What is Universal Basic Income?

What is Universal Basic Income?

Universal basic income is a guaranteed income given to citizens or residents of a particular country on a regular basis. This income is provided by the government or a publicly owned institution. Providing a steady income to the low and middle class, supplying a monetary cushion for job seekers, and sharing profits amongst citizens are all examples of how universal basic income would be used. The motive behind the pay is to help reduce poverty.

Where Has Universal Basic Income Been Implemented?

Over the recent years, citizens from countries around the world have experienced problems with job security, low wages and inequality. It is through these notions that different nations have come up with proposals for implementing universal basic income. Countries including Finland, Switzerland, the United Kingdom, Canada, Netherlands and the United States have engaged in extensive debates on how to roll out this fund. Although the plans were rejected, Switzerland was the first country to vote on a universal income plan in 2016 in a national referendum. A few countries have decided to pilot basic income projects. The Netherlands has begun a pilot program in the city of Utrecht where citizens of various income levels receive small amounts of payment. In 2017, Finland plans to launch a pilot program that will provide 10,000 residents with minimum grants of 550 euros monthly. In Canada, the government has tasked the Ministry For Employment and Social Solidarity to come up with a minimum income plan. Scholars and administrative specialists are still debating about a basic income plan in the United Kingdom, and the U.S. However, Alaska has an existing fund known as the "Alaska Permanent Fund" that was established in 1976. It was the first fund developed to protect the welfare of the upcoming generation that would find the oil wells depleted. Alaskan residents who have lived in Alaska for one calendar year are entitled to dividends from this fund, given the condition that the individual was not convicted. This dividend is referred to as the "Permanent Fund Dividend."

Criticism and Concerns

• Economic Impact: Economists that support the Modern Monetary Theory advocate for a job guarantee for citizens instead of a monetary income from the government. Universal basic income is expensive to run and could lead to an abolishment of the Social Security Fund and Medicare. Although universal basic income will raise the standards of low wage earners, it will not make a significant difference in the wealth gap. Rolling out a universal basic income plan could also increase inflation.
• Political concerns: There is a possibility that rolling out a universal basic income could increase laziness and reduce work motivation, resulting in an adverse impact on a nation's economy. Tedious restructuring of a country's taxes would be required to set up a universal basic income. Increased taxes would cause inequality because higher taxes would translate to an increase in the prices of goods and services. This would have a negative impact on poor people. Instead of providing monetary assistance, social help for vulnerable groups is helpful because it is personalized depending on the needs of the individual.