We can’t afford not to pay everyone a basic income

Settit Beyene argues that a Universal Basic Income is the only solution to oncoming crises of poverty and structural unemployment.

March 9, 2018 · 7 min read
Image: Steven Depolo / Flickr

What do Nixon’s administration and the Green Party have in common? Whilst the conservative President and the Green party leader could not be more different ideologically, a curious overlap between policies occurred; that of Universal Basic Income and its role in eradicating poverty. Universal Basic Income (UBI) is a regular payment made to individuals regardless of employment status or income: an unconditional wage paid out to citizens from the government. It has been included in the Green Party manifesto and President Nixon was close to implementing it, which begs the question: can Universal Basic Income provide a foundational income and would it consequently be beneficial to all in society?

In the heady summer of ’69, when the idea of free love was first taking hold, the idea of free money was also being assessed for its merits: Nixon was pondering how best to eliminate poverty in the USA and ease pressure on the welfare system. A social welfare programme that incorporated UBI was proposed but trials needed to be run to ascertain whether an unconditional wage would disincentivise people from working and prove too costly to run. An unconditional income of $10,000 (equivalent to today’s money) was paid to citizens in different states. 

The results were surprising: when paid a basic income, the majority of participants chose to continue working. Paid work only decreased by 9% per family and even this figure is deemed an exaggeration. The results conclude that working hours barely decreased and when they did they were often replaced with activities not incentivised by a market society. These include activities such as raising a family, going to back to study and volunteering, all activities that may not have immediate economic value or generate profit, but all worthwhile pursuits that are not given due credit under a neoliberal state. Many were lifted from poverty, able to retrain in other careers and start businesses. Nixon’s experiment was a resounding success but failed to pass through the Senate Finance Committee as it was believed that the UBI offered was too low to lift people out of poverty.

Basic Income in Canada 

In 1974 UBI was also trialled in Mincome, Canada and the results were like other UBI experiments: working hours stayed the same. But other surprising results emerged: domestic violence had decreased, as had mental health complaints and hospitalisations were down 8.5%. On studying the archives in 2004, Professor Evelyn Forget could even trace the effects of UBI into the next generation, to the children of beneficiaries, through to their earnings and health. 

The proposal of UBI is a break with the current neoliberalist agenda and a welcome recognition of the fact that a new antidote is needed to curb rising unemployment and increasing precarity. Australia’s Labor leader opposes UBI as he believes in “dignity through work,” but what happens when accelerating technological advances mean that there is not enough work to go around? How else must we be encouraged to maintain our “dignity”? Under capitalism, distributing wealth via wages has been the main way that workers receive a portion of what they produce, but with increasing automation of the workforce this may become more difficult in the future. Robots are predicted to take around a third of British jobs by 2030 and the proliferation of zero-hour contracts and the gig-economy mask the true figures of unemployment and underemployment, meaning that there are far more people in need of UBI to supplement poor wages. 

The danger lying behind the implementation of UBI is that a right-wing government may use this as a pretext to completely strip the welfare state; replacing the existing welfare system with universal basic income. This would prove problematic as some individuals will have greater needs than the majority; illness, disabilities and child assistance for some households means that a basic income alone without the safety net of a welfare state would push many further into poverty. Providing essential services for citizens should be the main role of government and shifting the risk onto the individual for their well-being would be untenable and start a dangerous trajectory from which we cannot return. Case in point: the USA in which many are forced to sell everything they own and live in destitution to pay to treat an illness, with “pay or die” being the motto of the American healthcare system. 

UBI in Alaska 

Alaska’s version of UBI is the Permanent Fund Dividend in which yearly oil revenues are distributed amongst citizens. Implementing a tax on state resources is a potential source of funding for UBI, as rare is the state that does not have resources. Under neoliberalism, however, it is the norm for governments to give away resources to corporations that then profit from them and base their operations elsewhere, giving very little back to the state in in the form of taxes.


“But how will we pay for this?!” cry the naysayers: in the exact way we have been paying for everything; spending less in some areas and cutting concessions that benefit a minority of society. As per the neoliberal agenda, Tory Britain proposes lowering corporation tax to 17%, in order to make Britain “more competitive”, ignoring the fact that many countries who are equally, or more, competitive than Britain, have far higher rates of corporation tax: Japan, USA (on average across the states), France and Germany. Raising this rate back to pre-crash levels or higher, could provide funding for UBI. Some may see UBI as emblematic of the something-for-nothing culture, but let’s not forget that this already exists in the form of corporate welfare. Private enterprises are no strangers to state handouts and the slashing of taxes for businesses and the super-wealthy, as well as the accelerated growth of the rentier economy show that those at the top epitomise the very something-for-nothing culture that they condemn those on welfare for. 

In a political climate in which the welfare system is insidiously being dismantled by the government, UBI could alleviate economic pressure on citizens, especially the precariat; those who are forced to comply with zero-hour contracts, work in the gig-economy and must welcome job insecurity as the new reality of neoliberal Britain, a legacy bequeathed to us by a Thatcher government. UBI is one of those rare proposals that benefits rich and poor, the squeezed middle, left and right and society as a whole. Poverty is very costly and the British taxpayer is forced to foot this bill, with increased poverty meaning less able workers, more mental health problems debilitating those who are physically able to work and more homelessness and increasing reliance on food banks. With many jobs being automated and more and more being pushed into unemployment and increasing destitution for those in employment, it puts to bed the notion that “work pays.” A new system of wealth redistribution is needed to counterbalance the precariousness of work in our current economic employment.

Frankly, we can’t afford not to pay everyone a basic income. 

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