Devil’s advocate for UBI
“Universal Basic Income is a net transfer, so the true cost is lower than most people describe it.If you gave £1,000 a month to everyone in the country for a few months, the cost would still be in a similar ballpark to the bailout during the financial crisis and rather than bailing out the banks we would be bailing out people and small businesses, which is quite compelling.”
― Fuad Alakbarov
While the Corona virus is taking a toll on the countries, governments and corporates, there has been a growing concern about the number of people losing jobs owing to the recession and cost cutting measure by major firms. This has established a platform to voice out their support for universal basic income (UBI). While there is no fundamental definition for the UBI, it coarsely refers to the handing out of money to the people to lift them out from poverty and to run day-to-day life. Until this point in time, UBI was seen just as a poverty alleviation strategy. But from here on, due to advancements in technology, millions of workers are to be replaced by robots and AI , thus initiating a need for middle class style basic income for all the people. Let’s see why there are two sides to the same coin (UBI).
Pro-UBI
UBI supporters broadly can be classified into two types : UBI plus welfare, UBI as a substitute for the welfare programmes. The most important and arguably the greatest stunt that UBI can pull off is the elimination of the poverty. Especially in a country which has a high amount of workforce such as one working in India, UBI can change the destiny and life of many people who work in the informal sector which includes agriculture. This also ensures that wealth is distributed equally as much as possible. Already two states in India, i.e. Telegana and Odisha, are trying this out by schemes related to the farmers where they are paid as per the land size. UBI will also ensure that the persons aren’t working for survival but to unleash their value or creativity such as entrepreneurship which will ensure that they can mitigate the jobs which are not value adding. Statements like below
We are in the fourth inning of automation. Four million manufacturing jobs have been taken since 2000 and automated trucks are already making deliveries in Colorado. 1 out of 10 American workers works in retail. If we wait any longer, we will be out of time.- Andrew Yang
can also support UBI since they can automate the tedious task of the humans and also ensures that people make a living out of it. The major difference between unemployment benefits and the UBI-styled income is that the UBI doesn’t force people to accept jobs that are sub-par with their standards of job expectations. Nobody would be willing to take up the jobs which are not good on terms of returns.
UBI can work like a monopoly where everyone getting a few bucks can increase the amount of spending there by fuelling the growth of consumption and thereby GDP. In 2010, Iran ran a UBI trial, giving its citizen’s transfers of 29 percent of the median income each month. Surprisingly, Poverty and inequality were reduced, and there was no sign of large amounts of people leaving the labour market. People even used it to invest in their businesses, encouraging the growth of small enterprises.
Against UBI
The most important that goes against the UBI is in terms of working where millions of people might even lose their motivation to work if the UBI takes its full shape. Another thing which all must consider is the non-adjustment of UBI with respect to PPP (Purchase power parity) of the countries which implements UBI. For example, in a country such as Ghana the average of 1000 dollars a month can buy you things far more than an average American who can buy very few things compared to them, which in turn defeats the purpose of UBI. However this prevalent even inside the country, where the urban areas are forced to spend more and consume less for the same amount than the rural counterparts. Thus the idea of ‘Universal’ in UBI gets defeated.
The cost of UBI implementation is far high compared to the welfare schemes. If the governments can free up the burden from the welfare schemes and resize it to meet the UBI, it can free up around 10% of the UBI cost. For example, US needs 4.4 trillion dollars to make UBI a reality. US needs to make a cut on defence budgets if they are to cover the large part of that spent which in turn can establish a security threat to the civilians. UBI if used negatively can spark the prices of the commodities thereby increasing the inflation. Nobody is yet to implement the UBI in a full scaled manner which itself plays against the argument of UBI.
Conclusion
While there very few a doubt that implementing a UBI cannot provide any benefit to the people, the sheer size of implementation can hold value for it to be a successful one. While there isn’t a budget for that large establishment of UBI, we can actually take significant steps to UBI’s utopia. Things such as social credit ratings can be initiated through which one with good social rating (good samaritarian acts can get high social credit score) can get access to his full quota of UBI. Environmentalists can also make an impact by being the creditor of UBI where one with lesser carbon footprint can get access to UBI money. Because in the end everyone has their own right to make a fair living out this life.
“Let’s face it: There is something wrong with our system when I can leave [Harvard] and make billions of dollars in 10 years, while millions of students can’t afford to pay off their loans, let alone start a business, Now it’s our time to define a new social contract for our generation. We should explore ideas like universal basic income to give everyone a cushion to try new things.” — Zuckerberg
