What Is a Universal Basic Income — and Could It Work?

What if every month, the government sent money to help you pay your bills?

This is the essential idea behind a universal basic income.

Facebook founder Mark Zuckerberg and business magnate and inventor Elon Musk support the concept. Meanwhile, Finland is experimentally giving 2,000 of its citizens the equivalent of $587 a month, no strings attached.

But what exactly is a universal basic income? Here’s a primer.

How does a universal basic income work?

It doesn’t matter if you work, or how much you make. And it doesn’t matter what you spend the money on.

A universal basic income means the government sends everyone the same amount of cash periodically, with the intention that no one’s pay falls below that baseline.

That said, the policy can manifest in different ways. The money may go to families or individuals. And rich people can get taxed, so the pay they receive ultimately goes back into the system.

But should universal basic income replace or supplement current welfare programs?

What problems does universal basic income solve?

Supporters say a universal basic income can solve a number of issues.

Musk, for one, fears that workers are at risk of replacement by robots. A guaranteed income would ensure that people don’t fall through the cracks as they lose their jobs — especially when many don’t have the skills to get another.

More importantly, the practice confronts income inequality. The top 1 percent in the U.S. earn 81 times more than the country’s poorest half.

Some argue a universal basic income could streamline pre-existing welfare programs.

As Cato Institute Senior Fellow Michael Tanner tells CNBC“We have over a hundred different welfare programs all with different rules and regulations. They’re overseen by dozens of different agencies. Simplifying, consolidating and moving to cash would make a great deal of difference I think.”

Finland recipients already say they’re feeling less stressed.

Why do some people oppose a universal basic income?

Less than half of Americans support a universal basic income.

Critics resist the idea of “getting something for nothing.” And some contend that the policy could erode people’s desire to work. Others are unsettled by the notion that the money can be spent on anything.

The price tag can also daunting. Economist Karl Widerquist estimates that a universal basic income could cost $539 billion a year, if the U.S. spends $12,000 on every adult and $6,000 per child.

Granted, that’s less than 25 percent of the country’s current spending on entitlements.

What countries have a universal basic income?

Finland has been the most conspicuous country lately to experiment with a universal basic income, but the Netherlands and Canada have also tinkered with the idea.

Does a universal income work? We must wait and see.

Photo Credit: Vitaly/Unsplash

58 comments

Carl R
Carl R12 hours ago

Thanks!!!

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Margie FOURIE
Margie FOURIE1 days ago

This is so petty. It would never work.

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Joan E
Joan E2 days ago

Milli, the reason they would give the money to everyone is the same reason they give Social Security to everyone in the system even if they are rich. It's psychology. If only the poor get it, the people who make more resent it. If they get it too, it's something that everyone can count on and enjoy. It's more likely to be cut if Republicans are in power and not all the people in the country are getting it. They try to cut Social Security all the time, but there are too many people who don't want to let it go away. Same with Obamacare. The right always bad-mouthed it, but when many people had it and appreciated it, they don't want to let the Republicans get away with taking it away and giving all our tax money to the un-needy rich.

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FOTEINI h
FOTEINI horbou2 days ago

a very good idea!!!

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Marija M
Marija M4 days ago

I am sure it could, at least in some countries.

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JT S
JT Smith4 days ago

Even before I had my stroke I supported the notion of a universal basic income. And I would still work as along as I'm physically and mentally able to. Now if my body would just cooperate.

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Irene S
Irene S5 days ago

We had a discussion about this months ago and it would be great, for all those who can´t get themselves a proper income. But alas, we will not get it.
@ heather g it was Finland, not Denmark.

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heather g
heather g5 days ago

Firstly, Denmark is an advanced democracy. Elon Musk, apart from being a genius, is amazingly compassionate towards the less fortunate in society. It is unusual for any wealthy people to think that way...... perhaps a presidential candidate.....

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Donn M
Donn M5 days ago

Maybe, if they did away with all entitlements, including Obamacare.

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MilliSiteProbs M

Canada may have "tinkered" with it??? but certainly never implemented anything like that, unless you are referring to the Child Benefits? The current PM recently increased the Child Benefits to families earning up to $170,000 Canadian per year (what?), some families can receive up to $35,000 per year (more than some working stiffs earn in a year). It does nothing for the Seniors that have lost their pension due to mismanagement, fraudulent usage of pension funds or losses on the stock market, (big corporations with private pension like Sears, etc.). The Federal Government is also guilty of all of those and more, regarding the Canada Pension Plan (CPP) which they purportedly "manage for a fee" for the employee and employer (small private enterprise/corporate - totally funded by employee/employer). The Vets (no benefits), the homeless, unemployed or any individual without children receive no assistance what-so-ever. So in a nut shell, it is pretty darn useless and it does not help those with families unless they file a Personal Income Tax form each year (most families on Reserves will never see a penny of it).

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