June 30, 2018

Those who sell us a universal basic income as a total solution, could just be wanting for it to fail

Sir, I refer to Tim Harford’s “Basic income or basic jobs?” June 29. The theme has become more fashionable because of robots and artificial intelligence, but the lack of jobs is not a new concern.

In 2003 in an Op-ed I wrote: “There’s a hint of all coming to a standstill in the theory about how globalization will optimize the world economy, by ensuring that merchandise will always be produced at the lowest marginal cost. What good does it do us to have products where the cost of the labor component gets smaller by the minute, if workers can’t buy the very products they produce?”

I ended that in jest with “Friends, let’s give one another jobs, scratching each other’s backs—paying each other good salaries of course.”

In 2012, while I was still not censored in Venezuela, in another Op-Ed titled “We need decent and worthy unemployments” I began it with: “What politician does not speak up for the need to create decent and well paid jobs for young people? But, if that's not possible, and the economy is not able to deliver that on its own ... What on earth do we do?”

In search of the answer I there asked: “Which is better: educating for a source of employment likely to be absent and therefore only create frustration, or educate for unemployment, and suddenly perhaps reaching, when on that route, the pleasant surprise of some jobs?”

Therefore Sir, in the choice between a basic income and a basic job, I clearly go for the first. The waste that could result, especially in uncertain times like these to develop guaranteed jobs, would surely be too big.

But that does not mean I consider that a Universal Basic Income either can or should be designed to satisfy all needs. For the time being it should just be a tool to help people get out of bed and reach up to whatever job opportunities might be around.

How much? Start with little. For instance, if there are pressures to increase the minimum wage $3 per hour then, for a fulltime 160 hour per month that signify $480. So why not start a UBI at that level and let time tell us where it can go? The additional demand that could be generated will, at existing salary levels, generate many jobs too.

What I most fret though are the redistribution profiteers. Concerned with seeing the value of their franchise erode, they might sell UBI’s promises excessively, both in amounts and purpose, so as to make the whole idea of a social dividend collapse, in order for them to get back in the saddle again. It behooves us all to stop them.