It’s a myth that UBI will make people lazy and incompetent.
People are not the problem. Poverty is.
And over 70% of us are already unhappy at the jobs we do have.
What if the world’s biggest paradigm shift we could ever imagine – which, I believe, is the automation of all labor set to happen in the next decade – could bring about the opportunity to do UBI right?
OpenResearch, a nonprofit research lab, just completed the largest UBI study ever done in the United States. And I’m here to break it down for you.
Sam Altman’s Vision: Tackling Job Disruption with UBI
There have been over 200 trial programs of UBI done around the world. And interestingly enough, the majority of these trials have actually been done right here in the US.
But the US is also very divided on UBI.
In fact, there are several Republican-run US states that have banned UBI in their jurisdiction.
The reason that universal basic income fits into today’s narrative and is something we should actually be looking at, is because we are headed into a jobless society.
That’s right, 100% full automation of human labor.
In a world where jobs will be completely automated, we are going to have to come together and figure out how society should adapt and evolve, and what societal changes need to happen for us to avoid the huge and looming problem of mass homelessness due to enormous shifts in the job market.
For some context on this, check out my video on AI job disruption, where I break down a lot of stereotypes and labels that humanity has associated with poverty and how the welfare system is broken and would fail as a solution to jobs getting wiped out by robots.
Sam Altman, CEO of OpenAI and board member of OpenResearch, recognized the potential disruption to jobs early on.
In 2016, he put his support behind a comprehensive UBI study to help us understand how a universal basic income could help people thrive in a world that’s about to go full blast on automation.
What Did the Largest UBI Study in the US Reveal?
This wasn’t some small experiment. It was the largest UBI study in the United States spanning three years. In July 2024, the authors gave us a detailed look at the impact of giving people an extra $1000 per month, no strings attached.
Here are some highlights:
- Reduced Problematic Drinking and Painkiller Use: The study noted a 20% reduction in problematic drinking and a remarkable 53% reported decrease in non-prescribed painkiller use among participants. This suggests that financial stability plays a role in making healthier choices.
- Increased Mobility: With an 11% increase in moves to different neighborhoods, UBI recipients were empowered to seek safer environments or access to better school districts – key factors in quality of life.
- Financial Security in Housing: UBI led to a 5% increase in people opting to pay for housing rather than rely on living with family or friends. This suggests a move towards greater independence and improved living conditions.
- Unlocking Entrepreneurial Spirit: A recurring theme in the UBI study is the boost in entrepreneurial endeavors. This one was no different — with a 26% reported increase in business ventures or support for those starting one. This counters the myth that UBI fosters laziness.
- Prioritizing Health and Well-being: Recipients consistently allocated the UBI money toward health, indicating that having their basic needs met allowed them to prioritize their well-being. Simple things like dental care, often neglected due to financial constraints, saw a significant uptick.
- Power of Choice and Flexibility: UBI also provided recipients the flexibility to align employment with their values, hold out for better jobs, and even pursue education. This control over one’s life contributed to a sense of agency and empowerment.
UBI Makes Poor People More Productive
A common criticism against a universal basic income is that it would disincentivize work. Why would people work if they were given free money?
This argument, while understandable, has already been proven wrong. In fact, a study conducted in rural Kenya found that UBI recipients didn’t just continue working, they became more productive.
Findings revealed that unconditional cash provided individuals with increased agency and allowed them to make employment decisions aligned with their passions, goals, and values instead of just pursuing a paycheck. This led many to pursue further education, explore entrepreneurship, or seek more fulfilling jobs.
While there was a slight decrease in overall work hours, there was a notable increase in job searches. This indicates that individuals were using the safety net provided by UBI to find suitable work environments.
Interestingly, there was a significant rise in the number of Black recipients (26%) interested in starting or supporting a startup business.
UBI Improves Standard of Living
One of the most significant findings of this UBI study was the positive impact of guaranteed, unconditional income on basic necessities. The recipients consistently reported an increase in their ability to afford essentials such as housing, food, and transportation.
There was even a marked increase in participants who were able to relocate to more desirable neighborhoods (11%). This signifies UBI’s potential to improve housing situations. It provides individuals and families the freedom to choose living environments conducive to their growth. The increase in homeownership suggests an ability for people to build financial security.
