Early in 2016, the Liberal Party of Canada joined many other governments by putting forth a policy that would introduce a basic income for all citizens. After years of economic uncertainty and strong social values, this old idea is being *given* new life.
Basic income is the idea that all citizens are entitled to regularly be given a certain amount of money, with no strings attached. There are many ways of implementing basic income varying on how much is given and how it’s funded.
There are a lot of reasons to adopt basic income. It crosses the political divide and most of the world’s governments already have many cobbled together social programs the effectively do the same thing *albeit* with much more red tape, complexity, abuse, and, a lot of the time, the assistance doesn’t reach the people it’s supposed to help.
The key benefit is the reduction of poverty. Universal basic income would without a doubt increase social security costs, but at the same time it would drastically reduce the high costs of poverty. Housing, social services and diseases like high blood pressure, type II diabetes, depression, and others would become less common; likely saving billions on healthcare not to mention the saved time, hassle and stress for all. Right now, the system freezes people in poverty and never liberates them.
The other key benefit of basic income is the safety net it provides. People can explore new ideas or new businesses with the security that they won’t be financially ruined if their venture folds. They can also choose to train for a new job, stay in school longer or take care of their newborns and children.
There are also many smaller benefits like the elimination of student loans — enabling poor families to afford higher education, the lost stigma associated with welfare, better working conditions and many others.
The idea isn’t without detractors. Basic income hasn’t yet been fully tested in a large scale society. There have however been many small and medium sized experiments showing promising results. (Include all the examples)
Their main issue is incentives. The thinking goes, people won’t work because they are already being given “free” money. Why people choose to work is very complex. Many people in our current system, work *just to get by* but people also work so they can build relationships, develop pride, or to help others; money isn’t their sole motivator. Given the right system, the basic income doesn’t act as an incentive to not work; as a person makes more money, the income tax ensures that the people would get to keep their earned money, while gradually being given less. People need to have the security to find the job they actually want to work and with the safety net provided by basic income, they can finally get there.
There’s also the issue of funding but it’s not as daunting as it first seems. Basic income funding would largely be offset by replacing the old, cobbled together systems of welfare, unemployment and core old-age services while also benefiting from alleviating poverty and reducing it’s associated costs of healthcare, policing and support. If more funding is needed, it can be raised by a sales tax, capital gains tax, tariffs, a progressive toll or others depending on the government, people, and situation.
Lastly, there’s the question of, “Why not just raise the minimum wage?” Almost all governments have implemented a minimum wage to treat the problem of people not getting paid enough. In the current system, if employers can pay less, they will. People who can’t afford to work for little or nothing are shut out from opportunities having to accept worse jobs just to get by. With basic income, people will be able to choose between high paying jobs that are undesirable but valuable, and jobs that are low paying but are fun or are rewarded with work experience. Ultimately, the power would be back in the people’s hands and work would be paid more closely to its value.
Probably the most concrete example of what unconditional money can do is with the charity, GiveDirectly. They identify people in Kenya and Uganda living in extreme poverty and give them a money transfer with no strings attached. They operate on the principal that people know what to spend their money on; whether it be building a business, a new roof, or a marriage. This approach has vaulted them into the top-four recommended charities evaluated by GiveWell in just a few years. GiveDirectly says their transfers: allow poor households to build assets, increase consumption, reduce hunger, and others while not increasing spending on alcohol and tobacco or increasing criminal activity.
Whatever your thoughts on the basic income, there is surely enough evidence to give the new system a chance. Not only to break the poverty cycle, or act as a safety net for innovation, reduce government, or to give the power back to the people but as a new system for the future to remain secure in a brave new world. One that is increasingly mechanized, has minimal population growth and lives in a truly — global — economy.