Universal Basic Income — Is It Time?

By March 8, 2017December 22nd, 2020No Comments

50% unemployment. Millions jobless. These are the kinds of alarming numbers we keep hearing. And given the ongoing rise of work-stealing robots, that’s no real surprise.

Some say the world of work will undergo a major transformation over the coming decades, but in reality this has already begun: many in academia find themselves earning a lower salary than that of a blue collar worker. Automation of work doesn’t just affect manual workers, as often claimed, but also the highly educated. This growing fear of underemployment — or even unemployment — has brought the idea of a Universal Basic Income back into fashion.

A UBI is a sum of money handed out to everyone, irrespective of income, age, profession or employment status. A revised welfare system conceived to save us from the AI’s robotic whip, it’s meant to be sufficient to cover basic necessities and prevent material poverty.

The momentum is building

A recent study conducted by the firm McKinsey & Company found that current technologies could already lead to the automation of 45% of our jobs, and that a dramatic 60% of those occupations could see more than 30% of their complementary activities automated. Shocking enough as this is, we must come to realise that as our level of our technology increases, so will these numbers.

One of the first trials of a UBI-style program (dubbed ‘mincome’) took place in 1974 in Dauphin, Canada. Against the backdrop of the 1970s recession, 1,300 Dauphin residents began receiving monthly payments with no strings attached.

Unfortunately the program’s C$17m budget ran flat and the project ended in 1977. Nevertheless, it managed to prove that fears of UBI acting as a disincentive to work were unfounded. It also showed people would wait longer for a better job instead of taking the first one they were offered. Similarly, teenagers would remain in school rather than having to drop out to work, allowing them to complete their education and pursue a better long-term career.

Fast forward to 2017, and Canada will be conducting a C$25m pilot project in Ontario this year. Hopes are high that round two will produce more conclusive results.
Following Canada’s lead, several Dutch provinces have kicked off trials this year, as has the Finnish government. In Finland, 2000 randomly selected citizens will receive €560 of tax-free money each month for the next two years. There’s also been speculation that India may try a similar project, following the country’s 2016–17 Economic Survey, in which the UBI was described as a ‘powerful idea’.

Last but not least, Tesla CEO Elon Musk and Ebay founder Pierre Omidyar are the latest tech gurus to get behind UBI. Omidyar has put $493,000 into funding a UBI program in Kenya. So there’s no doubt that UBI is gaining traction all around the world.

Too good to be true?

One of the biggest concerns regarding UBI is always around who will pay for it, and who should be eligible. Besides, will there be any jobs at all? But there are solutions being offered to these potential issues.

The co-founder of Novara Media, Aaron Bastani, believes that most jobs will be automated, although there will still be some left, such as quality control and optimising agricultural robots and 3D-Printers. He believes that this will be done in an open, decentralised fashion, just like Wikipedia.

The chief economist of the Bank of England, Andy Haldane, has predicted AI could cause 15m UK job losses over the next 20 years. Who will pump money into the system if the robots are doing all the work? Well, just because they’re robots doesn’t mean that they won’t have to pay taxes, says French radical socialist party candidate Benoit Hamon.

Another question is who exactly will be eligible. Does ‘everyone’ really mean everyone? Countries with strong social welfare systems create huge pull factors for migrants. In Austria for example, a total of 37,500 refugees were granted asylum last year. Should they all be eligible, and should convicts serving prison sentences all receive payments too?

By dishing out a UBI to every citizen, the government would make huge savings in terms of administration. These savings help finance the UBI itself. Clearly imposing restrictions would increase red tape, add to administrative costs and stir up social resentment. And besides, it wouldn’t exactly be ‘universal’ then, would it?!

Broader Implementation

In the long run, the UBI should be for an entire nation. However, the most realistic way to introduce it would be a step by step, region by region approach, even if that could cause social and political tensions.

Let’s take Spain as an example. If the region of Catalonia was to implement a UBI, a lot of that money would come from the central government. This could create resentment in other regions because parts of their tax money would be used towards Catalonia’s UBI. To overcome this problem, regional governments would have to muster most of their UBI expenses from their own treasury.

Social Issues

A frequent challenge to UBI is that it removes the sense of purpose that comes from a job. Arthur C. Brooks, an expert in the fields of social science and happiness, says that work is a fundamental factor in creating happiness, stating that this is the reason why the majority of unemployed people lack a sense of purpose.

Moreover, a UBI is likely to increase existing resentments. The decline of work is asymmetric, and a costly policy designed to accommodate the decline of work is likely to generate more resentment from those who work toward those who don’t, especially from the upper classes. UBI could lead to a society built upon jealousy and resentment.


Some people perceive UBI as a kind of ‘luxury communism’. In other words, the economic stability provided by the system could end up acting as a disincentive to work and education. They feel these people may find themselves caught up in a vicious cycle of economic inactivity and illiteracy.

Austrian President Alexander van der Bellen, with whose government we’re always working closely on UBI and other issues, doesn’t subscribe to that idea. “Family, music, literature and community work would no longer be costly hobbies or side jobs, but instead be at the centre of some people’s occupation,” he says.

While there’s no easy answer to this complex question, I agree with van der Bellen. I believe that a UBI would smooth out the transition to the so-called ‘4th industrial revolution’. It would act as a compliment to work — not a substitute. People would be able to enjoy a sense of political and economic security whilst being able to make better choices for themselves and, most importantly, have the time to do what their hearts desire.