The universal basic income is not a new idea. It was first mooted when many kinds of problems rake up in the aftermath of world war 1. It is again in the news because of two reasons. The first one is attributed to the financial crisis (Ruckert et al., 2017). The 2008 financial crisis led to repercussions over the globe so the idea of universal basic income again got raked up. The second reason is the threat of losing the jobs to technology. Mass-losing of jobs due to technology is itself a contested idea but this has definitely given voice to the proponents of universal basic income. While some are advocating the idea of universal basic become for 100 years, there are some people against the UPI as well (Arnold, 2018). This paper aims to critically analyze both views and give a sound explanation to the question that whether Australia should opt UPI or not?
Basically, because of the threat of losing the wide number of jobs, some people are raking up the issue to provide income to all adult individuals without any work. This is known as Universal Basic Income (UBI). There are other closely related terms as well namely guaranteed income and negative income tax (lacey, 2017).
There are three essential traits of the UBI scheme which are as follows:
a) Universal- the UBI scheme is considered to be universal as the basic income is to be paid to every individual without any means test. But this is not entirely true; the universal basic income is to be given to all adult individuals. There is no provision to grant the same to children. Apart from this, there will be no discrimination amongst adults; the same amount is to be given under UBI be to each job and jobless adult, to single and partnered people, to people with or without disabilities (Copeland, 2018). It would be paid at the same rate without considering the income of the adult and his/ her relatives in the same household.
This is the major difference between UBI and other social schemes currently prevalent in the world. The current social schemes target the specific strata of the population.
b) Unconditional- there is no behavioral condition associated with the UBI. The current social schemes have certain conditions like looking for work, submit to drug tests, vaccination of children and sending them to school etc. basically, there are different conditions in each country (Sousa-Pinto, 2017). Whereas under UBI all the adult persons are entitled to basic income without considering their lifestyle into account. The way of living totally depends upon the beneficiaries’ intent.
c) Adequate- the third essential feature if the UBI is the supply or grant of an adequate amount of money to all adult persons so that they can live the life with dignity. This feature is not always essential as some UBI schemes are topped up by targeted income support payments
a) Replacement of existing welfare systems- the proponents of the UBI advocates the complete replacement of welfare and other schemes like support payments for disabled individuals, single parents, elderly etc. In the USA, it is strongly argued that the government is going to pay a huge amount to the people in the form of health insurance and age pension schemes. Removing these schemes will lead to saving of a big amount of money which can be utilized over UBI (Painter, 2016).
b) Payment rates- as stated above the UBI is meant for all adult individuals. But the question arises at what rate the basic income should be provided? The payment should be such that it meets the basic needs of the person without any experience of poverty. In the US, it is calculated as $250 per month whereas in Australia it is slightly low to the level of $230. Some people who advocate UBI moot the idea of providing UBI along with the other kinds of schemes (Heller, 2018).
c) Funding
To fund the UBI the governments of the respective countries will have to revamp the whole economic structure. There are two options – either the tax rate would have to be increased or the expenditure of the government will have to be reduced (Klein, 2018). The tax can be increased in a number of ways like land tax, tax on multinational corporations and the topmost individuals in economic hierarchy, carbon tax, financial transaction tax etc.
As stated in the introduction, the basic income idea is not the new one. It has past history as well which can be described as follows:
a) State Bonus scheme
The proponent of this scheme was a social reformer, named as Denis Milner. He argued that in the aftermath of the first world war, the British government should provide a weekly allowance to each individual which was termed as a state bonus. He argued that this will prevent any major upheaval like the Russian revolution in 1919. He argued the allowance to be made universal and unconditional (Levin-Waldman, 2018). But this idea was taken up seriously by the policy analysts and the then government of Britain.
b) Guaranteed income
This idea was mooted by the American Futurist Robert Theobald. He predicted that in future computers will replace the manpower so there will be a loss of a tremendous number of jobs (Trilling, 2018). In such a scenario, he argued, the business, as usual, will not be sufficient and each country will have to pay a guaranteed income to its citizens.
