Universal Basic Income: An Idea Whose Time Has Come ?
Introduction: The History of Universal Basic Income (UBI)
In recent months, there has been much discussion worldwide about a concept or an idea known as Universal Basic Income or UBI.
This term that captures the provision of a basic income to all citizens of a country irrespective of their income or nature of work is thought to be the answer to the increasing concern about automation taking away jobs as well as the solution to the ever-widening inequalities and disparities between the top wealth earners and those at the bottom of the income and wealth pyramid.
Indeed, while the concept of a UBI has been around at least in the West since the end of the Second World War and the advent of the Welfare State in Europe, it has gained traction in recent years so much so that countries such as Norway, Sweden, and Finland or the Scandinavian countries have either held referenda to gauge popular support or have already implemented it in some basic form on a trial basis in some cities and towns.
What is Universal Basic Income and How Does it Work ?
Put simply, Universal Basic Income, as the term implies envisages providing an income to all citizens or on a “Universal Basis” wherein the cash or the cash equivalent provided thus is of a “basic” nature enough to live on for all citizens.
Further, UBI is also a concept that takes into account the cost of living and the standard of living according to the geographical aspects such as how much income is needed in each region or country to live comfortably without necessarily living luxuriously or on the other end, living on a “hand to mouth basis”.
In other words, UBI refers to the state providing just about enough for its citizens to get by after taking into account factors such as housing, food, clothing, and some added extras.
The reason why UBI as an idea or a concept finds takers both on the right as well as the left sides of the political and economic ideological spectrum is that it is supposed to be an alternative to subsidies (which the right abhors but nonetheless tolerates since there would be social strife without some form of assistance to the poor) and on the other hand, the left believes that UBI can be a good answer to joblessness and the threat of automation making workers redundant even in the most developed countries.
Arguments in Favor and Against UBI
Having said that, it is also the case that many economists believe that UBI has to be debated and discussed before it can be implemented since the state is not really in the business of being a “nanny” to its citizens.
On the other hand, there are many economists who also believe that unless the state provides some form of a basic income to its citizens, the challenges arising from the intersecting trends of globalization, automation, immigration, and the aging societies of the West cannot be addressed.
Moreover, UBI can be a substitute to the ever increasing subsidies that seem to balloon out of control.
The Present State of UBI and its Acceptance
However, UBI as a concept has found support only in Europe at the moment since the European Countries and especially the Western European Countries have always been generous towards their citizens.
Further, UBI as an implementable policy runs the risk of deterring people from finding gainful employment since they are assured of a monthly check or UBI payments thereby “dis-incentivizing” them from working.
Moreover, even in these countries, there are many who argue that the “Welfare Queens” or those who live on “dole” would idle away their time and worse, become drug users or otherwise atrophy themselves since the state is meeting their basic needs.
Thus, it is indeed the case that like any other welfare measure that the governments worldwide envisage or propose, UBI too has polarized the economic ideologues.
On the other hand, some of the support for UBI has increased in recent years since automation is expected to the “next disruption” that has the potential to take away even “white collar jobs” the anxieties surrounding which have led to many among the upper-income segments lending their support for UBI.
Moreover, UBI is also a good way to link some form of employment to the provision of the basic income so that people do not stop working completely and on the other hand, they are also provided support in case they cannot find employment for reasons beyond their control.
UBI as a Concept in India
As for developing countries such as India, UBI has been mooted by the Government in recent months as an alternative to the already huge subsidies that are estimated to be around 4-5% of GDP or Gross Domestic Product.
Further, given the fact that with UBI, the government in India can do reduce or even do away with the multiple subsidy channels and instead, consolidate all the per capita subsidy payouts into a single monthly income payout makes the idea attractive to the entire body politic.
In addition, the fact that biometric identification cards and the concept of digital banking and banking for all are all tied into the UBI idea is something that works to its advantage. Apart from this, the concept of UBI has also been mooted in India along with the ongoing Demonetization exercise as a means of empowering and enabling the poor to be self-reliant as well as live decently without recourse to underhand methods of making money.
Thus, UBI has been received more enthusiastically in India when compared to other Asian countries for these reasons.
Authorship/Referencing - About the Author(s)
The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
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