30 million in the USA. 6.5 million in the UK. Over a million in Spain. 195 million projected worldwide. I’m talking about job loss and almost all of them have or will have been lost due to the spread of the novel Coronavirus.
It’s just what big proprietors of universal basic income (UBI) like 2020 presidential candidate, Andrew Yang and billionaire entrepreneur, Elon Musk predicted.
The arguments for UBI often arrived as a result of scepticism about the sustainability of the future job market. Automation is often cited as primary catalyst for such a cataclysmic change in our economic structure. However, nobody predicted that a global virus would cause a comparable employment loss to that off mass automation – forcing us to consider this as a possibility sooner.
The basic premise of UBI is that it attempts to break detrimental societal habits caused by financial inequity and allow people to pursue something that they want to do; effectively eliminating fiscal stress.
It’s an economic argument that fundamentally crosses party lines. Because it’s normally associated with the a future unavoidable loss of jobs at an inconceivable rate, the fear of mass automation of predominantly working class roles does spark radical thinking about their protection.
But COVID-19 has put the issue right on the doorsteps of politicians. So, what is it?
Positives of UBI
In a seemingly dystopian world where low skilled jobs and potentially high skilled jobs like radiologists are automated out of the labour force, it can be seen as an opportunity to provide those an equal opportunity at a good life.
The reality of life anywhere is that some people are dealt an abnormally poor hand. There are families living in conditions that no amount of ‘pulling yourself up by the bootstraps’ can alleviate. So, giving them a shot at a good life is the humane thing to do isn’t it?
This, in theory, would lead to the reduction in overall poverty, elimination of ‘inequality’ and a happier populous who aren’t plagued by constant battles with fiscal saving. With a happier population, we could see reductions in suicidality, alcoholism and substance abuse.
These are good things, but a lot of these ‘good things’ lead to some interesting counter points.
Negatives of UBI
The age old, right-wing question to every socialist policy coming out of the left-wing; “how’re you gonna pay for it?” Presumably, in order to fund a literal ‘free money’ scheme, you’d need to adjust the marginal tax rates to account for the sheer drop in GDP and the exorbitant cost of providing a living to the populous.
This leads on to another potential problem; the incentivising of unemployment. In order to function as a cohesive society, we need to have basic services and products in the modern age. The question then becomes, “why would I work when I can get a living wage for doing nothing?”. This not only incentivises people to join the scheme, but by design, it could possibly annihilate the free market as we know it.
If everyone is getting say, £2000 a month to live on, not only are companies and entrepreneurs competing with each other and government minimum wage laws, but they’d now be competing with a minimum yearly salary arbitrarily put in place as a result of a free living wage. Companies presumably would then need to provide incentive to get people to choose to work or fail if they can’t afford to do so. Who then provides products and services if multiple businesses can not afford the jump in payroll costs? What’s the incentive to innovate and develop? Does the economy collapse? I don’t know.
Finally, UBI also fails to address people’s purpose issues. With the introduction of welfare incentives after many workers were automated out of their jobs in the most recent industrial revolution, a statistic that Andrew Yang talks about, and others fail to mention, is that almost half of those people automated out of jobs never went back to work again. Amongst those people suicide rates, alcoholism and substance abuse skyrocketed.
It turns out when people don’t have a purpose, they become bored and fall into detrimental, dangerous and even evil habits. This is exacerbated by the fact that humans are innately terrible forging their own purpose. Those that are in abandoned or neglected communities often become “products of their environment”. If that environment loses its dynamism and adventure and If a lack of fulfilment and sinks into these communities, we could see similar problems arising, comparable to those left neglected and unemployed during the industrial revolution.
Depending on what side you’re on, UBI can seem as an essential or just another touted gateway by the political left into socialist agenda. Do I believe it’s coming? There will come a time but that time isn’t right now. But this could change; the economy isn’t projected to do the initial ‘v-shaped’ bounce back everyone was expecting. Consumer habits are set to change, so jobs could be out for a long period of time.