A closer look at Universal Basic Income 

What is Universal Basic Income?

In theory, Universal Basic Income (UBI) is an unconditional, no-strings-attached, flat payment made by a government to all citizens as a form of welfare. The questions of its implications and implementation carry ambiguity and are debated globally. Currently, there are two main philosophies around how a UBI should work: The first philosophy believes that a UBI is about ending poverty, the concomitant social and economic issues, and the stigma of aid by making payments exclusively to low-income citizens. The second philosophy targets irreversible systemic changes and antipoverty mechanisms by introducing a truly universal payment—one that goes to everyone regardless of income.  

The idea of UBI has gained steam because it has a lot of potential. It would lay out ground rules for what it means to be a part of society, ensure that those boundaries are respected, and compensate unpaid labour. Many in Silicon Valley and on the political left see it as a solution to the unprecedented level of economic and social disruption caused by artificial intelligence and the surge in in-work poverty. A UBI can also function as a way of creating a safety net in preparation for a future where technological growth no longer means more jobs for humans. The unconditional nature of UBI also promotes improved working conditions, contributing to the community, and autonomy in spending while cutting through levels of bureaucracy that can hinder access to aid. Many also see UBI as a possible source of relief to economies struggling to compete with large corporations by providing for basic needs and countering unpredictability. Communities that are struggling are also seeing low-income workers become increasingly supportive of right-wing, xenophobic, and anti-free trade policies as a reaction against their economy’s inability to stay afloat.  

There is a hope that in enabling access to higher education, the ability to gain more relevant skill sets, and striving to end cycles of poverty, there is a solution to the problem of encouraging job growth as demand for jobs rapidly rises. 

The Controversies

One of the main difficulties with UBI is the ambiguity around what role it should play, and who it should sustain. A key dilemma is that if it meets everyone’s needs, it comes with a tax burden; if payments are reduced, it no longer protects certain groups from poverty. The question of funding emerges in different ways in every society, although experts think shifting funding from existing insufficient welfare programs can bridge the gap.  As UBI frequently replaces existing forms of welfare, another major concern is the possibility that low-income groups would be made worse off—and there is no guarantee that economic and social inequalities will fade away. The UBI debate also affects immigration, as there are concerns that a UBI could lead to policies that decrease immigration. 

Pilots

There are several pilot programs currently running and planned around the world. Pilots exist in various stages of planning and at various scales in the United States, Canada, Brazil, Namibia, India, the Netherlands, Italy, Uganda, Kenya, Scotland, and France. Thus far, overall results have shown decreased crime rates, poverty, and malnutrition levels, and improved education, housing, confidence in the future, healthcare use, and economic activity. See here for more information. 

Finland

An important recent case study is Finland’s failed experiment with UBI. The Finnish design strayed considerably from traditional UBI: the trial provided the pre-existing welfare payments to the same group of people and only removed conditions. The hope was that people would use this extra freedom to take actions that would improve their chances of finding employment. Payments were kept to a limited group, which excluded some of the unemployed, and were insufficient for basic needs. Hence, this meant more regulations and barriers—which other UBIs are conceptually against. Furthermore, the pilot’s duration—just two years—has been criticized as being too limited to get accurate results.  

Ontario 

The recently terminated Ontario pilot was one of the most promising and exciting. It was directed as an antipoverty mechanism, was meant to last three years, and it provided income-based aid without eliminating the need to work for randomly selected low-income and unemployed residents. The experiment also included a control group of residents with similar circumstances who did not receive any UBI payments. See here for more details on the Ontario pilot. The program saw considerable successes: people found it easier to afford healthier food, were able to meet healthcare needs, took time to volunteer, started the process of paying off debt, pursued higher education or trade school opportunities, found stable housing, were able to stay in low-paying but socially critical jobs , and made neighbourhoods more friendly. Many felt that it introduced hope to areas that had seen substantial deterioration. 

Despite the positive impact the pilot generated, the newly elected Progressive Conservatives decided to scrap the pilot in July 2018, and participants in the pilot will receive their last payment on March 31, 2019. 

Premier Doug Ford’s decision to scrap the pilot has had domestic and international consequences. Those finally lifted from generational cycles of poverty began struggling again and governments around the world seriously considering UBI lost an invaluable opportunity to analyze results. Furthermore, the end of the pilot program has inspired protests and participants are looking to sue the Ontario government for “breach of contract, negligence, and misfeasance in public office.” 

The justification provided by ministry officials highlighted that the program was not encouraging people to work, and that it cost more than it was worth. See here for more details. However, as the project ran for only a third of its originally intended time and never saw the third-party review that was meant to follow the pilot, this claim has drawn extensive criticism and is largely considered baseless. According to experts, there simply isn’t enough data to make such a categorical claim at this point.  

This justification introduces a critical counterargument to a UBI: what about those who won’t contribute? While UBI brings a reduction in the labour force, studies show that the groups who choose to stop working are typically new parents, people with disabilities, those pursuing higher education, those searching for work, and the elderly. In other words, they are those whom the welfare state should, in theory, be taking care of. The other major concern is that people might waste money. While this has thus far not been supported by the Ontario pilot, it will be an important issue to keep track of in future pilots.  

Regardless of how governments feel about it, UBI is not going away any time soon. In a way, we’ve been conditioned to act with distrust, and this is reflected in our institutions. We assume that welfare recipients will make the worst decisions, and so government aid comes with conditions that often hinder access to and the usefulness of aid. Reconditioning ourselves to act with trust can come with benefits: if aid is unconditional, recipients can fully benefit themselves, their community, the economy, and the government. To make the best decisions over the course of the next 20 years, we need to make sure that we pay due diligence at this stage and set our primary focus on gathering data points. Crafting and tailoring policy should be secondary, and built on our findings, not our feelings. We need to ensure pilots test a diversity of scenarios and UBI philosophies. We need to let pilots run their course and analyze as much data as possible. Every government, regardless of location or level, should understand the gravity of each trial. Each pilot is valuable and the world needs the results.