The concept of a dependable income for a citizen body isn’t a new one. The Roman emperors were famous for giving away bread to their hungry citizens thousands of years ago. Modern programs like unemployment insurance and food stamps continue to flirt with the idea as well.
Going “all-in” on a basic income for all and sundry, though, remains a step that the U.S. government has not yet taken. Democratic presidential hopeful Andrew Yang made waves in the lead-up to the 2020 election with his “Freedom Dividend” that championed the concept of a “Universal Basic Income” or UBI, but it was more or less dismissed when Yang dropped out of the race.
However, with the coronavirus wracking the nation, millions shifting to stay-at-home work and school, and massive stimulus packages being passed, it has forced many politicians on either side of the aisle to reconsider their positions on UBI and how it may shape the future of the nation.
What is Universal Basic Income?
Before getting into the pros and cons of UBI, it’s important to define just what universal basic income is. At its root, universal basic income is a set amount of financial aid that is provided by a government for the citizens that live within a specific geographic area. Typically it:
- Is given to all members of a society within a geographic boundary.
- Covers basic living requirements.
- Is a predictable and guaranteed source of income.
While the specific amount of money and the way that it is provided varies, these basic tenets are the heart and soul of the UBI argument.
The Benefits of Universal Basic Income
There are many benefits to having a universal basic income in place. For instance, with so many expenses shooting up at incredible speeds in recent years, having a dependable source of income can allow individuals across the country to:
- Pay their mortgages and keep a roof over their heads.
- Purchase basic staple foods to keep them and their children well-fed.
- Buy affordable clothing.
- Afford childcare so that they can work and bring in additional income.
In addition, universal basic income has the potential to boost the economy, as the steady infusion of cash will enable Americans to increase their spending. It will take money that is being made by the ultra-rich and put it in the hands of those who will invest it into very real, day-to-day activities that boost the economy.
Another natural side-effect of UBI is the simple fact that it will increase the quality of life for countless individuals that currently spend nearly every waking moment scrambling to pay their bills. According to Zack Friedman from Forbes, a staggering 78% of workers live paycheck to paycheck, meaning their primary financial goal is earning enough money for things like avoiding defaulting their mortgage, paying their rent, and keeping food on the table.
Universal basic income would relieve this overwhelming pressure to work in the name of survival. Rather than taking any job that they can find, citizens will be able to invest themselves in fields and industries that they actually care about.
Instead, with the lowest rung of Maslow’s Hierarchy of Needs covered through UBI, they can shift their focus to that old Robert Frost line, “My goal in life is to unite my avocation with my vocation, as my two eyes make one in sight.” In other words, UBI would enable individuals to monetize their passions, even if those passions wouldn’t have generated enough money to cover basic living expenses before.
Why UBI is Resisted
Of course, the question that remains is why UBI hasn’t become a reality yet. The obvious reason for the resistance is the simple fact that it could cost the nation an arm and a leg.
For instance, Yang’s UBI number of $1,000 per individual per month has been criticized for not adding up. While there are certainly ways for a government to come up with cash, it’s definitely important that UBI is done in a way that doesn’t bankrupt the country.
The other significant criticism is that a basic income model will incentivize laziness. In other words, instead of encouraging individuals to invest themselves in areas that they care about, it will enable them to do nothing.
In addition, generational differences will likely impact how each person reacts to having a basic income. For instance, Baby Boomers are focused on stable retirement while Millennials want to work for something they believe in. This can lead to dramatically varied reactions to UBI.
The Need for UBI Now
While these concerns are certainly important to address, it doesn’t change the fact that the needs and benefits of universal basic income outweigh the criticisms at this point.
The overreaction to the coronavirus crisis is leaving many individuals in desperate straights and could leave both the U.S. and global economy so devastated that the need for a universal basic income could become a necessity in the near future — which is precisely why it is a pressing question that must be answered in the here and now.