You Think Hawaii is Expensive Now? Wait Until The Universal Basic Income

By Jeff Paul

I spent three years in Hawaii. It’s obscenely expensive to live there. Real estate, food, electricity, health care, and travel costs are significantly higher in Hawaii than on the mainland. And incomes aren’t rising fast enough to match rising cost of living. As a result, many natives rely on government aid to survive. This week, Hawaii passed a new measure to study the universal basic income (UBI) as an attempt to address this problem.

But will it make costs even higher?

The bill, House Concurrent Resolution 89, declares that all families are entitled to basic financial security and empowers a number of government offices to evaluate universal basic income options.

Hawaii state representative Chris Lee wrote on Reddit that the measure will “analyze our state’s economy and find ways to ensure all families have basic financial security, including an evaluation of different forms of a full or partial universal basic income.”

Presumably they’ll study what an adequate “full” UBI would be to live in Hawaii. I can save them some time.

The Missouri Economic Research and Information Center (MERIC) ranks Hawaii the most expensive state (ahead of Washington D.C.).  Analysis of their 2014 study determined that you need to make $122,000 a year to live in Hawaii.

All of those costs are surely higher today than in 2014, especially real estate which continues to set new record high prices. Although the median household income in Hawaii is higher than most of the nation at $73,486 per year, the shortfall of what’s needed is still tremendous.

A quick look at the cost of food gives us a sense of the challenges Hawaiians face.  According to the USDA, a “thrifty food plan” for a family of four in Hawaii costs $1,161/month, almost double the cost of the same food plan on the mainland.

Hawaii’s food stamp program SNAP bragged that they helped 98,440 families in 2014. That’s around a quarter of all households in Hawaii.
Hawaii already offers the highest welfare benefits in the country, equivalent to a pre-tax salary of over $60,000 per year, or about $29.13 per hour.

Why would anyone work in Hawaii?

Proponents of the UBI say it will be more efficient, thus more cost effective, than existing welfare programs and they claim it will be necessary to mitigate the effects of job automation. However, it seems Hawaiians would require a UBI higher than $60,000 per year to survive without a job. So it’s unclear how that would be less expensive or more efficient.

Hawaii should be careful because politicians’ reactions to problems often feed those very problems. The UBI may have the opposite effect of its intended purpose. Free-market economists point out that high welfare benefits drive the cost of living higher because they create artificial demand for goods and services that wouldn’t exist if not for government intervention.

It’s like raising the minimum wage to cope with higher living costs caused, in part, by higher labor costs. Or how the cost of college exploded when government intervened with easy student loans. Or how the cost of health insurance exploded when government forced participation. In that same way, an artificial guaranteed income high enough to survive in Hawaii will increase prices on everything for everyone — including massively raising taxes.

I oppose the UBI for moral and pragmatic reasons, as clearly stated by Bryan Caplan of the Foundation for Economic Education:

  • Forced charity is unjust. Individuals have a moral right to decide if and when they want to help others.
  • Forced charity is unnecessary. In a free market, voluntary donations are enough to provide for the truly poor.
  • Forced charity gives recipients bad incentives. If the government takes care of you, you’re less likely to take care of yourself.
  • The cost of forced charity is high and growing rapidly, leading to a future of exorbitant taxes or financial crisis.

All of the good feels one may get by being charitable with other people’s money won’t change the consequences of a future with bad incentives and exorbitant taxes or financial crisis.

It’s unclear how the Hawaiian government could pay for the UBI. In addition to federal taxes, workers in Hawaii already pay ridiculously high property taxes, a high state income tax (8.25%), a state sales tax (4+%), and one of the highest gas taxes in the nation (60.39 cents per gallon).

I went ahead and calculated what it would cost Hawaii to give every resident a UBI of $33,000 per year. It was easy to calculate because it’s the same amount that each man, woman and child already owes on Hawaii’s state debt – $46 billion – or $33,111/resident (2014).  If they aim to give people money, they’re going in the wrong direction.

Jeff Paul writes for Activist Post and Counter Markets newsletter. This article is Creative Commons. You may republish in full with attribution and link to this post.

