Universal Basic Income: Friend or Foe?

Universal Basic Income (UBI) is a policy whereby governments give every citizen a fixed amount of money without any conditions. It’s becoming an incredibly popular idea, with advocates saying it could positively impact issues such as income disparity, economic volatility, and loss of employment through automation. It’s underlying philosophy is that it provides a basic income, thereby decreasing poverty levels and boosting economic development.

How Does it Work?

In contrast to other welfare programs, there is no process of determining criteria such as a recipients’ income level. This saves a lot of time and – a real plus for an economic policy – money.

But the real benefit is enjoyed by its recipients. With decreased financial pressure, the hope is they feel empowered to go to school, create businesses, or acquire additional skills without having to worry about keeping the lights on.

Free Money?

The biggest criticisms of UBI are that it is too costly and may reduce the incentive to work. Funded by higher taxes or the redirection of welfare monies, there are also concerns it would contribute to inflation. And the diluted grant value would prevent its primary goal: eliminating poverty.

UBI in Action

Several pilot programs have been launched worldwide, with promising results. In Finland, studies found a positive impact on the mental health and well-being of the recipients – without any negative affects on the employment rate. In America, recipients in cities such as Stockton, California report improved financial security and less stress.

Final Thoughts

Wth the increasing trend of automation and job loss, policy will have to be enacted to ensure a sustainable future for everyone. Though UBI is a potentially radical vision of social protection – and certainly not a perfect solution – it has the potential to create a fairer society.