Universal Basic Income or UBI is an attractive political and economic idea that’s gaining popularity.
Guaranteed basic income would provide means for people to meet their basic needs regardless of their employment status or socioeconomic standing.
What is Universal Basic Income (UBI)?
Universal Basic Income or UBI is a minimum amount of money paid to a person by a government with no obligations of how they spend it.
Unlike income from a job, UBI does not need to be earned. It is no-strings-attached cash for people to spend on whatever they might need.
Unsurprisingly, UBI benefits most those living at or below the poverty line. Families and individuals who struggle to meet their basic needs due to lack of money have the most to gain from a universal basic income.
How does Universal Basic Income work?
UBI would be distributed on a weekly, bi-weekly, or monthly basis to citizens via check or direct deposit in their bank accounts. Once they receive this money, they can spend it however they choose.
Some people worry that recipients of UBI wouldn’t spend it on the “right” things. However, virtually all data on the poor and middle class show they spend their money on basic needs.
Almost every additional dollar you give to low income individuals or families goes back into the economy through consumer spending. It’s only the rich that hoard wealth in investments and stop money from circulating.
Universal Basic Income Pros & Cons
As with all things, there are upsides and downsides to a guaranteed income. Here are some of the perceived pros and cons of UBI:
- Support unpaid care workers including stay at home mothers
- Empower individuals to leave abusive relationships
- Support entrepreneurs to set up their own business
- Protects against loss of jobs due to technological advances
- End poverty and homelessness
- Eliminate the need for old age security benefits
- Expensive to implement
- Billionaires will be eligible to receive it
- People will not want to do certain jobs because they will be paid money for doing nothing
It’s clear the pros outweigh the cons. It’s also clear the pros are easier to predict, where the cons are hypotheticals that might not even turn out to be true if we did provide Universal Basic Income.
Why do we need UBI?
While it might strike you as merely a warm & fuzzy idea at first, Universal Basic Income is actually highly practical. In fact, UBI has been proven to reduce government expenditure later.
In other words, it’s cheaper to simply give people money than to deal with the fallout of poverty later.
UBI is an economic equalizer. Providing people with much needed income to care for their basic needs eliminates the stress and hardship of trying to care for those needs otherwise.
Economic equality reduces violent crime. One of the main cases for guaranteed income is it would result in a reduction in poverty, which would result in a reduction of all the bad outcomes associated with poverty, like violent crime.
Less violent crime would not only protect individuals from harm, but it would also reduce demands on law enforcement, courts, and rehabilitation services. If people aren’t fighting or using drugs to cope with the hardships of poverty, all the bandaid solutions we have to those issues would experience relief.
What it really comes down to, however, is if you believe food, shelter and clothing are basic human rights or not. If you do, and those things cost money, then giving people money in order to meet their needs is the only moral thing to do.
If you don’t believe human beings are entitled to basic human rights, well that’s a whole other issue entirely.
How much would Universal Basic Income be?
How much Universal Basic Income should be is debatable. US Democratic candidate Andrew Yang suggested a Universal Basic Income of $1,000 per month to every American. In Canada, the CERB payment during the COVID-19 pandemic was set at $2,000 per month, suggesting that was the baseline for supporting citizens.
In an ideal world, we would err on the side of a more generous guaranteed income that would allow recipients to maintain a decent standard of living. However, the nature of “basic” income is the absolute minimum, so in present-day dollars that would range from $1,500 to $2,500 per month.
How much would a Universal Basic Income cost?
It would cost approximately $3.9 trillion to implement a UBI of $1,000 per month in the USA. In Canada, a guaranteed income of $2,500 per month would cost $76 Billion per year to maintain.
How to fund Universal Basic Income
Many people believe we cannot afford to implement a Universal Basic Income. They’re wrong. We can’t afford not to have UBI.
Leaving people in poverty is actually proving to be way more expensive than simply giving them money. But that still leaves the dilemma of coming up with the billions we need to fund UBI now.
Except we’re already spending that money on multiple social programs. We just need to redirect it to the right place.
The money for UBI already exists
Implementing universal basic income could actually do away with a number of programs that already exist to support the poor.
You won’t need the same number of food banks if everyone has money to buy food. You won’t need as many homeless shelters if people have the means to pay rent. Successfully executing UBI could be as simple as taking all the money that’s currently going to supports for low- and no-income populations, and redirecting it to one place.
The other answer is increasing taxes. The easiest way to fund Universal Basic Income would be to increase taxes on wealthy and on corporations. The only way to do this is through government legislation, and the only way to do that is by voting for it.
If you believe in guaranteed income and want it to be part of our future, then elect political representatives who campaign for UBI and will fight to put it in place. Hopefully, it is something that happens in your lifetime.
Universal Basic Income would solve all our problems is written by Bridget Casey for www.moneyaftergraduation.com