When the idea of a Universal Basic Income started floating around a few years ago, it was touted as a saving grace for low-income people to increase their dignity and raise them out of poverty. Many people had strong reactions against paying people not to work, but the progressives out-shouted them, and a few select cities started carefully curated programs to test it out.
However a wider experiment with UBI has been happening over the last year, and the results are just becoming apparent.
When the COVID lockdowns hit, millions upon millions of people filed unemployment claims. No one could blame them. Without the opportunity to go to work, such claims were a lifesaver for many.
But now that lockdowns are easing, employers are begging – literally begging – for workers to hire, and they can’t find anyone willing to give up those generous benefits and actually take a job.
Employers are forced to offer perks: signing bonuses, college tuition assistance, family leave for managers, pay boosts. While all this sounds terrific for the workers, keep in mind the customer will ultimately bear the brunt of the cost increases.
In short, the stimulus money is an experiment in Universal Basic Income; and the results are fulfilling the worst fears of the critics. People – understandably – would rather stay home and get paid for doing nothing than work hard at a job where they’ll earn less. Who can blame them?
This is confirmed by the Federal Reserve Bank of Kansas City, which wrote a report on the issue of labor shortages. In it, one manufacturer noted, “Unemployed workers have no incentive to return to work given the COVID bonus payments.” Another manufacturer said, “It is very difficult to handle the increased business with supply chain issues across all materials and finding anyone who wants to work. The federal government has incentivized people to stay home and not be productive.”
And the Federalist noted, “In the Great Depression, Americans worked for government checks. Now people get checks for doing nothing.”
This labor shortage is creating more bottlenecks for the supply chain, already stretched to the limit. “The Biden administration effectively destroys the labor market, resulting in significant repercussions for the real economy, such as a labor shortage that could stall the recovery,” notes ZeroHedge.
Now we see data showing how increasingly reliant the American population has become on government money. In fact, “transfer payments” now account for one-third (33.8%) of all income. Or, to put it another way, one-third of all Americans depend on the government to provide their income. To put this in perspective, during the 1950s and 1960s, transfer payments accounted for about 7% of all income.
The Biden administration is working diligently to increase dependency even further – for example, quietly preparing for a food stamp increase without congressional approval. This certainly seems like a compassionate move, considering rising food costs. But what are the long-term implications?
The safety net to “prevent” poverty also promotes dependency. According to the Wall Street Journal, “This is now about mainlining benefits to middle-class families so they become addicted to government – and to the Democratic Party that has become the promoting agent of government. … But a more potent political target may be the bill’s tripling down on a welfare state that disdains the dignity of work and seeks to make Americans the wards of government.”
Or as the Washington Times put it, “Public assistance should be a trampoline, not a hammock.”
Now let’s look at this issue from the perspective of low-wage workers. Most of them think expanded unemployment benefits are a terrific development because they make more money than they did working. It’s enabled endless millions to give the middle finger to restaurants and other places where working conditions are difficult and wages are low.
A Twitter user named Lori Summers summed it up as follows: “People shouldn’t HAVE to work. People should WANT to work” – and takes her logic further on this thread. After all, money grows on trees, so why should anyone struggle to earn it?
Whatever explanation is true, two indisputable facts remain: Businesses cannot hire, and government handing out money is a hugely contributing factor.
There is another, less tangible issue with a Universal Basic Income: a lack of purpose. “This need for meaning has traditionally been met by four things,” observes Dennis Prager. “Religion, family, providing for oneself and one’s family, and patriotism. And all are fading. … So, then, with the four primary sources of meaning dying – killed in large measure by leftist ideology – meaning must be found elsewhere. And that is where the left steps in. Leftism has always been a secular religion. It kills traditional religion and presents itself as a secular alternative.”
A life without meaning is pointless, and taking away the incentive to earn a living is cruel. Religious faith is being stripped away by secularists, leaving people even more unmoored and unanchored. It’s no wonder we’re seeing the rise of radical leftism – burning and rioting in the name of social justice gives people some sort of purpose, however misguided. It does not, however, prepare them for the workforce.
We now have a large segment of society that currently doesn’t have to work if they don’t want to. They don’t have to put up with inhumane bosses or low pay. They have the option to stay at home and collect money. Yay for UBI!
It’s been said that free money is no less addictive than heroin. We’re creating generations of addicts.
Many people have noted the prescient words of commentator Paul Harvey, who back in 1965 broadcast his iconic piece, “If I Were the Devil.” (Here’s a transcript.) One of the many things Harvey predicted: “If I were the devil, I’d take from those who have and give to those who wanted until I had killed the incentive of the ambitious.”
Ronald Reagan said, “If you want more of something, subsidize it.” Evidently that applies to government money, too.
This, so far, is the results of America’s adventures in Universal Basic Income. What started out as compassionate aid during a time of an international medical crisis has morphed into a threat to the very supply chain, which in turn may trigger a cascading effect that will doom any economic recovery.
Yay for UBI.
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