's personal opinion on UBI after researching and analyzing various studies and perspectives?
-The speaker expresses a nuanced view on UBI. While initially supportive and hopeful about its potential benefits, they found that the measurable benefits were mostly temporary and limited to those at the poverty line. They suggest that happiness is found in the journey between reality and expectation, and that UBI might be more effective if targeted differently or if it provided for basic needs beyond just cash.
Outlines
🤖 The Future of Work and Universal Basic Income
The script discusses the imminent automation of jobs and the concept of Universal Basic Income (UBI) as a potential solution. It delves into the history of UBI, from Sir Thomas More's 'Utopia' to modern proposals like Andrew Yang's 'Freedom Dividend'. The video promises to explore the impact of UBI on society, work, and the economy, citing past experiments and recent studies in the United States.
💰 The Philosophical and Practical Debates on UBI
This paragraph examines the philosophical underpinnings and practical implications of providing a basic income to all citizens. It discusses the potential benefits of UBI in alleviating poverty and the challenges of mass unemployment due to automation. The script mentions various successful individuals advocating for UBI and the financial burden it would place on governments, highlighting the complexity and the ongoing global experiments to assess its effectiveness.
🌍 International Perspectives on UBI and Its Impact
The script reviews UBI experiments conducted in various countries, including Canada, Brazil, Finland, Germany, Spain, and Japan. It summarizes the outcomes of these experiments, which indicate improvements in mental health, reduced anxiety, and increased happiness among recipients, but mixed results regarding the effect on employment and physical health. The paragraph emphasizes the need for further exploration of UBI as a global solution to poverty and economic inequality.
🔮 Reflections on UBI's Potential and the Pursuit of Happiness
In the final paragraph, the script offers a personal perspective on UBI, expressing initial optimism followed by a nuanced understanding of its limitations. It references the Easterlin Paradox and discusses the relationship between happiness, relative income, and income growth. The author suggests that UBI might be more effective if targeted differently or if it provided basic needs rather than cash. The paragraph concludes with an open question about the future of UBI and an invitation for viewers to share their thoughts on its implementation and funding.
Mindmap
Keywords
💡Universal Basic Income (UBI)
💡Automation
💡Poverty Line
💡Economic Stimulus
💡Maslow's Hierarchy of Needs
💡Job Displacement
💡Income Inequality
💡Mental Health
💡Happiness
💡Experiment
💡Easterlin Paradox
Highlights
Open research published the results of a significant monetary experiment on universal basic income (UBI).
The concept of UBI is to provide a base income above the poverty line to everyone, regardless of employment status.
Automation is predicted to take over 40-50% of jobs, prompting discussions on the necessity of UBI.
UBI has been debated for over 500 years, with early mentions by Sir Thomas More in his book 'Utopia'.
Thomas Paine proposed a basic income to compensate for the loss of natural inheritance due to resource depletion.
Milton Friedman suggested a negative income tax as a form of UBI to support those with incomes below a certain level.
Martin Luther King Jr. advocated for a guaranteed income to abolish poverty.
Andrew Yang's political campaign included a 'Freedom Dividend' of $1,000 a month for every American adult.
The US government's stimulus check of $1,200 was a form of UBI.
UBI experiments have been conducted worldwide, with varying results on health, education, and employment.
Finland's UBI experiment found no significant effect on employment but increased happiness and reduced stress.
Germany's experiment showed recipients felt less anxious and more motivated to continue their education.
Spain's UBI experiment in Barcelona reported improved mental health but no significant change in work willingness.
A Japanese billionaire's private UBI experiment resulted in decreased divorce rates and increased happiness.
The US unconditional income study found that UBI allowed people to prioritize spending but did not significantly improve physical health.
The biggest benefit of UBI observed in the study was the reduction in stress and increased access to medical care.
The discussion on UBI is gaining importance as society evolves with technology and faces the challenge of mass unemployment.
The video creator expresses personal disappointment in the limited measurable benefits of UBI, suggesting a need for further exploration.
