Universal Basic Income: An Introduction

Bella Guangeti, '24

Currently, in 2021, not a single country has an active Universal Basic Income (UBI) policy in place, and while many countries including the United States have experimented with UBI on smaller scales such as the Alaska Permanent Fund Dividend since 1982, no government has nationally implemented UBI (for sake of this article set at $1,000 per month for each adult citizen) under the official criteria for the policy. According to the Basic Income Earth Network (BIEN), UBI is characterized as periodic, individual, universal, unconditional, and involving cash payment. Even though these characteristics remain constant, other factors such as source of funding will likely vary. In theory, UBI should decrease poverty, decrease income inequality, guarantee income to non-working citizens, and improve quality of life through providing the fundamental cost of living to everyone. However, factors such as funding, potential loss of job incentives, and a decrease in labor force, create hesitancy for this radical economic policy.
 
The concept of UBI in the US is highly debated because of the numerous positive and negative outcomes of the policy. Proponents of UBI, further dividing between age, race, and political affiliation occupy the minority at 46% of the US population according to a survey conducted by Pew Research center. The graphic shows that younger generations tend to be more receptive towards the idea of UBI compared to older generations. About 63% of low-income citizens support UBI, while only 31% of wealthier Americans do.
 
 
Proponents of UBI believe in its ability to increase quality of life, as it counters increases in income inequality and job loss to workplace-automation. Through ideally decreasing poverty, UBI directly correlates with physical and mental health, since the cost of UBI is to provide essentials, it reduces stress stemming from unavoidable expenses. For example, in a UBI trial in India (2013-2014) reportedly improved livelihoods because families were able to afford food, health care, and clean water. It reduced anxiety levels as well. Additionally, UBI reduces school dropout rates and leads to positive job growth. The Basic Income Grant Trial in Namibia (2007-2012) allowed parents to financially support their children throughout high school, and from 2007-2008 high school dropout rates decreased from approximately 40% to nearly 0% among the test subjects. UBI experiments have shown great increases in both physical and mental health, and may even be economically beneficial.
  
Proponent of UBI and 2020 Democratic presidential candidate Andrew Yang ran on a platform of UBI called the Freedom Dividend. Each adult citizen would receive $1000 a month from the U.S. government. Despite dropping out early in the primaries, Yang placed the policy of UBI in the spotlight and spurred lots of debate around the issue.
 
Contentions against UBI include it being wasted on the rich, loss of public benefit programs, funding difficulties, and decrease in labor force. Depending on how the UBI program is financed, the intensity of these concerns change. For example, UBI is not necessarily wasted on the rich even though they would still receive the periodic checks in many models because they tend to contribute more to the UBI, counter-balancing the cash payments that are received by all. This adjustment, however, may lead to further concerns about increase in taxation and the source of funds for UBI, which varies by model. No model variance can alter the extreme costs of UBI. In 2019, when there were 128.6 million households according to the US Census Bureau, UBI would have cost the US Government approximately 3.5 trillion dollars. This expense must either be paid by the increase and reorganization of taxes or by extreme budget cuts. In 2021 the United States’ Federal budget is 10.83 trillion dollars, so the implementation of UBI would take up about 33.72% of the already allocated federal budget. However, with child benefits, and a household limit of $27,000, the majority of the US population would be over the current federal poverty line for the US ($26,200). A solution would be to reallocate funding from public benefit programs, however, there would be no safety net to UBI, putting low-income citizens at risk if failure would occur.  
     
Due to the positive effects that have been seen so far with Universal Basic Income, BIEN is attempting to assist countries to move towards or experiment with UBI to continue research. However, the large costs of UBI make national implementation greatly contended and more difficult to realistically implement under the core characteristics of UBI.  
 
 
Sources: https://docs.google.com/document/d/1gvt67Tkb4Nvht6rvMPTkWw2Uq9remxb8UGI93lPiWIM/edit?usp=sharing ​