What is universal basic income and how does it work?
Advocates of universal basic income (UBI) argue it could reduce poverty, provide financial security, and give people more freedom to pursue education, start businesses, or engage in unpaid work like caregiving.
Critics of UBI are concerned it could reduce the incentive to work, be prohibitively expensive for governments to implement, and fail to adequately address the root causes of poverty.
UBI experiments have been conducted in places like Finland, Canada, and the US, with mixed results - some showed modest improvements in well-being, while others found no significant impact on employment.
The concept of UBI has existed since the 18th century, with proponents like Thomas Paine and Martin Luther King Jr.
advocating for a form of it to address poverty and inequality.
Funding a UBI program would be a major challenge, with estimates suggesting it could cost trillions of dollars annually in large countries like the US.
Potential funding sources could include taxes, budget reallocations, or the revenue from a "robot tax."
The COVID-19 pandemic has renewed interest in UBI, as job losses and economic disruption have highlighted the vulnerability of many workers without a social safety net.
Unconditional cash transfers, a form of UBI, have been shown to improve health, education, and economic outcomes in developing countries, according to research by the World Bank and other organizations.
A UBI system could potentially be more efficient and less bureaucratic than traditional welfare programs, which often require extensive eligibility verification and case management.
Critics argue that UBI could lead to inflation if the additional income is not matched by increased productivity or supply of goods and services.
Proponents of UBI suggest it could provide a safety net for workers displaced by automation and AI, allowing them to retrain or transition to new jobs.
The level of UBI payment is a crucial design element, as a too-low amount may not be sufficient to meaningfully improve well-being, while a too-high amount could be economically unsustainable.
Successful UBI implementation would likely require significant changes to existing tax and social welfare systems, which could face political resistance from those who benefit from the status quo.
Some UBI proposals suggest funding the program through a "universal basic dividend," which would provide all citizens with a share of the profits from publicly owned assets, such as natural resources or technology platforms.
Proponents argue that UBI could boost entrepreneurship and innovation by providing a financial cushion for individuals to take risks and pursue new ideas.
Critics contend that UBI could lead to a reduction in the labor force, as some individuals may choose to work less or leave the workforce altogether, potentially impacting economic growth.
The design of a UBI system, such as the frequency of payments, the age of eligibility, and the treatment of other social benefits, can significantly influence its impact and public support.
Experiments with UBI have shown that the payments can have positive effects on mental health, as they reduce financial stress and uncertainty.
The implementation of UBI could have different implications for developed and developing countries, with the latter potentially seeing more substantial impacts on poverty reduction and economic development.
Some UBI proposals suggest that the payments should be adjusted for regional cost-of-living differences, to ensure a consistent standard of living across a country.
The debate around UBI often intersects with discussions about the future of work, the role of government in addressing inequality, and the ethical considerations of using technology to automate jobs.