A UBI would shrink the economy and worsen benefits for the most needy.

The idea of a Universal Basic Income (UBI) is gaining more attention. With a UBI, the government would give every adult the same fixed, monthly payment regardless of work status, health, or wealth. There are serious reasons to be cautious about UBI: It is offered as a solution to technological unemployment, but jobs aren’t disappearing; rather, work is changing. A quarter century after the digital revolution began, the economy now employs 37 million more people and offers a record-high 6 million job openings. Viewed by some as an alternative to work, UBI would shrink the labor force. By definition, a smaller labor force would mean lower economic output and lower tax revenues to invest in the future. UBI is very expensive. A $12,000-per-year UBI would cost the government $2.4 trillion annually, or one-eighth of GDP. That’s nearly as large as the entire US safety net today. Because UBI is universal, it would divert assistance from the most needy. Even under a leading proposal that leaves most of the safety net intact, a single parent with three children could lose up to $19,000 in annual benefits on net. The idea has been scarcely tested. Only one of a handful of experiments with UBI would provide insights relevant to the US economy, but that study is still in its early stages. While the motivation behind UBI is admirable, it is not the right solution to the country’s core economic problem: the concentration of opportunity.