On today’s episode I want to discuss the idea of Universal Basic Income. This is a highly debated and controversial topic, with strong arguments on both sides! Would providing all residents or citizens of a country with small amounts of money on a regular basis improve people’s lives? Or are there better methods?
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Vocabulary List
unprecedented (adj) – never having happened or existed in the past
Unemployment has reached an unprecedented level
To adapt (v) – to change, or to change something, to suit different conditions or uses
Sometimes we have to adapt the design to suit the customers requirements
unconditionally (adj) – in a way that is complete and not limited in any way
He thanked his mother for being unconditionally supportive
Automation (n) – the use of machines and computers that can operate without needing human control
Automation will reduce the need for a large, highly skilled workforce
Detractor (n) – someone who criticizes something or someone, often unfairly
His detractors claim that his personality makes him unsuitable for leadership
Proponent (n) – a person who speaks publicly in support of a particular idea or plan of action
He is one of the leading proponents of capital punishments
To attribute (v) – to say or think that something is the result of a particular thing
Her success can be attributed to three main factors
Implementation (n) – the act of starting to use a plan or system
There will be a delay in implementation of the new regulations
To exacerbate (v) – to make something that is already bad even worse
This attack will exacerbate the already tense relationship between the two communities
To empower (v) – to give someone official or legal authority, or the freedom or confidence to do something
We empower our sales staff to make decisions without always having to consult their boss
Over the last few months, much of the world has experienced unprecedented challenges brought on by the ongoing pandemic. In particular, the stability of the global economic system has been repeatedly tested as millions businesses around the world have had to shut, change their business models, and adapt to the new situation. For self-employed people, small business owners, retail staff, waiters and waitresses, those who work in the tourism industry, and many many more professions, 2020 has been a year of instability, stress, and financial worry. Against this backdrop, Universal Basic Income has been gaining support in a number of countries!
What is Universal Basic Income? Universal Basic Income, or UBI, is a policy idea which involves governments regularly giving money to every resident. According to economist and long term UBI supporter Guy Standing, it is “a modest amount of money paid unconditionally to individuals on a regular basis; intended to be paid to all, regardless of age, gender, marital status, work status and work history”. Earlier this year, Spain announced its intention to bring in a ‘Guaranteed Minimum Income’ to ease the pressure of coronavirus on poorer families. There have also been some intriguing trials and experiments with UBI in all corners of the planet. Canada, Finland, and parts of India have all run short term programs to test how effective UBI is in practice. About 10 years ago, an experiment in Namibia gave 1000 people 100 Namibian dollars per month for around 2 years. The only genuine UBI in existence today is the Alaska Permanent Fund which provides all residents of the state a share of profits from the state’s oil revenues! This year every Alaskan received almost $1000.
Like any radical and new economic policy, UBI has both supporters and opponents, and can often provoke strong reactions. Supporters argue that UBI makes sure no one is in poverty; stops low wages; allows families to support their relatives; and helps those who work in careers likely to be replaced by automation. Detractors worry UBI discourages people from working; is too expensive; makes low-paid, unpopular jobs even more difficult to fill; provides people money that will likely be spent on drugs, alcohol, and other unhealthy things; and is wasted on the very rich people who don’t need it. The rest of this episode will look at a few of these arguments in more detail
Proponents of UBI usually argue that it reduces poverty and income inequality, and improves health. And there is quite a lot of evidence for this. Alaska is currently the second best US state in terms of income equality, which is largely attributed to the implementation of its UBI program. Moreover, Namibia’s UBI program reduced household poverty rates from 76% of residents before the trial to 37% after one year, while child malnutrition rates also fell from 42% to 17% in six months. Participants in UBI trials in Kenya, India, and Canada all reported improvements in happiness and health.
On the contrary, detractors of UBI claim that it actually takes money from the poor and gives it to everyone, increasing poverty and depriving the poor of needed targeted support. Funds that are normally given to the poor, are distributed to everyone under UBI. Research by the Organisation for Economic Co-operation and Development (OECD) in Finland, France, Italy, and the UK concludes that UBI “would not prove to be an effective tool for reducing poverty.”