c) Negative income tax
This idea was given by economist Milton Friedman in 1962. He highlighted the various benefits of NIT like the removal of bureaucracy, help to poor, less cost, removal of political dilemma and responsible individuals. His idea was that the government should give subsidy to the individual if his income is less than the threshold value. This was known as negative income tax (Sloman, 2017). The NIT will act as a boon for the person with zero or negligible income. Then reduce the subsidy provided to the person as his/her income increases. There will be a point when he or she does not require the subsidy. After that, there will be a stage when the person will start paying the tax known as positive income tax. He argued to replace welfare programs with NIT (Witte, 2018)
d) The capitalist road to communism-
Few advocates go to the extreme end of UBI and say that every individual should first get basic income and then the economy should be changed to communism. Their idea is obviously not taken seriously by any country. Capitalism has brought prosperity in the world though it has some advantages also. Instead of altogether embracing communism, free trade should be propagated and the disadvantages of the capitalist society must be removed. Free trade and economy are embraced by all the countries in the world so there is no space for utopian views (Fabre et al., 2014).
It started in 1920s alike European countries and North America. In the 1920s, Bonus proposal was discussed in Australia and the issue was raised in Australian parliament as well. The during the 1940s, Lloyd Thomas advocated guaranteed income scheme in Australia. In the 1970s, the idea was seriously considered by the then government but never enacted. In the 1980s, due to technological change, the idea of UBI was mooted but after coming to power, the hawk government discontinued the idea. This issue is again in the debate because of the 2008 financial crisis and growing threat of jobs lost due to technological changes (Gerard, 2018)
There are different views on the topic. Some people argue the idea as low carbon, steady-state economy in which population growth, economic growth, and technological changes are balanced or at a sustainable level (Martinelli, 2017). This type of future is predicted by many persons who advocate the Universal Basic Income (UBI). Whereas some people argue that technological changes will never lead to complete loss of jobs. This happened in the past also. Technology along with taking few jobs created new kinds of jobs opportunities so putting the blame on technology is not a feasible idea (Cowan, 2018).
There are many proponents of basic income in the world, this idea is not seriously considered by policy analysts. Critics view the idea as economically unviable and say it will lead to an exorbitant increase in the taxes imposed by the government on citizens if the taxes are increased by the governments (Fleischer & Hemel, 2018). In addition to this, if the cust on welfare programs is made, it may lead to vulnerability of poor, weak and marginalized sections of the society. They also doubt the sustainability of basic income from the political point as well.
Capitalism is embraced by every country of the world. In such a case, the assumptions of a few individuals cannot outweigh the real-time situation of the world. The world is becoming more globalized by each passing day. The corporate giants have become multinational in nature. The geographical distance is removed by the new means of communication. The person sitting in India can fix the problems of the computer located in the USA. The technology has opened a myriad of opportunities for the mankind which cannot be taken for granted. Definitely, there are some lacunae like increasing inequality, marginalization and many others. These lacunae must be removed instead of disturbing the economic order of the world. Assumptions without sound pieces of evidence can only bring deterioration. So there should be serious efforts for the people who have been left behind. They must be educated and provided training. The current economic order must be based on free trade.
According to a few estimates, if the taxes are increased to cater to the financial needs of providing UBI to every adult individual, the taxes will reach up to 70 to 80%. Moreover, the affluent section of society will not be satisfied to pay to the persons who do not work. This will create the chaos in society and economy (Fabre et al., 2014). In addition to this, the technological change will not lead to complete joblessness. There will still be avenues of jobs, though there can be a change in technology which will need skilled persons. So the governments should try to train the persons and provide the education to marginalized sections so the economic inequality brought in the country can be reduced. In addition to this, few jobs are always independent of technological change and cannot be overtaken by machines like communication and adaptability. The current debate is more about the vision and values as compared to policy (Berman, 2018)
No country can afford the universal basic income at the current levels. The proponents have just mooted the idea without having a concrete strategy. The idea will not yield good results as it is solely based on fake assumptions. Moreover, it may lead to the rise of utopian views which are against the world of free trade. There cannot be a viable solution for Universal Basic Income (Heller, 2018). Moreover, it will make the citizens relax in attitude and free from work.
