Posted: March 26th, 2021

Policy Discussion: Universal Basic Income

Policy Discussion: Universal Basic Income
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Policy Discussion: Universal Basic Income
Universal basic income (UBI) refers to a guaranteed, unrestricted recurring payment to every person in society to help them meet their basic human needs. UBI policy approaches the societal problems by providing an equal check to every person in society to meet the cost of living.
The Rationale for Using UBI Programs
Some of the rationale for using UBI programs is to assist in eliminating poverty, empowering people, cushioning citizens from technological unemployment, and reducing administrative overhead costs (Hoynes & Rothstein, 2019). These reasons are important to warrant some support for the UBI programs because it might help improve citizens’ economic well-being.
Historical Precedents/Experiments
The universal basic income has a long-standing history, as explained by the program’s supporters in the political arena. In 1795, Thomas Paine, an intellectual architect of the American Revolution, recommended UBI’s adoption to improve the wealth of the people. Paine recommended that £15 be given to every person who becomes 21 years old and £ 10 for every person aged 50 years old (Lacey, 2017). Every citizen, poor and rich were to be given the payments. One hundred years later, Henry George, an American economist, recommended no taxes and provided a pension to every citizen using the public land fund. Paine’s historical proposals influenced his UBI’s ideas. In the 1970s, both Canada and the U.S performed a survey of net income tax in 5 regions, and congress passed a regulation, which allowed for the implementation of the basic income variant. However, the survey was not conclusive when the law was fully passed.
Current Supporters of UBI Programs
UBI’s current supports are Andrew Yang, a former presidential candidate, which argued for UBI provision to counter the adverse effects of job automation. The continued adoption of technology has the risks of displacing manual work, leading to an increased unemployment rate. Andrew Yang claimed to give every person $1,000 would help challenge the costs of job losses from automation (Hoynes, & Rothstein, 2019). Other supporters with the same argument as Andrew Yang are Jason Furmon, an economist, Marc Anderssen, an investor, and Albert Wenger, an investor. These supporters argued that the rapid level of automation is likely to continue eliminating jobs in the economy. The programs are highly likely to create diverse economic transition levels, which could be improved by providing basic income (Francese & Prady, 2018). The labor market adjustments often lead to increased unemployment because it is challenging to acquire new skills and get new jobs.
Arguments against UBI Programs
The critics of the UBI programs is the price tag for such a proposal. For example, the proposal of Andrew Yang would cost the government around $2.8 trillion every year compared to the total government spending of $4 trillion (Parolin & Siöland, 2020). The UBI program is also challenged because of the redirecting of limited resources from the poor to the wealthy people. Critics also explain that the UBI will discourage people from work (Hall et al., 2019). Other economists explain that the UBI will lead to a potential increase in inflation rates in the U.S. economy.
Personal Opinion
UBI will not gain political momentum in the near future because of the current division in the political systems in the United States. The only political group that could support the UBI’s adoption is the democratic progressives who support programs to eliminate poverty in the economy. However, moderate democrats and republicans have opposed the implementation of the UBI. The program is also not popular among the public, with only small public. Personally, I think the program is good, but the costs of implementing the UBI are impractical and difficult to implement. Therefore, UBI is unrealistic, and it is impossible to implement the policy in the U.S. economy.

References
Francese, M., & Prady, D. (2018). Universal basic income: debate and impact assessment. International Monetary Fund.
Hall, R. P., Ashford, R., Ashford, N. A., & Arango-Quiroga, J. (2019). Universal basic income and inclusive capitalism: consequences for sustainability. Sustainability, 11(16), 4481.
Hoynes, H., & Rothstein, J. (2019). Universal basic income in the United States and advanced countries. Annual Review of Economics, 11, 929-958.
Lacey, A. (2017). Universal basic income as development solution?. Global Social Policy, 17(1), 93-97.
Parolin, Z., & Siöland, L. (2020). Support for a universal basic income: A demand–capacity paradox?. Journal of European Social Policy, 30(1), 5-19.