“What would you do if your income were taken care of?” This was the question that the Swiss government posed to its people in a historic referendum recently. First conceived by the British philosopher Thomas More centuries ago, the idea of universal basic income is enjoying a renaissance these days amidst growing economic instability around the world. It is easy to see its appeal, but the question over its sustainability, even for an affluent nation such as Switzerland, still lingers.
A monthly stipend of 2,600 dollars without any strings attached—This was what the Swiss government proposed to its people earlier this year. Under this scheme, every adult citizen would receive the said amount, regardless of one’s level of income or employment status. Sounds too good to be true? Swiss people surely seemed to think so, as their answer turned out to be a resounding “No,” with 77 percent of the population rejecting the proposal in a June 5 referendum. Though the Swiss plan ended in failure, it nevertheless served as a watershed moment that turned the eyes of the world to the idea of a basic income.
Basic Income—From A to Z
As hinted above, a basic income, also referred to as a universal or unconditional basic income, is a type of welfare program that guarantees every citizen, rich or poor, of a specific amount of monthly stipend. Despite the honorable idea of liberating people from the struggles of making a living, it has largely been dismissed as infeasible and impractical, at least until now. Starting with Switzerland, however, a series of countries have recently sought to put the viability of a basic income to the test.
▲ A supporter of a basic income dressed up as a robot.Provided by techinsider.io.
So why is this centuries-old idea that was kept in the shadow being revived now? In the case of Switzerland, supporters of a basic income argue that the soaring unemployment, which stems from the replacement of human labor with automation and Artificial Intelligence (AI), necessitates a fixed income from the government. This way, everyone would be ensured a dignified life in a society that is increasingly fraught with economic uncertainty.
A more fundamental cause is in the “continued global recession,” according to Professor Chung Sae Won (International Studies). “Besides Europe, there are signs of renewed interest in a basic income in North America and even in the Third World countries, such as Kenya and Uganda. This indicates that the issue is becoming a global phenomenon,” he said. Although the financial states of these countries might vary, he added that “people’s desire to secure a stable future is all the same.” The Netherlands, Finland, and Canada are all planning to kick off a pilot program to experiment with a basic income in the near future.
Approach with Caution
Despite such positive developments around the world, the predominant opinion is that a universal basic income has inherent drawbacks that make it unfit for contemporary society, as reflected in the Swiss vote. Without a doubt, the most obvious challenge in implementing a basic income is the astronomical costs that will inevitably incurred. Professor Chung inevitably be on this point by saying “this is likely to undermine Switzerland’s financial integrity, as it would require an additional 25 billion Swiss francs,” money that would have to come from the public purse.
Even if Switzerland could afford it, there is yet another reason why people are not welcoming a basic income with open arms. It is the fear of immigrants that have been wreaking havoc in Europe since last year. Scandinavian countries with robust economies and high living standards are already attractive destinations for refugees from the war-stricken regions in the Middle East. It is not surprising that Swiss people simply do not want to give them any more reason to overwhelm their country.
In addition, there are concerns that a basic income will reduce, or even eliminate incentives to work. This counterargument has always been hoisted against any form of welfare programs, but it is particularly relevant to the case of a basic income. It is understandable that doling out enough cash to lead a decent life every month would diminish the incentive to work for most people. This is precisely why certain nations, particularly the United States (U.S.), have been so reluctant to even consider the prospect of a basic income.
▲ A poster prior to the June 5 referendum in Switzerland. Provided by inthesetimes.com.
South Korea Giving a Shot at Basic Income?
Although a basic income might have once appeared totally beyond the reach of South Korea, whose welfare programs fall far below the average of industrialized nations, this is no longer the case. Recently, a form of basic income called the youth income, though neither universal nor unconditional, has been suggested, igniting a heated debate. The Seoul Metropolitan Government (SMG) recently announced its plan to grant 500,000 won to the unemployed youths, with the purpose of enhancing their employment opportunities and promoting economic activities.
This is seen as an attempt to follow in the footsteps of Germany, which also developed a similar basic income project named Mein Grundeinkommen, meaning “My Basic Income.” Yet, even at such a relatively small scale, it has faced fierce opposition from the Ministry of Health and Welfare (MOHW), who questioned the effectiveness of the program in tackling the unemployment issue. Here, it seems that the government shares one of the most common criticisms against a basic income, that it will become a disincentive to work.
It remains to be seen whether the SMG will succeed in its youth income program that is unprecedented in Korea. Whatever the outcome may be, one thing is sure; with a basic income on offer, this is only the beginning of a new era for pioneering welfare programs. Only time will tell whether a basic income will live up to its hype, but the promise of a basic income seems all the more tempting in the face of ever-worsening inequality and the fragile labor market.