Universal Basic Income Guarantee
By Elin Brimheim Heinesen
The wheels of society must keep turning. If they don’t, things will go wrong. In times of crisis like this, it is up to governments around the world to prove their value by taking responsibility and implementing systems to ensure that everything doesn’t come to a halt. No one should be left in a situation where they bear no responsibility for how things have developed. But how do we ensure that all citizens have a financial foundation so that everyone can weather this crisis and future ones?
As it stands, many people—through no fault of their own—are losing their entire income or risking a substantial part of it. Therefore, it is essential to do everything possible to provide financial security to all citizens in some manner. With nearly all activities—travel, trade, and social life—coming to a stop, it doesn’t take much to topple especially small businesses. The service industry is particularly hard-hit, and it affects us all, not just those losing their jobs.
To keep the economy running, we must prevent too many individuals and businesses from going bankrupt. It is necessary to ensure that the business sector remains operational and can bounce back fully when demand rises again post-crisis. People must not have the rug pulled out from under them, risking their businesses, homes, and livelihoods. There needs to be a safety net so that normal and essential functions can continue once the crisis is over.
A Financial Foundation to Stand On
To stimulate the economy, many now recommend—among them numerous social and economic experts from both the right and left—that all citizens receive an unconditional basic income. This is a minimum amount that ensures survival for everyone, so people have a safety net during tough times and do not risk losing everything, such as when they lose income for a few months. An unconditional basic income grants individuals the freedom to increase their income as much as they are able to earn. Furthermore, people are spared the restrictive demands, coercion, and stigmatisation present in current systems.
A basic income for all is not “charity” but an inherent right that every citizen should have to provide a foundation to stand on. It is essential that everyone has the opportunity to contribute fully as productive members of society. The basic income must therefore be unconditional — meaning people should have the freedom to earn as much as they want in addition to the basic income without being penalised. Currently, people must remain inactive to retain their right to unemployment benefits. Being forced into inactivity in this way can become a vicious cycle, difficult to break, as people are afraid to build something or create their own work for fear of losing the security that unemployment benefits provide.
A system with basic income for all eliminates this fear and gives everyone the freedom to work and earn as much as they want and can, beyond the basic income. It ensures all citizens have equal opportunities to survive crises, so no one undeservedly falls through the cracks. When everyone has the same right to a foundation to stand on, it can at least help break social inheritance and stigma.
“Put the money in our hands!”
In the USA, there are currently many voices, both among Republicans and Democrats, advocating for a basic income scheme, especially as more jobs are expected to be automated over time. It is anticipated that a significant portion of jobs lost during the COVID-19 crisis will never return because the work will be automated once the crisis is over.
“Put the money in our hands!” is the slogan. It is considered economically sensible to channel money directly to the people as “cash,” because it is primarily the people who need cash to survive and, for example, take care of their children, the sick, or the elderly.
Money does not just disappear. It goes directly back into the economic flow in society and into businesses, which can also better survive crises. This is seen as benefiting the whole society more than, for example, giving large corporations even bigger tax breaks, where the saved money is likely to go towards investments in more automation and not create more jobs.
Companies are primarily obligated to make money for their shareholders – they have no obligation to act as a social service for their employees. It is much cheaper and more profitable for companies to automate as much as possible rather than rely on employees who can only work a few hours a day, may fall ill, or go on maternity leave at any time and need sick pay, holiday pay, pensions, etc.
The Population’s Share in the Benefits of Technological Progress
In the USA, there is much discussion about the rapid and accelerating pace of automation. This means that creating new jobs is struggling to keep up with the development.
The technology that large companies profit from is based on data, which is now more valuable than oil. Companies acquire this data for free from individuals, but these are values that we all create and, legally speaking, are co-owners of. It is unsustainable for large companies, which increasingly outcompete almost all small businesses—such as giants like Amazon, Google, Facebook, etc.—to reap all the advantages of this data. One can rightly question whether it is fair for the profits from these shared values to go to just a few companies, allowing them to earn astronomical sums while their activities undermine the income base for almost everyone else. This does not seem sustainable.
