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Switzerland’s Rejection isn’t the Death of the UBI UBI should substitute for a range of existing welfare programs, rather than being added on top of them

UBI should substitute for a range of existing welfare programs, rather than being added on top of them The level of serious political interest in a basic income across the world compared to a few years ago is incredible

Swiss voters recently made international headlines for overwhelmingly rejecting a proposal to institute the world’s first, nationwide universal basic income (UBI) program. But while the Swiss proposal was seriously flawed, the general idea of a basic income is still worth taking seriously.

A basic income would be a tremendous improvement over the web of numerous, duplicative welfare programs in place in many nations today, including the United States. At its best, a basic income would be a more efficient, less paternalistic, and a less bureaucratic way of providing a robust social safety net.

But as with most things in life, the devil’s in the details, and the details of Switzerland’s proposal were far from ideal. Three problems loomed especially large with the more than 75% of voters who rejected it.

First, the Swiss proposal is simply far too expensive. According to organizers of the referendum, every adult resident of the country would receive 2,500 Swiss francs per month (about $2,700 US dollars), regardless of their income or willingness to work. With a population of more than 8.3 million, the cost would total roughly $208 billion francs annually. That’s over three times the entire existing federal budget, and almost one third of the entire Swiss GDP! A more practical basic income should be significantly less than half that size, and should substitute for a range of currently existing welfare programs, rather than being added on top of them.

Second, because organizers wanted this basic income to be open to all residents (not just citizens), voters feared that it would lead to a sharp increase in immigration, driving the cost of both the basic income and other social services up significantly. In order to avoid creating a political backlash against migration, it’s important to limit the benefits of a basic income to citizens, and perhaps to impose a waiting period before new citizens are eligible.

Finally, voters worried that a basic income would create a massive disincentive to work. This is probably the most common objection to a UBI. But it’s also the weakest. Because a UBI is an unconditional grant, it would actually reduce disincentives unlike other welfare benefits that cut off once recipients’ income passes a certain threshold.

And, earlier experiments with the related idea of a Negative Income Tax in the United States, the MINCOME in Canada, and cash transfer programs in the developing world all provide strong evidence that most people will continue to work when their income is supplemented by a cash grant.

Still, there’s a lot we still don’t know about how a well-designed basic income program would work in practice. Thankfully, there is exciting work being done right now that will help us to get closer to that goal. Finland is going to be running a series of large-scale experiments on the basic income starting in 2017. The Dutch city of Utrecht is planning to test four different versions of a basic income. And private organizations like GiveDirectly and Y-Combinator are running their own experiments in East Africa and Northern California.

The level of serious political interest in a basic income across the world compared to just a few years ago is incredible. But right now our excitement about the idea is far greater than our knowledge of how it would actually work. In a few more years, once some of these experiments have run their course, we’ll be in a much better position to know. And, we’ll be able to use that knowledge to design a basic income that is far more practical than the one Swiss voters rejected.

Matt Zwolinski is Professor of Philosophy at the University of San Diego.

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