Is Universal Basic Income the answer to inequality?
With the amount of inequality in the world it is becoming harder and harder for those struggling at the bottom to make ends meet while those with all the wealth are getting richer and richer. There have been many different ways governments have tried, and failed over the years to reduce inequality. However, a new way of thinking and application is Universal Basic Income, which is starting to be taken seriously over Europe.
What is Universal Basic Income?
According to basicincome.org:
‘A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement’
This differs from welfare, where citizens are often means tested and not everyone can get welfare. In general the basic income is offered to all individuals, whether they work or not. Therefore this is also different to minimum wage or living wage, as the recipients of basic income aren't required to work.
This basic income can either be full (enough to cover basic needs to keep an individual above the poverty line), or partial.
Real world case - Finland
In January 2017, Finland became the first European nation to start an official government back test of basic income. The trial has started with around 2000 unemployed Finish citizens who are being given a non obligatory amount of 560 euros per month - and will keep receiving this for 2 years whether they gain employment or not.
It is certainly to early to say whether this as been a success yet, but success could mean further rollouts of Universal Basic Income in other European countries.
Implications and arguments
People wont be motivated to seek employment
There are genuine arguments that having a basic income would make people lazy and less likely to seek employment. However the basic income is just that - a basic income enough for essential items. I know that I would be doing all I could to seek employment so that I could enjoy a few of life's luxuries that you need money for! In some cases welfare can discourage people from working, because money they start to earn is taken from their welfare and they often end up working for nothing, or have a restriction on how much they can earn. Others might even turn to illegal, or underground cash work to supplement their welfare.
More time for innovation
There are a lot of people out their who have great ideas and could do great things - run companies, become creators, sportspeople etc, but because money is needed to put food on the table and this is (obviously) a priority they are not able to pursue these things. So an argument could be made that these people (and society) would benefit from basic income as it would allow people more time to be creative and explore their passions.
Less pressure to work for survival
What about those who have fallen on tough times? Someone who has lost their job, for whatever reason, or is having family or relationship issues and can't work. Having the universal basic income would give them a ‘barrier’, and wouldn't put pressure on them to get back to the workforce before they were ready. I think this could lead to workers who want to work rather than what we have now, which is workers that work because the have to - to feed their families and pay the mortgage.
The 'working class poor'
In New Zealand where I grew up, we have what is labelled the ‘working class poor’ - those who work long hours and still struggle to get ahead, mainly because of the low minimum wage and the ever increasing housing prices. I think the basic income could help these citizens to get an extra boost, or encourage and give them the opportunity to work on business ventures. It is no doubt this would reduce the inequality in New Zealand and help more people get back on the property ladder. What has happened in the last 10 years is that house prices have boomed and investors are getting richer and richer, while the everyday person is finding it more and more difficult to get into the market.
Some potential negatives
There is no doubt that having a basic income would help those who live in poverty, and give them a chance to be more functioning members of society, but at what cost? Some wealthy people would argue they have earned their money so why should they share it with others. However, I think there has to be a cutoff between wealth and greed - but keeping everyone happy is never going to happen!
Another argument can be that this money has to come from somewhere - wage workers and those that work hard can argue that taxes will increase and they will in essence being paying for people to be unemployed.
Overall, univeral basic income has some potential, but also some pitfalls and it will be interesting to if and how countires can implement it in the future.
I look forward to your comments and discussion!
References:
https://www.theguardian.com/inequality/2018/jan/12/money-for-nothing-is-finlands-universal-basic-income-trial-too-good-to-be-true
http://basicincome.org
Wikipedia
UBI is a topic I'm really interested in, I touched upon it a few months ago in a post I did.
In my eyes at least, the "people won't seek employment argument" is a bit of a dud one. There are already people who will do everything they can to avoid employment, but ensuring that everyone at least has the money to pay for lifes necessities is just a win. I'd rather stamp out poverty and have a small number of people who don't work, than have poverty and still have a small number of people who don't work.
