The idea of Universal Basic Income (UBI) has existed for decades but has grown in popularity in recent years. UBI involves paying every member of the population an equal, set amount of money every month. There are variations that have been proposed, but in an “ideal” UBI model, the amount paid to each person is equal.
Ex-US-presidential candidate Andrew Yang ran a campaign on his version of UBI, the “freedom dividend”, $1000 a month for every American adult. Some countries have already trialled similar schemes, including Canada and Finland, but it’s yet to be applied on any large scale. This raises the question, could something like this ever work?
Well, first of all, could we afford it? The United States government has an annual budget of $3.8trillion, and Yang’s proposed UBI scheme would cost $2.8trillion. Totally unrealistic, right? Proponents of UBI argue that higher taxes on corporations and the wealthy could fund this but considering the entire US military budget is $748billion, the scale of taxation needed would be unprecedented, especially in America.
Regardless, UBI is technically possible. The cost, of course, will vary by population size and the amount set for each payment, so it’s difficult to say for sure how realistic it is. But assuming we find a way to fund it, do we even want UBI?
My initial thoughts when I heard the idea were sceptical. After all, why should a millionaire be paid the same as someone on minimum wage? However, the point of UBI is that it creates a basic income that no-one will ever earn below. Combined with taxpayer-funded healthcare and other public services, a scheme like this could completely eliminate poverty in a country. Those earning the most would, of course, be taxed at a high enough rate to fund their own payments, and those of others, making the program fairer and more equal than it initially seems.
But that’s part of the problem with many UBI proposals. In isolation, it’s unrealistic and essentially useless at solving the problems it aims to. Giving everyone in the US $12,000 a year will not fix inequality without taxpayer-funded healthcare, or a minimum wage that people could actually live off, and especially without fixing the tax system that lets the 1% pay (relatively) lower taxes than the poorest Americans. This would take time, and money, and a perhaps most unlikely, near-unanimous agreement across the political spectrum.
But I think we can overcome these issues and that doing so will be worth it. Imagine if students could get an education without having to worry about getting a job immediately after they graduate, or paying off student loans? If entrepreneurs could start a business, knowing that even if they fail, they can still afford to live? You might think that this would just make people lazy, but I don’t think that’s the case.
The problem with the neoliberalist model that most modern economies are (to varying degrees) built on, is that a person’s value is entirely dependent on their income. But not everything that benefits society can be measured by GDP. By letting people choose not to work, and giving them security, you allow them to take risks. Artists, entrepreneurs, researchers, can all contribute to society more if their basic living costs are guaranteed to be covered.
Having researched the concept of UBI, I think it is definitely something we should look into as a country. But the government needs to be aware that this alone will not solve all our problems. UBI simply isn’t compatible with austerity measures and privatisation. To make this work, we need to agree, as a society, that people have value beyond just their income. It has become increasingly apparent, especially under the pandemic, just how fragile our current economic system is. I think it’s time to try something completely different, however radical it may at first seem.