Skip to main content

7 Reasons Why Universal Basic Income is Gaining Momentum

Greg de la Cruz works at NCR Corp's R&D center in the Philippines and is the author of two published titles on Amazon.

Should all governments institutionalize some form of universal basic income?

Should all governments institutionalize some form of universal basic income?

Universal basic income is a concept that no longer belongs to the fringes of welfare programs. The renewed momentum it has gained in the past few years from two types of advocates – reformists and futurists – tells us that its widespread implementation in countries everywhere could soon become a reality. Powerful people have also become proponents of the idea, as the likes of Elon Musk and Jeff Bezos who both belong to world’s richest one percent, have come out publicly in favor of universal basic income.

I also wrote a piece about universal basic income (UBI) back in 2016 with my article, What It Means to be Middle Class in the Philippines, a piece which has since gained more than 13,000 views. And this stat tells me that at least 13,000 people acknowledge the idea of unconditional government cash handouts. Whether I’m in favor of UBI or not, I’m aware that it might soon become real enough. Some countries will of course hand out bigger paychecks than others, and I suppose the ongoing Covid-19 vaccination programs around the world is telling enough of the ability of governments to shell out money for some purpose just because everyone else is doing it.

Coming from a developing country like the Philippines which has a poverty incidence of more than 20 percent, I’m well aware that 2 out of 10 people need that minimum free cash handout just to get by. We in fact already have a version of Universal Basic Income in place called the Pantawid Pamilyang Pilipino Program (4P’s). And while I hate how the 4P’s has been this welfare program prone to politicization such as when government officials threaten to withhold the benefit for beneficiaries who refuse to get vaccinated – in general, this Filipino version of UBI has thus far worked without causing troubling inflation.

There are many reasons why UBI is a fantastic idea which governments should incorporate into their welfare programs, but here are seven reasons why it has recently gained momentum.

1. There’s income inequality everywhere

Income inequality just isn’t going anywhere – because it’s everywhere, developing and rich nations alike. A proponent of UBI in 1934, Huey Long, suggested not only a minimum income, but a maximum income of 300 times the average income. But will any type of unconditional or universal basic income ever solve the omnipresent issue of wealth gap in society? I don’t think so.

That said, having a UBI implemented in welfare programs at least acknowledges the issue of income inequality. It’s like wearing masks because of Covid – mask mandates won’t stop the spread of the virus, but it acknowledges its existence and the risk it poses to people. In the same way, UBI won’t resolve income inequality but at least it gives people with no income some dignity and money to spend for basic necessities. UBI will at least give the poorest people in society a leg to stand on.

2. Powerful people want it to happen

Elon Musk responded in a CNBC interview in 2016 that there’s a “pretty good chance we’ll end up with a universal basic income, or something like that, due to automation.” Based on his statement, we can infer that his approach was that of a futurist, as opposed to being a reformist. And it’s no surprise that a powerful tech mogul like Musk would respond with a futurist’s tone. He founded and invested in Neuralink, a company developing a connection with humans and computers with the aim of creating a symbiotic relationship between man and machine.

Well aware of the threat that automation will pose to the labor market, it seems that Musk and other powerful people know that the implementation of UBI is inevitable. The day that automation will replace most jobs in society may not yet be near – and futurists back in the early 1900s were too paranoid when they sounded the alarm bell – but it is a day that’s coming. Artificial intelligence will enable robots and machines to work many labor-intensive jobs better, faster, and more effectively than humans ever could. Musk even reiterated his view during a 2021 interview with the Wall Street Journal, saying:

“Well (robots) has the potential to be a generalized substitute for human labor over time… The fundamental constraint is labor… I can’t emphasize this enough, there are not enough people…”

While Musk’s concern was the lack of able bodies to do the work that was available, a time where there aren’t enough jobs to be worked by able bodies (because robots have taken over) is looming.

3. The pandemic has reshaped work

Has the pandemic changed work for the better? Perhaps it’s too early to tell. The mainstream adoption of remote work and hybrid working (not going to the office as much) has made a huge portion of the workforce to rethink work. Some jobs were found to be still effectively executed wherever the location of the worker might have been. And further streamlining has removed the need of some middle management jobs that were only essential in a full-office setup.

The changes that occurred throughout the pandemic workstyle upheaval has both rendered some jobs unnecessary and created flexibility in several jobs. Where will all the people who lost their jobs because of all these changes, go? It might not be apparent now because of the labor shortages happening and the Great Resignation trend that’s going on, but when the dust settles, we will likely be in a situation of less jobs than we initially had before the pandemic.

Those who lost their jobs because of work being reshaped did so without their own doing, and if the mass layoffs early in the pandemic were a sign, governments need to create a safety net for those temporarily or permanently without jobs – instead of enacting laws here and there to cut stimulus checks (which, let’s face it, are good for political campaigning).

