Here’s what happened when Americans received $1,000 a month in 3-year study

Years ago, OpenAI CEO Sam Altman set out to discover what would happen if people were given cash every month with no strings attached. This week, the results are in from the largest universal basic income study in the U.S., though how it went depends on how one interprets the findings.

Right-leaning Reason writes, " Bad News for Universal Basic Income : Researchers found that giving people $1,000 every month for three years resulted in decreased productivity and earnings, and more leisure time."

Center-rated The Register writes, "Sam Altman’s basic income experiment finds that money can indeed buy happiness : But not necessarily health."

Keeping in tune with Straight Arrow News ' mission of unbiased, straight facts, let's take a look at the facts from the research paper itself.

The ground rules

Researchers randomly selected 1,000 low-income people to receive $1,000 per month with no conditions for three years. A separate control group of 2,000 people received $50 per month to participate in the research.

The people in this study had an average household income of $29,900 in 2019, so $1,000 a month translated to a 40% increase in household income.

In 2016, Sam Altman wrote about launching the Basic Income Project and his desire to answer some theoretical questions about it.

"Do people sit around and play video games, or do they create new things?" Altman asked. "Are people happy and fulfilled? Do people, without the fear of not being able to eat, accomplish far more and benefit society far more? And do recipients, on the whole, create more economic value than they receive?"

The results

Excluding the free money received, individual income fell by about $1,500 per year, or 5%. It led to a 2 percentage point decrease in labor market participation and people worked roughly 1.3-1.4 fewer hours per week.

So what did they do with that extra time? Researchers saw the largest increase in leisure time, followed by smaller increases in transportation – people are driving around doing more – and time spent on finances.

Researchers found no impact on the quality of employment. They did see hints that people were thinking about entrepreneurial endeavors and there were some signs younger participants were investing more in education.

Researcher Eva Vivalt wrote, "Overall, the negative effects on labor supply do not appear to be offset by other productive activities, and we do not observe people getting better jobs over the 3-year duration of the program."

The study concluded, "While decreased labor market participation is generally characterized negatively, policymakers should take into account the fact that recipients have demonstrated–by their own choices–that time away from work is something they prize highly."

Universal basic income is a hot topic in Silicon Valley. That’s because the tech world is actively developing AI that could make some jobs obsolete.

"There will be fewer and fewer jobs that a robot cannot do better," Elon Musk said in 2017. "What to do about mass unemployment? This is gonna be a massive social challenge. And I think, ultimately, we will have to have some kind of universal basic income. I don't think we're gonna have a choice."

"These are not things I wish would happen," Musk continued. "These are simply things that probably will happen."

Altman, who was behind this study, said that while UBI is not a full solution, it's a component that should be pursued in the face of AI advancement.

"As a cushion through a dramatic [employment] transition," he said of UBI. "And the world should eliminate poverty if able to do so. I think it's a great thing to do as a small part of the bucket of solutions."

The idea of paying people with no conditions is incredibly expensive – the Tax Foundation said Andrew Yang’s $1,000-per-month proposal would cost $2.8 trillion per year. And many believe it's an affront to capitalism.

"This is straight out of the Karl Marx playbook. This is not out of the Adam Smith playbook," radio host Dave Ramsey said during his show last year. "Karl Marx, Father of Communism. Adam Smith wrote the Tome that we were all required to read on capitalism if we took economics. My friend Art Laffer, one of the leading economists in the world, says, 'If you pay people not to work, please expect them to not work.'"

Again, the people from this study did still work – try living off $12,000 a year – but they did take off a little more than an hour per week.

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