UBI

The Universal Basic Income

   The universal or unconditioned basic income (UBI), also known as basic income or unconditional basic income, is a government proposed program that allows every citizen of a country to get a set amount of money on a regular bases no matter their status, background, or any other condition (The Central Foundation). UBI was programmed for the removal of poverty and under paid incomes, as well as home labor work done by most women. Another big issue’s disaster that UBI was designed to solve is increasing unemployment side effects. Unemployment is bound to grow over time with the increase in population and upraising of artificial intelligence. How do the government plan on keeping everyone feed and housed when that happens? That’s right, they would turn to the UBI project (fund for humanity). Multiple governments around the world with different conditions and potential result. Why haven’t they implied and run the project on a larger, worldwide scale? Is there not already enough unemployment and poverty? The answer is exceedingly simple. While the various experiments around the world showed modest success, the risks of encouraging unemployment, raising debt along with lowering the GDP, and potential dropping out of students.

   To being with, an experiment was conducted in Finland by the Social Insurance Institution, from January 2017 until December 2018, where 2,000 unemployed people were given $634 monthly in place of their unemployment benefit. Although the experiment attracted many foreign governments, results raised serious questions. Since the program was designed to help the unemployed get back on their feet and help their economy, it was shocking to see that a bare handful of those unemployed citizens choose to look and get back into the work force, will the rest were much happier with the “free” money they got. The percent of people that did get jobs, were equal to what that percent would have been if they hadn’t been paid (BBS News). “Money matters, but alone it’s not sufficient to significantly promote either labor supply or demand,” said Minna Ylikännö at the Social Insurance Institution of Finland (New Scientists). Furthermore, it is well obvious that the government cannot fully control’s its people’s actions, they cannot make them use the UBI leverage the way they presume citizens would. To some of the unemployed involved in the experiment, it seemed that the program had little to no impact on their lives. "I am still without a job," he explained. "I can't say that the basic income has changed a lot in my life. OK, psychologically yes, but financially - not so much," Tuomas, a former newspaper editor stated to BBC News (BBC News). To conclude, the project did have a good impact on the stress and mental health of the unemployed, but not only did it not help them to get jobs, it also encouraged them to stay home since they were gaining money without doing anything but being a citizen.

   Studies conducted by Roosevelt institution show that if a UBI program, financed by deficits, passes $500 per month or $6000 per year to every adult in the country, the GDP would increase after eight years from the launch of the policy. But would it really? It is spectacle that the Roosevelt’s model did not account for reduced household labor surfaces and mainly increase in government debt’s effect on GDP. Alternatively, The Penn Wharton Budget Model (PWBM) analyzes the effects of a UBI program with a lot more considered than the Roosevelt model does. Taking consumption into account, it is found that the poorer households will tend to spend more of the UBI then the wealthier, who most likely save it as access money, thus causing a whole leakage considering that this is a wide scaled program. This would eventually result in a decrease rather than increase in demand, and in addition to less labor supply and capital, the GDP will inevitable fall hard. PWBM has drawn out conclusions and results of a large-scale UBI program financed by deficits, it shows that by 2027, the debt (% change) would be 63.5, the capital services (% change) would be -11.0, the GDP (% change) would be     -6.1, and the total revenue would be (% change) would be -8.0 (PENN WHARTON). In summary, considering that capital and labor has fallen, the tax collection has dropped, and the revenue generation has decreased, where is the government supposed to get all the money to pay up the raging high debt from?

   Although it might be bad to a certain extent to the economy, it would indefinitely help out students who can get higher education and go into low paid jobs they enjoy rather than tough unbearable ones just to pay off any loans they have. This would have a big impact on student debt, decreasing the street at efficient rates. In addition, it would help students pay up for their books, tuition, social and campus life, making education much more captivating (State Press). This is truly a dream come true for students that surly want to go forth and apricate education. On the other hand, what about the mass majority that study to get a good job to get money? Will they continue education if they are being handed free money without any absolute effort? As many teachers have noticed, thousands and thousands of students tend to ask, “will this be on the exam?” and based on the answer to that questions will they decide if they want to put the effort into learning that lesson (Action Tutoring). These small questions and actions are indicators that need to be further evaluated when talking about student’s reactions and actions when put into certain situations and when given certain choices.

   To conclude a wild, deep though program, it is safe to say that despite its inspiring and worthy abilities to help the people, it has an unavoidable draw back that would make the program, tomorrow if not today, come to an end. That, furthermore, would undoubtably end with leaving the once still much stable economy and its once still much put together over all people in a horrific condition where it has never been before. They would have to do hundred times more effort than ever before to get out of such a situation where everything is in ruins. All the markets crashes, all the houses full of couch people, greedy for money, no one willing to work, no more education system, in general no revenue whatsoever. Why ever let the economy get to that point?

Works Cited

Donnelly, Tim. "How Universal Basic Income Can Help Student Finances and Grades." State Press, 30 Jan. 2020, www.statepress.com/article/2020/01/spopinion-how-universal-basic-income-.... Accessed 31 Jan. 2020.

Luu, Donna. "Universal Basic Income Seems to Improve Unemployment and Well-Being?" New Scientists, 6 May 2020, www.newscientist.com/article/2242937-universal-basic-income-seems-to-imp....

Martin, Hannah. "Is universal basic income likely to happen and what impact would it have on education?" Action Tutoring, 26 Jan. 2018, actiontutoring.org.uk/universal-basic-income-likely-happen-impact-education/.

Nagesh, Ashitha. "Finland basic income trial left people 'happier but jobless.'" BBC News, 8 Feb. 2019, www.bbc.com/news/world-europe-47169549.

Novello, Amanda. "Universal Basic Income versus Jobs Guarantee." The Century Foundation, 17 Dec. 2018, tcf.org/content/commentary/universal-basic-income-versus-jobs-guarantee-serves-workers-better/?gclid=Cj0KCQiA5bz-BRD-ARIsABjT4ngqJi1-sTINTEE8a3mSwsJSyLXFeY3VXSQq_wn_oQGjjOSulGsa_84aAjEyEALw_wcB&agreed=1.

"OPTIONS for UNIVERSAL BASIC INCOME: DYNAMIC MODELING." University of Pennsylvania, PENN WHARTON, 29 Mar. 2018, budgetmodel.wharton.upenn.edu/issues/2018/3/29/options-for-universal-basic-income-dynamic-modeling.

Santens, Scott. "Learn about Universal Basic Income." Fund for Humanity, edited by Gerald Huff, 8 Apr. 2020, fundforhumanity.org/learn-about-universal-basic-income-and-the-future-of-the-united-states/?gclid=CjwKCAiAiML-BRAAEiwAuWVggvFUomHTrWPg3nABDH6OkgcHga1AawSOwSYTqbwyu6NG7t82bj3zyxoCIPUQAvD_BwE.