Universal basic income and its controversies.
Basic income is being discussed once again after the rise of automation in the last decade. This time the debate has arisen thanks to Jack Dorsey, co-founder of twitter, who has proposed a universal basic income through bitcoin. Basic income is the idea of giving every citizen of a country a minimum monthly payment.
This can be used to cover the essentials such as rent, food, healthcare, or transportation. The basic income can be unconditional or partly conditional. The former means that it is unconditional, and that all citizens will receive the minimum income at all times. The latter means that some people are given basic income to live on, while others are given a conditional basic income. In the latter case, the amount of basic income is less than the amount of the minimum wage, and some people will receive negative income. An unconditional basic income is a policy supported by many, but mostly by social democrats and socialists.
The aim
This policy is often discussed as a way to reduce inequality in the developed world. In fact, the aim of the basic income is to promote equality by increasing income for those in need. This would then make a large number of people more economically independent. This would prevent low income people from having an incentive to turn to criminal activities because they need more income. This policy is seen as a way to promote a life with a stable career and a good quality of life. However, some people see basic income as a way to get rid of welfare systems.
To be able to judge whether basic income would actually be an effective measure for the inequality issue in the developed world, one has to look at the evidence on the benefits of the current welfare systems and that of basic income. This comparison is made difficult by the fact that basic income is not a single policy, but a group of policies.
The current welfare systems in most of the developed world aim to alleviate the problems caused by poverty. The main aim is to help people who cannot support themselves with their current income and do not have a stable job. However, despite the fact that many are getting help and are less poor than they used to be, this does not mean they are getting an equal quality of life. One of the problems is that of income inequality. People with a stable job or a good career usually earn more than those without.
Although many people can support themselves with their current income, that does not mean they have an equal quality of life. Income inequality is a major problem in the United States, Britain, Canada, New Zealand and other developed countries, and basic income is often said to reduce inequality. This would probably happen if those people without a stable job would be forced to live on basic income, which is very low in most countries. But because they do not have a job, they do not have a regular income. Basic income could then become a way of forcing them to get a job and a stable career. They would then, most likely, have to join the regular workforce and live a high quality of life.
This would increase inequality because those with a stable job would be better off than those with no job. This could even be the case if basic income increased their income. A policy to make basic income unconditional could further increase income inequality, because people with a stable job would earn more. The same would be the case if basic income were partly conditional, because there would be a negative incentive to join the regular workforce. So, the effect on inequality would be highly debated. It is hard to say whether basic income would reduce inequality or increase it.
Benefits of basic income.
The most obvious benefit of basic income is that it gives people a basic income that they can use to live. People will not need to turn to illegal activities because they have no other way of living. There are very few countries that offer unconditional basic income and they cannot compare it with the social security and welfare systems of other countries. In the United States, in order to receive government assistance, one has to be in a household below a certain income. If one's family income is above that level, then the government is not obliged to pay assistance. The government has to choose between keeping people poor or helping them. But this does not mean people have an incentive to turn to illegal activities because they will not receive any income.
The lack of evidence from a lot of countries is partly due to the fact that the basic income would be very small in most cases. If there is an income ceiling for a basic income, then it would be very difficult to show that basic income is an effective measure to prevent people from turning to illegal activities.
A second benefit of basic income is that it is unconditional. People will be able to find a job without being obliged to take the first offer that comes along. But this would increase inequality because higher-income people would have more opportunities, and poorer people would have fewer. The opposite would be the case if basic income were conditional and conditional on being employed, because those with a stable job would then earn more than those without. However, that means that if we compare the income of those with and without a stable job, then income inequality would be increased if basic income were unconditional, because they would then both earn more than those without a job.
As we can see, finding a balance is quite difficult and the reality is that giving away money just for doing nothing is not viable in the current economic system that demands the production of goods and inputs or else the economy stops. One of the ways out would be to give a basic income to unemployed people on the condition that they get a job in a certain period of time or that the money they receive is used to generate more income, such as starting their own business or learning to invest it. In this way, inequality would decrease because those who have less and who are receiving an income would have access to financial education to make that money grow and not spend it on liabilities that do not generate anything. It would be useless to give away money to people and have them spend it on expensive phones and unnecessary things that are money thieves.
What do you think hiveans, would you like to receive money without doing anything, do you think it would be viable? I look forward to your comments.
Image made by @fclore22
