The need of Universal Basic Income (UBI)
A UBI is a free, unconditional payment made to all citizens who qualify. Such a system's potential to mitigate the economic impact of the income and livelihood epidemic at speed is a key reason for this jump in interest. Had there been a universal basic income scheme in place before corona-virus, it would have provided an automatic mechanism for delivering essential income supplements. It would also constitute a vital tool for boosting demand to help offset an unprecedented economic collapse and an inevitable rise in unemployment.
While there have been attempts to boost some revenues through wage increases and improvements in benefits, a UBI would have offered a much less complicated and more robust and immediate support mechanism. Following efforts by the government, millions of people will miss out enduring a fall in their wages.
A notable upsurge in interest in the idea of a Universal Basic Income (UBI) was one side effect of the Covid-19 crisis. More than 170 MPs and Lords across parties in the United Kingdom have called for a "Emergency UBI," while 84 percent of the public are now re-introducing it. Spain, particularly hit hard by the epidemic, is now seriously considering the introduction of such a scheme.
The idea of guaranteed income for all is one of the oldest in the multi-century history of social policy. The Beveridge post-war strategy was based on the concept of a common floor by way of social insurance, family support and full jobs. But the initiative had never been fully implemented, and over time the concept of universalism was greatly weakened by undue dependency on means-testing. The number of new universal credit claims has already increased by 1.4 million in recent weeks, putting even greater strain on the problem-ridden system. Means-tested benefits require complex and often intrusive administration and a cap on individual progress. They carry a very different message from universalism: not of entitlement, but of dependence.
Britain has never come close to creating a stable income floor, and millions are falling through what is an incomplete, mean, and patchy scheme. Work-related conditionality requirements, enforced through a punitive sanctions system, have been significantly tightened up. With poverty rates at near-record levels, the system also fails to meet the key test of robust defense against poverty.
Contemporary calls for guaranteed incomes come with varying degrees of radicalism. Some support a true, "big-bang" solution that would tear up the existing system and replace it with a generous system of payments. This approach was most strongly pushed by the proponents of the utopian "post-capitalist," "post-work" world. Some called for a more conservative program to be grafted onto the new benefits system. It will build an income floor that would sit like a lower level below it.
Such a basic income floor will create an automated anti-poverty mechanism into the existing system and improve stability in an increasingly unstable world. This will mean, for the first time, a decent income for carers and volunteers, who are overwhelmingly women. As the coronavirus pandemic has shown, their unpaid and mostly unrecognized contribution — together with the parallel low-paid force, from cleaners to supermarkets and social care workers — is vital to the functioning of society. In giving all people even more control over jobs, schooling, training, leisure and care, they will also lay the groundwork for greater personal prosperity and equality, a springboard for a more prosperous life.
Despite its strengths, the UBI is still controversial. One common criticism is that an unconditional reward will compromise our work ethic. A red herring is the disincentive argument. A recent study concluded that, far from helping unemployed people to work, punitive sanctions are more likely to push them into poverty or ill-health. The disincentive argument might have some force in full-blooded schemes that paid a generous weekly rate — though we should not confuse idleness with unpaid work and leisure — but would not apply to a low-payment scheme where incentives to balance work would be boosted.
Wary critics warn that UBI is the path to totalitarianism, "cashless society," "nanny state" dependence, and mandatory digital IDs. But none of these outcomes need to be accompanied by the UBI. It doesn't make people depend on the government for as long as they can function. It is just a supplementary gain, close to the dividends that investors earn from their stocks. UBI does not make people lazy, as a variety of studies have shown. On the contrary, they are becoming more competitive than without it. And the UBI doesn't mean the cash will be excluded. About most of of the money supply is now digital. UBI payments can be made directly without modifying existing framework.