Is Universal Basic Income (UBI) the answer to global inequalities? The question pondered on by numerous officials after Covid-19’s effects widened the wealth gap between rich and poor people, increasing global inequalities. Such an occurrence has sparked the discourse of establishing a UBI to install some equality in terms of financial benefits acquired by people. This strategy has been tossed around in many countries by governments, and various factors determine its implementation. It is more relative to a present environment and subjective to a specific set-up. But this strategy seems to have some positives when applied in other countries.
The UBI strategy brings pertinent points relating to how one defines ‘universal’ and ‘basic’ on a global scale. Due to different concepts in countries, people treat those two components in varying ways. For instance, developed countries and the so-called ‘third world countries operate on parallel grounds; hence whatever is ‘universal’ or ‘basic’ in a developed country is different in an undeveloped country. This means that a UBI plan might be contextual relating to a country’s conditions, especially when it comes to economic activities and the monetary value; hence economic trends are very influential whenever a nation’s leader decides to try out this plan.
The most devastating thing was how economic activities were suspended, leading to high unemployment, especially for the marginalized societies. Low-income earners were strongly jabbed by the effects of covid-19, which was financially draining, and a lot of expenses were incurred in buying foods and medical supplies. But the rich individuals flourished as they continued to amass wealth during the pandemic outbreak. Reports show how the poor were sucked dry while millionaires surged in the world and this point to increased global inequalities when it comes to money and personal wealth.
The United States of America launched the covid-19 relief stimulus checks, which were specifically designed to cater to the impoverished masses in ensuring that they are well fed and get medical care. However, the US, which is now focusing on the 4th stimulus check, could not be consistent with this process because it was a financial burden on the government’s coffers. Most countries, especially in Africa, only gave payouts to those infected by the virus and offered food hampers to poor communities.
Some senior UK parliamentarians supported their government for not introducing a UBI, citing it would be “extremely expensive.” They argued that giving everyone money does not help alleviate poverty because it will not support people who genuinely need it. Counter arguments have highlighted that a UBI is enough to cater to everyone by creating a “safety floor” so that people are not plunged into poverty [Source].
Government payouts can help the poor but also increase the wealth of those who are already rich. Because it is a ‘universal’ plan, every citizen has to benefit, so some governments cherry-picked only those who needed assistance while ignoring others who were financially stable. Some government departments were clever enough in coming up with conditions for one to be eligible for government funding, like prioritizing the elderly, unemployed people, those with disabilities, rural communities, low-income earners with a specified salary level, and school-going individuals. This was done to ensure that money is provided for the most underprivileged. Countries that have tried this plan include Spain, which gave monthly payouts of about $1 200 to the poorest families, and Germany, where a fair number of the citizens were given £1 200 monthly [Source].
India is also trying to launch the ‘Minimum Income Guarantee or Minimum Income Supporter’ that aims at giving families a sufficient income to live on [Source]. To be eligible for this fund, one has to be unemployed, living below the poverty line, or earning lower than the set national average. In May, Wales also engaged in a similar program of giving money to unemployed people and those with “irregular work” [Source].
The common thing about all these countries utilizing this strategy is that they only target poor people or low-income earners. This makes a lot of sense because they are the most affected during this pandemic and provide a sizeable population that the government can fund. But the question which remains is ‘For how long will or can the governments do this?” since the pandemic seems to be here for the long run. Some people have argued that once launched, UBI cannot be dropped because people will suffer more. UBI pilot programs have proved to work in many countries. Still, nations with a large population of struggling class faced many problems with this idea, specifically in Africa, as various countries operate on a limited budget.
UBI has been referred to as a ‘utopia.’ Theoretically, it looks good for a government to take care of its citizens’ well-being when they are faced with a deadly crisis as big as the coronavirus pandemic outbreak. On paper, this appears like good news, which is why it gained many supporters. On the practical side, people have to ask themselves if their government is ‘rich’ enough to support them. How many countries can fund people for a year or even less? The developed countries seem too scared to launched such schemes and have been holding unending discussions trying to devise other effective ways of taking care of the citizens. Economic analysts doubt the workability of this strategy, especially considering various poor communities, and others suggested that government should only lose money in funding medical services, education, and food but not give out incomes.
If a nation’s money reserve can afford it, the UBI plan can indeed yield results. And since it is a salary net for livelihood, it might be affordable in purchasing the basic human needs amid the pandemic outbreak. In terms of instilling equality globally, that is more of a challenge that needs more funds to be given out by the governments and is hard to implement.