Transcripts
all right so open research just
published the results to one of the most
important monetary experiments in human
history free money from the government
because what happens to society when our
jobs are taken over by Ai and robots
what would we do for work how would we
make money and I know this sounds like
science fiction but research shows we're
just a couple years away from that
reality because 40 to 50% of all jobs
will soon be automated this wave of
automation is coming and it hasn't
crashed over society yet but it's going
to and that's bad unless of course
you're the one building all the robots
but one of the solutions Economist have
come up with is what if we gave everyone
free money from the government boom
every single year it's yours no
questions asked it's a concept called
Universal basic income the idea that the
government pays everyone a base income
that is above the poverty line right now
the poverty line as defined by the
Census Bureau is almost at $5,000 a year
or a little over $1,200 a month now this
is an extremely controversial idea and
everyone has an opinion about it because
we've been arguing about this for 500
years now literally since the year 1516
that's when Sir Thomas Moore introduced
the idea in his book called Utopia
that's where he imagined a society that
provided a basic income to all its
citizens as long as they showed a
willingness to work and and as we go
forward through history you're going to
see variant of this idea over and over
again in 1797 for example there was
Thomas Payne one of the founding fathers
of the United States and he came up with
an idea for basic income in a pamphlet
he called agrarian Justice he wanted to
pay every citizen some amount of money
to compensate for What's called the loss
of their natural
inheritance and the natural inheritance
is an idea that every person born on
Earth should be entitled to some part of
its natural resources because think
about it people born way into the future
will have less stuff to pick from as
more and more of Earth's resources are
used up and privatized so to compensate
Thomas Payne wanted to pay them some
amount of money and in the 20th century
there was another variation proposed by
Economist Milton fredman in the form of
a negative income tax fredman's idea was
to provide cash payments to anyone whose
income fell below a certain level Milton
Friedman by the way was an OG loved by
everyone he was a Nobel prizewinning
Economist that fun fact predicted
bitcoin's existence way before it
happened in 1999 look it up but not
before you watch this video please now
in 1967 in a book called Where Do We Go
From Here chaos or Community Martin
Luther King Jr had his own idea when he
said the solution to Poverty is to
abolish it directly by a now widely
discussed measure the guaranteed income
and one of the more recent examples is a
political candidate Andrew Yang with his
freedom dividend when he proposed giving
anyone over the age of 18 $1,000 a month
my Flagship proposal is a freedom
dividend of $11,000 a month for every
American adult starting at age 18 and
most recently you probably had a taste
of Ubi when the government started to
give everyone a stimulus check of
$1,200 all of these are variations of
the universal basic income idea and it's
only going to get more important to
figure out as Society evolves thanks to
technology but here's where it gets
super interesting we've been running
this money experiment All Around the
World in different countries and just a
couple weeks ago we got the results to
the United States and what's considered
to be the most comprehensive randomized
study of Ubi ever conducted and in
today's video I want to show you the
history of Ubi the arguments for it some
of the arguments that are against it and
what the test results showed I think
this is going to be a huge part of our
conversation
really soon and I want you to know about
it so let's get into it hi my name is h
j hope you're doing well come for the
finance and stay for Universal basic
income one of my favorite videos on
YouTube was a video by Casey neistat
where he talked about money and how it
solves all the problems money won't
solve your problems what a Croc of sh
and I think I do have like a unique
perspective on this because you know I
spent a a good part of my life being
very very poor I qualify very poor is
like zero in my bank account zero
savings zero safety net nowhere I could
turn to for money and you know there was
definitely a time in my life when my my
son own was very small where if I didn't
get free diapers and milk and money from
the government I'm not sure I could have
make made ends meet as a as a parent or
as an individual fast forward a bit
though in Casey goes on to have one of
the most successful careers on social
media he makes millions of dollars goes
on to become famous and then he says
money will solve your problems this idea
that money won't solve problems it's
when I was dirt poor money
would have solved every one of my
problems so if money does solve all the
problems then why doesn't the government
just pay everyone some amount of basic
income what if the government was able
to solve the bottom of maso's hierarchy
of needs physiology the idea that
everyone could be able to afford the
basics like food shelter and clothing
would the world become a better place if
people had more time to do what they
love and become creative or with the
absence of a financial struggle make
everybody lazy artificial intelligence
and automation is getting us there
faster every single day and I think we
could be on the edge of this future
really soon and if robots will soon be
able to do our jobs faster and better
than we can Will Jobs still be a core
part of our Identity or will we have to
find new purpose in life in his video
Casey says that after a certain point
money doesn't really solve the problems
that all of us will face throughout our
lives so all of these questions are very
