Would a Universal Basic Income Help Global Poverty?
Universal Basic Income is a government program in which every adult citizen receives a set amount of money regularly with the ultimate goal of eliminating poverty and replacing social welfare programs that require greater investments and bureaucratic involvement. The money collected to distribute to the citizens would most likely come from tax reforms and cut of welfare programs which I believe would eventually lead to inflation. Some say that a universal basic income is fisable and would help improve health and education among others; however I would argue that the engines behind implementing an UBI are nearly impossible because of the negative consequences of cutting social welfare programs. Therefore, a better solution would be to implement financial assistance to the households with the lowest economic strata and maintain, if not increase, social welfare programs.
Social welfare has been crucial for the survival of many, unfortunately from my point of view the only way to economically support the implementation of UBI’s would be through cutting programs. Social welfare offers assistance to individuals and families in need, some of the programs include health care, food stamps, unemployment compensation among others. This can be seen all across the globe, in Brazil 25% of families in 2010 were recipients of monthly allowances which allowed them to send their kids to school and buy sufficient food, 8% of French citizens receive around 1,500 euros monthly from unemployment, and in Kenya a universal social pension is provided to all citizens over 70 which allows them to live a healthier and less stressful life. Many believe that the UBI could replace the programs offered by social welfare. Their point of view is that with an extra income citizens could survive during temporary unemployment, would have enough money to buy food and basic hygiene products, and having some extra disposable income would help grow the economy. After closely analysing Bolsa Familia — the basic income program from home country Brazil — I understood how often when giving citizens anywhere between $1000 and $2000 dollars, many of them would no longer feel the need to work. In any developing country that would be way more money than the average household income, the minimum salary in Brazil is around 200 dollars a month. Why would they keep working, exposing themselves to violence and staying away from their families? Also after taking Economics last year with a concentration in the French marker, I got a better understanding of how a lot of countries, especially in Europe, choose to work the least amount of hours possible. Therefore, I believe that the economy would not grow and would be in this never ending cycle. A lot of the money put into social welfare programs go specifically towards healthcare, the problem is that in america for example health care is so expensive that this monthly help would not be neat enough, nearly 18% of Americans hold large amounts of medical debt. So when cutting social welfare programs I believe it would lead to chaos and uncertainty. From my point of view, it would be economically impossible to implement an UBI without cutting other costs which in my opinion are more useful for citizens and in the long run will help tackle economic growth. All in all, social welfare programs are extremely beneficial and should not be cut nor replaced.
On the other hand many people believe the opposite, they think that a Universal Basic Income would be more beneficial than welfare programs as it would help provide all citizens with basic human rights, improve quality of life and would lead into economic growth. In many developing countries many programs do not work efficiently, families don’t have disposable income to contribute to the economy, and those offered are nowhere near sufficient to help tackle those battling poverty. As mentioned, I believe that UBI’s could potentially slow down the economy, however there are some studies that show the opposite: if Yang’s program was financed by the government debt it would generate about $2.5 trillion in economic growth by 2025, increase employment by 2% and add around 4.6 million jobs; if it was founded through progressive income taxes it would generate $515 billion and create around 1.1 million jobs. Other examples of how it would contribute include increasing entrepreneurship which in the long run would generate economic growth, decrease in crime rates in Brazil for example for every 1% that unemployment rises there is an increase of 1.8% in homicide rates, and an increase in education as kids would be able to stay in school for longer instead of having to work to help help support their families from a young age. Over 34 million people are currently living under the poverty line which has led to malnourishment, increasing crime rates, homelesness, stress and growing illiteracy. Therefore, a UBI would help tackle such issues as it would give families a little bit more economic freedom and simultaneously boost economic growth. Growing up in a developing country and doing volunteer work at the favelas I have seen the struggles of many families and understand how even a small amount of money can completely change their lives, I want to see positive change worldwide I still believe that investing in programs would tackle poverty more efficiently and I doubt how the economics behind it.
It is extremely expensive to implement UBI’s, and even though I can understand the positives and how it could contribute to a growing economy, I still believe that it would be impossible to raise this kind of money. Some ways to raise money include taxing automation companies that are predicted to eliminate half of U.S jobs, tax the rich or going into more debt which in the long run with economic growth would be justifiable discussed previously. When looking to tax a lot of tech companies and ‘the rich’ it can often lead to a lot of these companies leaving and going to settle in the Bahamas, Monaco or the UAE where there are no taxes and looser policies. In my opinion this is very likely to happen, cutting even more jobs. Additionally, I believe that the monthly allowance will lead to inflation as businesses would be aware that now citizens have more to spend, increasing the price of rent, food and goods in general. When taking into consideration that it would be impossible to raise money through taxation, the solution is cutting social welfare programs. UBI’s and social welfare programs cannot coexist because of their price. In the United States just under 30% of the total GDP goes to welfare programs alone which is equivalent to 6.3 trillion dollars and to give all American adults 1,000 a month would cost 3 trillion dollars a year. However, if the money is given prices are going to rise again creating a never ending cycle.
In conclusion, I believe that instead of introducing an UBI, we should work together as a united globe to implement better welfare programs in developing nations and assist the families in more urgent matter as well as introducing programs to tackle those in extreme poverty.
