In May of last year Spain announced its intention to trial a system of universal basic income.
What is Universal Basic Income- or UBI for short?
Universal basic income is generally defined as a system whereby the government pays everybody,
regardless of income,
employment state,
age,
gender,
or martial status
a flat sum of money.
This amount is supposed to be equivalent to something somebody could live off,
thus it eradicates absolute poverty and creates an economic ‘floor’ below which nobody
can fall.
In this video we’re going to find out how exactly UBI works and where the money comes
from,
also why it’s useful
especially in the modern climate of COVID 19
and a precarious job market,
and finally we’ll learn about some of the criticisms of it.
But first, why don’t you hit the subscribe button for more great content.
Universal basic income has only been tried in a few countries, so there isn’t a set
way of doing it yet.
For example, Alaska does it by paying all adults a flat sum every year,
which comes from profits from the oil industry.
In 1969 Richard Nixon pushed for a similar policy in which families were paid a set amount
that was enough to live on, but that was not universal.
Questions abound due to the scale of paying every single person, of where the money would
come from.
One way it could be paid for is by diverting money that goes to tax cuts,
but realistically, universal basic income would have to come at the cost of services
the government provides,
like education and welfare,
otherwise government spending and resultantly taxes, would have to increase.
Take this hypothetical, if you were to give 10 grand a year to just the adults in the
US, that amounts to 200 million people and it would cost 2 trillion dollars.
The US bureau of economic analysis estimates that US public spending was 7.3 trillion in
2019,
so if you add in UBI that would increase spending and taxes by over 25 percent.
The next question to ask is why UBI is becoming more popular.
There are three main reasons for this increasing popularity;
firstly the nature of the current job market which is reliant on unstable, unskilled service
sector jobs.
secondly, due to the argument that welfare means testing is unfair and often coercive.
A third reason focuses on the benefits of UBI in giving people more freedom economically.
Proponents of UBI argue that it does this by raising everybody above the poverty line,
people's wages are essentially topped up,
meaning they can care for elderly relatives, women are freed from abusive relationships
etc..
People switching or searching for a new jobs are also free from the financial hardships
of unemployment,
as are those retraining.
Secondly, many have argued that in the wake of covid 19 and high unemployment, people
need a system to fall back on.
The fact is, in our modern service economy, almost every job is unstable and insecure,
and at risk of automation.
Expecting the market to simply give everybody a job is simply not enough.
Moreover, it is naive to think that governments can spend money trying to resurrect dying
or dead industries.
The unstable job market also shows us that our current conception of people as either
hard workers or scroungers is outdated, and it is precisely this ideology which informs
the current welfare systems in most countries.
this ideology is a leftover of the archaic poor law system that sent the quote undeserving
poor to the workhouse
and those ‘deserving’ of aid into the hands of churches and private charities.
Because this ideology persists, most welfare systems are means tested,meaning they require
the weakest in society to prove they are ‘deserving’ of support,
for people in wheelchairs to prove they are disabled,
those starving to prove that they are hungry and so on.
In the final part of this video, we’re looking at some of the criticisms of UBI.
These tend to fall into two categories,
criticisms of the principle behind UBI,
and the argument money could be better spent.
Opponents of UBI argue that it would incentivise people to work less, meaning the benefits
that people get from having their incomes topped up would be nullified because they
would work less anyway,
and there would be less wealth to share out.
This explains why most political parties oppose UBI, they think people should work,
and fear that the floor created by UBI would soon become a ceiling; people would simply
work enough to get by,
or refuse to do lower skilled jobs.
That being said, Finland did a trial of universal basic income recently and found that more
people on the basic income worked more and resultantly made more money than those not
on it,
although the methods were somewhat criticised.
There is also the issue of UBI’s universality, opponents ask whether we really want to give
money to alcoholics,
drug addicts,
and even children?
This leads to the argument that money could be better spent creating universal services
like free education, healthcare, etc.
Surely, opponents of UBI argue, it is better to target the poor, and those who would need
more than the UBI amount, say the extremely disabled.
UBI also does nothing to deal with inequality,
in fact it arguably perpetuates it by giving the rich more money.
That’s UBI explained, thanks for watching, please like, share and subscribe! Thanks for
watching.