Imagine receiving a thousand dollars in your bank account every month, for the rest of your life, regardless of your status or income, no questions asked, no work or payback required. – Impractical you say? Andrew Yang, a 2020’s presidential candidate is running for president based on a proposal called Universal Basic Income (UBI). This short article explains everything you need to know about UBI and why you should be thrilled about it.
Before we get into it, let us briefly explain the idea of Universal Basic Income. By definition, Universal basic income is a policy where every adult member of a society receives a basic level of income, every month, to meet his or her basic needs. This short article explains why the UBI model is superior to the current economic models and will further address two of the main criticisms that UBI has faced namely, UBI’s risk of individual laziness and the UBI’s effect in market inflation.
The first question one might ask is ‘what problem does UBI fix?’ What problem are countries going to face in the near future that necessitates a policy like Universal Basic Income, Well, here’s the answer: Imagine pouring water into bathtub that has a giant hole at the bottom. That bathtub being our current state of economy. The poor are getting poorer, the top 1% of the world own 99% of total wealth in the world. Individuals work in fear and scarcity. United States department of health research and development has reported over 48% of Americans do not care for their jobs. Millions of retail, call center, truck driving and fast food jobs are soon to be taken over with automation. Government works to create new jobs, manage economic gaps and provide mental and physical healthcare while the pile of problems just get bigger and bigger. In an era of the greatest economic and technological transition in the history, governments need a meaningful solution to secure individuals and their wellbeing.
It is important to clarify that UBI is not a solution where it only makes sense from an economic standpoint. UBI’s magnitude of benefits should be taken seriously on a more fundamental level. Universal Basic Income’s true value lies within its humanly and moral benefits to the society by improving market’s definitions of work and value. For example, while caring for elderly and the ill is an immensely valuable and moral act, in a market it is considered of low value, with an average salary of $25,000 per year. Unfortunately, the current market fails to recognize values of caregiving, arts and creativity, journalism, environment, infrastructure and public goods. Somehow, everything that truly matters gets punished by the current market design.
But wait, doesn’t free money just make us lazy? Doesn’t UBI turn a nation into the land of laziness? Absolutely not. It is important to realize that a Universal Basic Income falls just below poverty lines (e.g. $1000UBI vs. $1200 Poverty line). There is no reason to think one thousand dollars results in people living large and staying at home. In fact, individuals still need to work in order to maintain a financially stable life. Data display that the two groups of individuals who display fewer working hours with more money are mothers with newborn children and fresh high school graduates. However, UBI helps prevent unhealthy work patterns which is safely believed to be moral. In Simpler terms, UBI is predicted to result in possible future savings, or a family taking their children out to the movies more often.
But what about inflation? Doesn’t putting a thousand dollars monthly in the hands of public going to rise the inflation rates on consumer products? Again, absolutely not! The current causes of inflation in the United States tend to fall into three buckets; Housing, education and healthcare the three principle critically dysfunctional markets. Consumer goods such as clothing, electronics. Media and so market show to be quite efficient because price sensitivity and fierce competition are the main drivers of these markets and verticals. It’s not like people are going to pay $40 for a burger. The beauty of the Universal Basic income is that it does not affect price sensitivity of the market.
After all, unfortunately the capitalistic economy together with advancements of technology have resulted in a dysfunctional damaged society. While companies such as amazon continue to grow as monopolies by closing down small businesses day after day, a post-capitalistic economic system looks to be more promising. Universal Basic Income is not only practical and affordable for governments to implement, but this system reverses the mindset of scarcity with a mindset of abundance by securing individuals financial stability and more fundamentally encourages the wellbeing of the society, re-assess the true definitions of work and value within a market and invests in humans and the future of humanity.
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