Basic Income Among the Rich

While reading a few articles today on basic income, I had a bit of an epiphany.  Basic income is already all around us, and the vast majority of those who have it are also hard workers.  Bill Gates, Warren Buffet, and Donald Trump are three of the highest profile Americans with a basic income.  Basic income is a minimum income that an individual receives, regardless of any work they do.  The three people mentioned above, along with a many other wealthy Americans, have a basic income in the form of interest and dividends from stocks, bonds, and other investments.  For a basic income to be viable, it needs to provide enough income to survive on.  According to the Federal government, this comes out to about $15,000 a year for one person, for the most expensive state (Alaska).  The Federal poverty guidelines add $5,230 a year per additional person.  Actual research (rather than the guesses of out-of-touch government officials) estimate that the actual poverty level is between $25,000 and $35,000 for one person, depending on what state that person lives in.  According the Federal poverty level, this means that a basic income for one person is about $1,250 a month*, with $436 more per additional person.  For the poverty level based on real evidence instead of arbitrary guesses, a basic income for one person would need to be about $2,000 a month, on the low end, and around $3,000 a month in more expensive places like northern Alaska.  I don't recall whether the real research had data on income beyond one person.

So, using the Federal poverty level as a guideline (since my knowledge of the real poverty level is lacking beyond one person), a basic income must provide a minimum monthly income of $1,250 a month plus $436 for each person in the household beyond the first, or $15,000 a year, add $5,230 per person beyond the first.  Assuming a 2% annual interest rate (you can get this on 5 year certificates of deposit at most credit unions and even better rates with real investments), each household would need $750,000 add $262,000 per person after the first invested, to have a basic income.  Any millionaire with significant investments has a basic income that will support the millionaire and a spouse, without ever having to work or otherwise earn money.  This covers far more than just the top 1% of Americans, and if you count retirement funds, nearly the entire upper class and part of the middle class have basic incomes ready for them when they retire, and that does not even count Social Security!  My list above includes some of the richest people in the U.S., who are making enough income on investments alone to provide a basic income for hundreds or even thousands of other people, in addition to themselves.

The fact is, the rich already have basic incomes.  Why is this important?  It is important because one of the biggest arguments against a basic income is that people will quit working for a living if they get one, which would ruin the economy.  So let's look at the evidence.  The existing basic incomes in the U.S. are held almost exclusively by business owners, hard working CEOs, and investors.  Yes, there are some freeloaders born into wealth who don't work, and there are some investors who stopped working when their investments starting making enough to live on, but a vast majority of people with a basic income actually work far too much!

I have already discussed plenty of other more direct evidence that basic income does not reduce work, but this leads to another conclusion: If basic income does reduce incentive to work enough that there is significant risk of economic collapse if we provide it to everyone, then we have a massive disaster on our hands.  The people holding up the roof of our economy all have basic incomes!  It is time to panic, because what happens when they realize that they don't have to work and suddenly all quit their jobs en-mass, leaving the economy to crumble?  If basic income reduces incentive to work so dramatically, we have a moral responsibility to relieve these people of their fortunes immediately, otherwise we are in for a disaster far worse than could ever be predicted!

Yes, that was entirely sarcastic.  Rich people with de facto basic incomes have been working hard for the entire history of humanity, and there is no reason to believe they will stop now.  This should make it clear how utterly absurd even the suggestion that a basic income would destroy the economy is.  I am not opposed to rich people, but I am opposed to rich people who already have basic incomes telling the rest of us that we can't have them, because we are too lazy to work if we did.  This is toxic elitism at its finest.  We are all humans here.  If they can be productive despite having a basic income that is 10 to 100 times the poverty level, then the rest of us can be productive perfectly well with a basic income right above the poverty level.  At least we still have an incentive to work beyond just getting a high score in some money game.

The fact is, our economy works because people don't lose motivation to work just because they have enough money to live on indefinitely.  In fact, the evidence seems to suggest that the exact opposite is true.  While there are rich people who freeload on their basic income earned by someone else, the people with the most money tend to be the hardest workers.  Yes, some might consider this a cause and effect relationship of hard work resulting in greater fortune, however there are still plenty of hard workers in all of the income classes, and it does not take much to see that hard work does not correlate to income at all in our society, otherwise farmhands who work 16 hour days would be as rich as the typical CEO, and school teachers would get paid as much as engineers.

There is some irony here: The people who have basic incomes are the people who need it the least, and they are also the most likely to oppose a universal basic income, despite the fact that they stand to benefit from it the most.  (More income means more spending, which means more money for investors, CEOs, and business owners.)

My challenge to the rich: If basic income is so dangerous to our economy, get rid of all of your investments, and never invest again.  Otherwise, trust the rest of us, who have a real stake in this, to use a basic income as wisely as you seem to think you use yours.  We are not asking for enough money to compete with you in your little money game; we are just asking for enough to feel some degree of financial security.




* I can tell you, where I currently live, which is not Alaska, $1,250 a month would pay for rent, utilities, and food, but it would not fully cover transportation, insurance, and other necessities.  Note that I live in an area with a very low cost of living.  I have lived in Alaska, and $1,250 a month in Alaska would cover rent and food, but not utilities (heating gets expensive) and definitely not transportation (you can afford food, but you cannot get to the store in the winter to buy it) or anything else (warm clothing...).  Cost of living for one person in Alaska is at least $2,000 a month, and that assumes that person lives in the cheapest part of Anchorage and lives close enough to stores that transportation can be exclusively on bike, even in the coldest parts of the winter.  The average is closer to $2,500 a month, up to at least $3,000 a month in the coldest parts of the state (where heating alone can eat well over $500 a month in the winter).