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Artificial intelligence headliners are romancing universal basic income (UBI). In April, Elon Musk, CEO of Tesla and SpaceX, expressed support on the social platform X for a “universal high income via checks issued by the Federal government [as] the best way to deal with unemployment caused by AI.”
“During his 2017 commencement speech at Harvard, Facebook (now Meta) CEO Mark Zuckerberg called for exploring [UBI]” to provide “all citizens with a standard amount of money each month to cover basic expenses and . . . lift people from poverty.”
Andrew Yang’s 2020 presidential campaign featured the Freedom Dividend, “a UBI of $1,000 per month, $12,000 a year, for every American adult over the age of 18. This is independent of one’s work status or any other factor.”
Yang described UBI as a safety net if automation leads to large-scale job losses and surmised that the pandemic-induced economic shutdowns accelerated those losses.
Pandemic and Precariat
The idea of governments giving residents cash with no strings attached gained traction with the coronavirus pandemic. In a March 2020 article, the Brookings Institute identified five lessons for using UBI during a pandemic.
The Institute observed that a UBI program did not necessarily cause inflation; delivery system strength is key; an effective communication strategy is essential; the UBI program should fit within existing schemes; and crises shed light on the gaps in social protection systems.
While the article was being written, the U.S. government implemented UBI-style pandemic cash transfer benefits through the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020; the Consolidated Appropriations Act, 2021, enacted on December 27, 2020; and the American Rescue Plan Act enacted on March 11, 2021. Three rounds of direct stimulus involved payments of up to $1,200 per adult and $500 per child in March 2020 (CARES); up to $600 per adult and child in December 2020 and January 2021 (Consolidated Appropriations Act, 2021); and up to $1,400 per eligible individual in March 2021 (American Rescue Plan Act). All payments were means tested based on income.
However, even pre-pandemic, UBI was touted as a solution to the age-old fear of unemployment fueled by technological advancements in automation. In his 2011 book, The Precariat: The New Dangerous Class, economist Guy Standing blames globalization for pushing more people into the “precariat,” a globally growing social class primarily consisting of gig workers, freelancers, and part-time workers who face chronic financial insecurity, job instability, and limited access to traditional benefits. A combination of “precarious” and “proletariat” coined by socialist Pierre Bourdieu in the 1980s, it describes a group without a reliable long-term income, high levels of debt, and lack of career security.
Guy Standing has discussed the precariat as far back as 2016. In a youth perspectives column for the World Economic Forum, he described the precariat as a new political class. Therein, he defined the class in three dimensions: Distinctive relations of production (unstable labor, no occupational identity, and no control over work scheduling); distinctive relations of distribution (reliant on volatile and falling wages, lacking non-wage benefits and characterized by poverty traps); and distinctive relations to the state (losing cultural, civil, social, economic, and political acquired rights).
NEW YORK, NEW YORK – NOVEMBER 1: Democratic New York City mayoral candidate Zohran Mamdani attends a campaign event on November 1, 2025 in the Brooklyn borough of New York City. (Photo by Stephanie Keith/Getty Images)
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A July 2025 opinion piece in The New York Times outlines 10 reasons for Democratic New York City Mayor Zohran Mamdani’s November 2025 election win. The eighth reason is “an emergent coalition of the precariat.” The piece describes an alliance among voters “between the managerial and the laboring classes . . . that seemed to mix solidarity with a kind of mutual recognition.” This alliance may strengthen alongside advancements in AI technology.
Definition of UBI
UBI proposals vary widely in terms of payment size, frequency, eligibility, and source of funding. A frequently cited definition for UBI is offered by the Basic Income Earth Network, a U.K. nonprofit with affiliates in 37 countries. It defines UBI as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.”
The Basic Income Lab at the Stanford Center on Poverty and Inequality has a similar definition that lists three features: Basic income is paid periodically, unconditionally, and in cash.
A pandemic-era University of Chicago Law Review article identified six “building blocks” of a UBI scheme — core components that shape UBI policy outcomes. The article makes recommendations for each component based on existing tax and transfer systems and then estimates the costs of their recommendations.
