Lifting a Financial Burden
The Department of English at Slippery Rock University hosts an annual scholarship contest, the James Strickland Award, for the best essays to come out of our first-year writing course (English 102.) Below is one of the honorable mentions for the 2021-2022 academic year. In selecting this essay for recognition, Dr. Strickland noted, “Melanie Putt’s essay is a well-reasoned argument in favor of providing a universal basic income for every United States citizen. Melanie offers the benefits and drawbacks of the plan and to those who find the concept unbelievable, she presents examples of how it has successfully worked in Alaska, California, Kenya, and Canada.“
By Melina Putt
Money. It is something that controls the lives of each and every one of us, and at many times, we feel as though we do not have enough of it to support ourselves or our families. However, there may be a solution to this financial burden that nearly everyone faces at one point or another: a universal basic income. Although some are skeptical of implementing a universal basic income (UBI) because they fear it would disrupt the current welfare system and give more power to the government, the cost would be too high, and that it would remove the incentive to work, a UBI would be an effective alternative for combating poverty and income inequality, which would in turn improve opportunity for education and employment, economic growth and advancement, and physical and mental well being among all individuals.
Before discussing the potential risks and benefits associated with implementing a universal basic income (UBI), it would be good to first understand exactly what a UBI entails. A universal basic income is a welfare system in which the government provides every citizen with unconditionl monetary payments on a fixed basis, whether it be monthly, quarterly, annually, etc. These payments would be given to every citizen, regardless of their current financial status, and could be utilized in any way. The idea of a universal basic income dates all the way back to the late eighteenth-century, when in 1797 Thomas Paine had suggested to “create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her inheritance, by the introduction of the system of landed property” (Kaza).
There are some potential risks and issues associated with implementing a universal basic income, such as the possible economic disruption associated with re-rooting the welfare system and allowing the government to exert even more power over its people, the major loss of a willing and motivated labor force, and the significant cost and means of implementing such a system. To begin, implementing a UBI would allow the government to exert even more power over its people by increasing their dependence on the regularly allotted cash handouts, similar to that of the current welfare system, though on a much larger scale (Iglesias and Walter). This would essentially drive us away from the self-reliance that a personal income establishes because we would come to expect these regular “free” cash handouts (Igelsias and Walter). There is also reason to be skeptical that the government would eventually use a universal basic income to their advantage by threatening to lessen, or eliminate the benefits entirely, for those who disobey their laws and policies (Iglesias and Walter).
The promise of a universal basic income also establishes the issue of removing the incentive to work. If people are receiving “free” cash on a regular basis, they will, in turn, lack the motivation to work the same amount of hours as previous because they will be receiving compensation while simultaneously working less. This poses another issue in that a decrease in working hours among employees leads to a decrease in production among businesses (Iglesias and Walter). This would cause sales to drop, and if the demand for production remains constant or even slightly increases, prices will escalate and products may lose their afforddability (Iglesias and Walter).
Discussing a universal basic income forces us to consider the signficant cost of such a system, and how exactly we would fund it. The most obvious source of funding would come from taxing, though this emanates a sense of “robbery” or “theft” (Iglesias and Walter). After all, taxes would be imposed upon everyone, and it would mean that a portion of someone’s income would be confiscated and indirectly given to another individual through these “free” cash handouts. It imposes the issue of injustice in that a portion of the income of those who actually contribute to the labor force, would be given to those who contribute nothing whatsoever. In addition, this system would not disclude the wealthy in its target of addressing the needs of those in poverty, as it would be participatory among all individuals, so the wealth gap between groups would remain relatively the same (Iglesias and Walter). Seemingly, the only way to combat this unequal distribution of wealth would be to take money directly from the wealthy and give it to the poor. However, in our capitalist society this could never occur but through the generous “private efforts” of the wealthy (Iglesias and Walter).
While there are certainly issues associated with implementing a system of universal basic income, there are also many potential benefits, such as a decrease in or elimination of poverty and malnutrition, increased opportunity for education and employment, as well as economic growth and advancement, and finally, an improvement in the mental and physical well-being of all individuals. First off, a universal basic income could be an effective solution in lessening or eliminating global poverty and malnutrition. According to the Universal Declaration of Human Rights, “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control” (Goldsmith and McNeill), and this could be achieved by providing everyone with a sufficient amount of money to provide for themselves. Income is a major determinant of food insecurity, and under a universal basic income, people would be able to utilize the extra inflow of cash to afford adequate amounts of food and other necessary resources. Additionally, data collected from basic income trials has shown a significant decrease in poverty and child malnutrition rates, proving it to be an effective solution.
A universal basic income has proven not to discourage motivation to work, and instead creates greater opportunity for employment and educational attainment, which in turn facilitates economic growth and advancement. In a pilot program performed in Alaska, part-time employment increased by 17% and entrepreneurship increased by 15% (“Universal Basic Income: Key to Reducing Food Insecurity and Improving Health”). Entrepreneurship is encouraged through a universal basic income because the inflow of extra cash allows for ventures towards starting a small business while also maintaining the ability to afford basic necessities (“Universal Basic Income: Key to Reducing Food Insecurity and Improving Health”), and this positively affects the economy in creating new jobs. The inflow of extra cash also creates greater opportunity for educational attainment. In many basic income trials, both school attendance rates and performance have seen improvements (Bregman 459). Evidence also supports the idea that a universal basic income would benefit the workforce and “help soften the adverse effects of automation” (Rajwanshi). The additional income provided by a universal basic income would allow people to take more calculated financial risks like taking night classes, for example, which would help them transition to more rewarding job positions with less automation, while simultaneously improving workplace happiness (Rajwanshi).
