The study found that people spent most of their cash on basic needs
ChatGPT maker OpenAI partially funded the largest universal basic income (UBI) study in the country in which 3,000 Americans across Texas and Illinois—with an income below $28,000—received free money for three years.
OpenAI CEO Sam Altman has been a proponent of UBI. Several Silicon Valley leaders, including Elon Musk, believe free cash handouts could help people if AI and robots take over jobs. At the same time, some worry that UBI could make people feel dependent on tech companies.
Under the study
A third of the participants received an “unconditional” monthly sum of $1,000, while the rest received $50. People who received $1,000 spent $310 more on rent, food and transportation. They also visited doctors more often.
The study found that people spent most of the amount on basic needs.
Overall, for every dollar received, around 81 cents went to items such as housing, and 22 cents went to leisure, according to a Wired analysis of the published results.
Interestingly, negative 3 cents went to increased borrowing as recipients took on more car loans and mortgages. Some participants cut back on their work (over 1 hour) and let the free money fill the gap.
However, the participants’ long-term financial status did not improve despite financial assistance.
Some countries have tested UBI, the biggest of which is a 12-year trial in Kenya. Since the 1980s, Alaska has been paying its residents annually from the state’s oil and gas money.