Sam Altman's Vision for Universal Basic Income Gains Credibility with Groundbreaking Study Results

Sam Altman Stands Vindicated? OpenAI-Sponsored 'No-Strings Payment' Study Quells Fears About Misuse Of Money, Making Strong Case For Universal Basic Income When AI Makes Jobs Obsolete

Unconditional cash transfers increase recipients' use of hospital & emergency department care, and some types of office-based medical care. An unconditional monthly $1,000 cash payment to low-income groups increased their ability to meet basic needs and support others, according to the final results from the Universal Basic Income study sponsored by the Sam Altman-led OpenAI project, OpenResearch, published on Sunday. The three-year study delved into the impact on a series of employment outcomes in a group of 1,000 low-income individuals, who were paid $1,000 per month unconditionally. A control group of 2,000 participants received $50 per month. The experiment was carried out in the states of Texas and Illinois. Impact On Employment: By the end of the three-year period, it was found that employment rates rose from 58% at the start to 72% among recipients. The transfer, however, caused total individual income to fall by about $1,500 per year relative to the control group, excluding the transfers. The labor market participation fell by 2% points for participants and labor hours were reduced by 1.3-1.4 hours per week. Participants' partners reduced their hours worked by a comparable amount. The study found that the transfer led to the largest increase in time spent on leisure but smaller increases in time spent on other activities such as transportation and finances. "Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities," study authors, who include OpenResearch personnel, and academicians, said. "Cash can increase people's agency to make employment decisions that align with their individual circumstances, goals, and values. Recipients were more likely to be searching for a job, but they were more selective," they said.' A testimonial statement by a study participant named Jessie said, "Because of the [cash transfer] and being able to build up my savings, I'm in a position for once to be picky...I don't have to take a crappy job just because I need income right now. I have the opportunity to hold out and try and find the right fit." See Also: Best Artificial Intelligence Stocks Health: The study found that unconditional cash transfers increased recipients' use of hospital and emergency department care and some types of office-based medical care, particularly dental and specialist care. Notable improvements were observed in stress, mental distress, and food security in the first year of the year study but the positive impact faded out during the later years of the study. Study participants reported decreased problematic alcohol use and some types of illicit drug abuse. "Although we find no significant effects on measures of physical health, self-reported access to health care, or on health-promoting behaviors such as exercise or sleep, the increased utilization of medical care may lead to long-term health benefits," the researchers said. Spending: Recipients were found increasing their spending by $310 per month. On average, recipients increased their monthly spending on food by $67, rent by $52 and transportation by $50. Cash provided the flexibility to meet diverse needs, and to support others. Why It's Important: Altman pledged financial support to the project in 2016 just after OpenAI was set up. The OpenAI co-founder, who was running Y Combinator, explained the logic of the study in a blog on the startup incubator's website at that time. "I'm fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, we're going to see some version of this at a national scale," he said. The entrepreneur said the study would answer several questions, including "Do people sit around and play video games, or do they create new things? Are people happy and fulfilled? Do people, without the fear of not being able to eat, accomplish far more and benefit society far more? And do recipients, on the whole, create more economic value than they receive?" Other tech leaders such as Tesla's Elon Musk, Block Inc.'s Jack Dorsey and Salesforce's Marc Benioff, have also backed "cash payments with no strings attached as a potential antidote to the negative effects of technology automating people's occupations," Bloomberg said in a report. The report also noted a sharp increase in local basic-income pilots in 2020 that aimed to "use cash as a tool for economic and racial justice, and test its potential to bolster the social safety net." However, detractors and opponents fear that recipients will take the money and drop out of the labor force or use the money on vices. it added. Read Next: Cathie Wood Sees This Technology Accelerating GDP Growth To 50% Per Year Photo via Shutterstock Market News and Data brought to you by Benzinga APIs

A Sam Altman-Backed Group Studied Universal Basic Income For 3 Years. Here's What They Found.

