The Universal Basic Income (UBI) includes a periodic cash grant available to all citizens, to provide people with a standard of living above the poverty line.
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What is universal basic income
The Universal Basic Income, abbreviated to UBI; also known as’s citizen income, guaranteed minimum income, or basic income
Universal basic income includes a periodic cash subsidy that is available to all citizens, without checking whether they should be paid, to provide people with a standard of living above the poverty line.
(According to basicincome.stanford.edu)
The purpose of these funds is to provide enough money for residents to cover basic living expenses and provide financial security. This concept has now become famous as a way to compensate for job losses caused by technology.
The government will be the sender, but the difference of the universal basic income plans is who will fund these payments. Some plans call for an increase in taxes on the wealthy, while others say corporate taxation should be levied.
Advantages of universal basic income
– Employees can wait until they find a better job or better salary.
– Everyone will have the freedom to return to school or stay at home to take care of loved ones.
– Traditional welfare programs will escape poverty traps.
Citizens can get simple financial support, avoid bureaucracy.
– The cost of administering this program of the government will be lower than traditional welfare programs.
These payments will help young couples get married in countries with low birth rates.
Payments can help stabilize the economy during a recession.
The disadvantages of universal basic income
– This program may trigger inflation due to an increase in demand for goods and services.
– In the long run, the standard of living will not increase because of price increases due to inflation.
– A small program, distributing meager sums, won’t make a real difference to impoverished families.
Free income can discourage people from trying to get a job, and make working seem optional, optional.
– Free income can cause a permanent decrease in the labor force participation rate.
This program will be very difficult to pass, especially in countries like the US because of the fierce opposition to the unemployed.
See also: What is GDP? How is GDP calculated?
An example of a universal basic income program
In 2017, Finland started a two-year trial. The country left 2,000 unemployed people € 560 a month for two years, even when they found work. The recipients reported the relief helped relieve their stress. It also gives them more motivation to find a good job or start a business on their own.
A pilot program in Utrecht, the Netherlands, pays 1 person 960 euros per month for 250 people.
Scotland is funding the study of a program that pays people for a lifetime. Retirees will receive £ 150 per week. Working adults will receive £ 100 and children under 16 will be paid £ 50 per week.