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Universal Basic Income is the way to go

Universal Basic Income is the way to go

Universal Basic Income is the way to go
September 30
12:00 2021

The COVID-19 pandemic has brought on one of the worst economic fallouts America has ever seen. It brought a financial shock and a global economic slowdown that surpassed all predictions. The pandemic provided major devastations to industries such as air travel, restaurants and movie theaters. One in four adults have had trouble paying their bills since the start of the outbreak while one in six have had to go to a food bank, according to a survey conducted by Pew Research.

Though there has been a rise in employment, 49 percent of Americans claim that their financial situation is still the same as last year, compared to 30 percent saying it has improved since last year. In the same poll, 44 percent of Americans think it will take them three or more years to get back to their financial situation pre-pandemic while one in 10 feel they won’t ever financially recover.

Over the course of a year, the government has sent out three stimulus packages to bring aid to Americans. Despite an online petition with over 2.9 million signatures and the support of 11 senate Democrats, a fourth stimulus check will not be provided nationwide anytime soon. The financial difficulties of Americans have made some support the possibility of the U.S. implementing Universal Basic Income (UBI).

UBI is a government program that provides every adult citizen with a set amount of income on a regular basis. Its goal is to keep citizens above the poverty line and to replace other need-based social programs. Entrepreneur and former presidential candidate Andrew Yang placed a spotlight on UBI when he made the issue one of the key pillars of his campaign and proposed every adult citizen should receive $1000 a month from the federal government. Though he didn’t win, the momentum of support for UBI undoubtedly helped pull Yang from a relative unknown to a strong contender, with many outlets calling him “the most surprising candidate” of the 2020 election.

Iran is the only country in the world that has fully embraced UBI, implemented nationwide in 2011. European countries such as Belgium and the Czech Republic have dabbled with the system but opted to roll it out to a limited portion of the population as opposed to Iran. The U.S. has tried the system before in small-scale short trials in the 1970s when former President Richard Nixon designed a negative income tax plan. It was supposed to send money to families of four who would get a cash grant and then Nixon would rapidly tax it away so taxpayers would get no money back at all. 

The negative income tax plan experiment was conducted in seven states with a sample population of 7,500 people. The experiment was brief, but studies found that the policy was beneficial to those getting the money but modestly reduced the number of hours they worked. The plan was deemed a failure and proof of social idleness according to UBI critic Pascal-Emmanuel Gobry. The problem with the experiment was that not all people involved stayed out of the workforce forever but instead chose to use their money to pursue higher education. It should also be taken into consideration that the negative tax plan experiment was too brief to make any permanent conclusions.

UBI is not meant to be a system that people solely depend on for their income. One of the positives of the program is designed to help keep one afloat if they must leave work to tend to a relative or if they are in between jobs. It also gives more money to young families and helps keep people stable during economic recessions. There is a trend of falling birth rates because a lot of young people feel they cannot keep up with the idea of raising a family while maintaining financial stability. If UBI were implemented, this money might give young couples the confidence they need to start a family. They’ll be able to pay their bills, keep food on the table and still have enough money left over for savings. 

Some states, such as Alaska, already have a program in place for guaranteed income, the money coming out of oil revenues. The Alaska Permanent Fund has paid each resident $992 a year since 1982. In 2017, the Hawaii state legislature passed a bill that declared everyone is entitled to basic financial security. One of the solutions may include guaranteed income. It isn’t to say that UBI is without problems. There is potential that everyone would be in a rush to spend the extra cash which would raise up inflation and drive up prices. If this were to happen, there is a chance that the standard of living would be unaffected by the program. However, UBI would eliminate traditional welfare programs such as housing vouchers and food stamps. It would also cost the government less money and cash payments would terminate costly income verification paperwork. 

America needs a change and perhaps including UBI in that change would be appropriate. We are living in uncharted territory and there is a chance that a lot of Americans will never financially recover from the economic crisis brought about by the pandemic. For some, UBI may be their only chance.

Featured Illustration by Pooja Patel

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Adrian Maldanado

Adrian Maldanado

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