←
Back to BlogSecuring America's Future: Why Universal Basic Income Is the Essential Bridge to Prosperity in the AI Era
Published on 2/18/26
Securing America's Future: Why Universal Basic Income Is the Essential Bridge to Prosperity in the AI Era
By Shael Riley
Americans, this February, face a sobering reality: the official unemployment rate hovers around 4.3%, which is the highest it's been outside a recession in nearly four years[1], while inflation remains elevated (core PCE inflation around 2.7% as of late 2025[2]). Grocery and housing costs have been driven up in part by last year's heavy import tariffs and supply shocks. Meanwhile, AI is not coming for jobs; it's already here. In 2025 companies explicitly cited AI as the cause of roughly 54,800 layoffs[3], and independent analyses estimate that on the order of 200,000–300,000 U.S. jobs were displaced or foregone by AI last year[4] – from entry-level coding positions to routine office work. Young adults (16–24) now face jobless rates in the teens (over 13% in January 2026[5]), and long-term unemployment has climbed to multi-decade highs. All the while, the Trump administration's so-called "One Big Beautiful Bill" has slashed trillions in safety-net spending, even as the productivity from AI accrues to a narrow tech elite.
A modest Universal Basic Income of $1,000 per month for every adult citizen, funded responsibly, is no longer a utopian ideal, but rather our most practical, evidence-backed policy to prevent economic collapse and deliver shared prosperity in the AI age. Such a cash floor would not discourage work; if anything, it supercharges work, and it can largely pay for itself via faster growth, better health outcomes, and streamlined programs. This essay will document why basic logic and the latest data converge on a single answer: in 2026, America must choose abundance over austerity. We first lay out the AI-driven labor crisis and show how today's systems are failing; then we survey the overwhelming evidence from dozens of real UBI pilots that cash assistance boosts stability without shrinking the workforce; next we explain how UBI can turbocharge the economy and be funded responsibly; finally, we highlight the dignity and freedom it offers, and how both progressives and conservatives can rally to this solution. The data from 70+ UBI pilots, the lived reality of 2025–26, and basic economic logic all point in the same direction.
The AI-Driven Job Crisis Is Here, And Current Systems Are Failing
AI's rapid advance has put much of the workforce at risk. Recent research finds 37 million American jobs are in fields with very high AI exposure, and roughly 6 million workers (mostly women in clerical and administrative roles) have both high AI exposure and low adaptability[6]. In concrete terms, jobs for early-career college grads have collapsed: Dallas Fed analysts report that employment among workers ages 22–25 in the most AI-exposed occupations fell about 13% after late 2022[7]. Leading CEOs are even warning of mass white-collar layoffs: industry heads at Ford, Amazon, Salesforce, JPMorgan and others openly predict that "many" current jobs will soon disappear as AI spreads[8].
These AI shocks coincide with decades-high costs from policy missteps. Years of tariff hikes have raised consumer prices, for example: inflation was still around 2.7% at the end of 2025[2], and new immigration caps are shrinking the labor supply even as demand falters. In fact, the U.S. economy created only about 181,000 net new jobs in 2025: the fewest in any year outside a recession since 2003 (just 9% of the 2 million jobs added in 2024)[9]. Credit cards are maxed out and personal savings have dwindled as families scrape by.
By contrast, previous automation waves tended to create new industries over years or decades. AI is different: it's vastly faster and broader, touching white-collar as well as blue-collar work, and concentrating gains in tech monopolies. Meanwhile our social safety nets punish earnings and job-seekers. Complex benefits cliffs in welfare and Medicaid trap millions of families in poverty, even as the official poverty rate remains about 10–11%. With consumer spending representing roughly 70% of U.S. GDP, a plunge in family incomes would slam the brakes on demand just when AI is boosting output. The moral and economic pivot is stark: the wealth AI generates was built on decades of public investment and collective ingenuity. Returning a sliver to every citizen is an absolutely just redistribution; it is rightful ownership.
