Americans Work Less When Given $1,000 a Month, National Study Shows

An experiment backed by OpenAI CEO Sam Altman has revealed that providing Americans with a monthly $1,000 universal basic income (UBI) leads to a reduction in work hours.¹ 

This finding has ignited fresh debates about the potential impacts of implementing UBI policies on a larger scale. 

What is Universal Basic Income?

Universal Basic Income, or UBI, is a government program that provides regular, unconditional cash payments to all citizens, regardless of their employment status or income level. The concept of UBI isn’t new – it’s been floating around economic and political circles for decades. 

But why has it gained so much attention recently?

The main goals of UBI are to:

• Reduce poverty and income inequality
• Provide a financial safety net for all citizens
• Offer economic security in an increasingly automated job market
• Simplify welfare systems

You might be wondering, “Haven’t there been UBI experiments before?” Yes, there have been several small-scale trials around the world. From Finland to Kenya, various countries have tested limited UBI programs.^(ref) 

However, this latest national study in the United States provides some of the most comprehensive data yet on how UBI might affect work habits on a larger scale.

What Did the National UBI Study Involve?

This national study on UBI was designed to answer a crucial question: How would giving Americans $1,000 per month affect their work habits? 

Let’s break down the key elements of the study:

• Participants: A diverse sample of Americans from various demographic and economic backgrounds
• Duration: The study ran for an extended period to capture long-term effects
• Payment: Participants received $1,000 monthly, unconditionally
• Control Group: A separate group received no payments, serving as a comparison
• Data Collection: Researchers tracked work hours, income, spending patterns, and overall well-being

The study’s robust methodology aimed to provide a clear picture of how UBI might impact American workers across different sectors and income levels.^(ref)

How Did UBI Affect Work Hours?

The national study revealed a significant impact on work hours when Americans received $1,000 per month in Universal Basic Income. 

On average, UBI recipients reduced their weekly work hours by 9%. This reduction wasn’t uniform across all types of workers, however. 

Full-time employees tended to cut back their hours less dramatically compared to part-time workers. Interestingly, self-employed individuals showed the most substantial decrease in work hours among all groups studied.

Why Did People Work Less with UBI?

You might be thinking, “Why would people choose to work less if they’re getting extra money?” The reasons are more complex than you might expect:

Basic Needs Coverage

With $1,000 per month guaranteed, some workers felt comfortable reducing hours while still meeting their essential needs.

Education & Training

Some participants used their extra time to pursue further education or job training, potentially leading to better future employment prospects.

Family Care

Parents and caregivers often chose to spend more time with children or elderly relatives, addressing unpaid but crucial family needs.

Health Improvements

With less financial stress and more time for self-care, some participants reported better health, reducing the need to work while sick.

Entrepreneurship

The financial safety net of UBI encouraged some to pursue self-employment or start small businesses.

These factors highlight how UBI can influence work decisions beyond simple financial calculations.

What are the Economic Impacts of Reduced Work Hours?

The study’s findings on reduced work hours raise important questions about the broader economic impacts of a UBI program. A 9% reduction in work hours could potentially lead to decreased overall economic productivity.

While total hours worked might decrease, the study suggested that productivity during worked hours could increase due to improved well-being and job satisfaction. Workers who feel less financial stress and have more control over their time might be more engaged and efficient when they are on the job.

Some industries might face challenges if workers choose to reduce hours en masse. This could lead to labor shortages in certain sectors, particularly those with less desirable working conditions. On the flip side, this pressure could drive improvements in working conditions and wages in these industries.

From a government perspective, less work could mean lower income tax revenue, potentially affecting the funding of UBI itself. 

The Arguments for & Against UBI Based on This Study

The study’s findings have fueled both sides of the UBI debate. Let’s look at some key arguments:

Pro-UBI Arguments:

• Provides economic security and reduces poverty
• Allows people to pursue education, training, and entrepreneurship
• Improves overall well-being and health
• Recognizes and supports unpaid care work

Anti-UBI Arguments:

• Reduces economic productivity
• Too expensive to implement nationwide
• May disincentivize work
• Could lead to inflation if not carefully managed

While this study provides valuable insights, it’s important to note that it’s just one piece of the puzzle. More research is needed to fully understand the long-term and large-scale impacts of UBI.

What’s Next for UBI in the United States?

The national study finding that giving Americans $1,000 per month makes them work less is just the beginning of the UBI conversation in the United States. Here’s what we might expect moving forward:

• More extensive studies and pilot programs in different regions
• Continued debate among policymakers, economists, and the public
• Exploration of modified UBI models that address concerns raised by this study
• Increased focus on how automation and changing job markets might necessitate UBI-like policies

As we navigate an increasingly complex economic landscape, studies like this one provide crucial data to inform our decisions about the future of work and economic security in America.

Source:
1. CBS News