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32 Comments on "You Think Hawaii is Expensive Now? Wait Until The Universal Basic Income"

  1. That Venezuela thing hasn’t really made sense to anyone yet? Socialism DOES NOT WORK.

    Greedy corporations unable to feel good about millions of dollars of profits need billions. This of course means cheaper goods, lower wages, etc. How much is enough?

    • It’s ultimately the “strings” that destroy free humanity. Mandatory vaccinations? Mandatory chip? They’ll foist whatever they can on us.

    • George W Obama | June 21, 2017 at 4:46 am | Reply

      Socialism has certainly been a disaster for the Department of Defense. The military is bankrupting the US.

      • It is socialism. I almost lost my work ethic. I was spending more energy “skating” than working. I wouldn’t even shit unless I got paid for it and read a newspaper every morning as I gave birth to and drowned Republicans. Then there were the “golden flows,” where our democratic government inspected our urine. I told them to take a shit sample to see what I thought about their pathetic organization. They asked me what I was going to do when I got out, and I told them that I would eat roots and berries before I stayed in that organization. I spoke three languages when I went in and wanted to go to Monterrey to learn Chinese or Russian but they gave me a test and told me that I didn’t have the aptitude to learn a foreign language. One term and out. The Air Farce, a great waste of life.

        • Chuck Morrison | June 26, 2017 at 7:53 am | Reply

          Don’t you know? Only men willing to march around in red pumps and spend time on their knees get a plum assignment like Monterrey.

  2. We need to rethink what poverty actually is. Poverty is not a lack of character, it is a lack of money!

    We could easily pay for a basic living wage for everyone if we eliminated corporate subsidies and waged no more wars on foreign soil.

    About $59 billion is spent on traditional social welfare programs. $92 billion is spent on corporate subsidies. So, the government spent nearly 50% more on corporate welfare than it did on food stamps and housing assistance in 2006.

    Corporate subsidies even include foreign corporations!

    If we keep applying the principles of the 20th century to the challenges of the 21st century (growing unemployment, increasing automation / robotization of industry, market saturation, finite growth, etc.) then the middle class will crumble and inequality will soar. A dystopian future.

    Governments are obscessed with pushing people into jobs, even when there are no jobs. And “the market” ain’t gonna fix it.

    We do not live in a free market. No such thing as a free market exists. Nor can it. The world is far too complex, far too interconnected. All markets are rigged. The only question is: in whose interest?

    There is a bleak fatalism at the heart of conservatism, which has been codified into the lie that the market can only do what the market does, and that we must therefore watch powerless. We have seen the untruth of this in the successful interventions governments have recently made, always on behalf of the rich.

    The answer might very well be: A universal basic income for every citizen young and old. Here are some arguments for it:

    The One Minute Case for a Basic Income

    Social experiments around the world have shown that free money results in … less infant mortality, lower health care costs, lower crime rates, better school completion records, less truancy, higher economic growth, ….

    Researchers have shown that free money may be the most efficient, the cheapest and the most civilised way to combat poverty.

  3. Garry Compton | June 21, 2017 at 2:20 am | Reply

    How about starting to raise the average Soc. Sec. recipient to a level where they can live like humans. 1300 dollars a month to someone who not only paid 100,000 into that system bu paid for government paycks and pensions — should be the First recipients.

  4. When a UBI comes we have fascism/feudalism total! (use translate function)

  5. It’s not, and doesn’t have to be “other people’s money” with a state bank issuing money needed directly based on the values it’s spent on. Of course that just sounds crazy to most people who don’t know how money is created or what it’s based on.

  6. It’s not the cost of living that’s expensive, it’s the cost of government ! So that means we have to change what we call it from COL to COG .

  7. The system is breaking down. The universal basic income is to stop people from rioting. Every country in the world is only forty eight hours away from a revolution if the food stops circulation. It turns out it is very expensive to control everything.
    It could work if government is dissolved to pay for it. Then, the UBI is also dissolved after a time when jobs return.

  8. F. Bastiat seem to understand the unholy goat worshipers that have the title to the unfederal b.s. bank of the U.S. that was given to them by Woodrow ‘the treasonous’ Wilson.
    End the fed and all zentral banks and there will be a thousand years of peace and prosperity.
    Sacrifice the old goat(s).
    Silver Stakes required.