Findings from a Sam Altman-backed study on UBI give insight into the method's impact on spending and employment. For the past three years, participants across Illinois and Texas have received monthly cash payments of $1,000 to take part in a project funded by Sam Altman, the CEO of OpenAI and one of the most prominent proponents of basic income. Newly released findings from the study provide early insights into whether a universal basic income (UBI) is a sustainable model for a future driven by A.I. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters The study measured the spending habits of 1,000 participants against a control group of 2,000 that was given $50 each month. Recipients of the $1,000 cash payments reported a modest decrease in employment, an increase in setting and achieving goals and an emphasis on spending that benefitted basic needs and supported others, according to the study's results. The initiative was conducted by OpenResearch, a research organization that has received some $14 million from Altman and around $10 million from OpenAI. Altman, who has pushed for UBI as a solution to concerns that A.I. will replace employment opportunities, first backed the project in 2016 while he was still leading the startup accelerator Y Combinator. "I've been intrigued by the idea for a while," wrote Altman in a blog post at the time. "I'm fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, we're going to see some version of this at a national scale," he said. What did Sam Altman's study discover? The study's participants, which were selected from rural, suburban and urban areas and had an average household income of around $29,000, reported different employment trends depending on whether they received payments of $1,000 or $50. The target group on average worked 1.3 fewer hours per week and were 2 percent less likely to be employed, although they were also 10 percent more likely to be actively searching for a job. "Recipients were more likely to select interesting or meaningful work as an essential condition for any job," according to the study, led by Elizabeth Rhodes, research director at OpenResearch. This concept of agency was a common theme for the basic income recipients, 14 percent of whom were more likely to have pursued education or job training during the final year of the program. They also displayed a greater interest in moving, reporting an 11 percent bump in their ability to move neighborhoods and a 5 percent increase in their likelihood to pay for housing instead of seeking other living arrangements. Healthcare was also impacted by the experiment, with the UBI group increasing their spending on medical care by around $20 per month and showcasing a 10 percent rise in the probability of receiving dental care in the past year. "Although we find no significant effects on measures of physical health, the increased utilization of medical care may lead to long-term health benefits," wrote the study's authors. Health wasn't the only area that benefited from additional spending -- recipients overall spent $310 more each month. The largest increases went to food, rent and transportation at spending increases of $67, $52 and $50, respectively, while spending on support to others rose by $22 per month. "Beth and the OpenResearch team have done critical research to shed light on questions around" UBI, said Altman in a statement to Bloomberg. The OpenAI head has also recently floated a new take on UBI that he calls "universal basic compute," which would see members of society each receive a portion of large language models instead of funds. While other A.I. figures like Elon Musk and academic Geoffrey Hinton have similarly advocated for a form of basic income, not all tech leaders are convinced. Dario Amodei, the head of OpenAI rival Anthropic, has described UBI proposals as "kind of dystopian" and urged for alternative methods to offset inequalities caused by A.I. Expect more findings from Altman's basic income study in the coming months and years. OpenResearch is set to release results regarding politics, relationships, household composition and effects on children later in 2024, followed by additional findings on well-being, material hardship, crime and children's education in 2025.

Sam Altman's giant basic income study is out. Here's what it found.

