Basic Income, also called “unconditional basic income” or “universal basic income” (UBI) (*1), and sometimes “citizen’s income,” is a form of social security system in which all people of one country receive a certain amount of money unconditionally, and the amount must be large enough to cover the basic existential needs of one person.
If the amount of money is not enough to satisfy all basic needs, it is called “partial basic income.”
The idea of a minimum income first appeared at the beginning of the 16th Century, theorized by Thomas More (1516) and Johannes Ludovicus Vives (1526) as a means of providing welfare for poor people or as more astute way of fighting theft than sentencing thieves to death. (*2) Towards the end of the 18th century, Marquis de Condorcet and Thomas Paine (Founding Father of the United States) similar ideas emerged that had a great role in the easement of poverty throughout Europe. Trough 19th and 20th century, many famous people like John Stuart Mill (English philosopher), Charles Fourier (French writer), Bertrand Russell (Nobel laureate in literature), James Meade (Nobel Prize-winning economist), Richard Nixon (37th U.S. President), Martin Luther King Jr. and many others supported and advocated idea of Universal Basic Income in one form or another.
- It is unconditional — Basic Income does not discriminate; it is a fairer system, where everyone receives income as a birthright. Although some of the models envision separation by age groups, in the end, everyone should receive the amount necessary to cover all basic needs.
- Simplifies administration — necessary to handle distribution of the income. In many countries, welfare systems have become increasingly complex, intrusive, and administration-intensive. As the only thing needed thing for Basic Income is to have a citizenship and a bank account, additional checks are not necessary, which makes the number of people and administrative processes needed to handle the schema close to none. It is considered to be the simplest tax benefit schema.
- Removes the need for other types of welfare — when fully implemented, as people have enough resources to cover basic needs, all other welfares are discontinued. By replacing other welfare systems, a significant amount of money is redirected into the Basic Income fund, and, by that, reduces overall costs or possible pressures on the budget. During the transition phase, some of the welfare forms will need to stay for some time, until the effects of the schema kick in, dealing with possible issues of housing.
- Saves money — as the result of the previous two. Simplified administration removes unnecessary expenses connected with additional administration needed to handle welfare systems and the government apparatus needed for preventing, detecting, and fighting fraud.
- Reduces welfare benefit frauds — false reporting on income or size of household does not give any advantage, as it does not have any impact on Basic Income payments.
- Distributes the wealth more fairly — instead of supporting banks and stock market gambling, money is distributed directly to consumers. This is beneficial in multiple ways. Many studies are pointing out that the middle class, immensely important for a stable economy, is in constant decline, experiencing a long time of stagnation of salaries while the GDP is constantly growing. By distributing money to everyone, it would be possible to stop the financial decline of the majority caused as the consequence of wealth accumulation by a few. Additionally, Basic Income can serve as a safety net that can potentially increase salaries by putting the average worker in a better negotiating position.
- Reduces inequality — by sharing wealth, instead of concentrating it in the top of the pyramid, Basic Income can reduce the growing wealth gap between classes, but it has the ability to reduce inequality between genders, also, creating an emancipating effect.
- Eradicating extreme poverty — by giving money as a right, without any obligation directly to the people, Basic Income can end the suffering that is part of almost every developing country and return dignity to those people roaming on the streets, begging for change, just to survive.
- Economic safeguard — as people have their “survival” guaranteed through income by default, the stress of finding a new job, taking maternity leave, or having a longer professional break does not create stress and suffering. Basic Income can provide a safety net that is especially valuable in times of economic and social insecurity, followed by unpredictable work patterns.
- Professional orientation — Basic Income can help people rethink what they truly want to do in their lives. It allows them to take more time learning new skills while maintaining a decent standard of living.
- Improving working conditions — with Basic Income in place, workers will have more courage to challenge their employers, if working conditions are unfair or degrading. Mandatory unpaid overtime hours, bullying, and harassment could become things of the past.
- Freedom and independence — the current system in place can be described as wage slavery, where many must work low-paying jobs, in order to survive. More working force supply than demand, creates a job market with low-paying jobs, where a single job is not enough to support the basic needs of one person. With Basic Income in place, people will have the financial independence necessary to survive, will have freedom to choose whether they want to work or not, and where they want to work. On the other hand, employers will need to increase salaries, on the account of their profits, in order to attract a working force, or they will need investment into automating those jobs. Furthermore, this will increase personal autonomy and oppose domination by allowing people to escape abusive relationships, giving them the opportunity to pursue education, find better jobs, and live happier lives. Basic Income will give people more time to care about their children (especially single mothers and fathers) or relatives — elderly, disabled, or otherwise vulnerable persons — and give people more time for other community responsibilities.
