Universal Basic Income (UBI)
Robert & Mimi (2018) describe UBI as an income policy with a record of failure idea. The policymakers who reform the state of welfare major in UBI; it is a government program where every adult citizen regularly gets a certain amount of money. The UBI system’s primary goal is to alleviate poverty and substitute it with other essential needs that require greater potentials and involvement of the bureau (Robert & Mimi, 2018).
UBI has gained much momentum in the United States since its automation improves workers’ replacement in manufacturing industries and other economic sectors. Both UBI and Guarantee of Job opportunities are good complementary ideas. UBI is first an unconditional salary for everyone in the country. It is a job guarantee as an open-ended government commitment to improve living standards with many benefits to everyone who wants to receive it (Jeff, 2017). There are many arguments concerning UBI, which are discussed in this context; one of them is that it fights unemployment in the country. Although research has reported UBI’s role in fighting unemployment, there are still other strongest arguments against it, such as eliminating social security needs. This paper provides an in-depth explanation of these arguments in the context of UBI.
Strongest argument in favor of UBI
UBI is a powerful tool against poverty hence unemployment. Providing low-income families with unconditional monthly income can help to eradicate poverty in the United States. Receiving the monthly payments will enable many families living in abject poverty to cater to their basic needs and focus on other activities for growth and development. Being focused, one is likely to engage in activities that generate revenue after receiving UBI to create employment opportunities. Having the basic needs met using the universal basic income, people are likely to develop and progress themselves towards success in the business field as they are not required to strain to cater for their basic needs. Additionally, when the basic needs are met, individuals will not direct their energy towards obtaining income to cater to their next meal rather they concentrate on creating self-employment opportunities hence eradicating poverty and the level of unemployment. For instance, the monthly incentives can be saved to start a small farming business that will create employment for the farmer and other individuals in the supply chain. “By contrast, a job guarantee would tighten labor markets directly by just creating jobs. And it wouldn’t compete with private employers by upping its wage offer, so the potential for inflation is lower” (Spross, 2017). Thus, UBI will help to fight poverty and create employment for many jobless people.
Individuals can make savings from the universal basic income to boost and start small businesses. Since the UBI is a monthly payment to every US citizen, people living in poverty may decide to make savings and start small businesses that can be used to generate revenues to cater to their needs. Many people are living in poverty because they have no cash to initiate their ideas. Economist Joseph Hanlon once said that poverty has been created by a lack of cash but not all about lack of knowledge. Many people have indeed been unable to get themselves out of poverty because they have no source of income. Ensuring that every citizen receives a monthly payment through the UBI, the level of unemployment is likely to be reduced as many people living in poverty will be in a position to invest their ideas using the little amount of cash they receive from the government reducing the level of unemployment. “Supporters of Yang’s Freedom Dividend and other UBI schemes argue that the benefits would extend far beyond the obvious one of providing a minimum income to keep people out of abject poverty” (Spross, 2017). Additionally, people who have been unable to expand their businesses because of a lack of revenue are likely to make savings and invest the cash to boost their businesses. Expanding their businesses will not only create employment for the owners of the business but also for other unemployed individuals who will be given opportunities to work in such businesses.
Due to the automation of many activities in the business sector, UBI could be a solution to fight unemployment in the United States. “Proponents believe UBI could help reduce poverty and income inequality and address the changes in the job market caused by increased automation” ( Spross, 2017). Over the past decades, technological automation using artificial intelligence has been taking up jobs that used to be handled by humans. Due to the high level of unemployment that has been caused by technological advancement, the government may need to rely on UBI to fight the rate of unemployment. Providing monthly income will help many people living in poverty to cater to their basic needs and ensure their well-being. The idea will be an alternative solution to fighting the unemployment crisis level. When the unemployed receive paying jobs, they will be able to have additional incomes from the UBI improving their standards of living and saving to start small businesses that can be run by their relatives or other people who may be unemployed. More interesting, UBI will help to compensate many people who have been doing unrecognized and unpaid jobs such as parenting and those proving elderly care hence creating employment for them.
Strongest argument against UBI
In the contemporary world, universal basic income is faced with numerous criticisms. The main critics regarding the UBI are that such a system removes the incentives and morale to work. The proponents of this idea argue that providing basic needs to everybody in society could reduce the incentives to work, thus encouraging a drop in productivity, high cases of unemployment, and a succeeding slowdown in economic growth. Besides, the workers will absent themselves from the labor market since they are assured they will be provided with enough money to live off. In the US, for instance, the majority of the workers appear gradually drop out of the labor force due to the UBI received periodically.
UBI is likewise found to be costly to be feasible. The most prevalent criticism of the UBI is its apparent cost in light of the fact enough money needed to be disbursed to the society to live off must have a source. Typically, the only means, which can make UBI affordable, is a withdrawal rate in the case of Negative Income Tax (Jeff, 2017). As people earn more, the amount they earn through the NIT reduces drastically until a certain point where they are ineligible to NIT. The cost of UBI will have to be met through over-taxation for the generation of money for such benefits.
The universal basic income is likely to encourage poverty and inequality. Although the predominant aim of the UBI is to eliminate poverty, the tradeoffs necessary for funding are likely to cause harm, particularly to the vulnerable population. “Transfer funds away from the vulnerable to affluent persons capable of self-support” (Jeff, 2017). The proponents of this idea cite that by replacing particular benefits with a single grant, those who depend on multiple benefits would not have enough income to cover their basic needs; similarly, those who do not need extra income will get it anyway. While the latter squander the money prodigiously, the former spend such money on necessities such as food and shelter. Sometimes the money might be unevenly distributed, with the poor and the bourgeois having the little share. Albeit inequality is something to be least concerned with, the actual level of inequality is likely to decrease with the UBI since there would be a baseline living standard, which narrows the gap between the rich and the poor.
Further, the universal basic income makes people more reliant on the state. With the benefits from the UBI, individuals are found to become more reliant on the aforementioned welfare, and this over-dependence could be detrimental. “Reduce work and increase recipient dependence. The overwhelming majority of Americans believe that able-bodied adults should be required to work or prepare for work as a condition of receiving aid” (Robert, 2018). People tend to spend their wages recklessly with the hope of getting more disbursements in the future. Miserably, some boycotts working and distance themselves from the workforces, thus encouraging laziness. Further, people are most likely to find work meaningless.
Conclusion
UBI could be a solution to fight the rate of unemployment in the United States as giving people the monthly payments will enable many families living in abject poverty to cater to their basic needs and focus on other activities for growth and development. Also, individuals can make savings from the universal basic income to boost and start small businesses. UBI could be a solution to fight unemployment created by technological advancement in the United State, which has led to the automation of many activities. The inspiration behind most of the UBI proposals is estimable; it helps in reducing the widespread poverty, hence proving long-life income security for the society. However, the undeniable fact is that UBI is likely to fall far short of eradicating poverty since the government has to impose high economic costs to collect the money meant for the program. Equally, people become over-dependence on the government, hence ignoring future opportunities for work.