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. "Recipients had greater agency to make decisions that worked best for their lives and to prepare for the future, from moving neighborhoods to expressing interest in new business ventures," the report's authors said. Altman, the CEO of OpenAI, a leading artificial intelligence company, raised $60 million for the study, including $14 million of his own money. OpenResearch conducted the study, which was led by researcher Elizabeth Rhodes. It officially began in 2019 when 3,000 Texas and Illinois residents across urban, suburban, and rural areas enrolled. All of these residents had incomes below $28,000. A third got $1,000 a month for three years, while the rest -- the control group -- got $50 a month. No enrolled participants lost their existing benefits. The study found that those who received the $1,000 payments increased their overall spending by an average of $310 a month, but most of that spending went toward food, rent, and transportation. They also offered more financial support to others in need compared to the control group. Researchers, however, said they found no "direct evidence of improved access to healthcare or improvements to physical and mental health" among those who received $1,000 payments. "We do see significant reductions in stress, mental distress, and food insecurity during the first year, but those effects fade out by the second and third years of the program," the report said, noting that $1,000 a month could only do so much. "Cash alone cannot address challenges such as chronic health conditions, lack of childcare, or the high cost of housing." The study was inspired by Altman's belief in the importance of a basic income in the age of AI, which some fear could render millions of jobs obsolete. "It's impossible to truly have equality of opportunity without some version of guaranteed income," Altman said when announcing the project. The idea of a universal basic income has been around for awhile, but rose to prominence as the center of Andrew Yang's 2016 presidential campaign. Other significant figures in the tech industry have since voiced support for some kind of basic income, including Twitter cofounder Jack Dorsey and Tesla CEO Elon Musk. AI godfather Geoffrey Hinton recently advised the British government to adopt a universal basic income to mitigate the number of "mundane jobs" AI is set to replace. A universal basic income would provide all people with direct cash payments, no strings attached. That's a hefty political lift, however. So many cities and states have experimented with guaranteed basic incomes instead. These programs provide cash payments without restrictions to select low-income or vulnerable populations. Altman's study falls into this camp as well. Data from dozens of these smaller programs have found that cash payments can help alleviate homelessness, unemployment, and food insecurity -- though results still stress the need for local and state governments to invest in social services and housing infrastructure. Earlier this year, Altman also floated another kind of basic income plan, which he called a "universal basic compute." In this scenario, Altman said people would get a "slice" of the computational resources of large language model GPT-7, which they could use however they like. "You own part of the productivity," he explained on a podcast. Even these smaller experiments, however, have faced political hurdles. Conservatives in several states have challenged the programs, halting their progress. In its results, Altman's study assessed both quantitative data, such as surveys and bank transactions, and qualitative data, such as interviews with recipients. The study found that compared to the control group, recipients' total individual savings in their bank accounts increased by nearly 25%. Recipients also spent $22 more a month on other people, or about 26% more than the control group. There was little impact on car or home ownership, though recipients of the $1,000 were more likely to move neighborhoods or pay for housing than the control group. Regarding healthcare, recipients saw slight increases compared to the control group in dental care, emergency room visits, and healthcare spending -- though there was no direct evidence of improved health. Recipients were more likely to want to have a budget and advance their education, specifically in the third year, compared to the control group. However, there were no significant effects on educational attainment overall. The study, which began during the COVID-19 pandemic when unemployment was high, found that employment rates fell in the second and third years among recipients compared to the control group. On average, incomes rose significantly for all groups, though slightly higher for the control group. Incomes for recipients of the $1,000 rose from just under $30,000 to $45,710, while incomes for the control group started at a similar level but grew higher, to $50,970. "Cash offers flexibility and may increase agency to make employment decisions that align with recipients' individual circumstances, goals, and values," the report's authors said. One recipient in the program, Sarah, is a mother of four from rural Illinois who teaches in a homeschool network and makes just enough from her job to pay for school supplies. "I don't really make anything off of it," she said in a testimonial shared by OpenResearch. "Even though my husband had a pretty decent job, we didn't have a lot of money for extras." The payments from the Altman program helped Sarah pay for braces for both of her children, which weren't covered by their insurance, she said. She also used the money to finance a graduation trip for her daughter. However, Sarah said she began "slipping into a mindset" where she was less careful with her finances because it felt like money was coming in "without having to work for it." "Looking back, I regret that I didn't save more of it," she said. Another recipient, Cara, told the study's researchers that she suffered from a debilitating nerve disorder that caused pain across much of her body and a loss of mobility. While she started to receive some short-term disability payments, she said a break-in to her apartment set her back financially, and she began to sell her personal belongings. "Feeling the loss of being able to care for yourself and desperately needing the help of others; it's rough," Cara said. She said she "probably started crying" when she got the phone call saying she would be receiving $1,000 payments from the Altman program. The money helped her pay off nearly all of her debts. "It's almost like a miracle," she said. "Knowing that I was able to manage that mountain of medical debt, it felt like my brain would have been in a completely different place." Celene, another participant, told researchers she was forced to move her family in with a friend after losing money in a business venture. She said she was living in squalid conditions. When she received the call that she had been selected for the group receiving $1,000 a month, she was in utter disbelief. She said the money helped her buy new clothes, shoes, and basic necessities for herself and her children. By the second month, she had landed a job and began saving.

