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All you need to know about the Universal Basic Income

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All you need to know about the Universal Basic Income

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Switzerland will become the first country to hold a national vote on whether to introduce a Universal Basic Income (UBI).

Here we explain what UBI is and look at the cases for and against the initiative.

What is universal basic income?

At present, state benefits are paid to people on an individual basis, often according to what their existing income is.

There are various UBI models, but the general idea is that states pay a sum of money to individuals, regardless of how much they are already earning.

The official wording of the Swiss initiative does not specify how much the UBI would be, however supporters have suggested a sum of 2,500 Swiss francs (2,259 euros) for adults and 625 (564 euros) for children.

Why are we talking about it now?

It’s on the agenda because the Swiss will hold a national referendum on whether to introduce a UBI on Sunday, June 5.

Citizens are able to launch bids to change the country’s constitution in particular areas if their ‘federal popular initiatives’ attract 100,000 or more signatures.

While Switzerland is the first country in the world to hold a national poll on UBI, the vote is only on the principle of whether to introduce one, not on any of the finer details.

What do UBI supporters say?

Proponents claim that by introducing a UBI you would sweep away poverty, inequality and welfare dependence, at the same time slashing the costly bureaucracy around state benefits.

This, they say, would dramatically increase an individual’s liberty to choose the work they do – important if the future will see a more automated workplace – boosting entrepreneurship and allowing people to pursue roles that benefit society.

There are other alleged knock-on benefits such as encouraging young people to stay longer in education and helping to bridge the income gap between men and women.

Basic Income Earth Network says: “It is the inability to tackle unemployment with conventional means that has led in the last decade or so to the idea being taken seriously throughout Europe by a number of scholars and organisations. Social and economic policy can no longer be conceived separately and basic income is increasingly viewed as the only viable way of reconciling two of their respective central objectives: poverty relief and full employment.”

Is UBI just a ‘socialist fairytale’?

Critics, some of whom have dubbed UBI a socialist fairytale, say it would discourage work and employers would have little obligation to pay a living wage if the government was giving regular cash handouts.

The other key point for those opposing UBI is that it is simply unaffordable – such a policy would require a big hike in taxes.

Also, higher taxes might mean businesses leave the country, at the same time as citizens from elsewhere migrate in, to take advantage of the payment.

Who else is considering it?

Finland has committed to carrying out a pilot project on universal basic income, set to get underway in January 2017.

Last month a convention of Canada’s Liberal Party saw the passing of a resolution to “develop a poverty reduction strategy aimed at providing a minimum guaranteed income”.

The city of Utrecht in the Netherlands, together with its local university, is to conduct an experiment on UBI.

Universal basic income: they said it

German philosopher Eric Fromm said: “Guaranteed income would not only establish freedom as a reality rather than a slogan, it would also establish a principle deeply rooted in Western religious and humanist tradition: man has the right to live, regardless!”

Martin Luther King, leader of the American civil rights movement, said: “The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income. … We are likely to find that the problems of housing and education, instead of preceding the elimination of poverty, will themselves be affected if poverty is first abolished.”

Emran Mian, director of the Social Market Foundation, said: “Proponents of a universal basic income have a utopian idea which they believe is inherently correct. The rest is detail. What a shame that the detail is the messy, shifting, complicated lives of people like us.”

Declan Gaffney, a former policy advisor to the Mayor of London, said: “It promises a division of labour between government and market that is neither feasible nor desirable, in which the government’s role in ensuring economic security is to redistribute income and then stand back.

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