Universal basic income (UBI), also known as basic income, is a social service model that provides all citizens of a country a small monthly or annual stipend, which each person receives regardless of their employment status, income, or any other qualifying factors. UBI aims to reduce poverty and increase the quality of life among citizens. As of early 2022, no countries had implemented a truly universal basic income model, though a few had launched UBI-like programs specifically designed to aid the neediest individuals. Universal basic income models differ in their sources of funding, amounts distributed, and other dimensions.
In the past four decades, many countries including Finland, Canada, the United States, and Brazil (see map above and table at page bottom for full list) have discussed and debated UBI models. Many governments and private organizations have gone on to implement pilot programs to determine the practical cost of universal basic income, as well as its effectiveness in fighting poverty and its effects. The Basic Income Earth Network (BEIN) is one of many groups devoted to the promotion and implementation of universal basic income in countries around the world. The BIEN defines UBI using the following criteria:
Five Defining Characteristics of Universal Basic Income (UBI):
- Periodic: distributed in regular payments
- Cash payment: distributed as funds, not coupons or vouchers
- Individual: paid to every adult citizen, not just every household
- Universal: it is paid to all citizens, regardless of their situation
- Unconditional: there are no requirements regarding employment status or any other criteria
The pros and cons of universal basic income
As with other policies and models, universal basic income has its advantages and disadvantages. Supporters point out that many UBI pilot programs have resulted in increased school attendance and employment, greater community health, and improved financial stability with no corresponding increase in negative traits, such as unemployment claims or alcohol abuse. Supporters also argue that UBI enables college students to receive a degree in what interests them and not just a degree that will make them money. Because payments are automatic and do not require eligibility evaluations, the government would spend less time administering the welfare than it does now.
However, opponents of UBI argue that the system could not be funded on a nationwide scale without raising taxes for everyone. Additionally, because there are no requirements to receive UBI (proof of employment or willingness to find employment), people may be disincentivized to work. Free income could also trigger inflation, canceling out UBI's stated goal of decreasing poverty and increasing the overall standard of living.
Notable experiments in Universal Basic Income
Universal Basic Income in the United States
The United States has hosted nearly a dozen pilot programs in universal basic income. The longest-running of these is the Alaska Permanent Fund, which has awarded each of its citizens a portion of the state's oil and gas revenues (roughly $1,000-2,000 per year) since 1982.
2020 Presidential Candidates Andrew Yang campaigned with a universal basic income plan called the Freedom Dividend. The Freedom Dividend responds to the increasing automation that will inevitably take away one in three jobs from American workers over the next decade. Yang’s plan would distribute a $1,000 "partial dividend" to each American adult every month ($12,000 per year)—enough to help, but not so much that it would encourage recipients to stop working. Several states have tried small-scale basic income programs in the past, including Alaska, North Carolina, New Jersey, Pennsylvania, Iowa, and California.
Universal Basic Income in Norway
The country whose system most closely resembles universal basic income is Norway. Norway is a welfare state, ensuring that all Norwegian citizens residing in the country have access to education, universal health care, and income in the form of social security or benefits. However, recipients of the monetary benefit must still meet specific conditions. For instance, they must seek work, abide by the law, participate in elections, and pay taxes.
Universal Basic Income in Finland
In 2016, Finland launched a basic income experiment with 2,000 randomly selected unemployed citizens, who were each given 560 euros ($640) monthly. Although the amount was only 50 euros more than what participants were previously receiving from unemployment benefits, they reported being happier and in better health. They also greatly appreciated being relieved of the ongoing paperwork involved with maintaining proof of unemployment eligibility.
Universal Basic Income in Brazil
It could be argued that Brazil has been more openly supportive of universal basic income than any other country. The UBI-like Bolsa Família social program, established in 2004, delivers a stipend worth roughly 20% of minimum wage to the neediest 25% (or so) of Brazil's people, helping them buy food, school supplies, clothing, and shoes. The town of Santo Antônio do Pinhal has gone a step further and established one of the world's first true UBI systems, giving all residents who have lived there a minimum of five years a portion of the city's tax revenue. Finally, a privately funded UBI pilot program has been active in the region of Quatinga Velho since 2008, and according to data, has led to improvements in living conditions, health, housing quality, and nutrition, particularly among children.