A universal basic income (UBI) refers to a predetermined sum of money that is given to by the government to all its citizens irrespective of their income or work status (Perkio 2015). The main purpose of issuing UBI is trying to tackle inequality and redistribute wealth. UBI is transferred from the public into private account all through the entire lifetime of the citizens without any application. The UBI is issued regardless of the employment status, relations, personal circumstances, and attitudes.
The UBI is used as an effective way to adjust the theory of social market economy to globalization and digitization in line with the society which is demographically aging. It also helps the less qualified employees to cope with the current living standards with the low income they earn from their jobs. The idea is a straightforward one but it is has a big impact on the society. The basic income gives people stability in chaotic times. If an individual loses their job they are still able to meet basic needs as they think about what to venture into. Technological advancements are taking over a number of job and with the basic income, it is not fatal. The universal basic income is very expensive, and the United States requires $3 trillion to cover all the adults (Fajfar and Beloglavec 2014). The finances for the basic income come from a number of sources. One of the ways is redirecting money from other social activities which are unnecessary such as food stamps. The other way is through dividends from shared resources which include land tax and carbon dividend. Another way is through an increase in taxation of a variety of sources such as corporate tax, income tax, sales tax and capital gains tax.
There has never been a better time to implement the UBI as now. First of all, UBI is a form of social justice in the society. Studies have shown that a society that does not assure its citizens a decent minimum income has failed the test of justice. If all members of the society are not given a stake then there cannot be any justice or stability. The UBI develops the values of a society which state that all people are equal and free. It also creates flexibility in the job market, and it reduces poverty. UBI encourages efficiency by decreasing the wastage in government transfers which in turn increases productivity (Fajfar and Beloglavec 2014). The universal basic income has also been adopted because of poverty reduction. A universal basic income is the quickest way to reduce poverty in the presence of a well functioning financial system. It is also viable in countries with large populations because even if it is tied down to low levels of income it still manages to give immense welfare gains. It also helps the poor in countries such as India to be treated as agents rather than subjects. Other systems often dignify the poor through the assumption that they cannot make economic decisions in regards to their lives. In UBI the states take each on their own and not the household which is important in eliminating poverty. Another benefit of UBI is that it acknowledges that the society has to provide a minimum living standard which is crucial in this era with all the unemployment. It also allows flexibility in the labor market by giving people a chance to have partial engagements. Employees cannot be exploited to accept any working conditions so as to survive. The past methods such as welfare schemes have been said to have a lot of misallocations which end up excluding the poor (Klein 2016). UBI will, therefore, ensure that the welfare transfers are efficient take away the responsibility of the national government.
Despite all the benefits of universal basic income, there are some downsides to having it. The first one is that some critics argue that UBI reduces the incentive to work. They also say that UBI will also reduce workers productivity. However, the benefits of UBI are minimal such that it is necessary to work. This concern is however disregarded because the same argument has been brought forward against high wages claiming if workers are paid above a certain level they will choose leisure over work. Then we have another concern which arises from the question of whether income should be separated from employment. For this question, it already happens but only to the wealthy and fortunate. In societies where inheritance or any form of non-work income is accepted then they have already detached income from employment. Therefore, those who get a small amount of unearned income from the state are supposed to be economically less problematic than the unearned income that is allowed by the society (Klein 2016). Furthermore, there is also a concern of reciprocity. If the society is termed as a scheme of social cooperation then income should be unconditional regardless of individuals contribution to the society. In most cases, people will contribute to the society. Therefore, UBI will be an approach of recognizing non-wage work that relates to the contribution of the society.
The universal basic income is an essential change in our social system. UBI treats people equally and is very fair and liberal. Those individuals with a high income disburse more taxes than individuals with lower income or no income. Overall the universal basic income merges social security and economic efficiency.
Fajfar, Luka, and Sabina Taskar Beloglavec. "Universal Basic Income." Nase gospodarstvo/Our economy 60.3-4 (2014): 73-81.
Klein, Elise. "Universal basic income." Arena Magazine (Fitzroy, Vic) 142 (2016): 6.
Perkio, Johanna. "UNIVERSAL BASIC INCOME." The Politics of Ecosocialism: Transforming Welfare (2015): 137.
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