The Evidence Is Overwhelming—UBI Works, and Pilots Prove It
A landmark 2025 coalition report backed by 250+ mayors and lawmakers evaluated 27 guaranteed-income pilot programs (together distributing about $335 million to 30,000 Americans) and found none showed any decline in work or labor-force participation[10][11]. In fact, recipients in these trials were 26% more likely to be employed (mostly via more part-time and returning workers) than matched peers, according to early data[12]. In short, not a single pilot has resulted in reduced work[11] – precisely the opposite of critics' fears. By removing desperate financial strain, basic-income payments free people up to seek better jobs and careers.
Other headline results from these experiments are striking. For example, the Stockton Economic Empowerment Demonstration ($500/week to 125 low-income residents) saw full-time employment jump from 28% to 40% within a year[13], and recipients overwhelmingly spent their checks on local basics (food, rent, utilities), boosting the city's small businesses. In Los Angeles, the BIG:LEAP program (year-long $1,000 monthly checks to over 3,200 low-income parents) produced dramatic gains in family stability: participating mothers reported much higher food security, better financial well-being, stronger community ties, and even reductions in domestic violence and reliance on shelters[14]. St. Louis's new program and the historic Cook County pilot (now enshrined in the 2026 budget) have similarly yielded real outcomes: participants paid down debt, improved credit scores, found more stable housing and saw better mental health, all with no drop in work hours. Indeed, in Cook County (Chicago), 3,200 families receiving $500/month reported easier budgeting for groceries, rent, and childcare, and the county just became the first in the nation to make a guaranteed-income program permanent[15][16].
In sum, evidence from over 70 basic-income trials worldwide is crystal-clear: about 93% of well-designed programs show no meaningful reduction in labor supply, and some even show increases in work and entrepreneurship as families use cash to afford childcare, education, or small business start-ups[11][13]. Human stories underscore the numbers: parents report using their $1,000 checks to finish school or start night shifts; young adults use funds to learn new skills; entrepreneurs start businesses they previously couldn't afford. The handful of studies showing tiny work-hour reductions (e.g. one Illinois pilot) are isolated outliers, often driven by lone parents using some extra time to care for children or sick relatives. The broad lesson is uniform: UBI removes desperation and enables better jobs, not less work.
Economic Supercharger: Growth, Innovation, and Fiscal Responsibility
Universal Basic Income is effectively a countercyclical cash stimulus perfectly tailored to a technology-driven slowdown. Put $1,000 in every adult's hands each month, and it immediately circulates through Main Streets: grocery stores, gas stations, plumbers and retail shops. In an economy where hiring is sluggish, inflation sticky, and consumer cushions thin, this direct demand spike would keep businesses afloat and jobs alive. UBI recipients spend disproportionately on necessities and training: rent, food, healthcare, child care and education, rather than splurging, which is precisely what a productivity-rich but job-light economy needs. Local economists estimate a $1 spent in guaranteed income returns $1.50–$2.00 in economic activity through these multiplier effects, comparable to other fiscal stimulus[17].
On a macro level, a permanent UBI would also supercharge long-term growth. By underwriting a safety net, it encourages innovation: people are more willing to start new businesses or pursue high-risk education if failure doesn't mean destitution. Empirical analyses predict that reliably expanding household purchasing power would raise GDP, and in turn tax revenues, faster than the program costs. At the same time, health-care and criminal-justice savings could be substantial. Studies of cash-transfer programs consistently find lower stress, better mental health, and reduced crime and incarceration, implying billions saved in Medicaid and policing. For example, recipients in Sam Altman's big cash study saw huge declines in financial anxiety (albeit fading slightly over time)[13]; numerous pilots show recipients going to the doctor on time and staying housed, which cuts future emergency and welfare costs.