The core components and the article’s recommendations are:
Size: Participants would receive payments of $500 per month because that amount “would bring an end to extreme poverty in the United States and would be feasible given the current size of the U.S. economy.”Eligibility: “A comprehensive basic income should cover citizens and lawful permanent residents of all ages.”Uniformity: Payments would not vary based on geographic location, marriage penalties, or asset tests.Assignability: “Adult UBI recipients should be able . . . to use future payments as collateral for short-and medium-term loans — either from private lenders or from the government.”Payment Mechanism: “Payments should be made via direct deposit on a biweekly basis and delivered through the Social Security Administration.”Funding Mechanism: The UBI program’s cost would be offset by the consolidation of current cash and near-cash transfer programs plus a surtax administered by the IRS.Estimated Cost of UBI
The Chicago Law Review article offers a formula for estimating the costs of a UBI proposal and the adequacy of funding ideas using population, income, and tax data from 2017 and 2018. The formula generally estimates the cost of UBI by multiplying the number of citizens and lawful permanent citizens and lawful permanent residents (314 million) by the amount of the payment ($6,000 per person per year). That total annual cost is $1.884 trillion (compared with the $2.2 trillion cost of the CARES Act and the $1.9 trillion cost of the American Rescue Plan Act).
That annual cost could be offset by discontinuing $354 billion of cash and near- cash government transfer programs, excluding those administered by the Social Security Administration, leaving a funding gap of $1.53 trillion. This gap could be reduced by assuming a one-third cut to disability and supplemental security insurance benefits, generating $106 billion savings and lowering the gap to approximately $1.42 trillion. That could then be offset with carbon tax revenue of $190 billion (calculated as $36 per ton).
The remaining $1.23 trillion deficit is funded by an approximately 9.3 percent surtax, calculated as the $1.23 trillion shortfall divided by $13.21 trillion in total individual income and corporate pretax profits.
The article notes that “each additional $100 billion in cost savings would translate to a 0.75 percentage point reduction in the requisite tax.” It then considers “eliminating tax expenditures —such as the exclusion of employer-sponsored health insurance, the home mortgage interest deduction, the 20 percent deduction for pass -through income, and stepped-up basis at death — could generate additional revenues that would offset a UBI’s cost.” However, this “would still cause millions of taxpayers to pay higher effective tax rates.” The article also asserts that an income-based phaseout of UBI would simply be a disguised surtax.
Would overhauling the U.S. tax system, paring the social safety net, and imposing carbon and UBI surtaxes be worth it? It depends on the beholder.
Mixed Perceptions
Stanford’s Basic Income Lab provides a global map that displays 203 basic income experiment sites and is current through January 30, 2025, 50 of which were active and the rest completed. Commentary on the experiments yields a mixed bag.
Positives
Finland. Finland’s UBI experiment is considered the most well-known. “Unemployed people were given payments of about $620 a month as part of a UBI trial in Finland in 2017 and 2018. There was no means testing, and the payments continued even if the recipient subsequently got a job. People receiving the payments worked an average of 78 days between November 2017 and October 2018 — six days more than those on unemployment benefits. An analysis of the trial by McKinsey & Company confirmed the increase.”
the Finnish flag flutters during the parliamentary election day in Helsinki on April 2, 2023. (Photo by Roni Rekomaa / Lehtikuva / AFP) / Finland OUT (Photo by RONI REKOMAA/Lehtikuva/AFP via Getty Images)
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People who received UBI reported significant improvements in mental health, confidence, and general well-being. The trial also found that “people who received UBI reported a significant boost to their mental health, well-being, and levels of confidence when thinking about the future. The report concluded that a “relatively small positive intervention seems to have generated multiple mutually reinforcing positive effects.”
Brazil. A small positive intervention also generated a positive ripple effect in Brazil.
A project organized in Quatinga Velho, Sao Paulo, Brazil, by nonprofit organization ReCivitas began in 2008 to provide a monthly payment of 30 reals (about $15), enough to help people satisfy basic needs. The payment led to “gains in nutrition, clothing, living conditions, health, construction of new housing, and improvements to existing ones.” The coordinators “noticed increased self-esteem and social interaction, reduction of social insecurity, and rising expectations of the future.” They did not observe “increased use of alcohol or illicit drugs . . . or generation of economic dependency.”