Scroll to Continue

Read More From Soapboxie

4. UBI has worked well on test runs

In 2020, Vox media created a map of places where UBI has been tried and tested. Finland used to come to mind as an outlier, but it was astounding to find that as of 2020, some type of UBI experiment was already being tested in 130 countries! But because Finland’s was more popular and closely monitored, let’s briefly go over how they did.

Finland did a two-year study of UBI, randomly picking 2,000 people nationwide to participate in the experiment. The experiment was simple – give the random participants, who were initially unemployed, 560 Euros a month for two years. This cash handout was guaranteed, automatic, and unconditional. The outcome of the Finnish experiment was that there was a small uptick in employment (people still looked for jobs despite having guaranteed income) and significantly improved the participants’ well-being.

UBI is also working well in Brazil, which implemented the Bolsa Familia welfare program that provides an average of $34 per month.

Spain in 2017 launched its “B-MINCOME” experiment which guaranteed almost 2,000 USD to each household per month. The success of that experiment likely helped make the case for launching in June 2020 its UBI of 1,145 USD – a scheme which could cost the government at least 3 billion Euros a year.

5. Automation is a constant threat

The futurists’ fear that automation will one day wipe out so many jobs that a significant portion of the population is left without any means to earn a living, is not unfounded. You’ve already heard what Elon Musk had to say about the inevitable rise of robots replacing humans in the workforce. And you’ve probably heard of the fulfillment centers of Walmart and Amazon that are operated with such efficiency and automation, that it’s inevitable that the manpower needed to operate these centers will continue to decline.

Manpower may still be an essential part of any operation – whether it’s in logistics, manufacturing, or even knowledge work – but what portion of the operation will be left for humans to work, and is that portion big enough?

It’s better for governments to be proactive when it comes to technological advancements that change the landscape of work. Time and again, legislators find themselves on the reactionary (after-the-fact) side, like it did with Facebook and Google on data privacy and now with cryptocurrency companies on pump-and-dump schemes. Job automation is inevitable and has been happening throughout history, and technology will continually churn out labor-saving devices. Governments therefore need to step in before the time comes that not enough jobs will be available for the workers that are available.

6. It can help combat sudden high inflation

It seems counterintuitive when you make the assertion that free cash handouts to people will help fight sudden inflation. We’ve seen the high inflation that was caused mostly by the stimulus checks given to Americans during the pandemic, and because of that outcome governments might caution themselves from implementing UBI.

However, any sudden inflation directly caused by a UBI, if any, would just be transitory. I’m a big proponent that the economy will find a way to fix itself after something unique like a UBI program gets green-lighted.

But what issue won’t fix itself? Poverty. And that goes for the inability to purchase basic necessities. Inflation is not only caused by a singularly faceted issue such as too much cash going around. High inflation can be caused by many factors – labor shortages, supply chain issues, shortages on raw materials, high tariffs – the list goes on, and it can be caused by a combination of these factors. A UBI shouldn’t get the blame for permanent high inflation – it is instead a safety net for sudden inflation, as people have that buffer of income already in place.

7. More focus on the problems that really matter

Last but not least, the idea of widespread UBI implementation is gaining momentum because the world is facing so many problems. It’s high time that people focus on the problems that really matter, as opposed to focusing on just surviving, or getting out of poverty. Could you imagine if Steve Jobs, Elon Musk, or Bill Gates were all stuck in a poor nation, raised by a poor family, and had to find their way out of their own financial predicament? Would they have made the impact they have now on the world? Perhaps not.

We need more people focusing on the issues that matter. Removing people from poverty also gives politicians and governments less on their plate – campaigners will no longer politicize welfare programs as a means to bolster their eligibility to become the next top elected official.

If one day poverty will no longer be a major world issue, other issues such as the recurring threat of infectious diseases, climate change, sustainable energy, etc. will hopefully get more attention. If UBI becomes institutionalized, caring for the poor would perhaps no longer be a to-do since there would be no more poor people.

Universal Basic Income still has a long way to go

If we were to assess what stage the world is in when it comes to UBI, I’d say we’re still at the experimental phase. A lot of experiments have been done around the world, and the verdict has generally tilted in favor of implementing UBI. The hesitancy towards UBI has mostly been on the adverse effects it will have on employment, however, when the future of human employment is still heading towards an inevitable future where not much of it is needed, does it still make sense to have any resistance to UBI at all?

That said, whichever country you may belong to, UBI still has a long way to go. It needs to go from a stage where people are not idolizing or putting too much meaning towards their jobs, to a point where not having any job is acceptable. People should be working a job not because it’s the only way they can sustain their lives – but because it’s what makes them happy and feel fulfilled. Right now, unfortunately, it’s still hard for people especially in developing nations, to accept the idea that jobs are not just for mere survival.

Related Articles