OpenAI-Backed UBI Study Shows Cash Reduces Poverty, but AI Fears Remain

The UBI experiment backed by Sam Altman and OpenAI provides valuable insights into the effects of unconditional cash transfers, but should not be considered a definitive argument for basic income as a response to AI-driven unemployment.

Key findings from the three-year study: The largest randomized basic income experiment in the US to date, funded by OpenAI’s Sam Altman, gave 1,000 low-income recipients $1,000 per month and found mixed results:

• Recipients spent an average of $310 more per month, mostly on housing, food, and car expenses, but their overall incomes fell by about $125 per month due to working slightly less.
• There were short-lived improvements in mental health and food security in the first year that faded by the end of the study, and no significant improvements in physical health.
• Qualitative interviews with participants painted a more positive picture, with many citing reduced stress and increased ability to plan for the future thanks to the extra cash.

Separating the case for UBI from AI fears: While tech leaders like Altman have promoted basic income as a necessary response to AI-driven job displacement, the arguments for unconditional cash transfers do not depend on the trajectory of AI development:

• Tying basic income to the possibility of rapid AI progress leaves the policy vulnerable if those fears do not materialize, as some analysts suspect the current AI hype may be a bubble.
• The strongest case for basic income rests on its potential to more effectively reduce poverty than existing means-tested welfare programs, regardless of the future of AI and automation.
• Even if AI does lead to significant technological unemployment, $12,000 per year would be insufficient to replace lost wages, suggesting the need for other policy responses like job guarantees or more radical economic democratization.

Broader implications for the basic income movement: The study provides further evidence that unconditional cash can be an effective anti-poverty tool, but also highlights the limitations of using UBI as a comprehensive solution to economic insecurity:

• The lack of sustained improvements in key outcomes like mental health suggests that cash alone may not be enough to address the complex challenges facing low-income individuals and families.
• Policymakers interested in specific goals like improving health outcomes may need to pair basic income with more targeted interventions.
• The fact that recipients worked slightly less in response to the extra cash should not necessarily be seen as a policy failure, but rather a restoration of the forgotten promise of capitalism to allow people to trade productivity gains for more leisure time.

Ultimately, while the study adds to the growing body of research on basic income, it also underscores the need to consider unconditional cash as one tool among many in the fight against poverty and economic insecurity, rather than a silver bullet tied to the uncertain future of AI.