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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 incomePopularity Over Time1516: 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 sumThe 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 EmploymentUp to 30% of all hours worked globally could be automated by 2030Nearly 3 in 4 believe that AI will eliminate more jobs than it creates– Wages Go DownCompetition for work drives wages down for existing jobsPoor-paying jobs would become prevalent as demand outweighs supply– Threats of RecessionLoss of income to buy things means consumption would fall sharplyLack of earnings would burden businesses, further lowering employment– Overwhelming Debt BurdensThose borrowing to stay afloat could face exorbitant interest ratesHousehold 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 automationUniversal 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?
Sources: https://news.gallup.com/poll/228194/public-split-basic-income-workers-replaced-robots.aspxhttps://whatis.techtarget.com/definition/universal-basic-income-UBIhttps://basicincome.org/basic-income/history/https://basicincome.org/basic-income/history/#note5http://old.seattletimes.com/special/mlk/king/words/poverty.htmlhttps://basicincome.org/basic-income/https://niskanencenter.org/blog/ubi-real-ideal/http://economics.fundamentalfinance.com/povertycrime.phphttps://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.htmlhttps://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=yhttps://www.northeastern.edu/gallup/pdf/OptimismAnxietyNortheasternGallup.pdfhttps://medium.com/age-of-awareness/universal-basic-income-is-an-inevitable-part-of-our-automated-future-3cc181d4778dhttps://www.thebalance.com/universal-basic-income-4160668https://medium.com/predict/how-we-could-pay-for-a-universal-basic-income-759c232562dchttps://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
Carrie Morris
Author
Warren Dahl
Editor-in-Chief