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What is Universal Basic Income (UBI)?


The term 'Universal Basic Income (UBI)' is included in the Economics edition of the Financial Dictionary. Get yours now on mazon in ebook or paperback format. Read more here...

Universal basic income (UBI) is known by a variety of names in different countries and continents. Among the more popular are basic income, citizen’s income, unconditional basic income, basic income guarantee, universal demo grant, and UBI. This represents a type of social security welfare program and safety net. In it, all residents or citizens of a nation periodically receive an amount of money which the government or another public institution gives them unconditionally. They receive this on top of and regardless of any other income they earn from work or investment returns. When the money is given out to any persons who live with less than the government-mandated poverty line, it is also known as partial basic income.

This universal basic income and its distribution systems could be financed by the revenues and turnover of publically owned enterprises. These are many times referred to as a citizen’s dividend or a social dividend. Such a strategy is a component of a market socialism model, as opposed to market capitalism in which participants’ incomes are based on their abilities, hard work, and opportunities. Taxation is another means of paying for such basic income schemes.

It was Thomas Paine’s Agrarian Justice published in 1795 where he wrote about capital grants to be provided at the age of majority that began the debates concerning universal basic income within the United States. Up through the year 1986, the phrase which referred to this basic income concept most commonly was “social dividend.” After that year, the universal basic income wording gained universal appeal. There are many well-known proponents of the social and economic philosophy. Among them are Ailsa McKay, Philippe Van Parijs, Hillel Steiner, Andre Gorz, Guy Standing, and Peter Vallentyne.

In the United States, this Universal Basic Income has been discussed on a number of different occasions as a serious idea for public policy. The numbers which have been bandied about for Americans amount to approximately $1,000 per month, which would be sent via check to every American. Among the conservatives who espoused the concept and argued for it to be implemented were legendary Nobel prize-winning economist Milton Friedman and former Republican President Richard Nixon.

The base case for this Universal Basic Income has been most effectively argued and written extensively about by Andy Stern, who was once the Service Employees International Union president and who serves as a Columbia University professor since then. He published a book called Raising the Floor in which he argued dramatically and effectively for the UBI.

Stern argues that the concept of a basic guaranteed income has become more necessary for two reasons. On the one hand, the wars on poverty programs have not been so effective nationally. On the other, the rapid advance of technology has led to unparalleled job dislocation and disruption for millions of American workers. This program would deliver an effective floor, or social safety net, to every American.

Critics of the plan in the U.S. have asked how the Federal Government would possibly afford to pay for this proposed program. Stern referenced the 126 existing separate government programs which each already distribute money to American citizens. Some of these might be rolled into the Universal Basic Income program. Besides this, additional taxes would have to be introduced in order to make the proposal a reality. Economists have predicted that implementing such a UBI would require around $3 trillion each year in funding.

Despite the fact that this concept has many critics, it is also possibly the only significant ideology in the early twenty-first century which has supporters on both the right and the left sides of the political, economic, and social spectrum.

The Swiss were given a vote on the UBI issue for their own country in the late spring of 2016, and they soundly rejected it. Interestingly though, the same voters answered an exit poll claiming they expected to see this policy implemented in Switzerland within the next 25 years.

The term 'Universal Basic Income (UBI)' is included in the Economics edition of the Financial Dictionary. You can get your copy on mazon in Kindle or Paperback version. See more details here.