The average recipient also increased spending on health, including dental care and mental health that were previously neglected due to their high cost. This suggests individuals were taking proactive steps towards well-being.
As I mentioned in the highlights, there was also a significant decrease in problematic drinking (20%) and painkiller use (53%), underscoring the potential of UBI in mitigating societal issues related to substance abuse and self-medication.
These findings challenge the notion that a UBI would lead to widespread laziness or social ills. Instead, the evidence suggests that providing a safety net can actually unlock greater productivity and economic potential among those living in poverty.
There was even a significant surge in financial support for others (26%), indicating that individuals with greater financial security were more likely to extend help to those in their communities.
This UBI study suggests that a universal income could play a crucial role in alleviating financial strain and improving overall living standards in the face of rising living costs.
UBI Creates More Entrepreneurs
Beyond improvements in living standards and careers, the study highlighted shifts in recipients’ mindsets. Many participants revealed a greater willingness to delay instant gratification and prioritize long-term goals. They even demonstrated an increased tendency to budget effectively.
When compared to a control group, the UBI recipients experienced an increase in both household and enterprise savings. They were more likely to engage in entrepreneurial activities, moving away from traditional wage work and toward self-employment. This suggests that the financial security provided by a UBI empowers individuals to invest in their future and take risks that can lead to greater economic success.
Again, this challenges the narrative that UBI fosters a lack of financial discipline. It showcases its potential to foster financial awareness and planning for the future. This income experiment led to some people having more leisure time to pursue their passions or spend time with family members.
Debunking Common Misconceptions About UBI
Despite evidence suggesting its positive influence, misconceptions about UBI persist. Here are three myths that have been debunked by this UBI study:
Myth #1: UBI Discourages Work
UBI studies consistently demonstrate a minimal reduction in work hours, contrary to fears of widespread idleness. This slight dip is often accompanied by individuals opting for more fulfilling or flexible work arrangements. The study found a 10% increase in active job searches, highlighting a shift towards better job fit rather than complete work avoidance.
Myth #2: Recipients Squander the Money
UBI doesn’t fuel reckless spending. Instead, the study found recipients allocated the funds responsibly — prioritizing necessities, paying down debt (like car payments), saving up for the future, and even offering financial support for those in need.
Myth #3: UBI Doesn’t Lead to Long-Term Change
This UBI study revealed an increased focus on long-term planning. Recipients were more likely to pursue education and save money, indicating UBI’s potential to break cycles of poverty.
Short-Term Cash vs. Long-Term UBI
What would you do if you knew you were to receive a guaranteed basic income for the next 12 years? Would it change your spending habits compared to knowing you’d only receive the basic income for 2 years?
This UBI study found that individuals who received a 12-year UBI had different spending and saving habits compared to those who received a 2-year UBI, even though both groups received the same amount of money during the first two years.
Long-Term UBI Leads to Increased Savings
One of the most significant findings of the study was that individuals who received the long-term UBI were more likely to save money. The researchers found that this group had “enormously higher rotating savings” and were more likely to participate in ROSCAs (Rotating Savings and Credit Associations) than those who received a lump sum payment.
Long-Term UBI Encourages Investments in the Future
In addition to saving more, individuals who received the long-term UBI were also more likely to invest their money. The researchers suggest that this is because the long-term UBI gave individuals a “longer stream of high incomes to invest in the future.” This finding challenges the misconception that UBI recipients are less likely to invest or plan for the future.
UBI a Solution to Full Job Automation?
So that’s the summary of what they found in this study, which is pretty cool.
These findings have profound implications for our society. With automation poised to transform the job landscape, finding ways to ensure everyone thrives, regardless of employment status, is crucial.
UBI isn’t about handouts; it’s about creating a safety net that allows everyone to adapt and prosper in a future defined by rapid change.
We’re living in a bubble that’s about to burst. It’s going to be interesting to see how society responds.
For me, the best thing you could do is lean into AI, learn how to use it, and get ready for this coming bubble.
If you’re AI-proof, meaning you have AI skills, you’re going to be much more in demand in the future, robots notwithstanding.
