In principle, a Universal Basic Income, as floated by the NZ Labour Party, sounds great. It’s once you start looking harder at implementation that things quickly become, well, messy, writes Eric Crampton.
1. A high enough basic income that few people on current benefits are made worse off;
2. A low phase-out rate so that lower income workers do not face sharp penalties for accepting work;
3. A cost that isn’t massively higher than current spending on benefit programmes.
You cannot have more than two of these.
Labour could never do a UBI that doesn’t do 1 and 2 so hence the only sort of UBI Labour could do is one that costs massively more than current welfare spending.