A second argument often made by supporters is that UBI leads to positive job growth and lower school dropout rates. It helps to protect people from slow wage growth, low wages and the lack of job security. Moreover, it could allow recipients to stay in school longer and participate in training to improve skills or learn a trade. Since start of the Alaska Permanent Fund, the fact that UBI recipients have more money has resulted in 10,000 additional jobs for the state
On the other hand, opponents of UBI argue that a strong economy needs people to be motivated to work hard, and that uncertainty is a great motivator to work hard! UBI, as it provides guaranteed security, removes this uncertainty. Maybe, “if we pay people, unconditionally, to do nothing… they will do nothing.” In 2016, the Swiss government opposed UBI, stating that it would encourage fewer people to work and exacerbate the labor and skills shortages.
Perhaps the strongest argument by opponents of UBI is that UBI is too expensive. In 2016 the UK Minister for Employment, Damian Hinds, rejected the idea of UBI, saying that estimated costs ranging from £8.2 billion – £160 billion ($10.8 billion – $211 billion USD) are “clearly unaffordable.” Economist John Kay studied proposed UBI levels in Finland, France, Germany, Switzerland, the United Kingdom and the United States, and concluded that, in all of these countries, UBI at a level which can guarantee an acceptable standard of living is “impossibly expensive… Either the level of basic income is unacceptably low, or the cost of providing it is unacceptably high.”
Nevertheless, for supporters of UBI the positives still outweigh the negatives! For instance, UBI guarantees income for non-working parents and caregivers, thus empowering important unpaid roles, especially for women. It allows working parents to reduce their working hours in order to spend more time with their children or help with household chores.
Final Thought
Today’s episode has looked at some of the arguments surrounding the debate over Universal Basic Income. Do the costs outweigh the benefits? What do you think? Should the government be responsible for giving money to the people? Does it discourage hard work? Or does it help those most in need? Is it too expensive? Or is it worth the money?
Comprehension Questions
Q. The Namibian UBI trial gave 1000 people how much money?
A. 100 Namibian dollars every month
Q. What did research by the Organisation for Economic Co-operation and Development (OECD) in Finland, France, Italy, and the UK conclude?
A. It “would not prove to be an effective tool for reducing poverty.”
Q. Why did the Swiss government oppose UBI?
A. They believe it would encourage fewer people to work and exacerbate the labor and skills shortages.
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Hi Tom,
I Just would like to thank you for you great job you do while releasing your podcast. Topics you cover are so interesting and make me feel to gathering new knowledge while listening them. I truly belive that listening your podcasts will bring my english on next level. I am sending you greatings from Poland. Thank you and take care.
Thank you so much for your lovely comment!
Dear Tom, maybe this podcast is the most suitable to the nowdays italian political debate, since when I listen to in “Thinking in english”.
In 2018, the italian government (at the time a gathering between a populist left wing party, Movimento 5 stelle, and a sovranist right wing party, Lega) introduced the “reddito di cittadinanza”, which literally means “citizenship income”, directed to unemployed people and people who can’t work because of their particular condition, as age, disabilty and other cases.
A minister of that time came out on a Palazzo Chigi (the house of italian prime minister) balcony and said: “Today we have abolished the poverty”. As you can imagine, it was not true.
In fact, the citizenship income has been a disaster. It has created many abuses and increased the illegal work (“il lavoro nero”, the black work, to tell it with an italian idiom). Pratically, people to keep on the citizenship income have preferred working without declare adding this social income with the (undeclared) working income, BTW without paying taxes and increasing formally the unemployment.
The new goverment by the prime minister Georgia Meloni, the most right wing goverment in italian history, won the sept 22 last year elections also thanks the proposal of abolishing citizenship income for people who can work, maintaining it for people who can’t work because of special personal conditions (not employable people). As promised the government has approved a law who stop, progressively, the citizenship income within the end of this year.
Actually, italian citizenship income is very different to universal basic income, because it is only directed to uneployed and uneployable people, whereas UBI is directed to everybody independing to their poverty or whelthy. This would resolve the most problem which citizenship income has presented, i.e. the fact that people don’t want to loose it because of starting to work.
Finally, I thing UBI is better than italian citizenship income and in my opinion is a great idea to reduce (not eliminate) crime, poverty, without alterate working market. As you said, the main issue is about resources to finance it. Maybe they might reduce some social services to finance it.