In a 2018 poll, nearly half of Americans supported the idea of a Universal Basic Income program. This model that was created in hopes to increase equality and reduce poverty has been gaining popularity over time, dating back as early as 1516 with Thomas More’s ‘Utopia’ philosophy. Following More’s ideas on the benefits of a minimum income, Thomas Paine proposed a plan in 1796 to provide a basic endowment for
all adults over 21 years of age. And if those names don’t ring a bell, in 1967, Martin Luther King Jr. was convinced that a guaranteed income is a counter to poverty. This system has been around for a long time, and with the threat of automation, a possible recession, and other societal problems, is it finally time to put a Universal Basic Income to the test?
The goal of a Universal Basic Income is to reduce poverty, alongside the negative effects that come with it, as well as lead towards freedom of choice in lifestyle and employment. Many people have called for UBI as automation has increasingly become a factor of unemployment in hopes that the system would offset job losses. Hopefully, a Universal Basic Income would ideally provide freedom of choice in work, lifestyle, and education. Not only that but create an egalitarian society with equality among citizens.
This idea may seem too idealistic to some, but testing the reality of a Universal Basic Income has just begun – and not without questions. Funding for a Universal Basic Income would be coming from a Value-Added Tax, taxing the production of goods or services. Another form of funding could be a Flat Income Tax. A 70% tax on income over $10 million could bring in almost $300 billion by 2028.
Nearly three in four believe that AI and automation will eliminate more jobs than it creates, and that’s the future of our economy. As competition for work drives wages down for existing jobs, threats of recession will increase. The loss of income to buy things means consumption would fall sharply. And as if it were a game of dominoes, decreased consumption means a lack of earnings that would burden businesses, further lowering employment. In a future without work, a guaranteed income could help sustain the economy and help people stay afloat through burdens of debt or other factors of economic crisis.
There are current trials of this method of welfare reform in California and the Netherlands, as well as stalled implementations in Ontario and Finland. Preliminary findings include a 12% increase in confidence in financial situations in addition to optimism for the future. The time to experiment may be coming to an end – nearly half of all work activities in the world have the potential to be automated. Looking towards the future of employment means seeing the possibilities of decreased wages, threats of recession, and overwhelming debt burdens. Providing real money, having no employment requirement, and receiving aid in regularly distributed intervals may seem utopian to some, but as the future of work changes, a Universal Basic Income could be a step towards a more equal and livable society.
Find out more about how Universal Basic Income could change society here.