India. In 2011 a basic income pilot project was conducted in 20 small rural villages in India.
In eight of the 20 villages, each adult received INR 200 per month (about $3.75), and each child under the age of 14 received INR 100 per month. The other 12 villages served as a control group. The payments were credited with improvements in “nutrition, health, education, housing, infrastructure, and economic activity.” The most visible impact was on investment in education as spending “increased on school uniforms, fees, shoes, books, school supplies, and private tuition.” In the cash transfer villages, school attendance increased three times above the level in the control village and student performance improved.
Namibia. Throughout 2008 a pilot project was conducted in a Namibian village about 65 miles east of Windhoek. “All residents below the age of 60 received a basic income grant of N$100 per person per month, without any conditions being attached.”
A project assessment report highlighted that the percentage of underweight children fell from 42 percent to 17 percent. Most residents increased their work, and “this finding is contrary to critics’ claims that the Basic Income Grant would lead to laziness and dependency. Income has risen in the community since the introduction of the Basic Income Grant by more than the amount of the grants.” Like in India, investment in education improved as “more than double the number of parents paid school fees and the parents prioritized the buying of school uniforms.” The schools improved as more children attended them, and dropout rates at one school fell from 30-40 percent to 5 percent. Residents increased their use of the local health clinic, and its income increased fivefold. More people suffering from HIV/AIDS were able to procure antiretroviral therapy. “Economic and poverty-related crime (illegal hunting, theft, and trespassing) [fell] by over 20 percent.”
United States. Many of the same outcomes occurred in a recent program in Atlanta, Georgia that focused on low-income Black women.
One featured participant in the 650-person program “received $20,400 in basic income cash payments between 2022 and 2024, no strings attached . . . the extra money allowed her to build savings and earn a teaching certificate.” Immediate results showed improved well-being, but long-term benefits were negligible. The featured participant ultimately resumed working multiple jobs but still credits the payment with a general improvement in her living standard beyond the amount of the payment. The dubious long-term benefits of these programs are a common criticism of UBI, among others.
Negatives
Canada. A 529-page Basic Income Expert Panel Report was published in British Columbia, Canada, on January 28, 2021, that examined the feasibility of a UBI program in British Columbia.
Paragraph 8 of part 5 of the report concludes that UBI is “impractical as a use of taxpayer funds, because it is much less effective than an income-tested alternative . . . for a given budget constraint.” It notes that income-tested formats are more responsive to changes in circumstances. Basic income cash transfers are not a good substitute for basic services in a social support system. The report further explains that “The negative income tax form of a basic income can in principle respond rapidly, but the existing income information and benefit delivery infrastructure in Canada, the tax system operated by the Canada Revenue Agency, cannot in practice deliver such responsiveness.”
Paragraph 1.1. of part 6 provides that “basic income for all . . . is not the most just policy change we can consider . . . the needs of the people in our society are too diverse to be effectively answered simply with a cheque from the government.” While basic income supports individual autonomy, it does not emphasize social interaction and cooperation. In other words, it places “too little emphasis on the communities in which [British Columbians] live and that help define them.” Targeting UBI to some groups is a better policy choice.
Switzerland. A case against UBI was triggered by a nationwide referendum on UBI conducted in Switzerland in June 2016, the first of its kind on this issue.
The proposal gave CHF 2,500 (about $3,200) monthly to every adult and CHF 625 (about $800) to every child. The proposal would cost CHF 208 billion (about $230-250 billion) per year, most of which would have been covered by repurposing the existing social security system, although CHF 25 billion (about $28-30 billion) would have required tax increases and spending cuts.
Opponents, including the Swiss government, said the proposal:
would cost too much, and weaken the economy;would discourage low earners from working;would undermine social cohesion; andoverlooked the economic and social system already in place, which worked well.
Swiss voters soundly defeated the proposal, 77 percent to 23 percent.