Therefore, it is now considered sensible for the population to secure their share in the benefits of the values they rightfully own—namely, their own data. If a small amount (e.g., in the form of a so-called robot tax, duty, or VAT) were added to every online transaction, and the revenues from this were returned to the population as dividends, everyone would thus have the opportunity to also enjoy the benefits of technological development and automation, and be better secured during crises like the current one.
Sound Economic Policy for the Benefit of All
Andrew Freris, a financial analyst, investment advisor, and CEO of Ecognosis Advisory, states: “The USA has a population of 330 million. If they start giving $1,000 a month to every American, within three months they will have spent about a billion plus, and they will still have plenty of money left – and this money will go directly into consumption.” (Source: https://www.cnbc.com/2020/03/13/us-should-give-citizens-1000-a-month-amid-covid-19-crisis-analyst.html)
More and more people, including billionaires who own large companies, recognise that the current economic development is unsustainable. Companies contribute to unemployment without pay, forcing more people into poverty, and fewer can afford to buy the goods produced by technology and robots.
Robots neither buy goods nor pay taxes. If compensation is not provided to ordinary people for the work that automation takes over, the entire economy could collapse. Therefore, an increasing number of people, including billionaires, advocate for the introduction of a basic income for all. This is not a matter of left- or right-wing politics, but simply sound economic policy that benefits everyone—both citizens and businesses. In short: a win-win situation.
……………
Learn more:
Facebook:
A Faroese group on Facebook where you can join to read about and discuss Basic Income Guarantee:
https://www.facebook.com/groups/grundindtokutrygd/
New York Times:
“Andrew Yang’s idea of $1,000 per month may have seemed absurd before. Not now. Mr. Yang fought to put money in the pockets of every American adult during his presidential campaign. Now, amid the coronavirus crisis, he says, ‘This will be passed.'”
https://www.nytimes.com/2020/03/18/us/politics/universal-basic-income-andrew-yang.html
Washington Examiner:
“A universal basic income works because it is universal. The populist revolution responding to coronavirus was spearheaded by none other than Mitt Romney. The senator from Utah supported a $1,000 cash payment to every adult in the country, both to stimulate consumer demand among middle- and high-income groups and to help those who couldn’t pay their bills immediately.”
https://www.washingtonexaminer.com/opinion/a-universal-basic-income-works-because-it-is-universal
CNN:
“The Trump administration seeks guidance from Andrew Yang on providing Americans with cash. The 2020 Democratic candidate Andrew Yang joins CNN Tonight with Anthony Scaramucci, Catherine Rampell, and Don Lemon to discuss the Trump administration’s response to the economic impacts of the Coronavirus COVID-19 pandemic.”
https://youtu.be/p1EVhgsu_-o
Scott Santens:
The Water Room Analogy Why giving basic income to even the richest makes sense.
“You’re even going to give basic income to the rich?! That makes no sense because they don’t need it, it will cost more, and you’ll be taxing them just to give it back to them.” This is a common reaction to the idea of providing everyone with an unconditional basic income. Yes, everyone. This means even Bill Gates would receive $1,000 a month. Why?
https://www.scottsantens.com/the-water-room-analogy-why-giving-basic-income-to-even-the-richest-makes-sense
Altinget:
“David Trads: Basic income on the way in the USA. What about Denmark?”
Finance Minister Nicolai Wammen (S), together with all party leaders, has stressed that the Danish Parliament is ready to do whatever it takes to help, writes David Trads. Thousand-dollar checks to individual citizens in the USA are part of the aid package being negotiated by the President and Congress now. Denmark should take inspiration at a time when politicians, in the words of Finance Minister Nicolai Wammen, are ready to do anything, writes David Trads.
https://www.altinget.dk/artikel/david-trads-borgerloen-paa-vej-i-usa-hvad-med-danmark
The Independent:
“Spain to implement a universal basic income (UBI) “as soon as possible” to mitigate the impact of coronavirus.” … “the government’s ambition (is) that UBI could become something that “remains permanent, a structural instrument, a permanent instrument.” If the payments are successfully implemented, Spain would become the first country in Europe to introduce them nationwide in the long term.”
https://www.independent.co.uk/news/world/europe/coronavirus-spain-universal-basic-income-europe-a9449336.html
Jonathan Pie:
“Coronavirus: The survival of the richest!”
https://youtu.be/aox7CeOdmOY