So what is Universal Basic Income (UBI)? It’s a stipulated amount which is given to each citizen of the country regardless of income in order to provide sufficient subsistence. There are usually 5 characteristics that show Universal Basic Income. These are:
1. Periodic: it is paid at a regular interval
2. Cash payment (cash is the only medium to be given)
3. Individual (given to individuals and not groups or households)
4. Universal (everyone is paid the same)
5. Unconditional: You do not need to demonstrate actively looking for employment.
Now that we have a little bit of a background let’s see what’s going on when it comes to UBI.
One country which has piloted UBI is Finland and is being run by Kela (state welfare department) and it was created to change 2 things, poverty and the integration of artificial intelligence into the job sector. A group of 2000 unemployed individuals was included in the sample. They will receive €560 per month regardless of any improvements in their income for the next 2 years. Currently, the results show that there has been a reduction in stress, more incentive to find work and pursue business ideas. Most of the people in the sample claim that now that they are not under pressure to get a job they are less stressed than before and this reduced how much paperwork they have to fill in to show how they have been using their income. It gives them the chance to pursue what they really want to do even if it means looking for a job or starting up their business.
Alaska as a state is the next sizeable area where the UBI was also implemented starting in 1982. This case is different as the amount given to residents fluctuates according to their return on the investment portfolio as that is their supplier for the UBI. For Alaska, the benefits include the creation of 10,000 jobs due to the increase in the residents purchasing power. In addition, poverty rates within the Native Americans fell by 6% in 10 years and only 1% of Alaskans reports working less because of the UBI.
Namibia also decided to do a form of UBI in 2008 in a small village Otjivero-Omitara which was ridden with crime and poverty. Every village member was given a basic stipend every month in order to tackle the different social issues within the village. After it was implemented there were numerous benefits. These include a drop from 42% to 10% of malnutrition in infants. Poverty also has fallen from 86% to 68% and crime has dropped 36.5%. So even though it was implemented in a small village it still shows that it has numerous advantages.
So while we have seen the good and the bad side of implementing Universal Basic Income, all we can do is wait and see how this work out. So we will keep you updated in 2019 as that is when the overall results will come from Finland.1