Sunday, July 7, 2019

Kevin O’Leary: This is why UBI won’t work

Kevin O'Leary

“Shark Tank” star Kevin O’Leary has a simple yet lyrical response to all the buzz surrounding the idea of universal basic income (UBI), or the distribution of a “no strings attached” cash handout to every citizen regardless of employment status. And it comes from a popular ’80s song.

“Money for nothin’ and your chicks for free? It never works out that way,” O’Leary tells CNBC Make It, referencing lyrics from Dire Straits’ song “Money for Nothing.”

“The idea that you’re going to sit on the sofa and get paid to do nothing? Keep dreaming baby.”

While everyone from politicians to quite a few billionaires have been discussing the idea of UBI to help level the “wealth” playing field and to help make up for jobs that could be lost to automation, O’Leary says, “It just ain’t going to happen.”

O’Leary adds that even with 2020 Democratic presidential hopeful Andrew Yang making it his platform to give all citizens, ages 18-64, a check for $1,000 every month from the U.S. government, it’s just an idea, not a solution.

Yang’s website says if he becomes president, the payments would begin in January 2021, paid for by a VAT, or value-added tax, on automation.

“I’m sorry. It’s a wonderful idea, but that’s all it is,” says O’Leary. (A representative for Yang did not immediately return CNBC Make It’s request for comment.)

“Most people will come to the realization sooner than later that if you want to make money, you got to work. It’s that simple,” O’Leary says.

Less incentive to work is a popular criticism of UBI (it’s too expensive and it won’t have the desired results are others). But such payments are generally seen as supplemental income.

For instance, Yang’s plan to give $12,000 a year could not fully support a person — it’s an income that is below the U.S poverty line, which is $12,752 per person per year for those under the age of 65, according to the United States Census Bureau. Yang’s campaign website suggests instead that people could use the money to “pay down debt, start a business, go back to school or shop at local boutiques.”

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