Sam Altman Stands Vindicated? OpenAI-Sponsored ‘No-Strings Payment’ Study Quells Fears

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.”

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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.

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