Opinion General

Universal basic income is a modern alternative to the welfare state

Two states in India could be implementing universal basic income (UBI) within two years. Universal basic income is a social aid system where all citizens are guaranteed the funds to meet their basic needs, like food, shelter, and clothing.

Opponents believe that the system would harm productivity and de-incentivize work. Proponents argue that benefits to those below the poverty line would lead to greater creativity and entrepreneurship. While universal income has its pitfalls, it may be a more sustainable means of social aid than our current welfare aid system, especially in the age of growing workplace automation.

Even UBI’s supporters are concerned over where the funding for the program would come from. Most countries currently using the program pay for it by eliminating certain social programs, like food stamps, unemployment benefits, etc., or through tax income or decreasing spending in other areas. While some supporters advocate eliminating the entire welfare state (including programs like Medicaid), others tout the elimination of only means-tested programs (like unemployment benefit), and tax benefits. This system is more sustainable because it ensures cornerstone systems like public healthcare while eliminating programs like “welfare” which treat the symptoms of social inequality without addressing its root causes.

UBI will be most effective in countries with high poverty rates like India, where increasing automation can threaten up to 69% of current jobs. As factories lay off workers in favor of cheaper robotic options, thousands find themselves unemployed. The problem also goes beyond the manufacturing sector, with up to 97% of farm laborer jobs at risk. UBI can increase purchasing power, so it both aids those who are unemployed and creates new jobs.

The most dangerous part of UBI is the risk of its implementation without a solid plan. In India’s case, few details are available about what the program would look like, how it would be paid for, and what other social programs might change as a result. However, UBI can be managed responsibly; in Namibia, UBI dropped the poverty rate from 89% to 68%. Considering the program would not be implemented in India for at least 2 years, the lack of available detailed planning should not be a concern yet.

While some claim that UBI funds would inevitably be spent on drugs and alcohol, instead of necessities, a trial run in Kenya suggests otherwise. In Kenya, UBI funds are most often spent on necessities like food and medical care. Furthermore, UBI funds have not resulted in people working less.

UBI aims to treat social inequality at its root. Rather than aid those in poverty, it aims to abolish poverty altogether. UBI treats things like homes, healthy food, medicine, and clothing as human rights, and it aims to provide those rights through government stipends, not charities. In a UBI system, living out of poverty is a right, not a privilege. As Jeremy Howard states, “Do you want half the world to starve because they can’t provide economic value?” By providing the income to cover necessities, UBI frees up individuals to begin adding “economic value” in the form of goods consumption, intellectual production, education, and creative work in the arts, who otherwise would be spending most of their waking hours trying to gather the resources for their next meal.

UBI may not be a perfect system. As with most social programs, there are risks and expenses. But it should not be written off as a socialist attempt for the government to control the economy. In an increasingly technological world, where machines can do many human jobs with a fraction of the time and resources, UBI can help treat the disease of poverty, not just its symptoms.

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