UNIVERSAL BASIC INCOME

What if the government took the responsibility to pay its citizens a minimum amount of money from time to time without imposing any conditions at all? Sounds crazy right? But this economic policy is being considered seriously in many parts of the world. This is known as ‘Universal Basic Income’ or UBI in short. When UBI is in place, every citizen of a country receives a minimum amount of money from the government regularly regardless of the economic or social status of the person, which means the richest and the poorest, both will receive the same amount of money.

Why have a UBI?

The world has gone through various phases, the Age of the Empires, The Industrial Revolution followed by the Post-Industrial revolution. And today we live in an era of disruption.

Taking history as precedent, it is evident that within the next 15 years, we are going to have a very different outlook of the world than what we have today.

Back in the 17th-century, the invention of the steam engine changed the world completely. It helped run larger production runs at minimum cost which led to it being a replacement to thousands of labourers. Great Britain and Europe were able to save millions of dollars in labour cost and were now much more efficient thereby growing to be one of the most dominant economies of that time. The rise of the machine today is at a speed never seen before and is replacing many blue and white collar jobs. Companies such as Amazon have already started using robots to fulfil orders in 13 of its warehouses. According to an IBM survey “more than 120 million workers globally will need retraining in the next three years due to artificial intelligence’s impact on jobs”. UBI acts as a security for those whose jobs have been replaced by advancing technology.

Although the idea of a universal basic income isn’t new, it's being thrown around a lot lately as thousands of people are losing jobs owing to the pandemic and it is not long before Artificial Intelligence takes over. UBI and similar ideas have gone from fringe to more mainstream economic thoughts. Not long ago, Spain’s government launched a website offering monthly payments of up to €1,015 (US$1,145) to the poorest families in Spain. Many countries like India, California, Finland, Namibia, Brazil, USA, and others have also experimented with performing UBI in small scales.

There is constant debate regarding the feasibility of universal basic income. While the supporters believe that implementing this scheme will help ameliorate the problem of poverty and people who are compelled to do their jobs to support their families could quit such jobs and have the freedom to choose a job that suits them or could even continue their education. There would be a boost in the country’s productivity as people do the jobs they are passionate about. Further, there would be an increased standard of living as people will start spending their money to buy quality items.

Critics believe that UBI is going to remove the fear of getting poor and this will only result in people getting lazy and not doing their jobs. Jobs such as sewer cleaning will drastically fall in demand as no one would want to do such low paying unhygienic jobs anymore.

Studies show that the poor, when given money in hand, often tend to spend it on snob appeals to cover the void that existed due to lack of capital. Free money will make people over-dependent on the government, and if someday the government is unable to provide UBI, the entire economy might crash. Many also believe that not only will the amount spent by the government on the scheme be extremely high but also will result in slower development as the government diverges from spending money on public services to giving free incomes to its citizens.

However, UBI hasn't been tested on a larger scale, which makes me have a neutral opinion as we are unaware of its impact on countries like India with such a large population. But one thing is for sure, as Elon Musk has said - that with advancement of technology, there will be fewer and fewer jobs that robots cannot do better. And we will end up with some form of UBI whether we like it or not!