Conclusion:
From the above discussion, it can be concluded that not only Australia but any country of the world is not in the situation of embracing Universal Basic Income. The idea is merely a desire which is not supported by policy analysts as it may lead to chaos in the economy and society. The idea is based upon the flawed assumptions. The technology may reduce the labor work in the future, it will not lead to joblessness. There will still be opportunities for work, thought the intensity of work may be reduced. This should be viewed s the positive change. There is need to usher in a new era of less physical labor and should welcome the technological change (Klein, 2018). The utopian voices must be curbed so that they do not disturb the free trade present in the world.
The current economic order must not be disturbed and mankind should not get swayed by the assumptions made by few individuals. Technological change should be viewed from the prism of reduction in physical labor that will ease the work for mankind. The future can be predicted as having fewer labor jobs but technology have created and will create myriad of opportunities. These changes must be welcomed and embraced. No country can survive without the essential features of free trade.
References:
Arnold, C., 2018. Money for nothing: the truth about universal basic income. Internation Journal of Science, 3(1), pp.34-45.
Copeland, J., 2018. Universal Basic Income: More Empirical Studies. Seven Pillar Institute, 3(2), pp.34-36.
Cowan, S., 2018. Universal basic income: Unworkable and unaffordable. A Journal of Public Policy and Ideas, 33(4), pp.34-38.
Fabre, A., Pallage, S. & Zimmermann, C., 2014. Universal Basic Income versus Unemployment Insurance. Econpapers, 5(4), pp.67-76.
Fleischer, M.P. & Hemel, D.J., 2018. Atlas Nods: The Libertarian Case for a Basic Income. SSRN, 4(2), pp.17-306.
Gerard, N., 2018. Universal healthcare and universal basic income: Complementary proposals for a precarious future. emeraldinsight, 32(3), pp.394-401.
Heller, N., 2018. Who Really Stands to Win from Universal Basic Income? The New Yorker, 4(2), pp.456-563.
Klein, D.E., 2018. Economic Rights and a Universal Basic Income. Griffith Journal of Law and Human Dignity, 6(1), pp.34-37.
lacey, A., 2017. Universal basic income as development solution? SAGE Journals, 5(2), pp.23-56.
Levin-Waldman, O.M., 2018. The Inevitability of a Universal Basic Income. Challenge, 61(2), pp.133-55.
Martinelli, D.L., 2017. Assessing the Case for a Universal Basic Income in the UK. IPR Policy Brief, 8(2), pp.45-54.
Berman,M., 2018. Resource rents, universal basic income, and poverty among Alaska’s Indigenous peoples. Elsevier, 106(4), pp.161-72.
Painter, A., 2016. A universal basic income: the answer to poverty, insecurity, and health inequality? BMJ, 4(2), pp.56-89.
Ruckert, A., Huynh, C. & Labonté, R., 2017. Reducing health inequities: is universal basic income the way forward? Journal of Public Health, 40(1), pp.3-7.
Sloman, P., 2017. Universal Basic Income in British Politics, 1918–2018: From a ‘Vagabond’s Wage’ to a Global Debate. Journal of Social Policy, 47(3), pp.34-47.
Sousa-Pinto, B., 2017. Universal basic income may be a Trojan horse. BMJ, 4(2), pp.156-90.
Trilling, D., 2018. Universal basic income: Money for nothing or efficient equalizer? Journalist’s resource, 3(5), pp.67-78.
Witte, K., 2018. How will universal basic income change our lives? DOC Research Institute, 4(2), pp.45-57.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download