Altman’s Universal Basic Income Experiment (Part-1-Employment)
This has always been on my mind: what happens in a world where we have our basic needs covered every month? How will we navigate our lives, and on what things will we spend our time more?
UBI
Universal Basic Income (UBI) is a social welfare proposal where all citizens receive a regular, unconditional cash payment from the government, regardless of their income or employment status. Some key points to summarise :
- Unconditional Payments: UBI is provided without any means testing or requirements to work, distinguishing it from other welfare programs that target only low-income individuals.
- Regular and Predictable: Payments are made on a regular basis (monthly, for example) to ensure a stable income for recipients.
- Goal of Poverty Alleviation: The primary aim of UBI is to reduce poverty and provide a safety net for all citizens, enabling them to meet their basic needs, but this actually has more impact on the people who has ambitious plans but are doing the job for the sack of pay-check.
I mean, I always thinks, that there are a lot of amazing people and if they given a choice that there monthly basic expenses will be covered for let’s say 10 years, and they are free to chose anything to do for the next 10 year, majority of them will choose to create/contribute something meaningful.
Well to do that experiment in real-world, you need a lot of money, and Sam Altman did the exact same thing, and the results are pretty favourable to above statement.
Research
The OpenResearch UBI study, backed by Sam Altman and conducted through a nonprofit organization, is one of the largest universal basic income (UBI) trials in the United States.
Objectives
- To explore the effects of providing direct cash transfers to low-income individuals.
- To assess how UBI impacts spending habits, employment choices, health care access, and overall well-being.
Structure
A group of people from Illinois and Texas are divided into two groups :
- The study provided $1,000 per month for three years to 1,000 low-income participants in Illinois and Texas. (recipients)
- A control group received $50 per month for comparison. (control participants)
Remember this is just an experiment but in real-world, impacting lives of people.
Key Findings
Employment
- Employment rates and work hours for both recipients and control participants rose from 58% to 72% for recipients and, 59% to 74% for control participants respectively.
- Also, due to unconditional monthly cash, recipients were 2% points less likely to be employed than control participants
- In other words, people have chosen the jobs that aligns more towards their goals, and values. (As said, people have become more ambitious)
Impact on Individual and Household Income
- Both Individual and household income are higher for recipients, transfers included, shows that recipients were able to use the cash transfers as replacement or supplemental income and chose to work few hours, or reduce the number of jobs held.
- The transfer of cash may allow other adults in recipients’ households the opportunity to adjust their earnings, leading to larger difference in total household income.
- The visualisation below shows household yearly income over time with and without the transfer amounts.
- Cash might increased ability to take jobs that aligns to individuals’ circumstances, goals, and values, instead of pay-checks.
- Impact on Single Parents : They were less likely to employed by 3.9% points and worked an average of 2.8 hours less per week than single parent control participants.
- Impact on High Income at enrollment : The recipients whose household income was highest at the time of enrollment, were 4.4% points less likely to be employed, and on average worked 3.7 hours less per week.
- Impact on Personal Time : Another potential explanation for the reduction in work hours is that recipients were able to spend more time with kids, pursue education or training, prioritize health, take a lower paying job that was more enjoyable or ofference opportunities for advancement, or simply take a break.
- Cash has increased the likelihood of people to find jobs that better matched their skills. They become more selective in their job searches, that aligns their values and enable them to do meaningful work.
“Because of the [cash transfer] and being able to build up my savings, I’m in a position for once to be picky…I don’t have to take a crappy job just because I need income right now. I have the opportunity to hold out and try and find the right fit.” — Jessie, recipient
- Prioritizing time with family: Some recipients used the cash to replace the income lose from quitting their job or reducing work, opting to be a fulltime caregiver or spend time with family. Bethany left her job to homeschool her three kids, two of whom had recently diagnosed with autism and ADHD and were struggling with traditional education. On the other side, Nathan, cut his 50 hour work week in half so he could spend more time with his four-year-old-son, teaching him things that he never did or learned from his own father like hunting, fishing, gardening, fixing cars, driving around and listening to music, and playing Pokemon Go. This is beautiful, indeed.
- Prioritizing physical or mental health: For individuals struggling with physical and mental health challenges, the cash transfers may make it possible to take time to seek care. For example, Tessa experienced a brain injury several years before enrolling in the program; she was working 20 hours a week that made her physical health, after the enrollment, she quit her job, used the transfer cash for her expenses and the cost of the surgery.
Conclusion
Some recipeints showed that as long as they have enough money to meet their basic needs, they are willing to give up some additional income and the items it would allow them to buy to meet their other needs — for caregiving, leisure, learning, exploring, and a myriad of other things they value spending time.
The extra cash gave them more flexibility to do so.
