Universal Basic Income
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Universal Basic Income

In a 2018 poll, nearly half of Americans supported the idea of a universal basic income program* ─ where did this idea come from and what would it do?

Universal Basic Income
The idea that all citizens are entitled to a livable income

Popularity Over Time
1516: Thomas More’s Utopia philosophizes on the benefits of a minimum income
1796: Thomas Paine wrote of providing a basic endowment for all adults over 21
1967: Martin Luther King Jr. named guaranteed income as the counter to poverty
Today, many call for UBI with the threat of a new industrial revolution: automation

Essential Tenets
Aid given in real money rather than vouchers or services
No income level or employment requirement
Provided to individuals rather than households
Distributed in regular intervals and not as a lump sum

The Ideal Outcome
Freedom of choice in work, lifestyle, and education
Creation of an egalitarian society with equality among citizens

Ultimate Goal ㅡ Reduce the effects of poverty: crime, depression, addiction, etc
The idea might seem utopian, but testing the reality of a Universal Basic Income has just begun ー and not without controversy

A Question Of Logistics

Who Pays ー And How?

Value-Added Tax (VAT)

Tax on the production of goods or services, usually paid by consumers

Flat Income Tax

A 70% tax on income over $10M could bring in almost $300B by 2028

Current Trials: Stockton, California

2019-2020: Monthly stipend given to 100 randomly selected citizens

The Netherlands’ “Know What Works”

2018-Present: Test groups receive varied levels of stipends and benefits

Stalled Implementations: Ontario Pilot Program

2018: Conservative leaders ended the trial halfway through to focus on other plans for welfare reform

Finland’s National Experiment*

2017-2018: The program was not continued after results showed improved well-being but no significant impact on employment

Preliminary Findings*

Confidence in financial situation +12%
Optimism for the future +12%
Good or better health +9%
Influence on society +6%

The time to experiment may be coming to an end ー nearly half of all work activities worldwide have the potential to be automated, potentially changing the world as we know it

Economics of the Future

– Artificial Intelligence Reduces Employment
Up to 30% of all hours worked globally could be automated by 2030
Nearly 3 in 4 believe that AI will eliminate more jobs than it creates
– Wages Go Down
Competition for work drives wages down for existing jobs
Poor-paying jobs would become prevalent as demand outweighs supply
– Threats of Recession
Loss of income to buy things means consumption would fall sharply
Lack of earnings would burden businesses, further lowering employment
– Overwhelming Debt Burdens
Those borrowing to stay afloat could face exorbitant interest rates
Household debt levels  could turn into another economic crisis

How Could Guaranteed Income Fit into a Future Without Work?

The Argument Against

– Take funding from proven methods of welfare
– Disincentivize people to get jobs after free income
– Perpetuate the current rate of voluntary unemployment
– Trigger inflation due to the increase in demand for goods and services

The Argument For

– Provide freedom of choice regarding employment and lifestyle
– Could help sustain the economy even through recessions
– End the “poverty trap” that can result from traditional welfare programs
– Offset job losses that are predicted to come with the rise of automation
Universal Basic Income may not be a solution to all of the world’s problems, but it could be a step towards a more equal and livable society

How would society change if provided a Universal Basic Income?

Universal Basic Income

Sources:
https://news.gallup.com/poll/228194/public-split-basic-income-workers-replaced-robots.aspx
https://whatis.techtarget.com/definition/universal-basic-income-UBI
https://basicincome.org/basic-income/history/
https://basicincome.org/basic-income/history/#note5
http://old.seattletimes.com/special/mlk/king/words/poverty.html
https://basicincome.org/basic-income/
https://niskanencenter.org/blog/ubi-real-ideal/
http://economics.fundamentalfinance.com/povertycrime.php
https://www.yang2020.com/what-is-ubi/
https://taxfoundation.org/70-tax-proposal/
https://www.stocktondemonstration.org/
https://www.theatlantic.com/business/archive/2016/06/netherlands-utrecht-universal-basic-income-experiment/487883/
https://news.ontario.ca/mcys/en/2018/07/ontarios-government-for-the-people-to-reform-social-assistance-to-help-more-people-get-back-on-track.html
https://nordic.businessinsider.com/Finland-is-killing-its-world-famous-basic-income-experiment–/
http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/161361/Report_The%20Basic%20Income%20Experiment%2020172018%20in%20Finland.pdf?sequence=1&isAllowed=y
https://www.northeastern.edu/gallup/pdf/OptimismAnxietyNortheasternGallup.pdf
https://medium.com/age-of-awareness/universal-basic-income-is-an-inevitable-part-of-our-automated-future-3cc181d4778d
https://www.thebalance.com/universal-basic-income-4160668
https://medium.com/predict/how-we-could-pay-for-a-universal-basic-income-759c232562dc
https://stjosephinstitute.com/understanding-the-relationship-between-poverty-and-addiction/
https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages