Basic universal income is the idea of the state giving unconditional, significant and regular income to its citizens. It is a socialist idea, you can’t get away from that. But the question is whether it is a good thing. I think there are both good economic and social reasons for a basic income.
It worth starting with a brief comparison on social and economic realms of thought. I understand that the economy is important, and having a strong economy as a base helps a country to afford certain freedoms for its people. However, in developed countries where there is already a strong economic base, I do think the social realm trumps economic concerns.
Productivity per hour worked in the UK is low, compared to other developed nations. The UK’s productivity per hour is 18% behind the G7 average and at least 30% behind Germany, France and the Spain (Elliott, 2016). Even if you correct for the UK’s increased working hours compared to other countries, the UK is 10-20% less productive that France and Germany per worker (instead of ‘per hour’, which is the other statistic) (Van Reenen, 2015). There are many reasons for this productivity gap, the UK’s poor education, culture of bad management and lack of investment in technology are all partly to blame (Bloom, 2015); poor infrastructure (Heath, 2015) and the UK’s poor internet speeds (Jackson, 2016) are all in the firing line. As everyone with a keyboard seems to be entitled to an input here, I’d like to add mine: anxiety and stress is high in the UK (Mental Health Foundation, 2015), probably related to the increased number of hours worked, and people suffering from stress and anxiety simply perform worse (Owens et al., 2014).
I probably don’t have to cite sources from claiming anxiety lowers mental bandwidth, problem solving ability and cognitive performance (although, I did ― that’s Owens et al). You have probably felt yourself not function properly when stressed, or seen someone close to you lose their normal product selves to stress. My point here, though, is that a Universal Basic Income will alleviate some of that stress: worrying about having enough income for rent and food is a cause of stress which will lower productivity. Giving citizens less to worry about will help in calming many people down, leading to a more productive national work force. A more productive workforce makes more money for themselves, which is then taxed, and more money for the business, which is then taxed.
Another economic advantage to the Universal Basic Income is that it allows people to break certain employment and benefit traps. These traps are where a person doesn’t want to take a risk and search for a more fulfilling job, because the risk is quitting one job without landing the fulfilling one soon enough. A Universal Basic Income is a cushion that encourages people to take those risks, and the result is people getting out of the low-paid jobs that don’t want and into higher paid jobs that they do want. Related to this is the poverty trap, where a poor person is forced into a poor neighbourhood with poor job opportunities; the result is a spiraling self-enforcement of poverty. Turning all these people into economic actors, or higher-level economic actors, benefits the economy in increased tax.
All this economic talk frames obstacles to career progression and mental health issues as if their only value is to economic concerns. I do, however, disagree with that. The stresses of financial concerns are hitting people pretty hard (Quinn, 2016), and I’d weigh in my moral concerns by saying that this needs addressing even if no economic benefit could be articulated. One would think, and should be able to expect, that the physical and mental health of the citizens of a country are the priority of a government; not economics at the cost of all else. Universal Basic Income is, again, a solution.
There is the argument that this is socialism, and therefore shouldn’t happen. Firstly, that isn’t true; socialism is when the people own industry and production. This idea that distributing wealth is socialist is a weird invention. Secondly, even if we take ‘when the state funds something for public interest’ as the definition of socialist, this doesn’t follow. Thirdly, under this definition, there is a lot of socialism: healthcare, commonly pooled police and fire services, state pensions and infrastructure like roads. This new definition of socialism isn’t a bad thing. Compare it to the other end of the spectrum, free market economics, and you see wealth get concentrated into increasingly few places; it’s like a national game of Monopoly. Putting social interests at the heart of some policies and laws is not a bad thing.
It is possible to imagine other solutions to these problems. Stress and employment traps will have other solutions. And that is a conversation worth having. But I think the case for a Universal Basic Income is quite strong.
Elliott, L. (2016) UK productivity gap widens to worst level since records began [online]. The Guardian 18 February. . Available from: http://www.theguardian.com/business/2016/feb/18/uk-productivity-gap-widens-to-worst-level-since-records-began [Accessed 30 January 2017].
Heath, A. (2015) Britain’s productivity crisis: beware all the usual simplistic solutions [online]. The Daily Telegraph 21 April. . Available from: http://www.telegraph.co.uk/finance/economics/11553774/Britains-productivity-crisis-beware-all-the-usual-simplistic-solutions.html [Accessed 30 January 2017].
Jackson, M. (2016) Average UK Internet Speeds Hit 15Mbps as World Rank Falls to 20th. Available from: http://www.ispreview.co.uk/index.php/2016/09/average-uk-internet-speeds-hit-15mbps-world-rank-falls-th.html [Accessed 30 January 2017].
Owens, M., Stevenson, J., Hadwin, J.A. and Norgate, R. (2014) When does anxiety help or hinder cognitive test performance? The role of working memory capacity. British journal of psychology . 105 (1), pp. 92–101.
Quinn, B. (2016) Young people living in a ‘suspended adulthood’, finds research [online]. The Guardian 22 September. . Available from: http://www.theguardian.com/society/2016/sep/22/young-people-living-in-a-suspended-adulthood-finds-research [Accessed 30 January 2017].
Van Reenen, J. (2015) Are British workers less productive than Germans and French? Available from: https://fullfact.org/europe/factcheck-are-british-workers-less-productive-germans-and-french/ [Accessed 30 January 2017].