In previous posts, I identified groups of US workers who might be tempted to stop working or reduce their hours if they were to receive a guaranteed Universal Basic Income (UBI) of about $1200/month. These included rejected applicants for federal disability benefits, part-time workers, poorly educated prime-age workers stuck in low-paying jobs, and twenty-somethings taking a few extra “gap years” before moving on to full-time serious work.  That adds up to about 108 million adults.* Of course, there is some overlap among these groups and most of these individuals wouldn’t stop working or reduce their hours if they could count on a UBI – but many would, at least for a while.

And that’s just a preliminary list. Other contenders for downshifting their labor market participation with a guaranteed UBI include workers near retirement age and rejected applicants for non-federal disability benefits, such as State Disability, Workers Compensation, and Long Term Disability.

Then there are US adults who either don’t want to work or say they do but haven’t been actively seeking employment for some time. How many of these individuals would make their inactive lifestyle a permanent career choice if they got that guaranteed UBI check every month?

As it is, we already have 23 million prime-age (24-54) adults who are not part of the US labor force. Many are unmarried, childless men with limited education and skills. Their numbers keep growing: the rate of inactive prime-age men has more than doubled since the 1970, when it was 4%  It is now 11%. Their numbers don’t track the state of the economy.  They are not in jail or prison. Few are studying, watching the kids, disabled or getting government benefits. Few are "discouraged workers" who have given up looking for work.  Many of these men are living off other household members and spending most of their days watching TV and socializing, even though a third of them are below the poverty line, as is clear from the following charts:

That's a lot of men who could improve their financial lot by working, even if only part-time at low wages. Yet they choose not to work at all, in increasing numbers. And the longer they're unemployed, the less likely they will ever go back to work. Per the Obama Whitehouse:

One of the best predictors of future unemployment is past history of unemployment ...Absence from the labor force may mean that critical skills atrophy or are never acquired, making work in later years less likely and less productive, ultimately lowering the trajectory of lifetime wages and earnings. Lack of labor force attachment may also sever or inhibit ties to the networks of firms and fellow workers that ease employment transitions and make higher-wage jobs easier to find. The Long-Term Decline in Prime-Age Male Labor Force Participation, p. 6

Now imagine if every single one of these prime-age men got $1200 a month from Uncle Sam, no strings attached.

Why does this all matter? Next.

--

* Roughly 67 million rejected disability applicants and part-time workers, 6 million prime-age adults stuck in low-paying jobs, and 35 million twenty-somethings (half of the 19-34 age group). These groups overlap very little, e.g., few part-timers report disability as their reason for working part-time. See Universal Basic Income: Effect on Full-Time Workers, Universal Basic Income: Lessons from Disability Benefit Programs, Part II and Universal Basic Income and Part-Time Workers for more details.