Financial Health

What Are the Biggest Misconceptions of Universal Basic Income?

Alongside increased political awareness and energy, more Americans are tapping into progressive economic ideas.

It’s time to debunk the major misconceptions surrounding UBI and clear up any remaining confusion. If you’re someone fighting for a better financial future for yourself and Americans like you, this information will equip you for the road ahead.

We’ll also address some UBI basics that will help shape policy moving forward and point out some practical financial tactics you can deploy in the meantime to stabilize your income - all with the help of Steady and our partners.

Why Is Universal Basic Income on the Table?

UBI has seen many iterations in various regions of the world. From presidential candidates like Andrew Yang to local efforts to implement extra income for citizens, the concept of UBI has made strides in recent years, more so than economists might have expected.

But like any big idea that changes the status quo, UBI has also drawn plenty of criticism, with detractors calling it everything from a puzzling math problem to a pure pipe dream.

Misconceptions about Universal Basic Income (UBI)

  • UBI Has Never Been Tried
  • UBI Would Cost Too Much
  • UBI Removes Incentives to Work
  • Inflation Would Worsen with UBI
  • UBI Doesn’t Address Root Causes
  • UBI is Too Good to Be True

Anyone advocating for UBI will get some pushback at a Saturday city council meeting or on a presidential debate stage.

Let’s examine the biggest UBI misconceptions you’ll come across and the facts you need to counter them.

UBI Has Never Been Tried

This statement attempts to shut down the conversation before it begins. If we have no evidence of a policy in action, how can there be proof that it works?

However, we have many positive examples and studies about UBI’s efficacy and application. Many forms of basic income have been tried and succeeded in the United States and beyond.

Alaska, for example, has been handing out checks to citizens via a state-owned investment fund known as the AlaskaPermanent Fund, which comes from oil revenues in the region. While the size of the annual checks fluctuates, they offer a substantial quality of life boost for Alaskans throughout the state.

Native American casino revenues are another notable instance of recurring revenue turned into profits for the people. Members of various tribes in the States receive payments based on their heritage and allegiance.

Numerous nations have launched income-boosting programs from Finland and Germany to India and Macau. Many of these programs are currently active, proving that UBI is viable when done right.

UBI Would Cost Too Much

A program based on cash payouts would surely cost too much to implement on a broad scale, right? This argument seems sound, but the answer is simple — we must reach compromises to create a better financial future for all.

This may mean restructuring current benefits plans, putting a hold on healthcare or education objectives, or lessening the administrative costs that would otherwise go toward the vast array of government programs each year.

It’s not a clean and easy answer, but it’s the economic reality of the situation. Instead of a complex welfare state, with assistance programs splintered into various convoluted functions and budgets, UBI would see the federal government increase the standard of living and bypass the arbitrary bureaucratic boxes that currently dominate our social safety nets. 

Since money circulated through a universal basic income program would likely stimulate the economy and reduce poverty and crime rates, we think it’s money well spent. At the least, it’s more transparent from a budgeting standpoint.

UBI Removes Incentives to Work

The psychology of UBI can be tricky since we’re speculating on how people respond to situations based on fuzzy past information and projections for the future.

That’s why this argument — that UBI dampens the economic drive in workers — is hard to prove and easy to fight back on. Critics will point out that receiving “free money” will cause a sluggish, unproductive economy in time.

The truth is that people are naturally motivated to work, given the opportunity to do something they enjoy. That is the crucial point of UBI: freeing up that extra time to discover passions and pursue them without fear of falling through society’s cracks.

With things how they are now, workers barely have enough time to eat, sleep, and care for their families without stressing about bills and obligations. UBI, if implemented carefully, will assist these individuals in times of need, giving them the chance to advance to a higher level in work and life.

Inflation Would Worsen with UBI

Americans face unprecedented inflation following the economic stimulus during the coronaviruspandemic, so wouldn’t UBI just make things worse?

Not necessarily, according to economists who suggest that UBI doesn’t require printing more money. Redistributed wealth would likely lead to higher rates of saving, which may place downward pressure on inflation moving forward.

After all, UBI would not place an incredible amount of money in the hands of banks and already-wealthy institutions. It would put cash in the pockets of everyday Americans, where it belongs.

UBI Doesn’t Address Root Causes

Issues like generational poverty, homelessness, and other economic afflictions are complex, and “throwing money at the problem” doesn’t instantly solve them.

Although UBI isn’t an immediate fix to these issues, it also doesn’t claim to be. Instead, it’s a long-term solution that will allow individuals and families to rise above their circumstances with the additional time and money provided.