Sam Altman gave people $1,000 a month for 3 years. Here's what happened

ChatGPT-maker OpenAI funded the largest basic income study in the U.S. to date. The AI startup worked with researchers to give people living below the poverty line unconditional cash payments for three years. Some 3,000 people between ages 21 and 40 from Texas and Illinois were part of the study. They earned less than $30,000 per year. One-third of those participants were given $1,000 per month (the recipients), while the other participants (the control group) were given $50. The study found that recipients of the bigger checks had more flexibility to look for jobs that they actually wanted. "Cash can increase people's agency to make employment decisions that align with their individual circumstances, goals, and values. Recipients were more likely to be searching for a job, but they were more selective," the study's authors wrote. In an interview, one participant in the study said, "Because of the [cash transfer] and being able to build up my savings, I'm in a position for once to be picky," adding, "I don't have to take a crappy job just because I need income right now. I have the opportunity to hold out and try and find the right fit." Another recipient said they were able to take a lower-paid entry level position in a field they wanted to work in, and in two years, they attained a six-figure salary. "If I didn't have the cash transfers there is no way I could have taken that pay cut," they said in an interview. The study found no major difference in employment levels between those who received larger payments and the control group. Recipients only increased their spending for basic needs. Food, housing, and transportation were the biggest items. Payments helped recipients pay for health needs like braces and treatment for alcoholism. While the payments initially reduced stress, many health benefits faded after two years.

