Balades en expertise comptable :
Universal Basic Income

Actu Anglais juin 2022

Universal Basic Income... décrypté par Jean-François Allafort, co-auteur des Fiches DCG UE12 Anglais des affaires, collection « Expert Sup », Dunod, et présenté par Ian Waddelow.

Universal Basic Income (UBI)

Welcome to the series of DUNOD podcasts designed to help improve your English in your own time on topics related to your studies.

What if the state covered your cost of living ? Would you still go to work ? Go back to school ? Not work at all ? What would you do ?

This concept is called “Universal Basic Income” or UBI. It is probably one of the most ambitious social policies of the 21st century.

So how does it work ? And what are the key arguments for and against a Universal Basic Income, which has also been called “freedom dividend” by some people. It is an unconditional, periodic cash payment that a government makes to everyone regardless of their living standards. It is not means-tested and there are no requirements. Rich or poor would receive the same amount of money. It would replace already existing welfare schemes.

So how does it work and what are the arguments for and against a Universal Basic Income ?

Well the UBI basically promotes equality. As some people would choose to work less, it would increase job opportunities. It would also recognize the economic contribution of unpaid labour, mainly undertaken by women. It potentially eliminate extreme financial poverty and some of the poverty traps.

A UBI also gives more time for yourself. People would reduce their working hours without sacrificing their income, so fostering a greater entrepreneurial and creative spirit while reducing stress and insulating people from negative externalities.

Another argument for UBI is better working conditions. With a guaranteed income, people will be able to challenge unfair working practices strengthening the position of ordinary people in relation to their corporations.

So what are some of the arguments against UBI ?

It is commonly thought that a UBI disincentivizes work. It may encourage laziness and undermine the value of work as a social institution. People would have no motivation to take low-skilled or badly-paid jobs, which could eventually be bad for the economy.

A UBI doesn’t really target money to the most needy, either. The richest would also get a UBI, including billionaires. That would contravene the role of benefits which is to help the poorest find employment and not give to those who have already more than enough money.

Also employers may be tempted to pay lower wages, as they would be compensated by the UBI. This is likely to affect those in lower paying jobs more than the wealthiest.

Another argument against UBI is that it’s bad for the economy. Governments would have to borrow extensively creating perpetual debt and deficit. A UBI could eventually lead to inflation, making things more expensive for ordinary people.

However, a basic income wouldn’t necessarily cause inflation since the money used for it would come from already existing welfare so it would be more like a transfer of resources. Taxes on the richest could also be raised.

The pandemic has already paved the way for the implementation of a UBI in the form of stimulus checks in the U.S or furlough schemes in the UK. The idea seems to have taken momentum in the world with studies showing that we have more to benefit from it than what we could believe.

Should governments institute a basic income, even if it’s for a short period of time ? It may help answer questions about the effectiveness of such a program. Yet, until the results of more research become available, a universal basic income will remain an uncertain but tantalizing prospect.