  9. Chuck Morrison | June 21, 2017 at 10:02 am | Reply

    While I agree that UBI feels wrong and seems morally repugnant, I feel that if the center holds, we don’t have WW III or some other catastrophe, then the natural progression of technology will make it necessary. Can we just replace what’s left of the workforce with robots, then turn to the people and say, “Run along now! Go eat cake and be happy!”? The robots are going to have to be taxed to pay the displaced workers, at least until the new paradigm is integrated. There might be efforts to limit machine labor, but when overall costs are fully calculated, the corporations themselves will want UBI. I call this the “Star Trek” option. People would be freed from dull, repetitive tasks, and potentially empowered with new levels of creativity and entrepreneur-ship. The thinking is, we’ve all got an ancestor who created a new use for the wheel, or for fire. Robots should be a legacy for us all, as the value of labor has been consistently stolen by the ruling class for all of civilization, and we have royalty payments coming to us.

    Now, if the campaign rhetoric of both Trump and Ron Paul were actually implemented as law and policy, we could see a genuine restoration of the Republic. But we can see by Trump’s actions that the Deep State, the Globalist Banksters, and the Military Industrial/Security Complex still hold full sway, and are not going to allow meaningful reforms.

    Unfortunately, I think we’re more likely to get the “Hunger Games” option: we’ll get War, both global and civil, and there will be a large culling of the herd, and a reset of the economy with a new financial and currency system, and the rebuilding phase following the catastrophe will use a lot of ‘slave’ labor, as well as robots. Movement will be limited, and every aspect of your life will be controlled.

    What all this means is that we are left with little choice: we must unite and FORCE the reforms that Ron Paul wanted and Trump campaigned on, or there will be the Four Horsemen of the Apocalypse.

  10. Oh when will people learn that Government s not about people or liberty or safety. Government is about control as are social programs.

  11. rhondareichel | June 21, 2017 at 1:38 pm | Reply

    Let them eat coconuts

  12. rhondareichel | June 21, 2017 at 1:46 pm | Reply

    If among you, one of your brothers should become poor, in any of your towns within your land that the Lord your God is giving you, you shall not harden your heart or shut your hand against your poor brother, but you shall open your hand to him and lend him sufficient for his need, whatever it may be … For the poor you will always have with you in the land. Therefore I command you, ‘You shall open wide your hand to your brother, to the needy and to the poor, in your land.’ (Deuteronomy 15:7-11)

    Jesus had the right idea….charity should come from people individually….not be mandated by Govt.

  13. I am against accepting the term “Universal Basic Income”.
    It is welfare, has always been called welfare, and will always be welfare.
    Welfare for all, not Universal Basic Income.

    Don’t let them change the language – that is how how they work at gaining acceptance for the unacceptable.

  14. Dick Lancaster | June 21, 2017 at 5:06 pm | Reply

    Hawaii’s problems can be solved easily enough if its government bans ALL welfare benefits, funds only those services which cannot be performed by private industry and prints its own currency backed by gold and precious metals in secure storage, publicly and regularly audited. When the people begin to starve they will find ways to legitimize the black market because a black market is also a free market.

  15. Garry Compton | June 22, 2017 at 2:26 am | Reply

    Last time I was in Hawaii was in the late 90s and it was already overrun by immigrants while the locals were living on the beaches in blue tarp- ville – communities. And the natives were restless over any “Howley” camping next to them. We were welcomed only because we were Alaskans but we could see that there was going to be a problem back then – Amazing how out of staters can see an eventual problem arising but not the Federal, State and local governments. Lack of island planning and lack of curbing Immigration killed Hawaii. Now they want to make this stupid plan to pay everyone off before the revolution starts – LOL at the dysfunctional governments of the USA.

  16. America 1st. | June 22, 2017 at 6:37 am | Reply

    no problem, Hawaii will continue to lose opportunities and wonder why they are careening toward bankruptcy.

  17. Hawaii needs to regain the sovereignty that was stolen by the “christian” missionaries

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