There's also the fact that the rise of AI and robotics will make certain jobs more scarce, although probably not to the levels that some analysts claim. The job market is shrinking in many ways, as businesses embrace technologies and increase their efficiency. I'd like to see a shift more towards "artisanal" crafts. There are plenty of millenials who make a living off sites like Etsy, and it doesn't just have to be crafty stuff either. There's a big computing makers movement, kicked off by the Raspberry Pi, where individuals can now make things that 20/30 years ago would have been the stuff of a techies dreams.
One interesting proposal I heard for funding such a scheme was by placing a tax on businesses that handle personal data. How exactly that would work I don't know, but I like it. There would also be the savings made by reducing bureaucracy and administrative costs, as UBI isn't means-tested, so it's possible that a pretty much fully automated system could handle the payments, maybe incorporating blockchain technologies? There's other so-called "stealth taxes" that could be used, like maybe a specialised higher rate of VAT on certain "luxury" items.
To be honest the reason I wanted to know about it is because I keep seeing the MANA BASE referals on here and wondered what it was all about (and Steem basic income)
I agree I think that in general most people want to work - for a number of reasons - to have goals - to have more money - to contribute to society.....
Yeah I read about the robots argument and that automation is leading to job losses - this will hit bad in places with a large manual labor force.
Thanksfor the awesome comment @johngreenfield!
Sorry it's taken me a few days to respond! Been making the most of the British summer, it's probably going to end abruptly soon.
What's this mana base? I tried googling, but it just gave me results about Magic: The Gathering.(It's alright, just found it!) I only recently found Steem Basic Income, and I love the idea. Infact it was the @simplymike contest you pointed out to me that first introduced me to the idea. Any future contests I do, I'll definitely be giving out SBI shares in the same way that @simplymike did.I don't view the being motivated to seek employment issue as too big a problem, but that's probably just because I'm used to freelancing and the "gig economy". I can totally understand how older generations or just people who know the current model of college-career-retirement would be left feeling displaced, but that's why it's good to start the ball rolling on these kind of initiatives early. In the coming decades, so many different job markets will be affected by the increasing use of technology that I believe people need to start retraining or preparing for this seemingly inevitable future now.
In my head, it's this idyllic utopian future where everyone has enough to survive in relative comfort, there's a move towards a more sustainable and self-reliant way of living and society as a whole is just radically different to how it is now.
Its becoming nicer weather here in Spain - loving it!
Yeah @simplymike pointed the idea out to me aswell - yeah I thinking its a great way to share around and help fellow Steemians!
I will be writing a post on Manna base at some stage.. I have downloaded the White Paper - I was interested because I see all the referal links...
Yeah thats what lots of people are talking about that because of robots more and more people are going to lose their jobs - so having a 'back up plan' is a great idea. But then someone has to create and programme the robots so new jobs can be created aswell...
It's a very interesting topic of conversation for sure. There is a definite progression towards a certain age of abundance and the amount of focus on the crafts will determine how much we all prosper in societies eye. The AI/robotics movement will change the job space indefinitely and just like the shift from the industrial-information age, people are going to need to adapt. There is already a focus in curriculums for coding and developing, so the next generations will be geared up to take these jobs on and live well.
It's the people who aren't ambitious at the ages of 30+ who are going to miss the boat on a few things. Pair that up with the delusional state of self the majority are in and you've got a downward spiral leading them back to the square before one.
Great job @johngreenfield!
My sincerest apologies for taking so long to reply. I've only just fully read your comment, and it's spot on. I've just left a slightly less coherent comment trying to say the same kind of thing above, but I totally agree with you. I think that the "delusional state of self the majority are in" is definitely the problem here, but I just have no idea how the rest of society can go about changing their minds, or helping them to see things differently I guess.
Thank you so much for your comment and support
Thanks for explaining the universal basic income. I have been seeing the name but no time to research about it.
In my own opinion, i believe the concept is good being that a lot of these below poverty level countries would benefit from it. But on the other hand, there would always be people who are trying to game the system by one means or another, an example being that people become lazy since they are basically being spoonfed. You won't really know the true value of money you did not work for.
@dee-y over and out.
Yeah I wanted to know about it because I have seen alot of those Manna referral links on here - that will be a post for another day...
Yeah I guess its about trial and error - will be interesting to see what they come up with over the next few years
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