05 Jan Universal Basic Income Program
The universal basic income program provides a fixed sum of money to the citizens of a country or a region by the government or any other source. It is different from social security in the United States. This income is not dependent on any test, financial status, employment status, or any other component. The goal of universal basic income program is to eliminate poverty and promote equality.
The system functions in a cycle where the funds are distributed evenly among the citizens and then earned back in the form of taxes from the ones having a higher income. Usually, the amount is decided in a way to satisfy the basic needs, not to provide luxury. It is a guaranteed minimum income (GMI) model or basic income guarantee (BIG).
Critics believe that this system can discourage people from working. It’s proven that free money can lead to laziness resulting in less productivity and lesser tax revenues. Eventually, the entire system can collapse. Some experiments have been carried out to test its viability. In the 1970s, United States experienced a 5% decline in working hours. In the household of two, the productivity of the second earner was hampered largely. With the increase in benefits, productivity reduced at an equal pace. It happened even when people knew that it was an experiment for a limited duration. At the same time in Mincome (rural Dauphin, Manitoba), the productivity was majorly reduced among new mother and teenagers who wanted to support their families. New mothers gave more time to their babies and teenagers spent more time in studies. The reduction in productivity was – 1% among men, 3% among wives, and 5% among unmarried women.
On the other hand, proponents believe that it will show good results in the longer run, avoiding the problems stemming due to poverty and allowing people freedom from life’s struggle, which will eventually promote entrepreneurship and creativity. Also, it is more transparent than other welfare systems such as unemployment insurance, child support, pensions, etc. Some proponents also believe that basic income should be added to the other welfare systems; rather than discarding these systems for adding basic income. Some think it also gives liberty to an individual to say no for a job that they don’t want to do just for fulfilling the basic needs. Such freedom along with political and religious freedom makes a person truly free. The argument says that every individual should have access to the requirements. Scottish economist Alisa McKay believes that it also brings gender equality. In some villages of India, a study noted a rise in education among young people by 25% due to basic income.
Universal Basic Income program gives faith in the future, as Elon Musk and Mark Zuckerberg have recently predicted fewer jobs due to advanced robotics and Artificial Intelligence. In a report to the US Congress, the white house estimated that a worker earning $20 per hour in 2010 might lose a job to a machine with 83% probability. For a $40 per hour worker, this probability is 31%. With this rate of unemployment rising in the future, poverty will spread very rapidly, and the poor will become poorer worldwide. As an example, we can see how Netflix made $9 billion with just 4500 employees. AI-driven cars can also lead to massive unemployment. In the next ten years, around 3 million jobs might get replaced in the US. Most people do not realize that the last time when the industrial revolution happened, it created more jobs; this time it is precisely the opposite.
There are many outcomes of any policy. What do you think about the basic income program? Is it a boon or a curse in the upcoming future?
Do you support a universal basic income program?