WASHINGTON, DC – JULY 22: Sam Altman, CEO of OpenAI, delivers remarks at the Integrated Review of the Capital Framework for Large Banks Conference at the Federal Reserve on July 22, 2025 in Washington, DC. The conference brings together experts to discuss regulatory policy and the implications on the financial system (Photo by Andrew Harnik/Getty Images)
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Before the pandemic, Sam Altman of OpenAI believed that equality of opportunity was impossible without guaranteed income. In 2019 “Altman helped raise $60 million, including $14 million of his own money, to fund the largest-of-its-kind experiment giving low-income participants $1,000 a month for three years.”
Altman’s startup OpenResearch ran a study that tracked how the payments affected participants’ lives. He was underwhelmed by the results. Researchers found that while recipients increased their spending, the experiment did not prove that direct cash payments could fundamentally reshape people’s lives, including their health and well-being. This lack of certainty changed Altman’s mind, as he said in a recent interview, “I no longer believe in universal basic income as much as I once did.” To Altman, as the balance between labor and capital shifts, “a fixed cash payment, although useful and maybe a good idea in some ways, does not get at what we’re really going to need for this next phase and the kind of collective alignment of shared upside.”
Some critics go even further, asserting that “Musk’s ‘universal high income’ serves tech oligarchs more than workers.”
Much of the AI industry has gradually decided to swipe left on UBI. Nonetheless, late last year a bill creating a pilot program for UBI was introduced in the U.S. House of Representatives and referred to the Ways and Means Committee.
H.R. 5830
The bill to establish a pilot program to provide a guaranteed monthly income and study its effects was introduced on October 24, 2025, entitled the Guaranteed Income Pilot Program Act of 2025 (H.R. 5830). It had 11 co-sponsors (all Democrats) and was sent to the House Ways and Means Committee, where it remains. The bill appropriates $495 million for fiscal years 2026 through 2030.
The bill begins with a list of Congressional findings that generally describe the precariat, including contributions to income volatility and obstacles to upward mobility. For example, the bill provides: “Because real wages have failed to keep pace with inflation, full-time minimum wage earners cannot afford an average two-bedroom apartment anywhere in the United States.” This finding constitutes the foundation for the pilot program’s basic income payment amount.
The bill specifically mentions the pandemic stimulus checks provided in 2020 and 2021 and cites a Census Bureau analysis showing that hardship in U.S. households fell after those payments. Between December 2020 and April 2021, “food insufficiently [sic] fell by more than 40 percent, financial instability fell by 45 percent, and reported adverse mental health symptoms fell by 20 percent.” By those metrics, the COVID-era stimulus payments were a success. The bill applies that same logic to the precariat described in the Congressional findings.
Citing the pandemic and the precariat, the bill requires “The Health and Human Services Secretary, in consultation with the IRS Commissioner shall establish and implement a three-year pilot program . . . to provide a guaranteed monthly income to certain eligible individuals.” An eligible individual is defined as “an individual taxpayer between the ages of 18-65” who is selected using criteria developed by the HHS, IRS, and a designated external partner.
“Of the eligible individuals participating in the program, 10,000 shall receive a cash payment each month equal to the fair market rent for a two-bedroom home in the ZIP Code in which the eligible individual resides, or a substantially similar amount as determined by the Secretary, in consultation with the Commissioner and external partner.”
The selected external partner will assist with “the design, administration, and evaluation of the program.” The partner must have experience in mixed-methods experimental design and cash-transfer program implementation. Furthermore, the partner will collect participant data necessary for the study and reports, and will conduct any additional research requested by the Secretary.
Payments to participants will not be considered income or resources for 12 months following receipt for purposes of determining eligibility for benefits under any federally funded federal, state, or local program.
Conclusion
Generally, UBI pilot programs yield underwhelming results observed by their critics, and as demonstrated above, not just in Swiss referendums.
According to an April 26 New York Times opinion essay, “While the American public ordinarily hesitates to support left-wing policies like a jobs guarantee or single-payer healthcare, AI seems to expand the political Overton window.” To what?
The essay cites Democratic pollster and strategist David Shor, who found that “a universal basic income is unpopular, but a federal jobs guarantee has legs.” Perhaps the AI industry should swipe right on that.