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The Universal Basic Income scenario seems to be one where people are free to cultivate their passions. From what I could gather, the main argument for this to be the best case scenario goes something like, if people are free to choose what they would like to do they would choose something which they are passionate about, which in turn would mean that they will gladly work towards becoming better at it, and create a pleasure-productivity feedback loop.

This seems almost universally accepted, and intuitively right.

My question is, who would take care of the menial but necessary tasks? (Elders' carers, garbage man, plumbers, cleaners...)

Some answer that AI development, will give rise to "unconscious" slave robots who will be able to take care of it. How likely is this?

There seems to also be an idea of the possible emergence of "artisanal" markets, in the sense that even if, for instances, robots are able to function as carers for basic tasks, there would be a premium market for "flesh" carers. And people who would choose to fulfill these roles would be highly remunerated.

Are there any studies, papers or polls on this topic?

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Pretty much by definition, "necessary" jobs have to be filled. Wages would have to be bid up so that the positions get filled. This implies some form of relative price shock, or inflation. If robots can do those taks, great, but the plausibility of that outcome is left as an exercise to the reader.

The Universal Basic Income can be viewed as a rebranding of the Negative Income Tax idea that was floating around during the Nixon administration. (Milton Friedman was a supporter.) Studies were done at the time, and the problem with the scheme is the effect on income taxes.

My comments here are my interpretation of some of that analysis. One example is the article "The macroeconomics of a negative income tax" by Hyman Minsky (1969), which was republished in "Ending Poverty: Jobs, Not Welfare" (Minsky). Although Minsky is viewed as a heterodox economist, I believe this particular analysis ends up being similar to the consensus view at the time.

In order to hand everyone a non-negligible amount of cash each month, roughly the same amount of taxes will have to be raised. (One could debate about the exact amount of taxes required, but it would presumably be a significant proportion of the transfers, as it would be safe to assume that most of the transfers would be spent. Otherwise, there would be a major inflationary impact from the program.)

Unless the ultra-rich are willing to pay a lot more taxes, marginal tax rates would have to be high, starting at low levels of income. This creates a massive incentive to drop out of the formal economy, creating a death spiral for the tax system (or equivalently, an out-of-control inflation).

Therefore, the real issue is not the effect of artisanal markets, but rather the global interaction between all low-paying jobs and the tax system. For example, if the marginal tax rate for a minimum wage job is close to 50%, why take that job instead of just engaging in barter or under-the-table jobs, and using the UBI money to cover cash expenses?

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Insofar as technology fails to substitute for all menial tasks, economic theory would dictate that those tasks pay a high enough wage to attract workers, so the wage for those jobs would likely be higher than they are in the absence of a UBI.

The only serious pushes I see for a universal basic income come in response to the threat of technology advancement making many menial jobs obsolete, so this may not be as big a problem as you worry about (assuming a UBI scheme is in fact sustainable at all). In this context, the UBI is pitched as a way to more quickly distribute the "technology dividend" to displaced labor instead of letting it concentrate in the hands of capital owners.

The strongest arguments I've heard for a UBI are based more on positive externalities. Consider how many intelligent people work menial jobs simply because they're the best-paying available. Perhaps if a few dozen hours of their weeks were freed up (for millions of people), they'd be able to engage in intellectual, artistic, or entrepreneurial pursuits with more long-term benefits to economic growth. This result, however, is contingent upon technology advancing fast enough to truly displace labor in the market. If capital equipment doesn't plunge in price to accompany the initial increase in tax costs, this would be a very hard sell.

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    $\begingroup$ Universal basic income has also been proposed, eg for India, as an administratively efficient alternative to a huge number of separate welfare programmes and subsidies. See The Economist here (economist.com/news/leaders/…). $\endgroup$ – Adam Bailey May 22 '17 at 10:27

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