Money, Money, Money. Worries, worries, worries. No more. Please. Universal Basic Income.

The sad truth is that you are only in your 20s and you are obsessed with money. It’s the center of your thoughts. How you don’t have any. How you are going to get a lot. And how you can lose it all because of some random technological innovation in the future. There’s a way out of this toxic spiral of thoughts and worries. It is called the universal basic income, and it is already being implemented in other countries. Even within the US, places like Hawaii and Alaska, which have the highest costs of living, are considering the idea. [0]

Despite all the distractions that come with summer, I bet you still fit a thought or two about eventually finding a job, and perhaps more importantly, a well-paying job. To be fair, you are at a point in life where you are making important life choices that are going to pave the path of your future. You don’t need to be a heartless, greedy utilitarian to understand that you can’t ignore it when making career decisions.

Sure, you don’t need to be rich to live comfortably or even to be happy. But you need to make a minimum amount to meet the basics: housing, transportation, groceries, something fun of course, because otherwise what’s the point of making money if you can’t spend a little of it on yourself, and perhaps leave some aside for savings.

The tricky thing is that a well-paying job means different things in different places and for different majors. As a good metric, STEM majors can be looking at average starting salaries of $60,000. Students in business, the natural resources and healthcare sectors can expect starting salaries of around $50,000. If you are in the humanities field you may be looking at something closer to the $45,000 line or even $35,000 if you are an education major. [1] (Find out more about starting salaries here:

However, you need to pay attention to more than starting salaries when choosing your major. You need to study the geography of the market for your profession. For example, if you are a computer scientist and you want a job in Sillicon Valley, you better hope you get a starting salary of $110,000. Recent rakings of cost of living in the US find large discrepancies between states and cities. Making $100,000 in North Carolina is hitting the jackpot, but if you are moving to DC or New York, this salary will make you feel like you have just enough to get by. [2]

If these two near-future considerations are not enough to keep you up at night, think about what will happen in 15 years with all the technological progress that we are now used to seeing. Despite being 20, you are old enough to know that computers, cell-phones, and the internet are a fairly new inventions that have revolutionized business across the world.

And today technological changes continue to dramatically reshape the way work is done in the economy. Should you be worried your profession will be obsolete in 15 years and you are going to have to go through all this again? (to learn about the percentage of jobs at risk to automation by sector and geography, visit:

Yes, you have money problems and reasons to worry about money in the future. However, in the bright side, at least you are now making decisions and have time to adjust and optimize. What about the fish that are already in the water? Some of them, are drowning. You know this from statistics shown just about everywhere.

Automation and trade, but specially automation, have taken a toll on the American middle class. Inequality in America is drastically increasing since the 1980s. Inequality on itself is not a terrible thing if it is just a case of the rich getting richer. The problem is that in America, the poor are getting poorer and poorer too. No longer should you aspire to a middle class salary if you are planning to live comfortably. The median salary is not rising fast enough to keep up with higher earners. (And in fact, the bottom 10 percent of households have actually seen significantly higher income growth than the median household. )[3]

So by now it is clear to you and to policy-makers in places with high living costs, like Hawaii and Alaska, and in places large newly unemployed populations with obsolete skills, like Ohio and New York, that some people need help paying the bill today, and some people are going to need help paying the bill tomorrow.

There are multiple ways to go about helping people adjust to rapid changes in the economy. For instance, since 1974, the Trade Adjustment Assistance program has been helping retrain workers who have lost their jobs to trade. Also, there are welfare programs like the Food Stamps program or the Temporary Assistance for Needy Families program.

(learn about the ups and downs of these programs here:, and here:

These type of assistance programs have been implemented at state and federal level with varying degrees of success since the Great Depression. However, there is a recent wave of support for an unprecedented type of welfare proposal whose actual first advocate was the American revolutionary Thomas Paine in 1795: The Universal Basic Income.

A universal basic income is a fixed amount of money given to all citizens regardless of their income or work status. (When eligibility is determined by citizenship, availability for the labor market, or willingness to provide community services, the welfare initiative is not truly universal. Most examples of basic income programs in the world are not of the universal type.) The amount of money that is given is subject to political debate. Average proposals are around $10,000 per year, but of course it varies by cost of living. For example, last year Switzerland was considering a $2,600/month, while this year Finland will be testing a $600/month UBI.

The UBI is an interesting policy that is consistent with the ideas of free market theorists. It turns out that being poor is quite expensive: you can’t buy bulk, you can’t get good interest on loans, you can’t get a driver’s license or a car to go to a better paying job, and since you don’t have money for a security deposit, you are likely going to take whatever rent that does not require one–probably an unfairly high one. Thus, the biggest benefit of a UBI would be the elimination of households living under the poverty line.

If you are not sure you like the idea of handing free money away, think about what the alternative would look like. Children from families that can’t afford basic needs are at higher risk of developing poor health conditions, dropping out of school, becoming imprisoned, and probably becoming heads of an equally poor family, thus perpetuating the cycle of poverty. If these families receive a UBI, members won’t need to put their lives at risk for pity money.

An additional advantage is that it is much simpler and more transparent that existing welfare programs. For example, under the TAA, workers that lost their jobs to trade are given money to go back to college. However, many of these workers are older people who have been out of the education sector for decades and who are not likely to be suitable competitors for current 20 year-olds. Hence, in the end the TAA ends up transferring a lot of money to a lot of people who can still not get a job at the end of their retraining.

Of course, this proposal is highly controversial and politicians from left and right are going to find arguments to shape their rhetoric and win votes. But let’s stay away from politics and just think about the economics of the UBI. In NC, handing $10,000 to every adult would cost around $70,000 million. The money would likely have to come from a combination of taxes, returns to investments, and budget cuts. The supporters of redistributive approaches would suggest the bulk should actually come from the disproportionate gains that accrue to tech companies and other research and engineering organizations that actually benefit from automation and technological innovation.

A UBI would bring financial security to workers concerned about losing their jobs to automation. A type of security much needed in a strongly manufacturing and agricultural state that has already reduced other forms of unemployment security. (In 2013, NC reduced the amount of weekly benefits and the total number of weeks that benefits are paid from 26 to 12 [4]) In addition, implementing a UBI would help address rising inequality and alleviate its consequences without adding new incentives that would distort otherwise “predictable” behavior of the recipients.

Finally, adopting this kind of welfare policy would certainly give us already sleep-deprived, money-obsessed millennials a little mental break from the never-ending anxiety over the future, and a little extra energy for … relaxation, actually.










Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s