Basic income is a proposed alternative to social welfare which gives every citizen of
a society a guaranteed, regular income.
This amount is enough to cover the basic necessities in life and is given to all citizens, regardless
of their current financial status.
There is no means testing and consequently no stigma attached to it.
People who work will keep every cent of their basic income.
People could also choose not to work and rely entirely on their basic income.
Current System
The current system, at least in Australia, requires the individual to meet certain criteria.
You must have under a certain amount of liquid assets, that is, if you have millions of dollars
in the bank, you are not eligible.
Your income is also restricted.
That is, if you earn too much, your welfare is slowly cut.
People with disabilities that prevent them from working are also eligible.
Elderly people who do not own too much are eligible for the aged-pension.
The major problem with our current system is that there is little incentive to work.
If I am receiving $400 a week from welfare and then I go out and get a job, for every
dollar I earn over a certain amount, my welfare is cut by a certain percentage.
It’s enough to cause many people to not bother getting a job.
Just say I go out and get a part-time job which pays $250 a week for 15 hours work,
but my welfare is reduced from $400 to $250, then my total earnings are only $500.
So, in effect, I’m working an extra 15 hours a week for only an extra $100.
Maybe in America, that’s a decent hourly rate, but here it’s a bit pitiful.
Furthermore, there’s a stigma associated with welfare recipients.
They are generally seen as lazy, or as we say in Australia – “bludgers” – people
who scrounge off the government.
However, some people I know who are on welfare simply cannot find a job.
Recently, lots of jobs are going because of things like technological unemployment, or
they’re going off shore due to lower wages in other countries.
Why pay an Australian $17 an hour to do something that a person in Asia is willing to do for
say $2 an hour, or less?
When I was working as a computer programmer in a large insurance company, they were in
the process of off-shoring many jobs, mainly to China and the Philippines.
And don’t think they just off-shored low-skill jobs, not at all.
Many of the programming jobs were going to workers in China with high levels of education
(masters or PhDs) who were willing to work for a lot less than we were.
Benefits of a Basic Income
A basic income allows everyone to live a life without fear of becoming homeless or jobless.
In our current system, if you lose your job and have a mortgage to repay, you’ll probably
also lose you house.
Banks aren’t in the business of giving people free mortgages.
Under a basic income, even if somebody in your household lost their job, it wouldn’t
be such a big deal.
Workers would have much more power than they do now.
Currently, most people put up with their current employer knowing that if they lose their job,
they won’t be able to pay their mortgage.
Employers know this and often treat their workers with contempt.
You would also get to keep more money.
That is, if you only wanted to work 15 hours a week, you would get to keep all of your
basic income, plus whatever money you earn at work.
There would be no such thing as the welfare trap that currently occurs.
In some real-life trials, it was found people were more likely to go out and find work under
a basic income.
Basic income is simple to manage and maintain.
Our current welfare system requires thousands of workers and resources just to function.
They’re constantly trying to hunt down “welfare cheats”, that is people who claim they are
not earning any money, but actually are.
Under a basic income, there is no such thing as a welfare cheat as everybody in society
is receiving it.
The number of man-hours saved would be tremendous.
You could also forgo all other types of welfare such as pensions, unemployment, and disability.
Everybody would be receiving something, so there is no need to also have an aged-pension.
Creativity and innovation would flourish.
Currently, if somebody wants to write a novel, they either have to do it in their free-time
(which would take years), or quit their job and take a year off to write it (losing lots
of income in the meantime).
Furthermore, there’s no guarantee that their novel will be a hit, so the risk of taking
time off work to write a novel is usually far too great for the average person.
This results in thousands of creative people simply not having the opportunity to explore
their passions.
They end up working in dead-end jobs for the rest of their lives.
I’ve known a few people who could probably be very successful in a creative field, but
due to the current state of our society, they simply could not pursue their passion.
It’s such a waste.
A basic income would allow these people to write that book, or design a board-game, or
learn Android and make an app, or paint a portrait, or learn the piano and compose the
next Rondo alla turca.
Basic income will also allow people to pursue unpaid opportunities, such as volunteering
at the local food bank, or helping the elderly go to church, or offering free classes in
their field of expertise.
I know if I had access to a basic income, I would happily go to students houses and
give them free, or discounted maths and science tutoring.
I would volunteer at the local university and assist students with disabilities, currently
a paid position only provided to students who can meet the strict criteria.
Society would become much more caring and people would become less greedy.
How Would We Pay for a Basic Income?
For every dollar a person earns over their basic income, there would be a fixed tax rate.
Who knows what that tax rate would be, but it could be adjusted from time to time to
make sure the system stays stable.
A basic income would replace all other welfare benefits, so there would be lots of savings.
Furthermore, because everyone would be receiving a basic income, people would be less likely
to worry about their financial future and more likely to spend, spurring on the economy.
Think about it, if you had a guaranteed $400 (or whatever) a week, you would probably be
more likely to buy that new jacket that you wouldn’t have bought otherwise.
Also, because there would be more people willing to take risks in business, for example, by
starting a new business, our economy will improve.
There will be more start-ups, more ideas, more people using their creativity and innovation
to improve our society.
Sure, not everyone will be successful, but with the sheer number of people creating new
business ideas and models, there are bound to be a few truly magnificent ideas that change
our society for the better.
Future
I think it’s only a matter of time before a basic income is implemented across the world.
It will probably start with a couple of forward thinking European countries such as Finland,
the Netherlands, or Switzerland.
Once this happens, the rest of the world will soon jump on board.
Currently, most politicians completely disagree with a basic income, mainly because they can’t
win votes with it, at least not presently.
But with time, normal people will jump on board realising its benefits.
If too many jobs are lost to automation, eventually we will need something like a basic income
just to keep our society stable.
We simply can’t have people not being able to afford food and clothing which would result
in mass riots and our economy grinding to a halt.
If you’d like to know more about basic income, visit QUT Basic Income, BIEN, UBIE, or Basic
Income Ireland.