An Easy and Compelling Breakdown of Universal Basic Income

11.19.2019 Career & Finance
Johanie Cools
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Humanity has made remarkable technological advancements throughout our history. In recent years, we’ve created lifelike prosthetics, explored the depths of the ocean, and even designed an exclusively robot-staffed hotel in Japan. 

The mindset behind the Henn Na Hotel is to replicate the robots ubiquitous in Japanese media to cut costs and increase efficiency. Hideo Sawada, the hotel’s owner, plans to open up 100 new locations. It is Sawada’s belief that robots will take over manual labor, leaving humans the opportunity to pursue more creative work like writing or painting. Other tech giants like Elon Musk, Mark Zuckerberg, and Richard Branson wholeheartedly agree.

Automation is happening, has been happening, and will continue to happen. Globally, there are 0.66 robots per 100 factory workers, and that number is expected to rise.

For some jobs like underwriting, farming, and fast-food work, automation is especially threatening. Thankfully, according to a study conducted by James Bessen, a Boston University School of Law researcher, that won’t happen in the immediate future (the next three to five years, at least). Instead, technology might transform work rather than eliminate it. The types of jobs on the chopping block are redundant tasks similar to assembly work.

Either way, change is here — it’s just not where we want it to be. Wages are still stagnant and the number of people in poverty is still high. In 2018 alone, 38.1 million people were below the poverty line. (That’s about 8.65% of the US population.) However, compared to other countries, the US is still ranked 17th for quality of life. Universal Basic Income (UBI) is the proposed solution for that.

What is Universal Basic Income?

Universal Basic Income is a periodic cash payment unconditionally delivered to all on an individual basis without means-test or work requirement. According to the Basic Income Earth Network (BIEN), basic income has five characteristics

1 | It’s paid at regular intervals (for example every month), not as a one-off grant. 

2 | It’s paid in cash, allowing the recipient to bypass all the bureaucratic paperwork that typically comes with government programs. 

3 | It’s given on an individual basis. (For example, my husband and I would each receive a payment instead of a combined payment for our family.) In some countries, children would get paid, too. 

4 | It’s paid to all without a qualification test. 

5 | It’s unconditional, meaning you can use the money however you see fit. 

Different kinds of UBI proposals have been floating around for quite some time. One version of it is a “Partial Basic Income” that would be supplemental instead of a replacement for current programs. Still, other plans want to render government assistance programs unnecessary. 

The goal is to invest in people and provide relief so that they can aim for better jobs, go to school, or start businesses of their own.

Presidential candidate Andrew Yang has popularized the idea of UBI. At first listen, it sounds as though UBI is a form of socialism. During an interview with CBS, Yang challenges this misconception saying, “Putting money in people’s hands is good for business, it’s good for the economy, it’s good for markets. This isn’t socialism. This is capitalism where income doesn’t start at zero.” He continues to argue that businesses aren’t incentivized to pay their workers well anymore. They don’t need their employees to buy their products when they can sell them globally. He claims that giving people money will kickstart the economy. 

The idea may sound new and radical, but it’s actually been around since the 1500’s, with some of the most famous advocates of UBI having been former President Nixon and the late Martin Luther King Jr.

While a lot of doubt continues to swirl around the discussion of UBI and its efficacy, several cities and countries around the world have chosen to adopt or experiment with it. For decades, Alaska has given its citizens roughly $1,600 annually because of the oil surplus as part of its Alaska Permanent Fund. Canada and Finland have both tried, with their trials ending because the government had doubts about its long term benefits. Kenya’s currently undergoing a 12 year  experiment where recipients receive roughly 75 cents per adult per day, delivered monthly. Stateside, a recent trial in Stockton, California has gotten off to a fantastic start. The recipients have reported lower stress levels than before and are generally happier. Though the experiment isn’t over yet, it’s showing promise. 

Sure, it sounds great… but who will pay for it? 

This answer differs depending on who you ask. Facebook co-founder, Chris Hughes, believes the 1% should pay for it through an earned income tax, though there are several proposed methods — some of which include a carbon tax, decreased military spending, corporate taxes, and so on. 

While some are all about it, for many there are doubts. Some governments believe UBI wouldn’t solve poverty in the long run. For example, Yang’s proposed $1,000 a month wouldn’t go that far with many American households. The costs of rent, childcare, medical bills, and education are still so high — it may make some bills a bit easier to pay, but it wouldn’t fix the systemic pitfalls of poverty.

Anne Coote, co-author of Universal Basic Income: A Union Perspective, wrote an op-ed with The Guardian detailing what she believes is the best solution to poverty. “Redistributing the personal tax allowance and developing the idea of Universal Basic Services (UBS) could offer a more promising alternative. This calls for more and better quality public services that are free to those who need them, regardless of ability to pay.” (This idea could even expand to include universal housing vouchers.)

While the particulars of each option may look different, the trending theme remains that people need safety nets. UBI might not be the answer, but it is a start.

Johanie Cools is a blogger, writer, book editor, and aspiring author. Follow her on Twitter at @jmartdotcom or on Medium at @jmcools.

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