The idea of UBI has been going frenzy for a while and now most people majorly economists seem to think UBI makes sense particularly amid pandemic.
But are you ready to face it?
Just imagine every month a pre-calculated sum of money is being credited directly to your bank account and it’s just like that month over month and no one would question you.
That’s Universal Basic Income in a nutshell. The UBI is gaining popularity worldwide and it started thought-provoking debate and controversy among economists. But the UBI has some strong will backed by personalities like Bill Gates, Elon Musk, Mark Zukerberg supporting the concept but several economists are not convinced.
The concept of UBI isn’t new but recently many people seem to care about it particularly because of the constantly increasing unemployment rate across the world.
But the question here, is UBI the solution for unemployment? And if so, is it economically strong?
But this ever ending controversy is growing particularly strong, now let’s review both the sides of the coin and discuss what they have been debating all along
Standing for UBI:
Most influential people from the top biggest technology companies in the world believe that constant improvement and breakthrough in AI would be overwhelming, and this would cause about a third of the population who are employable to find themselves unemployed or getting replaced by a machine. And yes several companies and innovation proving that this would be true soon,
“There will be fewer and fewer jobs that a robot cannot do better; we’re looking at mass unemployment. This is gonna be a massive social challenge and ultimately we would have to have some kind of universal basic income for sustenance. I don’t think we’re gonna have a choice.” – Elon Musk
The democratic presidential candidate of the United States of America Andrew Yang proposing a $1000 income on a monthly basis to all adult citizens of the United States of America.
But hey, now this money, where does it come from? And the major issue is wouldn’t it make people not willing to work and hustle their day job?
Well yes, but let’s check the numbers, when it comes to the US, the total cost for implementation of UBI turns out to be a whopping $3 trillion dollars. Yes, that’s a lot of money, but let’s also consider other welfare programs and security programs, which means about half of the US population are already getting income support in some way, then the figure comes down to about $1.8 trillion.
Andrew Yang also proposes VAT on Robot tax, the companies which are benefiting from the higher output due to advancement in artificial intelligence and technology as a whole.
But what most don’t understand is that a $1000 dollar monthly income will increase the acquisition or purchasing power and capacity to buy anything under that amount, and this money would trickle into the economy itself.
There’s also a group of community people who believe crime rates will decrease if this is implemented, since they don’t get into jail, so they can keep getting their share of UBI.
We thought that people would become passive instead of being assertive and they’d become lethargic and unwilling to do their job but the stats prove something different.
In Alaska, the UBI has been implemented already, economists have found out that citizens are more encouraged to take part in their passion apart from their work, this is another case.
Standing against UBI:
The following arguments are the majority ones that are against basic income people find convincing:
It might encourage people to stop working.
Foreigners might come to the country and take advantage of the benefit.
Only the people who need it most should get something from the government.
It is impossible to finance this.
It increases dependence on the government.
It is against the principle of job and reward.
The major argument revolves around UBI and it is the element that has been a major obstacle to implementing UBI, its financing. Imagine we are planning to implement UBI for a country the size of India, it is much difficult to make this a reality and to even entertain the idea of basic income. This could be a major reason to trigger inflation because the demand for goods and services around the country will be on all state high all of a sudden. And due to this issue of inflated prices, the standard of living cumulatively would not increase a lot.