Evaluating Universal Basic Income
By Sara Dube
The concept of universal basic income has policymakers and influencers around the world hotly divided. Those in favour frequently have a clear argument centred on the claim that there is less need for traditional nine-to-five jobs due to the impact of automation on society, opening up time for people to pursue creative or entrepreneurial interests while being paid a certain amount of money by the government to cover their basic needs. Not only does the scheme reduce poverty by providing a minimum level of income to everyone, it also has the potential to increase levels of happiness and well-being in society as there is more time and flexibility to explore one’s genuine interests, potentially increasing economic productivity.
Those against the implementation of a basic income often deliver a polar opposite argument painting the idea as overly idealistic and impractical. They respond to the claim of poverty alleviation by emphasising the negative effect on taxpayers and on the government: not only does it place an immense burden on these stakeholders to pay for the basic income, it also draws money away from projects that are specifically targeted to increase the welfare of citizens, such as medical care, education or health insurance. There is no guarantee that everyone granted a basic income would spend it on such services, creating the potential for a downward spiral into lower productivity and poorer health if the money is used on substances such as alcohol or drugs. The claim that people will explore their entrepreneurship, and thus contribute to increased economic productivity, is dismissed as too unrealistic: again, not everyone may choose to invest their newfound free time in productive pursuits and many may choose to stop contributing to the economy and the rest of society altogether, devaluing community life for the promotion of more individualistic projects.
While the issue may seem like a relatively black-and-white one, it is crucial to consider the nuances that surround it – such as, for instance, the specific impact on women of the implementation of a universal basic income. A universal basic income would offer women who stay at home to raise children a minimum level of economic security, freeing them from dependence on their partners to earn a living wage and granting them economic security and independence. Instead of being perceived as ‘free money,’ a feminist point of view regards basic income in the context of it being paid to stay-at-home women as a reward for the unpaid work they do at home that, in the long run, contributes to society and to the economy by ensuring the upbringing of their children and the running of a household. It creates the perception of this work and this care for others as something with value and as something that deserves pay, as opposed to a wage-less, and thus value-less, job in a society that places so much importance on money. The implementation of a basic income would particularly benefit the situation of women stuck in unhealthy relationships where they are dependent on their partners to pay for their basic needs, thus removing a huge barrier that, in many cases, prevents women from leaving abusive relationships.
On the other hand, there are those that argue that a basic income would in fact act to the detriment of a woman’s position in society, encouraging more women to stay at home and widening the gender pay gap as women with lower qualifications would have less incentive to acquire the increased training and skills to find work on the job market. A particularly unique and in-depth perspective considers the impact specifically on migrant women, who are predicted to seemingly suffer the most under the implementation of a universal basic income scheme, as they will have less of an incentive than ever to find work, lowering the rate of their language acquisition, social mobility, and thus integration into the host society.
These perspectives indicate that a crucial factor in determining the success of a basic income scheme is the manner in which the society in which it is implemented will respond to the policy: in a society that has already achieved a high level of gender equality, the scheme would empower women in allowing them to use the money to more efficiently balance household with professional work. In a more patriarchal society, it could lead to further stifling of a woman’s potential in encouraging her more than ever to stay at home, as there might be less of an incentive to find work.
The best way to determine how a society will respond to the implementation of such a system is, quite simply, to conduct a trial, as was done in Finland. This project, in which 2,000 randomly selected unemployed Finns received 560 euros per month for a year, was ended after two years in order to explore alternative welfare schemes , despite reports of greater flexibility and less bureaucracy. Critics commented that the trial was far too narrow and took place over too short a time period.
This is not to say that a universal basic income would not work in any country – some see this policy as a tool for development, to be implemented in developing nations as opposed to developed ones such as Finland. If it were to be provided in developing countries, it would have the potential to cover the basic needs of their citizens, leading to better nutrition and health with the population, if the income is used wisely. Eventually the beneficiaries of the program may rise above poverty to contribute to the program instead of being on the receiving end of it. This vision is, admittedly, an idealistic one that depends heavily on global cooperation in providing developing countries with the resources to be able to implement such a policy and in raising awareness amongst the general population on how to most effectively utilise the basic income.
Universal basic income is an idea that certainly has the potential to change the world, but its implementation is extremely nuanced and depends on several socioeconomic factors that must be taken into account before pronouncing a final judgement on its value.
Sara is an undergraduate reading Philosophy, Politics and Economics (PPE) at the University of Oxford. She is very interested in human rights and plans to pursue a career of law.