As new tech threatens jobs, Silicon Valley promotes no-strings cash aid

The rise of artificial intelligence has stoked fears that such technological advances will wipe out millions of jobs. Silicon Valley entrepreneurs have thought about that too, and they've long pushed an idea to soften the blow: cash aid from the government, no strings attached. Now, the first results are out from the latest and largest study on the impacts of free money -- research spearheaded by the man behind ChatGPT. Sam Altman, CEO of OpenAI, offered to fund an experiment on what's termed basic income back in 2016. In a blog post that year, he said some kind of national payments would likely be needed as technology killed more jobs even as it generated massive wealth for others. So, he said, it would be good to study what might happen if people got regular paychecks from the government. "Do people sit around and play video games, or do they create new things?" Altman wrote. "Do people, without the fear of not being able to eat, accomplish far more and benefit society far more?" Tech-driven job losses weren't his only motivation. Altman mentioned progress toward eliminating poverty, writing, "I also think that it's impossible to truly have equality of opportunity without some version of guaranteed income." It took a while for his experiment on free money to happen, and in the meantime, dozens of other experiments were carried out. The idea also got a boost from the success of federal relief checks and other aid during the COVID-19 pandemic. But Altman's study is far longer than most and involves a more nationally representative group across rural, urban and suburban areas. For three years, 1,000 lower-income people selected in Illinois and Texas received $1,000 a month. (A control group of 2,000 others received $50 a month.) Elizabeth Rhodes, the research director with Altman's nonprofit, OpenResearch, started tracking their financial situations as she signed them up. "One person's just finished beauty school, but she couldn't afford the cosmetology license," she says. "One person's phone had just been turned off. Another person had just been in a car accident and then totaled the car, and they couldn't afford another one." There were a thousand different needs, she says, and only cash could meet them all. Rhodes says this study, like the many others, finds people mostly spent the extra money on basics: food, transportation, rent. "We see an increase in people actually paying for housing," she says. "So a lot of people were actually doubling up with other people, and they were able to move out on their own." Many also put money in the bank. The largest increase in spending was actually on helping family and friends. One unexpected challenge during the experiment: The COVID-19 pandemic hit early on. This complicated the research but also meant it played out during a sudden spike in unemployment. "The cash gave more people agency in their employment decisions during the most turbulent time in modern history," says Karina Dotson, the research and insights manager with OpenResearch. For example, the study found that the extra cash allowed one woman to take a pay cut for a job with room to advance, and she now makes close to six figures. But that jump in job quality was rare. Overall, people who got the cash payments worked a bit less -- 1.3 hours less a week on average -- and their partners did the same. This includes some who'd been logging 50 or 60 hours a week at more than one job. Participants also reported more leisure time. Dotson recalls one single dad employed at a restaurant. "And when he learned about the cash transfers, he told us that he immediately went to his boss and said that he wanted to reduce his hours so that he could spend as much time as possible with his 4-year-old son," she says. As for Altman's question about whether people would create new things, the study did find more interest in entrepreneurship. But it wasn't until the third year of payments that some, mostly Black participants, took steps to actually start a business. Meanwhile, many people reported major declines in stress and food insecurity early on, but that faded after the first year. Researchers aren't sure why. Rhodes also notes that in certain cases, the extra cash actually led to more unexpected expenses. For example, some recipients were able to buy vehicles, which then broke down and needed repairs. The OpenResearch team plans more analysis on where people moved during the study -- the most common reason participants gave for moving was to be in a better school district -- and the impact that the cash had on children's educational outcomes. Altman declined an interview request to discuss the findings so far. But the bottom line is that in the debate over whether basic income helps people's long-term prospects, the report says, "Our results provide support for both sides." Guaranteed income is an old idea with a surprisingly diverse fan base, from libertarian economist Milton Friedman and President Richard Nixon to the Rev. Martin Luther King Jr. and the Black Panthers. Other Silicon Valley billionaires who've endorsed it include Elon Musk and Jack Dorsey. The most expansive vision has been a universal basic income, as when 2020 presidential candidate Andrew Yang called for giving every U.S. adult $1,000 a month (plus cost-of-living increases) regardless of income. In Altman's 2016 blog post, he called for giving people "enough money to live on." But the thinking around basic income has shifted sharply. The raft of recent experiments and the proposals for some kind of national policy are far more limited and targeted toward lower-income households. "I hope that people are taking away from this study and other studies that a guaranteed income will not work alone," says Facebook co-founder Chris Hughes. He also co-founded the Economic Security Project, which advocates for basic income. But Hughes says it's not a magical solution -- $500 or $1,000 a month is not nearly enough to overcome the ballooning costs of housing, health care, education and child care. Still, he says, the growing body of research, as well as the pandemic payments, prove that a little extra can keep families steady. "I think a great place to start would be to have a guaranteed income when the going gets rough," he says. To that end, Hughes suggests that automatic payments could kick in when an uptick in unemployment signals a recession. But turning no-strings cash into national policy would face strong opposition. Some states have even banned it. "Making contributions to society through the labor market ... is a more promising system than one where poor people just get a check from the government," says economist Michael Strain of the American Enterprise Institute. Even though research so far shows limited impact on work, Strain worries that a permanent basic income program would exacerbate a long-term decline in employment rates for some groups. A better idea, he says, would be to significantly boost tax credits for lower-income workers. For example, say someone lost a $40,000-a-year job to automation, and the only other job the person could find paid $25,000. "What if we lived in a world where the government gave you the 15 grand?" Strain says. "You only get it if you take the job. But the government will try to, you know, kick in enough to make it worth your while." For the record, neither Strain nor Hughes worries much about massive job losses from technologies like AI. They say history shows that over time, new technology creates new kinds of jobs. But they agree that as work becomes increasingly precarious, struggling American families need more help, one way or another.

