- Spain is moving to establish a permanent basic income in the wake of the coronavirus pandemic for low-income citizens.
- Meanwhile, President Trump’s administration is going to be handing out a one-time check of up to $1200 dollars – or an interim universal basic income – for Americans who qualify, under the stimulus package.
- This concept of universal basic income is a government guarantee that each citizen receives a minimum amount of money.
- The ideas behind a universal basic income, or UBI, is centuries old, but has been gaining traction in recent years thanks to former 2020 presidential candidate Andrew Yang, who used the idea as a key part of his campaign, as well as billionaire Elon Musk, who’s been an outspoken advocate for it.
The novel coronavirus has decimated whole economies as mass layoffs force many into unemployment and shuttered stores bring consumer spending to a halt. In response, the idea of a universal basic income (UBI), or the idea that every citizen deserves a minimum amount of income, has gained popularity in the US and abroad.
In Spain, Nadia Calviño, the country’s minister for economic affairs, told the Spanish broadcaster La Sexta that the government is planning to introduce cash handouts to low income Spaniards as a way to help people financially recover. She added that the government hoped it would become “a permanent instrument,” Business Insider reported.
In the US, the recently passed Coronavirus Aid, Relief, and Economic Security Act, or CARES Act includes a $2 trillion stimulus package, which guarantees a one-time cash payment of up to $1,200 to Americans who qualify based on earnings or Social Security status.
The idea of an emergency, or interm UBI was first announced by Secretary Steven Mnuchin in March, one day after Senator Mitt Romney publicly called for the government to give US adults each $1,000 during this financially trying time.
The long-simmering, but newly urgent, policy proposal has received high-profile support over the past year. Entrepreneur-turned-presidential candidate Andrew Yang made UBI the cornerstone of his candidacy. His plan was to implement what he called the Freedom Dividend. His plan consisted of guaranteed payments of $1,000 per month, or $12,000 per year, to all U.S. citizens over the age of 18.
UBI is gaining newfound interest, but the policy idea itself stretches back to the 16th century, when Spanish-born humanist Juan Luis Vives praised a system of unconditional welfare. “Even those who have dissipated their fortunes in dissolute living – through gaming, harlots, excessive luxury, gluttony and gambling – should be given food, for no one should die of hunger,” Vives wrote in 1526.
Over the next few centuries, political scientists and sociologists honed the idea of a minimum income even further. In 1797, the American revolutionary Thomas Paine advocated for a “national fund” in the pamphlet “Agrarian Justice,” for which every American would be awarded fifteen pounds sterling when they turned 21, with another ten pounds per year after age 50.
Even Dr. Martin Luther King Jr. declared his support for basic income at a Stanford lecture in 1967.
“It seems to me the Civil Rights Movement must now begin to organize for the guaranteed annual income and mobilize forces,” King said, “so we can bring to the attention of our nation this need … which I believe will go a long, long way toward dealing with the Negroes’ economic problem and the economic problem many other poor people confront in our nation.”
In his final book, “Where Do We Go From Here: Chaos or Community?”, King observed that “no matter how dynamically the economy develops and expands it does not eliminate all poverty.” Hence the need for the nation to create full employment – or create incomes.
The decade between 1969 and 1979 marked a crucial turning point in the basic income movement for two reasons.
The first was President Richard Nixon’s 1969 proposal of the “Family Assistance Plan.” The legislation promised to give an additional $10,400 (in 2016 dollars) each year to families who had kids, depending on income. While the FAP easily made it through the House of Representatives, it ultimately died in the Senate.
The second was the “Mincome Program” that took place in Manitoba, Canada. Between 1974 and 1979, residents in the city of Winnipeg and smaller nearby town of Dauphin received additional monthly income, again based on their income levels.
It wasn’t until University of Manitoba economist Evelyn Forget discovered the Mincome files 20 years later that anyone realized what a success the program had been.
Forget’s research showed hospitalization rates fell by 8.5%, high school completion rates went up, and new mothers could afford to work less. And in general, few people stopped working – one of the key fears that’s often cited about basic income.
By nearly all measures, the conclusion was clear: Basic income held serious potential as a way to lift people out of poverty.
Forget’s research was critical because it helped revive the basic income movement after two decades of dormancy. Advocates had been praising the concept all the while, but only within the last decade have mainstream economists considered putting it back into action.
Some of the biggest names in business, particularly the tech world, have endorsed UBI, including Musk, Mark Zuckerberg, and Richard Branson.
In over a dozen countries and many more cities around the world, academics and policymakers have launched basic income experiments of their own – some completed, some ongoing. Many of the projects have already replicated the effects Forget found in the late 1970s. Much of the contemporary research on UBI and related programs has been carried out in the developing world; the World Bank largely found that the global poor spend the money on household goods, health care, and that various costs that come with schooling.
As has been observed elsewhere, the biggest issue with basic income is that it still needs more large-scale, years-long empirical study in developed countries to figure out where or not it “works.” Given that UBI remains something of a political Rorschach test – the term “government handout” remains a lightning rod in 2020 – it needs more to be more tested than debated. (Though the financial havoc the novel coronavirus is causing Americans may change that). As UBI becomes more mainstream, it stands a stronger chance of being better researched – and ending up as viable policy.
Chris Weller contributed to an earlier version of this post.