The goal of universal basic income (UBI) is to give everyone a regular, unconditional cash payment. It addresses poverty, job loss, work transitional periods, or other income gaps.
UBI proponents see it as a way to reduce bureaucracy and encourage individuals to pursue goals without paternalistic state monitoring. They also see it as a way to recognize and support all forms of non-remunerated contribution to society, including taking care of children or elderly family members.
There are many different models of UBI, but at its core, it is a cash payment every individual receives without reference to their other income, wealth, or any conditions.
Over the last few years, UBI has risen to the national consciousness as concerns grow over automation and the potential to put millions of people out of work. Those are advocating UBI believe it can help reduce poverty among those who lose their jobs, even if they cannot find new employment.
In addition to reducing poverty, UBI could positively affect the population’s health and well-being. These include increased nutrition, fewer hospitalizations, and improved mental health. It also might strengthen families’ independence, improve self-respect and increase autonomy.
UBI supporters often stress that the goal of UBI is to eliminate inequality. They note that an imbalance in society causes poverty and that poverty reduction will be more challenging without addressing the roots of inequality.
They also point out that UBI will reimburse people for their contributions not refunded in the current income support system, such as parents caring for children or low-income workers caring for elderly family members.
The level of UBI would be a key design factor regarding how it is financed. The former may involve a progressive income tax, while the latter could be funded through a combination of taxes, such as a sales or capital income tax.
The goal of universal basic income is to eliminate the stigma associated with public assistance programs. Such stigma can prevent eligible individuals from enrolling in targeted cash transfer programs.
UBI solves this problem by providing unconditional cash support to all who meet income eligibility requirements. It also promotes work and entrepreneurship.
In addition, it removes the stress associated with means-tested programs and the risk of being deemed ineligible for social assistance. This may lead to better mental health outcomes.
UBI also promotes racial and gender equity. A UBI will challenge discriminatory public assistance policies and ensure all citizens are not subjected to wealth, race, or class inequalities.
One of the goals of UBI is to promote work. This could include lowering barriers to entry for people into low-wage jobs, challenging employers to pay a living wage and provide health and family benefits, or influencing entrepreneurship.
Several UBI models, including an income supplement in Canada and the Alaska Permanent Fund cash transfer, have positively affected work incentives. Some have also been shown to increase employment for part-time workers.
In addition, several studies have linked UBI to improved mental health outcomes. Recipients of unconditional cash transfers reported fewer hospitalizations and admissions for issues related to mental health, improved social relationships and housing stability, and lower rates of smoking and drinking.
