Universal basic income: Is the world ready?

Inequality, precariousness, insecurity are challenges that reforms have done too little to address

Finland has become the first country in Europe to pay unemployed citizens an unconditional monthly sum, in a social experiment that will be watched around the world. Under the two-year pilot scheme, which began on January 1, unemployed Finns will receive a guaranteed sum of €^560 (£475). A wide variety of basic income proposals are circulating today. They differ along many other dimensions, including in the amounts of the basic income, the source of funding, the nature and size of reductions in other transfers that might accompany it. Here is a look:

 

Why now?

 

Labour markets and systems of tax and social support have been through enormous change in the last quarter of a century. There is growing concern that we have seen the emergence of a “precariat” – insecure, often in poverty despite being in work, facing relentlessly complex life choices, a complexity reinforced by the operation of the welfare state.

 

Inequality, precariousness, insecurity – lack of control over one’s life – are challenges that recent reforms have done too little to address.

 

Basic income is designed to give people more control over their lives. It is not just the cash sum that is important but the security and certainty provided; a more predictable platform on which to make life choices.

 

Will people be lazy if given a basic income?

 

One might say this is a fundamentally, and worryingly, negative view of humanity.

 

In December last year, a small town of Smiths Falls in Canada voted against UBI as they believed unless people are taught how to spend the money, the scheme won’t be effective.

Is it expensive?

 

A workable system of basic income could cost up to 1% of GDP (a number of proposed schemes are significantly less). This is comparable in scope to decisions made by UK governments in the past 20 years to increase pensions, tax credits, raise the personal allowance threshold, reduce corporation taxes and so on.