The Strategist

Unconditional basic income: A blessing or a curse?

06/13/2016 - 09:03

Not less than 62% of Germans believe that people will not seek work if the government introduces unconditional basic income (UBI); at that, 53% are against such payments, according to a study conducted by an organization for the study of public opinion Emnid.
According to Bild am Sonntag, 40% of respondents were in favor of introduction of UBI, but only 32% believe that this innovation would not discourage the Germans from working. The survey also showed that UBI would change nothing for 46% of the respondents. 

It is noted that 17% of respondents would chuck their current job in the case of UBI’s introduction.

At least 40% of the survey participants reported that they would spend more time with their families if they received unconditional basic payments, and 30% would spend more time on charitable unpaid work.

The survey was conducted on May with 25 500 people taking part in it.

Earlier, Switzerland held a referendum on introduction of the unconditional basic income for its citizens. It was noted that the idea is gaining popularity. Many countries, including the Netherlands, Finland, India, Canada and Brazil, are considering options for possible introduction of such payments.

The idea of UBI is deeply rooted in history. Its elements can be found even in "Utopia" of Thomas More. Since then, this idea has undergone a lot of different formulations and interpretations, yet the main point remains the same: each person should receive a share of the public wealth from birth, regardless of their abilities, needs and contribution to the economy.   

The main promoter of UBI in the XX century is considered American economist Milton Friedman, who proposed to introduce a so-called negative income tax. In 1943, a similar concept was nearly adopted by the American Parliament. However eventually, the choice was made in favor of the social support system, where payments depend on a combination of factors (work place, salary level).

The history has seen several attempts to introduce similar initiatives at the state level, but they all failed. Numerous local experiments in Canada, Brazil, India, Kenya, Germany and Scandinavia proved more successful. Finland plans to launch UBI program in 2017, since not less than 70% of the country’s population are supporting the concept.

Example of Namibia illustrates positive results of the experiment. A number of charitable organizations and trade unions chose a small local village as a testing ground for an UBI experiment, under which every citizen monthly received 9 euros. As a result, living standards there increased significantly. Number of employees and working people grew up by 11% thanks to the fact that the locals began to open small businesses - bakeries, brick cooperative, etc. Academic performance of children in schools increased, and the crime rate fell by 42%. By the end of the experiment, the number of extremely poor villagers decreased from 76% to 37%. 

In total over the past few years, there were about two dozen programs related to the UBI idea around the world. Its rapid spread and popularization of public discourse is directly related to the global technological development which, for all its advantages, can deprive many people of work in the future. 

Need for the UBI introduction is also supported by owners of large capitals, which fear that the technological unemployment may reduce the consumer base to critical levels. The technological change is a great helper for industries, yet it simultaneously threatens mass consumption. Liberal commentator Robert Reich says: "If you put more money in people’s pockets, they can turn around and buy stuff, which means more jobs, not fewer jobs". 

In addition, the automation of production and services requires not only cutting costs for businesses, but also more comfortable living and working conditions. Manufacturing also requires implementation of human creative potential; besides, it should support a person’s dignity. Existence of meaningless work (bullshitjobs) today is the world’s psychological problem. In a nutshell, it’s when people engaged in any work do not understand their purpose. The introduction of UBI would allow people do what they really like.

Opponents of this project, including the Swiss government, indicate that the UBI introduction would destroy the incentive to work, lead to higher taxes and a shortage of skilled workers. The reduced performance would trigger production decline and stagnation. "Artificial unemployment" affects not only decline in revenues, but also leads to a loss of status, identity and even purpose in life, ending up with anomie and despair. It is noteworthy that none of the Swiss political parties mentioned high cost of UBI as the main reason.