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Universal Basic Income – All you need to know about it

Universal Basic Income – All you need to know about it


Many have promised the right the necessities like food, water, shelter and even education. Ending poverty is one of the toughest challenges faced by modern countries. Governments spend fortunes on public health care, affordable housing, and sometimes even free food and water in the world we live in. Socialist countries also play their part by introducing various schemes for the poor and needy. Now let’s learn more about Universal Basic Income.

Although many of these schemes and healthcare funds are beneficial, in no way will they ever end poverty. Approximately 689 million people in the world are living in poverty at this very moment. Countless have died in recent years due to the lack of proper living conditions.

What is Universal Basic Income

With many failed attempts, humanity has come up with another fresh idea to end this incessant problem. The idea is simple: Provide an equal and basic monthly income to each and every citizen of the world, regardless of caste, creed, gender and race. With regular distribution and proper management, this idea aims to gradually eliminate poverty. But why not just provide welfare, so that only the poor individuals get the basic income. This would also reduce government spending and eliminate the problem at the same time, right?

Wrong! Suppose an employee gets welfare of $1000 a month and chooses to spend it on basic necessities. As the employee’s financial situation gradually improves, he/she gets a promotion or pay raise. So, if the employee even earns a dollar more than the required amount, the welfare will cut all of the given income.

 This is a huge problem because if the employee earns $1300 a month from the job, the deductions will bring down the income below $1000. This is one of the reasons why this concept is getting so much attention.

Advantages for UBI

  1. New opportunities for poverty-driven individuals

Believe it or not, there are many educated, but poor people in society. These individuals have either lost money due to a recession or poor financial planning. A universal basic income gives these individuals the power to take advantage of investment and business opportunities. This could work like magic and bring wonders to the market. Even uneducated people could get themselves a secondary education in public schools. The possibilities are endless, and so are the benefits that could be seen.

  1. Privacy protection, hygiene and birth rate

Protection of one’s privacy comes under the 4th Amendment of the US constitution. A UBI could provide minimal housing facilities to poverty-driven individuals. With housing, comes security and a basic level of privacy. Housing and proper hygiene satisfy a human being’s most important necessity and provide a simple life. This concept could also allow for faster birth rates in countries with low populations, and even make it easier for senior citizens to retire. 

One book that I would recommend to learn more about this topic is:

Universal Basic Income

 

 

 

 

 

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Drawbacks of UBI

However, just like the others, this idea also comes with its drawbacks:

  1. Promoting laziness and tax increase

Just like socialism, UBI also promotes laziness and contributes to the lack of innovation in society. The concept of earning money without working may lead to job quits and a large number of retired individuals. Workers would be careless at work and entrepreneurs would take on risks that would have devastating consequences. Combined with birth rates, the situation will go way out of hand, as more stomachs will fill. An article by the name of economicshelp.org has also mentioned a valid point against UBI:

 

Less flexible labour markets. The universal credit may mean part-time workers, such as working mothers and students don’t need to supplement income by working part-time, reducing the flow of temporary part-time workers. Others argue this is not a problem as we should try to avoid a part-time, zero-hour contract labour market.”

Cost. The cost of a universal basic income will have to be met through higher taxes. A universal income will mean some benefits can be cut (e.g. unemployment and income support) But, now everyone will gain basic income – regardless of whether they are poor. This will lead to higher taxes to be able to pay for the benefits. The problem with higher income taxes is that it could lead to disincentives to work.

Inflation
With more circulation of money in society, prices will rise, eroding purchasing power. This would eliminate the whole point of having a UBI in the first place and will do more harm, as the middle class would lose all of their savings.
Loss of healthcare facilities and other organizations
To provide UBI, the government would most likely eliminate all healthcare funds and additional facilities that help poor people. Sometimes, the treatment necessary costs way more than what UBI can cover. Even organizations set up by socialist countries would vanish, severely affecting the population, especially during a recession.

Conclusion

No concept or idea is free of drawbacks. With adjustments and compromises, UBI could take off as well as we would all expect.

Which services would be eliminated if UBI is implemented?

To provide UBI, the government would most likely eliminate all healthcare funds and additional facilities that help poor people. Taxes would also increase, making welfare schemes worthless.

How does laziness affect society?

The concept of earning money without working may lead to job quits and a large number of retired individuals. Workers would be careless at work and entrepreneurs would take on risks that would have devastating consequences.

Why is welfare not a substitute to UBI?

As an employee’s financial situation gradually improves, he/she gets a promotion or pay raise. So, if the employee even earns a dollar more than the required amount, the welfare will cut all of the given income. This is a huge problem, because if the employee earns $1300 a month from the job, the deductions will bring down the income below $1000. This is one of the reasons why this concept is getting so much attention.

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