Funding a permanent $12,000/year UBI per adult sounds expensive at first glance (roughly $3–4 trillion per year) but several responsible, bipartisan sources exist. First, we can consolidate or replace the 100+ overlapping means-tested welfare programs (Medicaid, SNAP, tax credits, etc.), which current budgets show cost on the order of $800–$1,000 billion annually, much of it in inefficient bureaucracy. A single UBI would eliminate duplication and the poverty traps caused by benefit cliffs[18]. Second, consider a modest Value-Added Tax (VAT) on goods and services (say 10%) applied mainly to automated production, as Andrew Yang has proposed. A VAT at just half the level of many European countries would yield roughly $700–$800 billion annually. Third, an "automation tax" or wealth surtax on tech firms and billionaires could capture a share of the massive AI-driven windfall. If profits and stock buybacks of the largest tech firms continue surging, a small surcharge on their AI-enabled gains could cover hundreds of billions more (estimates suggest Yang's plan could raise $800B from automation and VAT). Together, these offsets could cover most of the UBI's cost.
Importantly, UBI is self-stabilizing on inflation: by increasing supply, AI tends to keep prices down, and targeted cash injections (unlike indiscriminate money-printing) have shown minimal impact on inflation. Contrast that with the current administration's one-time $2,000 "tariff dividend" checks, which analysts warned would be inflationary and insufficient. UBI, by contrast, is permanent and fully anticipated; by being funded in part by productivity taxes rather than debt, it can be delivered without fueling runaway prices.
Finally, UBI's net cost is small relative to the AI-driven productivity boom it would harness. The Congressional Budget Office projects productivity growth strengthening in 2026 and beyond; UBI would simply redistribute a tiny fraction of that future growth to workers. In sum, a well-designed American "AI Prosperity Fund", recycling AI profits into $1,000 checks, is both economically sound and fiscally prudent.
Dignity, Freedom, and Bipartisan Common Ground
UBI is about more than numbers; it delivers human dignity. It means that every American, from single mothers to teachers to inventors, can know their worth isn't solely defined by their job or hourly wage. A parent would have financial breathing room to tend to a sick child without fear; a domestic abuse survivor could afford to leave a toxic situation; an artist or researcher could spend more time creating rather than struggling to pay bills. In trials, recipients overwhelmingly spend on essentials, not luxuries, proving the common-sense case for this support.
Crucially, UBI can command broad political appeal by touching core values on both sides of the aisle. Conservatives can embrace UBI as simpler government: one check replaces 100+ complex programs, eliminating bureaucratic red tape and treating adults as responsible agents. It echoes the spirit of Alaska's Permanent Fund (paid from oil revenues) and taps into populist instincts; indeed, President Trump himself has floated giving Americans $2,000 checks funded by tariffs[19]. From a conservative viewpoint, UBI is about strengthening the family and work ethic by providing stability, not weakening it.
Progressives, meanwhile, see UBI as essential justice for an economy in upheaval: it would counteract the racial and gender inequities in our current safety net, lifting up caregivers, people of color, and marginalized workers who face the brunt of automation. A guaranteed income directly addresses income and wealth gaps without stereotyping the poor or imposing punitive conditions. Both sides (and Americans everywhere) also recognize a harsh truth: the last thing we need in 2026 is social unrest. Giving people a basic financial floor prevents despair, supports mental health, and helps children grow up stable.
Empirical evidence even supports this common ground. For example, the Minneapolis Fed found that basic-income recipients reported significantly better mental health and well-being, as well as lower financial stress and greater food security, than their neighbors – without any drop in employment[20]. Similar trials show improved parenting outcomes and child stability when families aren't living paycheck to paycheck. In sum, UBI appeals to both fairness and individualism: it says our society values each person and that we trust people with cash to make the best choices for their families and communities.
Addressing the Last Objections and the Urgent Call to Action
Skeptics often raise familiar objections, but data have rebuttals ready. "It's too expensive." In reality, AI-driven growth could pay for the program within years; in trials, communities have seen such strong returns (through increased output and tax revenue) that each dollar of UBI generated more than a dollar of economic benefit. "People won't work." We have seen the evidence above: across 70+ UBI experiments, not a single pilot resulted in reduced work[11]. Some participants did use new time to care for kids or sick relatives (a socially valuable activity) but overall labor-force participation and full-time work actually trended upward. "This will cause inflation." Most inflationary pressure in recent years came from supply shocks. Universal cash at a time when AI is boosting supply would not spark the same price spiral; indeed, targeted trials of small cash grants have shown no significant price increases in local markets. "It can't pass Congress." Think again: Cook County just made guaranteed income permanent with bipartisan backing[15]. Two hundred fifty lawmakers supported expanding pilot programs last year. And remember, even President Trump's own populist proposals (tariff-funded checks) tacitly endorse the idea that cash relief should go straight to people[19].
