Universal Basic Income, Could it work in the United States?

What does universal basic income mean? The top questions asked about Universal Basic Income. Can we pay for it or afford it?

  • As Finland ends its trial with Universal Basic Income, countries around the world are taking notes on whatever lessons can be drawn from it, including the United States.
  • Many lessons can be taken from Finland’s trial with UBI but caution should be made due to incomplete data, changes in the UBI design and country-specific factors.
  • UBI could work in America if a nation-wide reconsideration of old economic myths is taken into account.

For many, the “American Dream” has deteriorated into a nightmare. With titanic student loan debt and little hope of financial security nets like Social Security, younger generations may feel trapped. With dwindling benefits, fixed income and rising costs of living, pensioners feel the squeeze and working people all over the country are being forced to make the choice between groceries or medicine.

On top of daily struggles, America has the lowest social mobility rate of any rich country, with tremendous income disparity among the population.

As politicians across the United States look for more ways to assure the struggling and left behind that they will be provided for in some way, UBI begins to look like a better and better choice, but can a country so wrapped up in its on “Bootstraps mantra” stomach the thought?

Furthermore, what lessons can be learned by studying a country, nearly 30 times smaller than the North American giant?

What is Universal Basic Income?

One term is being echoed around the world, especially by those who are struggling, Universal Basic Income or UBI. It has been offered as both a solution to stymied economic conditions and the loss of jobs to automation but just what does it mean and how does it work?

Universal Basic Income is not new, in fact, the proposition of implementing it in America is an old one and there are already American states and cities that pay residents this incentive. It’s the idea that a population in need or the entire population is paid, either directly or through a negative income tax scheme.

This payment would not be remuneration for a past contribution or current salary, but rather, it would be given to people as a way of benefiting society entirely.

Economists and thinkers from both sides of the political spectrum have hailed the idea as the only genuine way to help people and various versions of basic income have been tested out around the world, the most significant of which just ended in Finland.

Finland Universal Basic Income

Finland just ended its UBI trial. The goal of the short-term Finnish experiment was to increase employment however, the conservative Finnish government made changes to the UBI scheme so that benefits were only provided to unemployed Finns previously receiving unemployment. Although the results are still being analyzed problems and best practices are already being discerned

Some argue by changing the UBI scheme, the Finnish government just made a plan to get more Finns into jobs they didn’t want anyway. It should also be noted that the program was extended to only 2,000 Finns and that other projects are still ongoing in the country as well. So what can we learn from them?

Takeaway Lessons from the Finns

The issues discussed above, notwithstanding, the performance of Finland’s UBI program leaves us with some good lessons. The first one is an easy problem to spot, politics.

From its proposal to its inception, Finland’s UBI program has been changed to significantly alter the distribution of funds across the population, mostly due to the actions of the ruling political party.

Even with the support from citizens, wealthy Americans and tech giants, it should be noted that the risk for political interference is still great.

Some myths were dispelled. According to findings from Finland’s and other, smaller “UBI” prototypes (for instance the decades’ old subsidy program for Alaskan residents), contrary to popular belief, UBI doesn’t make people lazy.

In fact, they are likely to increase work rather than reduce it, according to Guy Standing who co-founded the Basic Income Earth Network.

Like many, he theorizes that once work ceases to become just a means to put food on the table, people may work for other reasons, like leisure and passion, however, with a lack of certain jobs and the training or degrees required for others, this remains to be seen.

Seeing how Finland ran its UBI program has also given hope and ideas for similar attempts in the USA. Overall, Finland and other small-scale UBI projections give a good idea of some takeaways but more time is needed to see their true impact.

What about the U.S.?

There are arguments for and against UBI on both sides. For instance, some conservative proponents feel it could reduce government spending on social services like welfare and unemployment.

Liberal proponents see it as a way to redistribute wealth and benefit those living in poverty or caught in loopholes, like stay-at-home parents who spend the entire day working but whose work isn’t a paid employment opportunity (meaning they are not entitled to unemployment benefits).

Opponents say it will make people lazy or the incentive to work would be lost entirely. Another concern is that the financial disparity between groups will be widened if the rich or super-rich are subsidized along with those under the poverty line. So can this work in the USA?

Whether or not it will be implemented on any scale or even work is a question of time and persistence but there are two facts that are virtually undeniable. The first is that the American Way, the way that America is trying to eek by isn’t working and it’s time for a change.

Whether gradual or massive, working Americans deserve to live a stable life. For the Americans who can’t maintain a paid job (for instance, due to illness or while raising a family), the country they paid into with their (past) income, taxes, and labor should give them the same support they extended it.

The second fact is that if America is going to make any significant progress, it will have to get passed its own hesitancy to act. The notion that if you’re not succeeding, you’re just not trying hard enough is jaded and not nuanced enough for the contemporary situation many find themselves in. In short, it deserves to be renegotiated and updated or eliminated.

The results for smaller projects remain promising that UBI could work in the US but more trials must be done, on a smaller scale and result from previous trials should continue to be analyzed.

The current political climate remains inhospitable to larger-scale projects and implementing them now will do more harm than good until we understand how it all works.


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