- Acknowledging unpaid work — housewives/househusbands, parents and grandparents, open source contributors, and many others have done immeasurable amounts of work by caring for family, doing housework, creating software or hardware, and many other things that our world relies on. Today, it would be hard to imagine the world without Wikipedia or Linux, and, yet, society has not recognized those as economic contributions. Basic Income can be considered as recognition and “salary” for those activities, additionally paving the way for new generations to come that will give their knowledge and time creating a better society.
- Working hours decrease — being financially secured, people will have the option to reduce their working hours or more easily take time off. They will be able to spend more time caring for their kids or family members, learning, or doing any other things they find meaningful. On the other hand, employers will need to find more people to compensate for those hours, which can create a better distribution of jobs in the labor market, allowing those struggling to find a job to become productive members of society.
- Health impact — with Basic Income, people will have access to more nutritious food, without the stress of survival or job loss. People may become happier and reduce stress-related health issues, therefore improving overall health and extending life. A healthier society will save more money on health expenditures (currently, in the UK, £134.1 billion of tax money is spent each year on health).
- Crime rate impact — although crime will not disappear, in some countries, where tests were conducted, studies showed that crime rates went down, reducing the expenses of the police and justice systems (Police statistics showed a 36.5% drop in crime since the introduction of the Basic Income pilot project in Namibia. (*3)
- Employment and business impact — although it looks counterintuitive, when Basic Income is implemented, employment rates usually go up, as people start working more for the betterment of themselves and society. In pilot Basic Income projects, people have shown the ability to self-organize and pursue higher goals, such as education, training, creative work, or personal projects or startups, creating a more vibrant, entrepreneurial, and economically more valuable society. Women becoming more independent will start looking for work, contributing to an increase of overall GDP. Geneva-based International Labor Organization has shown that nearly all large economies — including the UK and the USA — are ‘wage-led,’ not ‘profit-led;’ they will experience slower growth when an excessive share of profits end up in the hands of investors, with less going into wages.
- Overcoming the “rat race” — people struggling to satisfy existential needs waste most of their time trying to find a better job while already working one or more jobs. In order to overcome that struggle, a person needs to find a better job. For a better job, the usual requirement is better education. For better education, a person needs free time and money. As most of the time and money are spent on basic survival needs, freeing up the time and finding the money for better education becomes an example of a “Catch 22” problem (impossible task). With Basic Income provided, people become masters of their own time. By overcoming that struggle, a person can dedicate his/her time to education, personal projects, volunteering, or creative work that can actually benefit something or someone. By removing the worry about existential needs, this will reduce economic inequality, which can otherwise hinder a person’s development.
- Alternative social contract — Basic Income gives an alternative to the currently-existing “stick and the carrot” approach. People will stay in a workplace not because they “must,” but because they “want to” be there. This motivation effect builds employees’ self respect and creates a higher quality working force that can increase the overall productivity of the company while creating a healthier company culture and environment.
- Solution to problem of technological unemployment — as a consequence of the Fourth Industrial Revolution, (*4)with the advance of computer science, technologies, and Artificial Intelligence, increasing numbers of jobs will be automated (drivers, call center workers, assembly line jobs, radiology diagnostics…), in the process disrupting entire industries and an already fragile labor market. Largely, our society is wealthier as a result of the efforts of our ancestors; therefore, it would be logical and morally right to fairly redistribute wealth created as a product of that technological advancement. Basic Income is one way to do that.
- Reinforcing Democracy — by having more time and worrying less about work, people will dedicate more time and be more actively involved in things they care about; this will result in innovation in political and social spheres, improving the relationship between the state and the individual.
- Tackling the problem of population growth — raising people above the poverty line can, among other things, effectively prevent population explosions, as wealthier societies tend to have fewer children per woman. (*5)
- Ecological effect — shifting to less work could encourage people to fulfill their lives with things other than consumerism. Without cheap labor, companies that make products no one needs could gradually disappear. The planet cannot sustain the current rates of consumption, waste and growth. Having enough resources to support themselves, people could turn to more sustainable lives and could dedicate more time to volunteering or finding creative solutions to tackling the imminent dangers of climate change.
Among many positive things Basic Income is and can-do, it is not a utopian system. Although it can lead to better society it is not a solution for all of our problems.