Here's What Happens When You Give People Free Money (They Get Poorer)

OpenResearch released the first results of the most comprehensive study on giving unrestricted cash grants to impoverished Americans. Researchers say it will flame both sides of the debate over welfare. OpenAI CEO Sam Altman's decade-in-the-making effort to understand how handing out free money affects recipients and the broader economy delivered its first big results Monday. OpenResearch found that when it gave some of the poorest Americans $1,000 a month for three years with no strings attached, they put much of the money toward basic needs such as food, housing, and transportation. But what amounted to $36,000 wasn't enough to significantly improve their physical well-being or long-term financial health, researchers concluded. The initial results from what OpenResearch, an Altman-funded research lab, describes as the most comprehensive study on "unconditional cash" show that while the grants had their benefits and weren't wasted on drugs and booze, they were hardly a panacea for treating some of the biggest concerns about income inequality and the prospect of AI and other automation technologies taking jobs. Some progressive organizations in the US and elsewhere have advocated for fighting poverty through forms of unconditional cash such as universal basic income. Conservative groups have largely panned the projects as handouts for undeserving people who refuse to work. In two papers published on Monday and a third coming next month, OpenResearch staff and its university collaborators offer data that could help fuel the full spectrum of views. OpenResearch, which has also drawn funding from organizations like OpenAI and the US government, handed out the unconditional $1,000 transfers from November 2020 to October 2023. The cash provided a 40 percent income boost to a diverse group of 1,000 21-to-40-year-olds who started out in households earning about $30,000 annually across 10 counties apiece in Illinois and Texas. As a control group, 2,000 people with similar characteristics received $50 a month. Participants answered surveys, shared credit reports, and took blood tests. The perceived benefits for those who received $1,000 monthly varied across facets of life. Their biggest jump in spending involved giving an average of $22 more per month to others, such as helping out relatives in need or gifts to friends. People started seeking out more health care such as dental braces and better stocking their refrigerators and pantries. Some began considering or pursuing startups. By year three of the payments, "Black recipients were 9 percentage points more likely to report starting or helping to start a business than control participants, and women were 5 percentage points more likely," according to one of the studies. Participants also moved out on their own, especially those who started out at the lowest incomes, and enjoyed themselves more. The forthcoming paper, of which OpenResearch shared a draft version with WIRED, roughly estimates 81 cents of each dollar transferred went to higher spending on items such as housing, 22 cents went to leisure, and negative 3 cents to increased borrowing as recipients took on more car loans and mortgages. The increased debt brought down participants' net worth over the three years. Combined with little change in credit access, bankruptcies, and foreclosures, researchers concluded that "the transfer did not improve participant's long-run financial position." People did put more money into savings and initially felt better about their financial situation. But they also slightly cut back on work and let the free cash fill in the gap. For every $1 received from OpenResearch, participants' earnings excluding the free money dropped by at least 12 cents and total household income fell by at least 21 cents. "Cash offers flexibility and may increase agency to make employment decisions that align with recipients' individual circumstances, goals, and values," the researchers wrote. They may be "taking more time to find a job, taking a lower paying position that they find more meaningful, or simply taking a break." What critics of assistance programs fear, though, is that instead of investing in the future, people eventually give up on working completely and become ever more reliant on support. OpenResearch found "the total amount of work withdrawn from the market" was "fairly substantial" in its experiment. Add to that researchers found "no effect" from the cash on several measures of physical health and welfare critics may have plenty to snarl at. But the studies' authors say it's important not to forget that participants showed with their spending what they valued most. "Policymakers should take into account the fact that recipients have demonstrated -- by their own choices -- that time away from work is something they prize highly," authors wrote. If anything OpenResearch has proved true the adage: Money can buy time.