A universal basic income would also positively impact the mental and physical well-being of all people. In a recent basic income trial performed in Kenya, recipients had reported “fewer instances of hunger, illness, and depression” even despite the economic uncertainties resulting from the Covid-19 pandemic (“Universal Basic Income: Key to Reducing Food Insecurity and Improving Health”). Another basic income trial performed in Canada during the 1970s shows just how effective a UBI could be in improving health and well-being. In the town of Dauphin, mental health diagnoses and treatments, as well as other hospitalizations, saw a drastic decrease during the trial. However, following the termination of the trial, the positive results had dissappeared (Codel). A universal basic income would very clearly minimize stress relating to financial insecurity, and it would also allow for people to more easily afford access to health care (Codel), resulting in improved overall health and well-being.
Various solutions have been offered to counter the previously mentioned issue with funding the significant cost of a Universal Basic Income. For one, the federal government could issue an act permitting the central bank to print a sum of money for this specific purpose, just as it did under the CARES Act, which gave $1.77 trillion directly to Wall Street (Brown). Although this poses the potential risk of inflation, it has been done before, and this time could be utilized to benefit all citizens. A second potential source of funding could be to transfer government spending from an already established system towards implementing a basic income. According to Rutger Bregman, the estimated cost of eliminating poverty is $175 billion, which is only about one-fourth of the money put towards military spending (Bregman 464), so implementation of a universal basic income would be feasible if government spending was cut from other established systems and programs and allocated to this cause.
Giving people “free” money poses the risk of recipients spending the cash irresponsibly on unnecessary goods and services like, for example, drugs and alcohol. However, many basic income pilot programs and trials have been performed, and in almost all cases, the recipients have spent the money responsibly. Rutger Bregman imposes convincing evidence in his piece “Why We Should Give Free Money to Everyone,” detailing the results of a 2009 London experiment in which a sum of money was given to each of thirteen homeless men. One of the men had been using heroin for twenty years and he “turned his life around” upon receiving the cash, even putting some of the money towards gardening classes (Bregman 457). In another basic income pilot program performed in Stockton California (2018-2021), five-hundred dollars was given to the recipients who utilized the cash to pay for things such as groceries, utility bills, and credit card debt (“Universal Basic Income: Key to Reducing Food Insecurity and Improving Health”).
A universal basic income–although posing risks of allowing the government to exert even more power over its people, being too costly to implement, and removing the incentive to work–would be an effective solution to lessening or eliminating poverty and malnutrition, while also improving opportunity for employment and educational attainment, economic growth and advancement, and mental and physical health and well-being among everyone. The potential benefits of implementing a UBI surely outweigh the potential risks, so why has nothing been done? This is a call to action, and with increased support for a universal basic income, it can become a reality.
Works Cited
Bregman, Rutger. “Why We Should Give Free Money To Everyone.” Rereading America, 11th
ed., pp. 456-466. 1 Nov. 2021.
Brown, Ellen. “A UNIVERSAL BASIC INCOME IS ESSENTIAL AND WILL WORK.”
AMASS, vol. 24, no. 3, Wntr 2020, pp. 8+. Gale Academic OneFile, 1 Nov. 2021.
Codel, Carsen. “Can Money Buy Happiness? A Look at UBI and Mental Health |.” Edited by
Haleigh Pine, Frontiers, Washington University Review of Health, 20 Nov. 2020,
https://frontiersmag.wustl.edu/2020/11/20/can-money-buy-happiness-a-look-at-ubi-and
mental-health/. 1 Nov. 2021.
Goldsmith, Mike, and Kellie McNeill. “The case for Universal Basic Income in New Zealand &
worldwide.” Pacific Ecologist, no. 21, autumn-winter 2012, pp. 27+. Gale Academic
OneFile,1 Nov. 2021.
Iglesias, David, and Walter E. Block. “UNIVERSAL BASIC INCOME: A CRITIQUE.”
Romanian Economic and Business Review, vol. 14, no. 3, fall 2019, pp. 7+. Gale
Kaza, Greg. “Considering the UBI.” Regulation, vol. 41, no. 1, spring 2018, pp. 56+. Gale
Academic OneFile. 1 Nov. 2021.
Rajwanshi, Yash. “Unboxing Universal Basic Income.” Edited by Alex Cheng and Andreas
Maass, Berkeley Economic Review, BER Staff, 25 Feb. 2020,
https://econreview.berkeley.edu/unboxing-universal-basic-income/. 1 Nov. 2021.
“Universal Basic Income: Key to Reducing Food Insecurity and Improving Health.” Center for
Hunger Free Communities, Drexel University, 2021,
https://drexel.edu/hunger-free-center/research/briefs-and-reports/universal-basic-income/.
1 Nov. 2021
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