The Promising Solution to Economic and Social Justice
What if I told you that you could get paid for doing absolutely nothing? No, I’m not talking about being a social media influencer or a professional napper. I’m talking about Universal Basic Income (UBI), the one thing that might make your parents regret telling you to stop being lazy and get a job. In recent years, UBI has gained momentum as a promising policy solution to address economic and social justice. Proponents argue that it can reduce poverty, promote economic stability, and enhance individual well-being. However, opponents of UBI argue that it can lead to inflation and disincentivize work. In this Blog, I will explore UBI and argue that it is a promising policy intervention that can help reduce poverty, promote economic stability, and enhance individual well-being.
What is Universal Basic Income (UBI)?
Universal Basic Income (UBI) is a social welfare system in which all citizens or residents of a country receive a regular, unconditional cash payment from the government, without any requirements or means of testing. The aim of UBI is to provide a basic level of economic security and alleviate poverty by ensuring that everyone has a minimum level of income to cover their basic needs, regardless of their employment status or other personal circumstances.
What is universal basic income? | CNBC Explains
How Does it Work?
- the feasibility and cost-effectiveness of UBI
While there are concerns over its feasibility and affordability, some argue that UBI can be funded through progressive taxation and public spending. As Straubhaar (2017) points out, progressive taxation – where those who earn more pay a higher percentage of their income in taxes – can generate revenue to finance UBI. He argues that the high-income earners would be taxed more, but the net benefit to them would be low since they would receive the same amount of UBI as everyone else. This would create a more equitable distribution of income, reduce poverty, and boost consumer demand, which could stimulate economic growth. In addition to progressive taxation, public spending can also fund UBI. Zouhar et al. (2021) argue that public spending can enhance inclusive growth by providing public goods such as education, healthcare, and social protection. UBI can be seen as an extension of this concept, where individuals receive a payment to cover their basic needs, allowing them to participate in the economy and contribute to society. UBI could reduce the need for other social programs, such as food stamps and housing assistance, which can be expensive to administer. By streamlining these programs into one, UBI could lead to cost savings and improve efficiency. UBI has the potential to be funded through progressive taxation and public spending. While there are valid concerns over the feasibility and cost of UBI, its implementation could lead to more equitable income distribution, reduced poverty, and economic growth. By using a combination of progressive taxation and public spending, UBI can be implemented in a fiscally responsible manner that benefits society as a whole.
What are the benefits of UBI?
Universal Basic Income (UBI) has the potential to enhance individual well-being by providing a financial safety net that allows individuals to meet their basic needs and pursue their passions. According to Haagh (2018), UBI promotes work and freedom by removing the fear of financial instability, allowing individuals to make choices based on their interests and abilities rather than financial necessity. This, in turn, can lead to greater job satisfaction and creativity, which can improve overall well-being. Additionally, Gupta, Jacob, and Bansal (2022) suggest that UBI can mitigate the negative effects of psychosocial stressors, such as financial insecurity and anxiety, on mental health. Their review of existing research indicates that UBI can lead to improvements in mental health outcomes, including reductions in depression and anxiety. This, in turn, can lead to improvements in physical health outcomes, as stress and anxiety have been linked to a variety of health problems. Overall, UBI has the potential to enhance individual well-being by reducing financial stress, promoting greater job satisfaction and creativity, and improving mental and physical health outcomes.
Additionally, one of UBI’s potential benefits is promoting economic stability. According to Hall et al. (2019), UBI can create a more inclusive form of capitalism that is less vulnerable to economic shocks. This is because UBI provides a minimum level of income security, which can help individuals and households weather economic downturns. Additionally, UBI can help reduce income inequality, which has been linked to economic instability in many countries. Rosnick (2017) adds that UBI can lead to increased consumer spending, which can stimulate economic growth and reduce the risk of recessions. When people have a stable and predictable income, they are more likely to spend money on goods and services, which in turn creates jobs and generates revenue for businesses. UBI can help individuals better prepare for the changing nature of work in the 21st century. As automation and artificial intelligence continue to replace jobs, many people are at risk of losing their livelihoods. UBI can provide a cushion for these individuals to pursue education or training to learn new skills and adapt to the changing economy. This can lead to a more productive and innovative workforce, which can help sustain economic growth over the long term.
Conclusion
Universal Basic Income (UBI) is a promising policy intervention that can reduce poverty, promote economic stability, and enhance individual well-being by providing unconditional cash transfers to all citizens, regardless of their socioeconomic status. UBI has the potential to enhance individual well-being by reducing financial stress, promoting greater job satisfaction and creativity, and improving mental and physical health outcomes. Additionally, UBI can contribute to reducing poverty and inequality in society, redistributing wealth, and increasing social mobility. UBI can also promote economic stability by creating a more inclusive form of capitalism, reducing income inequality, and stimulating consumer spending. Although there are concerns about the feasibility and cost-effectiveness of UBI, progressive taxation, and public spending can finance UBI and lead to a more equitable distribution of income, reduce poverty, and boost consumer demand. The implementation of UBI is not a silver bullet that will solve all the economic and social challenges that we face today, but it can be a step in the right direction. However, careful consideration of the specifics of the policy design is crucial. For example, the amount of UBI, the age at which individuals become eligible, and the source of funding should be determined based on a comprehensive analysis of the economic and social impacts of UBI. Furthermore, UBI should not be viewed as a replacement for other social programs but rather as a complement to them. UBI has the potential to provide a financial safety net that allows individuals to meet their basic needs, pursue their passions, and contribute to the economy and society. With careful consideration of the policy design, UBI can be a promising policy intervention that reduces poverty, promotes economic stability, and enhances individual well-being.