philosophical and we're finally starting
to get some of the answers and the more
I looked into them the more I regretted
picking this video because it's
extremely complicated so here's what I
learned so here are the arguments in
support of Ubi economists say that some
kind of a basic income can help us solve
one of the hardest challenges that
humanity is facing poverty right now
there's over 30 8 million Americans
alone that are living in poverty they
make less than $112,000 a year and that
leaves them very little for anything
beyond the basics and a study by the
Roosevelt Institute found that a Ubi of
just $1,000 a month could help a lot of
those people out of poverty by allowing
them to focus on their skills and their
career rather than just worrying about
how they're going to eat and according
to the World Bank over 700 million
people live in extreme poverty worldwide
so this is a huge problem on a global
scale but in theory Ubi could act like
an economic stimulus to boost consumer
spending because when people have more
money they tend to spend it on things
like food and rent which helps with
economic growth but I also learned that
some of the most successful and richest
people in the world who are working to
solve poverty say that Ubi could be one
of the better ways to fix it what to do
about mass unemployment every single
field is going to be touched by autom
this is going to be a massive social
challenge um and I think ultimately we
will have to have some kind of universal
basic income and Ubi to me represented a
floor a floor that people who could
stand on so it mean that unemployed
people will be paid across the globe
yeah and really have the the the
knowledge and peace of mind ultimately
that they could survive
and eat and feed their children while
they are learning how to transition into
this new world I don't think we're going
to have a choice so the main benefit of
Ubi is to fight against poverty and
automation which is going to become very
real this decade but the downside is
who's going to pay for it because it's
extremely
expensive if we were to give every just
$11,000 a month it would cost the US
economy about $4 trillion a year now for
context in 2024 the entire United States
federal budget was $6.5 trillion and
that includes spending on Social
Security the entire military Medicare
Medicaid and other essential services so
Ubbi at just $1,000 a month costs more
than half of what the country spends in
a single year which means funding it
would be really really hard but let's
assume we cut out a bunch of bloated
government programs we got rid of tax
loopholes we tax the rich even more and
we found a way to make this work the
next question is does it actually work
and it turns out we've been running
these tests all over the world to see
how people would react when they're
given money for free and here's what we
found in the 1970s for example Canada
was running the mincom test where they
gave the whole town of dolphin Manitoba
a basic income and what they found was
an improvement to health care and higher
graduation rates unfortunately the
program was cancelled after 4 years
because of politics but in 2017 Ontario
tried again with another program to help
4,000 low-income residents but again the
experiment was ended early because of a
new government so the results were
inconclusive but Brazil has been running
an experiment of their own for decades
called the Bolsa Familia or PBF which
helped around 20 million people out of
poverty from 2002 to 2012 the percentage
of Brazilians living on very little
money dropped from 8.8 to
3.6% and income inequality was lowered
as well in 2017 Finland which is
considered to be one of the most
advanced welfare states in the world
tried their own experiment for a whole 2
years they gave 2,000 unemployed
citizens a monthly income and what
Finland discovered was that their
program didn't really have much of an
effect on people's desire to work l less
or work more but it did increase their
happiness and it lowered their stress
levels now Germany also tried their own
experiment in 2014 where they gave
people $1,100 a month for one whole year
and the result was 80% of recipients
said the income made them less anxious
more than half said it allowed them to
continue their education and 35% said
they now felt more motivated at
work in 2017 Spain also o tried this for
Barcelona's poorest households and they
gave people almost $2,000 a month and
the results again showed not much of an
effect on people's willingness to work
but people did report feeling an
improvement to their mental health now
in Japan there was a billionaire who ran
his own private experiment he gave out
$9 million spread out amongst a thousand
people the results a decrease in divorce
rates and More than 70% of recipients
saying they experienced a significant
increase and happiness now as I looked
across the world at more and more
countries running their own experiments
I found that their results were more or
less the same so the last place that I
looked at was the United States because
just a couple weeks ago we got the
results to one of the bigger tests
called the unconditional income study
run by Sam Altman and open research and
here's what happened the study ran from
November 2020 to October 2023 and it
split people into two different groups
the first group group was given $1,000
every single month and the other group
known as the control group was given $50
a month now the average household income
of people that got any money was about
$30,000 a year and after 3 years of
running this experiment the results are
in and here's what people did with their
money on average people spent
$310 more per month mostly on food rent
and car expenses but surprisingly the
average income went down by
$125 a month the average work week also
went down by 1.3 hours which adds up to
about 8 days per year so yes studies
showed that anyone who received an
