Universal Basic Income: The Pros and Cons

On Sunday, Switzerland became the first country to hold a referendum on the potential introduction of a Universal Basic Income. While it was resoundingly defeated by 77% against, many commenters are saying that while it may have been voted down, it has succeeded in instigating a global discussion about the proposal to give everyone an unconditional basic income, regardless of whether they are employed or not or how poor or wealthy they are. In many people’s view, that in itself is a victory.

We’re going to have a look at the pros and cons of such an idea, but before we do that – what actually is it?

What is UBI?

The Universal Basic Income is a proposed form of social security that is designed to lift people above the poverty line, to protect citizens as automation lessens the number of available jobs, and to boost the economy by enabling citizens to spend more. The UBI system would be implemented on an unconditional basis, meaning that every citizen would receive it without having to submit to a means test.

Right now the idea is largely theoretical, with the exception of some trials in the Dutch city of Utrecht, a Y Combinator pilot in Oakland, California, a largely successful test run in the Otjivero-Omitara region of Namibia in 2008-09, and some planned tests in Finland next year. The logistical reality of imposing such a system is being widely discussed, and there are serious pros and cons to the argument. Let’s have a look at some of them.

Pros

Poverty alleviation

At its most crucial – and most noble – UBI could stand to alleviate poverty on a global scale, lessen societal inequalities and improve the quality of life for those who currently struggle to make ends meet.

Leaner government

Many people have argued that UBI could simplify our social support systems, cutting down on bureaucratic costs, and other spending on various forms of welfare.

Economic boost

Increased confidence in personal finances could in turn encourage consumers to spend more providing an economic boost to any country that implemented such a system. Corporations would also benefit given that people would have increased spending capacity to invest in their products.

Tech and automation

Wages have remained largely stagnant for decades, so that despite technological forward-leaps, employees haven’t felt as much tangible benefit as might be expected. As technological progress increases, many people face losing their jobs due to proliferating automation. But products don’t just need to be assembled, they need to be bought. Many feel that only a UBI could guarantee this.

Jobs people actually like

From a Jobspotting perspective, a key benefit is that people would no longer have to work in dead-end jobs that don’t align with their values and ideals. If people didn’t have to worry about finding a way to pay the bills, they might be able to spend their time on work that is meaningful to them. Companies too would be forced to increase the value proposition that they offer their employees, meaning that that standard of employment that people experience would be on a much higher level.

Increased entrepreneurship

If a person can cover basic costs for themselves and their families, there is less risk attached to pushing the boat out on a new enterprise. If it fails, they won’t have to go down with the ship. More entrepreneurship and small business could lead to a diversified economy, giving megacorps less of a chance to completely monopolise whole industries.

Cons

Expense

Introducing a UBI would be expensive to governments, especially at first as they change the existing systems to facilitate the new payments. If we take the US as an example, it would cost on average $3 trillion per annum to provide its citizens with $10,000 a year and this is much less than the rate that was proposed in Switzerland.

No incentive to work

The idea of ‘something for nothing’ doesn’t wash well with opponents of the idea, who fear a population that would become idle, signalling the end of high-functioning capitalism. However, any proposed social welfare payment meets with the same hackneyed argument. If indeed the current generation are more motivated more by fulfilment than finances as has often been argued, perhaps this assertion is dead in the water before it can even get started.

It doesn’t solve debt

As pointed out masterfully on John Oliver’s Last Week Tonight recently, debt is a serious consideration that many people have to face and having a small injection of money every now and then won’t alleviate suffering of those in deep holes of debt. Some also argue that debt collectors could be even more aggressive if they know that a person has at least a little constant income.

Poor countries get left behind

It’s all very well to see UBI as a utopian ideal in developed countries, but for nations that are already struggling to provide basic services and infrastructure, implementing this is simply an impossibility, and just a different way for poor countries to get left behind. The only countries currently considering this currently are largely wealthy and often quite monocultural, meaning that UBI could just be a new brand of Eurocentric elitism.

Corruption won’t go away

The implementation of a UBI presumes that we live in a fair society, where everyone plays by the rules. But as we have seen time and time again, having material wealth in a country doesn’t mean that people benefit from it. Many argue that this system would just pave the way for a new type of corruption or cronyism that we haven’t been able to foresee yet.

The Verdict?

Switzerland may have said a very clear NO to the proposition, but globally, the jury is still out. Social welfare systems already cost governments a lot of money worldwide, and even within those that function well, many people still fall through the cracks. While the idea of ‘free money’ is massively appealing for obvious reasons, it retains an idealistic sheen that needs to be properly thought through to make sure that it wouldn’t create more problems than it can solve.

That said, a little idealism is healthy and it’s good to see people proposing alternatives to the systems that we already operate in. The ways we work are rapidly changing, and the ways we earn should change too. But we can’t let every discussion about what would benefit ‘us’ – i.e. the human race – come from a jaundiced perspective that is elite and homogenous. For a system like UBI to work, detracting factors such as corruption, debt and intense poverty need to be part of the wider discussion.

I’m still in favour of the idea, but then someone like me – white, educated, European etc etc – stands to benefit more than most. For something like this to really work, we need to look past our own dreams of an extra financial cushion, and consider what would actually benefit people who will be at the bottom of the pile regardless of the system that is put in place.

Carrie M. King

Carrie M. King

Carrie M. King is the Editor of the Journal by Jobspotting. Hailing originally from smack-bang in the middle of Ireland, she moved to Berlin in 2014 to join the gang at Jobspotting. Carrie previously worked in journalism and literature. If you want to share thoughts or ideas, get in touch: carrie@jobspotting.com