For example, a single-parent household will no longer feel the paralyzing fear of missing a credit card payment or falling short of rent for the month. Mom or dad can spend more time with kids, creating a better home life and more substantial educational outcomes. Higher economic attainment is then no longer a dream but a reality.

This big-picture goal of UBI goes beyond the immediate gratification idea that many still hold about the policy.

Is UBI Too Good to Be True?

There may be some high hopes surrounding UBI, but that’s how all great movements get their start.

Did anyone anticipate the gig economy or the rise of the internet? Were we prophetic about any of the most transformative trends of our time? Of course not, and all these movements had their naysayers.

What made a difference was the continued efforts of innovators and people who were willing to brave uncharted economic waters for a better future. That’s what we believe in at Steady, and it’s a goal all of us should share, regardless of policy details in the short term.

Why Universal Basic Income is Helpful

  • Reduction in Poverty and Income Inequality
  • Improved Health and Overall Quality of Life
  • An Efficient, Savings-focused Economy
  • Reduced Inequity
  • Combat the Onset of Automation

The basics of UBI are simple enough - a monthly income boost to help people stay afloat amid challenging economic conditions. Here are some ways UBI has proven to help individuals and families with practical results.

Reduction in Poverty and Income Inequality

The gap between the rich and poor expands rapidly, with a smaller fraction of the population holding more significant concentrations of wealth. UBI is a mechanism to even the playing field and create a more equitable society. 

In the same way that welfare programs like social security and food stamps provide essential social safety nets, addressing the basic needs of low-income citizens, UBI provides a guaranteed income through a stipend that can help raise even those making incredibly low wages above the poverty line. 

Improved Health and Overall Quality of Life

With the implementation of a UBI system, individuals will cease working long, taxing hours doing physical labor or sitting sedentary. It provides economic security and a minimum income through monthly payments that free people from relying upon labor-intensive, low-paying full-time jobs. 

This frees up time and energy to regain their health and fitness, which has countless knock-on benefits for the healthcare system and society.

An Efficient, Savings-focused Economy

Rather than stressing about evictions and unmovable debt, individuals can break the cycle of living paycheck to paycheck, finally stashing away some savings and emergency fund planning. 

This can change the entire trajectory of a young family and lead to better outcomes throughout communities everywhere.

Reduced Inequity

UBI could be a true driver of equality, filling in gaps where other programs and efforts have fallen short in the past.

Combat the Onset of Automation

As automation replaces human labor in more industrial and service jobs, a growing portion of the population will not have reliable sources of employment. As these low-skilled workers strive to adapt to the new normal, UBI can help them avoid the harsh economic realities they face in a fast-moving world.

These are only the broad benefits of UBI in a summary fashion, but we can see how a policy like this can alleviate many of the ills facing our society now. 

From health and education to income equality and reduced crime, UBI has the power to transform communities - and the country - for the better.

What Is Universal Basic Income?

Everyone has a different idea about what UBI is and what it does. Let’s get an official definition in the books.

Universal basic income is a cash payment given to the residents at regular intervals, regardless of factors like earnings, employment status, background, ability, and more. The payments are unconditional and guaranteed for all, be it monthly, annually, or some other set period.

How UBI works

Since the concept is so broad, the details of a UBI policy come down to the goals and limitations of the government implementing the plan. A city or town might launch a UBI program in light of certain events or specifically address an issue like homelessness or poverty.

On a bigger scale, a state or country may create a comprehensive UBI strategy to account for more significant shifts in economic tides. What matters most is that UBI policies are consistent, reliable for recipients, and bring the desired results without unintended consequences.

If there was ever a good time to get UBI underway, it’s now. With technology like Steady helping people take control of their finances and get a grip on budgeting and saving, UBI can be handled more responsibly and take effect on a root level.

What Countries Have UBI?

Many countries, including the United States, have experimented with UBI. Brazil, China, India, Japan, and Spain have tested these policies in short bursts, while others like Kenya have delivered smaller amounts over extended periods to citizens.

UBI is generally considered a progressive policy for more developed countries. Still, the rapid adoption of technology globally may be within reach for a larger swath of the world population.


The stage is set for UBI to finally take on poverty, inequality, financial insecurity, and other disparities that have gone ignored for too long. Following the pandemic and the economic fallout of the lockdowns, it’s time we all become well versed in the idea of UBI.

Although UBI is still widely misunderstood, key battles have already been won in bringing it to the mainstream conversation. With bold leadership and innovation from companies like Steady, we can work together toward a better financial future.


Everywhere Basic Income Has Been Tried | Vox

Nine Arguments Against Basic Income Debunked | Adam Smith Institute

Top 3 UBI Pros and Cons |