Some facts about the Universal Basic Income:
- In June 2016 Switzerland held a referendum on the introduction of a guaranteed basic income estimated at 2,500 Swiss Francs. The majority of the voters rejected the idea.
- In January 2017, Finland started an experiment where 2,000 unemployment recipients started receiving 560 euros a month.
- Similar experiments have been announced in the Netherlands and Canada.
In May the OECD published a report on the current state of the debate about the Universal Basic Income. They focus on the difficulty of choosing a fiscally realistic and meaningful basic income amount and conclude that an unconditional payment to all would require tax rises as well as reductions to existing programs. Therefore UBI might not achieve its goal of poverty alleviation.
Proponents
As the traditional welfare state is cracking under pressure and the threat of automation displacing numerous workers is becoming real, a Universal Income policy is the best solution according to Philippe Van Parijs of Université Catholique de Louvain. “Although basic income could be a great tool to fight inequality, it’s not exclusively concerned with the abolishment of poverty.[Instead] it’s really concerned with freedom of all. The idea of a really free society”, Van Parijs clarifies.
Basic Income: A Radical Proposal for a Free Society and a Sane Economy
By: Stanford University
Many Silicon Valley entrepreneurs are supporting and have even financed UBI experiments as they believe that such a program will resolve the growing problem of robot automation.
Universal basic income has support from some big names
By: World economic Forum
Opponents
Tyson and Mendoca estimate that a $10,000 annual basic income payment to all Americans unconditionally will cost the US more than three quarters of the annual federal budget. Increasing the minimum wage, instituting transition assistance programs for displaced workers and a negative income tax would be cheaper and more efficient at dealing with poverty and the disruption of automation.
The pie in the sky UBI
By: Laura Tyson, Lenny Mendonca – Berkeley, Presidio Institute
UBI and developing countries
In developing countries digital UBI payments could have the additional benefit of bringing people into the financial system “unlocking” a slew of benefits for these economies.
Can universal basic income boost financial inclusion and transparency?
By: Leora Klapper – Brookings
If we diverted 50{5e7f07e14add20b2e04f4edb85a447d3cd8121fc27b809645e9fed603c22cc5c} of the current foreign aid budget towards basic income payments, would we alleviate poverty in developing countries? Not really, argues Chris Blattmann since structuring such a program would requires a correct identification of the needs, the appropriate amount of the cash transfer and the ever elusive political support in developed countries.
Why I’m a Universal Basic Income skeptic, especially for poor countries
By: Chris Blattman – University of Chicago
UBI and bargaining power
Rick McGahey suggests an additional benefit of UBI: strengthening labor’s bargaining power which is at risk of being completely eroded by automation. A powerless labor will translate into weaker overall demand and growing inequality. McGahey cautions though against using UBI as a way to eliminate the welfare state with the ultimate libertarian goal of reducing governenmet spending.
Robots, Universal Basic Income, and the Welfare State
By: Rick McGahey – INET
Philippe Van Parijs makes an interesting case for the impact of UBI on women’s bargaining power: since these payments are individually allotted they can change the intra-household bargaining equilibrium, enable women to leave unhappy marriages and increase wages of certain female occupations which are considered undesirable.
Brugel organized a roundtable discussion on the pros and cons of UBI. The invited speakers were Olli Kangas from the University of Helsinki, Hilmar Schneider from IZA and Philippe Van Parijs of Université Catholique de Louvain. You can watch the video of this interesting discussion on the Bruegel website.
Perspectives on Universal Basic Income
By: Bruegel
