Universal Basic Income (UBI) also known simply as basic income is a model and policy proposal for providing every citizen with a regular, unconditional cash payment, regardless of their employment status or income. The goal of UBI is to provide a safety net for citizens and to address issues of poverty, inequality, and unemployment. With the rise of automation and the decrease in traditional jobs, UBI has been getting more serious consideration than ever before. Here’s why we should take UBI seriously and not just dismiss it as a utopian dream.
Defining characteristics of Universal Basic Income
Universal basic income must be
1. Periodic – distributed in regular payments
2. Cash payment – distributed as cash rather than something like vouchers
3. Individual – each citizen receives it rather than households
4. Universal – all citizens receive it
5. Unconditional – recipients are not required to jump through any hoops e.g. demonstrating need and willingness to work
Benefits of Universal Basic Income
Decreased poverty: UBI is considered as one of the most effective ways to reduce poverty. Giving people cash enables them to meet their basic needs and improve their standard of living. In the 1970’s Canada tried it and the New York Times reported, “poverty disappeared.”
Increase in unemployment: One study reported that automation could make half of the existing jobs redundant in 10-20 years. These people will need to survive somehow. UBI can stimulate economic growth by providing people with disposable income to live on.
Improved Mental and Physical Health: Poverty and unemployment don’t do much for mental health. UBI can improve mental and physical health by reducing financial stress and insecurity. It can also increase access to healthcare and other services, improving overall well-being.
Increased Education and Training: UBI can provide individuals with more resources and flexibility to invest in education and training, which can lead to an increase in human capital and productivity in the long term.
Reduced Inequality: Addressing unemployment and poverty can lead to more equal distribution of wealth and opportunities, which can be beneficial for social cohesion and stability.
Improved Social Mobility: UBI can improve social mobility by providing individuals with more resources and opportunities to invest in their own development and that of their families, this can lead to a reduction in poverty and inequality over the long-term.
UBI continues to be tested and implemented in different countries from the richest to the poorest. Some success stories include:
Finland: In 2017, Finland launched a two-year pilot program that provided a basic income to unemployed individuals. The program was considered a success as it led to an increase in employment among participants, as well as an improvement in their overall well-being. The recipients were less stressed, more confident in their future and healthier than before.
Canada: In Ontario, Canada, a pilot program provided a basic income to low-income individuals and seniors. The recipients were less stressed and in better physical and mental health. They also had more stable housing.
Kenya: GiveDirectly, a charity organization, has been testing UBI in Kenya since 2011. The organization provides cash transfers to households living in extreme poverty. It led to food security, improved mental health and reduced dependence on harmful coping mechanisms such as alcohol and tobacco.
Alaska, USA: Alaska has had a Permanent Fund Dividend (PFD) in place since 1982, which provides a yearly cash payment to every resident of the state. A study by the University of Alaska found that recipients of the PFD reported improved physical and mental health, and a substantial reduction in poverty and financial stress.
It is true that UBI is a complex proposal with many different ways of implementing it and so many moving parts. Still, as difficult as it may be to implement, we can not go on like this, marching towards a world with even higher unemployment and inequality. As difficult as it may be to implement, it beats just giving up and accepting more of the inequality and suffering all around us. The benefits of UBI are so significant as to warrant whatever drastic changes will be required to implement it. If our only options are to accept suffering on a massive, global scale or try and implement a working solution that focuses on meeting people’s needs, then the choice is obvious.