niversal basic income (UBI) provides that the government gives every citizen a sum of money at regularly stipulated periods. The idea is that every citizen, regardless of their means, has access to a regular source of income. Typically, the income will be sufficient enough that they would not need to work. The motivation for the idea is simple. When there’s a modest income floor across the nation, citizens’ reliance on existing social security benefits will reduce.
“THE SOLUTION TO POVERTY IS TO ABOLISH IT DIRECTLY BY A NOW WIDELY DISCUSSED MEASURE: THE GUARANTEED INCOME”Martin Luther King Jr, Civil Rights Activist
Essentially, with UBI, the government guarantees that each citizen has access to a minimum income. This way, the essential cost of living in a given country is covered. In recent times, UBI has gained popularity because people see it as a permanent solution. It can serve as a way to offset job losses fueled by the advent of technology.
“MARK MY WORDS: UNIVERSAL BASIC INCOME IS COMING, AS ARTIFICIAL INTELLIGENCE AND ROBOTS EAT AWAY GOOD JOBS”Robert Reich, Former United States Secretary of Labor
Who Does Universal Basic Income Impact?
There are still varying proposals on who qualifies to fund or receive the universal basic income. Countries all over the world are researching to see if they agree on its relevance. However, various politicians, economists, and propounders believe differently about who pays for it or who receives it based on individual proposals.
Although the government is the one who disburses the funds, they don’t pay for it. To pay the check, some have argued in favor of a general tax that will affect the working class. This way, while UBI is served to everyone generally, only the working class will be tasked for it.
The only issue with this proposal is its feasibility. Since universal basic income will pay the threshold prices above poverty, some people believe it is enough for working levels to drop. That means if UBI is from a general income tax, only the working few will have to pay for everything.
Another group proposes a value-added tax for the wealthy alone. A novel idea, but most worry about the right measurements of who pays for what. Yet another group wants to tax big companies to fund the operations.
As for whom will receive it, several proponents support a standard stipend for every citizen, working or not. Some want to pay those who are below the poverty line. This can be tricky since there are varying measurements for poverty all over the world. The last sect of people wants to give universal basic income only to those who lose their jobs from advancing technology.
History of the Universal Basic Income
For centuries, there have been supporters of UBI. In the 16th century, Sir Thomas More depicted a society where everyone receives a basic income in Utopia. The idea was again floated by political activist and mathematician, Antoine Caritat, way back in 1795. In the 18th century, Thomas Paine and Thomas Spence individually related their support for a system that guarantees some form of payments. In more recent times, Martin Luther King argued for a guaranteed income for all Americans to combat poverty.
Countries have also been testing and weighing its benefits and disadvantages for a while now. In the 1970s, the US conducted a pilot for negative income tax, which was inconclusive. In Alaska, a guaranteed income program called the Alaska Permanent Fund has been running since 1982. The Fund pays every resident a stipend of $1200 every year from oil revenues. Research shows that about a third of the population keeps the funds for emergencies.
Canada has also experimented with two basic income programs. Mincome ran from 1974-1979 in Manitoba. Recently, the Ontario 2017 Basic Income Pilot gave 4000 people up to $150,000,000 per year. It ran for a few months before the newly elected conservative government cancelled it.
The Finnish government gave 2000 unemployed people 560 euros monthly in 2017. The experiment was supposed to last two years and even extend to the employed populations. Although the reviewers reported stress reduction and incentivization, Finland still cancelled the program in search of other social welfare alternatives. Also, Scotland is funding research that may lead to lifelong payments for its citizens. Children below 16 will receive 50 pounds; working adults, 100 pounds; and retirees, 150 pounds.
Is the Universal Basic Income Politically Motivated?
Interestingly, UBI has had supporters from every political spectrum. Republicans, democrats and conservatives alike support varying models of universal basic income. Non-supporters have also stemmed from all across the political spectrum — from the post-capitalist variety to radical leftists. One thing is obvious – whether they are arguing for or against it, UBI has become a worldwide conversation. The picture below depicts how critics view the concept of UBI.
There are several versions of the policy that piques people’s interests. Most ideologists, economists, and entrepreneurs that support the UBI do so based on their interpretations and experiences. Chris Hughes, the Facebook co-founder, recently released a book detailing why he supports this theory. He claims that it is the only solution in a society where very few people are becoming wealthier while a lot of others still struggle with abject poverty. Hughes will see UBI paid for by taxing the top one percent. Interestingly, it would seem like a few members of the unofficial top-tier club agree with him. Mark Zuckerberg, Elon Musk, Richard Branson and Bill Gates are also supporters of the proposed social system.
How Andrew Yang Made UBI Famous
“THE IDEA THAT POOR PEOPLE WILL BE IRRESPONSIBLE WITH THEIR MONEY AND SQUANDER IT SEEMS TO BE A PRODUCT OF DEEP-SEATED BIASES RATHER THAN EMBLEMATIC OF TRUTH”Andrew Yang, Politician/Entrepreneur
Andrew Yang recently dropped out of the 2020 Presidential Campaign. But before he did, he had already caused a stir with the basic income topic. The entrepreneur, who based most of his campaign on what he called the “Freedom Dividend,” reawakened the waning conversation on universal basic income.
According to his campaigns, he was going to pay a $1000-a-month guaranteed income for Americans. Yang wanted to pay the dividend to make up for those sidelined by automation. He proposed to make up for the $12,000 increase per citizen by imposing additional taxes on the companies benefiting the most from automation.
Yang received several rebuttals from other presidential candidates, including leading candidate Senator Bernie Sanders. Sanders claims he has a better idea on how to solve the looming problem.
Conclusion
While some might consider it a pipe dream, others see it as the only way forward. Given how employment could continue to drop due to emerging technology, they don’t think there’s any other option. UBI proponents argue that it can serve as an answer to the fast-changing employment market, allow financial freedom, solve poverty trap issues and give citizens the freedom to chase their dreams. Arguments against basic income emphasize that it’s a lazy solution, which might worsen participation rates in general. They believe there ought to be better, more practical solutions.
Several pilots show that some countries might believe in the efficacy of a universal basic income. Despite the growing interest in the topic, there is still no concrete proof that confirms the benefits of a basic income over other welfare programs. Also, the cost of funding is a significant reason the idea is yet to take centre stage fully.
As noble as the idea behind the universal basic income is, its proponents are yet to provide solutions for the apparent problems it poses. Until there are answers to these questions, nothing will likely change about the world’s position on UBI.
