COVID 19 and Universal Basic Income

Ever since the coronavirus crisis got underway, large sections of the economy are now facing a crisis. Social distancing has become the norm. This means that individuals all over the world are forced to stay in their own houses. A handful of sectors where most of the work is done electronically are able to continue working. However, in the majority of the cases, production has been disrupted. Hence, unemployment has soared to record levels. Many blue-collared workers who live from hand to mouth are now finding it impossible to survive under these circumstances.

An economic idea called universal basic income had been floated several times in the past. This idea has been recommended by people like Elon Musk. It has also been tried by countries in Scandinavia. However, up until now, it has been rejected by the majority. However, it seems to be the best solution to deal with a crisis like COVID 19.

In this article, we will understand how the idea of universal basic income, if implemented, can help companies survive the COVID-19 crisis.

The Government’s Rights and Responsibilities

During the COVID-19 crisis, governments all over the world are asking people to stay at home. Many industries are being shut down because of the government’s instructions. People are losing their sources of employment. Now, the question is that if the government has the right to shut down the businesses, it must also have the responsibility to help people survive when these businesses are shut down.

Right now, the United States government is relying on its bailout package and various social security schemes to help its people sail through. However, the alternative would be to use universal basic income, which would be more convenient. In fact, Universal Basic Scheme should not only be used by the United States government but by various governments around the world.

Why Universal Basic Income?

Universal basic income means an unconditional transfer of a fixed sum of money to every adult in the entire country. This sum of money should be enough to provide a basic standard of living i.e., food, clothing, and shelter.

This is how universal basic income would help the COVID crisis.

  1. Social Distancing is the Only Solution: At the present moment, there is no vaccine available for COVID-19. Hence, social distancing is the only solution to help mitigate the coronavirus crisis. However, it is important to understand that social distancing also prolongs the time period required to overcome the crisis. Distancing can only work when it is practiced by everybody and over a long period of time.

  2. Prolonged Lockdowns Bankrupt People: The only reason why people cannot stay locked down for long periods of time is economic. There are a lot of people who survive from hand to mouth. Therefore, after a few weeks, they would have depleted all their savings and would have to come out in order to earn money to survive.

  3. Imagine that in such a situation, people were able to receive money directly in their bank accounts. This money would enable them to survive with a basic lifestyle, and hence theoretically, the lockdown could continue indefinitely. The basic requirements such as food, energy, shelter, etc. would be met, so there would be no reason for the poor people to venture out of their homes.

  4. UBI Helps Flatten the Curve: There is no doubt about the fact that universal basic income would be extremely useful in managing the COVID 19 crisis. Since fewer number of people will get out of their homes, fewer will get infected, and they will be able to get all the medical assistance that they need. Medically, this has been termed as flattening the curve. This is what countries all over the world are trying to achieve and are unable to do so in the absence of universal basic income.

Is Universal Basic Income really Unaffordable?

Universal basic income has often been pegged as being unaffordable. However, that is not really the case. For instance, $1000 put in the bank account of every American would add up to $3.4 trillion dollar budget. The federal budget is already over $4 trillion. A large chunk of that money already goes to policies such as social security, disability insurance, etc. All that could be reduced or eliminated if universal basic income is implemented.

Also, last year, Donald Trump has cut trillions of dollars in taxes for American corporations. These corporations already have billions of dollars and are not struggling to survive. On the other hand, if the poor people are not given money now, they will keep coming on to the streets and enabling the spread of the coronavirus. This will prolong the recession and even hurt the interests of the giant American corporations.

Hence, the best thing to do, at least temporarily, would be to reverse all the income tax breaks which were given to big corporations last year. The money so accumulated should be used to fund the universal basic income program. In the absence of such a program, this crisis is likely to continue for a longer time. This will cause more human pain and suffering and will also accentuate the economic losses.

The bottom line is that universal basic income is no longer a utopian policy. Instead, it is the need of the hour now since the livelihoods of millions of workers around the world have been jeopardized by COVID-19.

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