Over the coming year, Oakland, Finland, the Netherlands and Ontario will trial Universal Basic Income (UBI) programs. Glasgow and Fife councils in Scotland are considering similar programs. And its not just governments; an independent initiative in San Francisco called My Basic Income is currently fundraising and inviting entrees for its second $15,000 basic income sweepstakes.
The concept of universal basic income is relatively simple. Essentially, a government writes all its citizens a monthly check to cover basic living needs without any conditions. Originally outlined in 1797 by Thomas Paine, universal basic income has been backed in some form or another by everyone from anti-poverty organizations to Nobel-Prize-winning and free-market-loving-economist Milton Friedman. Under Richard Nixon, the Family Assistance Plan, a form of UBI under which the very poor would receive money from the government instead of paying taxes, passed the House but stalled in the Senate.
UBI certainly has its detractors, who argue that it would disincentivize work, be cripplingly expensive and exacerbate the social problems it seeks to address. However, the admittedly small-scale research into the potential effects of UBI has been largely positive.
Canada set up one of the earliest organized trials of UBI in 1970s Manitoba. Termed Mincome, the program helped working families by ensuring their income would never fall below a set minimum.When the data from the study was finally analyzed some three decades after the program, the results were remarkable.
The vast majority of participants kept working. There was a slight decrease in hours worked amongst primary wage earners. Teenage boys worked less as well, no longer forced to abandon school to support their families. Women took longer maternity leaves. Hospitalizations also decreased. Overall, the extra income eased economic anxiety and helped lower the stress of making ends meet.
Related studies about direct cash transfers to fight poverty have shown similar positive results. Numerous high quality studies across Asia, Africa and Latin America have demonstrated that direct cash transfers “have arguably the strongest existing evidence base among anti-poverty tools,” according to Give Directly. The positive impacts include reduction in low birth weight, reduction in HIV rates, and substantially increased schooling amongst children. Also, contrary to common myths, recipients do not increase their spending on “temptation goods” like tobacco or alcohol or decrease working hours.
2017’s UBI trials will provide more concrete data which can be used to corroborate or contradict these prior studies.The trials also come at a vital time of reflection on the relationship between work and income.
The rise of the so-called “gig economy,” where long-term and secure employment has been replaced by short-term and contract work, has left millions around the globe in precarious positions. In the United States, one study found that nearly 95% of the jobs created under Barack Obama were part-time or contract work. Similarly, increased automation is threatening more workers than ever before. The traditional mode of working to earn a living is becoming less viable as work becomes more ephemeral and unreliable.
Universal Basic Income is by no means a structural remedy for the ills of global capitalism. Rather, it superficially treats the gross inequality that has resulted from the concentration of wealth and capital in the hands of the very few. However, as work becomes more and more scarce, UBI may be an effective way to ensure the basic wellbeing of everyone.