income on average did decide to work a
little less but it wasn't to the point
where they all got lazy and they all
became aspiring Yu-Gi-Oh players or
Worse bad magicians and the effects of
free money on people's Health was also
not that noticeable after doing blood
tests the study concluded that we find
essentially no evidence of improvements
in physical health any benefits in
nutrition and blood samples that they
measured were so small that they had to
rule them out because they were also
temporary for example stress went away
in the first year of receiving money but
in the second year it came back the only
real measurable health benefit that the
paper reported was that recipients went
to hospitals doctors and dentists more
often and they spent about $20 more a
month on Medical Care at the end and the
study concluded saying that the biggest
benefit of a basic income is that it
allowed people to prioritize how they
spent their money instead of always
having to prioritize something like food
now right now we are still running these
free money experiments in over 24 States
and dozens of cities but as of now we
don't have a national Ubi program but at
one point in history we got really close
to it in 1969
that's when President Nixon was on the
edge of accepting a basic income bill
that would have given a family of four
about $1,200 a month in today's money it
got so close to becoming law that it was
passed by the Senate but it was then
rejected by the
house now throughout the video I've
given you a lot of data and a lot to
think about but if you made it this far
here's my personal opinion have you ever
found the answer to something that you
were really disappointed in if I showed
you one of my magic traits on how it was
done you You' probably be pretty upset
by the time you see how it actually
works like if I took this two of clubs
and I magically changed it into another
card looks cool until I showed you how
it was done well that's not magic is it
and that's how I feel about Ubi I was
rooting for it to work I wanted to make
this video and tell you that the studies
show that if you pay these people this
amount of money it solves everything and
on paper it really does it's amazing but
the only measurable benefit where we see
real good things happening is for those
at the very bottom anything above that
line of poverty becomes a temporary
benefit and there are theories that
predicted this exactly like the
easterland Paradox which showed that
worldwide among all people of all
countries happiness does go up with
money but it only goes up to a certain
point and subsequent studies show that
the bigger indicator of happiness is not
absolute income it's relative income and
income growth I have this weird crazy
Theory that happiness can be found
between reality and expectation we can
find happiness on the journey between
two spaces of where we are today and
where we want to be so if you gave
someone $112,000 who wasn't making
anything you would make their life if
you gave that same 12,000 to someone
making 50k a year you'd make them
happier as well but not as happy as the
person who wasn't making anything and if
you gave that same 12,000 to a person
making a million a year You' have no
effect on their happiness at all and
that's because as we make more money our
reality improves and that closes the gap
between itself and expectation that's
why I think a lot of Rich successful
people can be so miserable it's because
their lives are so far ahead and so
utopian that there's no reasonable
reachable expectation that can be
achievable because if your life is
already perfect where can you go from
from there that Gap is closed and so
what you're left with is just comparison
to others feeling like you're behind or
setting unattainable unreachable goals I
was watching this guy who was on a yacht
he rented the yacht but he was worth
hundreds of millions of dollars and he
was complaining that he couldn't afford
the yacht yet and I thought how are you
not happy with where you are you're
worth hundreds of millions of dollars
you think that yacht's going to do it
for you find something else else to
close the gap with don't make it money
and if it's money make it something
attainable or make it something else
happiness is that Journey between where
we are and where we want to be that's
why it's not absolute income that
measures happiness it's the growth of
income that's longer lasting and
actually measurable but I'm not giving
up on the idea just yet because maybe
the experiment itself was wrong maybe
instead of giving 12,000 a year to
people that are making 30,000 wasn't the
right answer maybe it was supposed to go
to the people that weren't making any
income or people that are homeless or
maybe it wasn't supposed to come in the
form of money at all maybe it should
have been basic needs like affordable
housing shelter Health Care food and
education a circumstance a reality that
set people up on a good path to chase
that gap between their reality and their
future expectation and their goals
whatever the answer is I hope you didn't
think you going to find it on a YouTube
video so I don't know why you're still
watching but I'm just glad that there's
welfare programs that exist that gave
people like Casey neistat the security
to pursue their dreams and make the
videos that I've enjoyed that's why I'm
not giving up on the idea yet but I'd
love to hear your thoughts do you
support Universal basic income and if
you do how do you think we should go
about it and how should we fund it I
think it's a really interesting
conversation that we're about to have a
lot more of in the future but in the
meantime I hope you have a wonderful
rest of your day smash the like button
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linked Down Below in my patreon thank
you so much for watching this video I'd
love to see you back here next week I'll
see you soon bye-bye
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