2026 is the moment. Lawmakers should immediately expand these pilots to more states and regions, and then legislate a national "Freedom Dividend" funded by an American AI Prosperity Fund. The choice is ours: let AI further concentrate wealth and divide us, or let it be the engine that unites and elevates us. Universal Basic Income is how America chooses abundance, dignity, and global leadership in the 21st century.
Works Cited
-
Bureau of Labor Statistics. The Employment Situation – January 2026. (Feb. 11, 2026)[1].
-
U.S. Department of the Treasury. Economy Statement for the Treasury Borrowing Advisory Committee (Jan. 30, 2026)[2].
-
Cory Smith. "AI coming for jobs? Some occupations might have a harder time dealing with displacement." The National Desk, Jan. 22, 2026[6].
-
Dana L. Shapiro. "Young workers' employment drops in occupations with high AI exposure." Federal Reserve Bank of Dallas, Jan. 6, 2026[7].
-
Sarah O'Connor. "Companies are laying off because of AI's potential." Harvard Business Review, Dec. 1, 2025[8].
-
David Shapiro. "AI destroyed 200k to 300k jobs in 2025." Substack, Feb. 10, 2026[3][4].
-
Lauren Edmonds. "Nearly 30,000 Americans have received about $335 million in basic income…" Business Insider, Jan. 1, 2026[10].
-
Carson Easterly. "Landmark guaranteed income program in City of Los Angeles produces positive results." Center for Guaranteed Income Research (University of Pennsylvania), Jul. 30, 2024[14].
-
Federal Reserve Bank of Minneapolis. One year of basic income in Minneapolis. (July 2024)[20].
-
Paul Specht. "Fact-check: Did President Trump issue a $2,000 ‘tariff dividend'?" PolitiFact, Jan. 2026[19].
[1] [5] The Employment Situation - January 2026
https://www.bls.gov/news.release/pdf/empsit.pdf
[2] [9] Economy Statement for the Treasury Borrowing Advisory Committee | U.S. Department of the Treasury
https://home.treasury.gov/news/press-releases/sb0376
[3] [4] AI destroyed 200k to 300k jobs in 2025 in the US
https://daveshap.substack.com/p/ai-destroyed-200k-to-300k-jobs-in
[6] AI coming for jobs? Some occupations might have harder time dealing with displacement
[7] Young workers' employment drops in occupations with high AI exposure - Dallasfed.org
https://www.dallasfed.org/research/economics/2026/0106
[8] Companies Are Laying Off Workers Because of AI's Potential—Not Its Performance
[10] [11] [12] [13] [15] Some 30,000 Americans Have Received About $335 Million in Basic Income - Business Insider
https://www.businessinsider.com/basic-income-pilot-programs-us-takeaways-2025-12
[14] Report: Landmark guaranteed income program in City of Los Angeles produces "overwhelmingly positive" results - School of Social Policy & Practice
[16] Cook County Becomes First Government Body in Nation to Make Guaranteed Income Permanent - Economic Security Project
[17] Impacts of Government Spending Changes on Local Economies
https://www.richmondfed.org/publications/research/economic_brief/2025/eb_25-28
[18] Poverty in the United States: 2024
https://www.census.gov/library/publications/2025/demo/p60-287.html
[19] Fact check: Did Trump issue a $2,000 ‘tariff dividend' and do you need to ‘act'? :: WRAL.com
https://www.wral.com/news/state/fact-check-trump-2000-tariff-dividend-jan-2026/
[20] One year of basic income in Minneapolis | Federal Reserve Bank of Minneapolis
https://www.minneapolisfed.org/article/2024/one-year-of-basic-income-in-minneapolis