How Universal Basic Income Could Change the World as We Know It

universal basic income

What if you were guaranteed an income every month just for being alive?

The check wouldn’t make you rich, but it would cover basic living costs, and you could spend it any way you wanted.

That’s the idea behind universal basic income, a movement that has captured interest on a global scale. It’s a concept that’s gained support across both sides of the political aisle. In fact, many Silicon Valley leaders insist guaranteed income is the solution to potential wage loss thanks to job automation.

How would a universal basic income work, and what do opponents have to say? Read on to find out.

What is universal basic income?

A universal basic income (UBI) would guarantee a set income to every citizen. You’d get a check every month from the government, regardless of your other income streams or employment status.

Unlike current forms of assistance, a universal basic income wouldn’t have eligibility requirements, and you could decide how to spend the check. The money would truly have no strings attached.

This income would not replace the need to work. Rather, it would guarantee a minimum salary to cover basic needs. What people did next would be entirely up to them.

A history of the universal basic income movement

Universal basic income gained popularity in the 1960s and 1970s. Martin Luther King, Jr. was an advocate, stating, “I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

And President Richard Nixon, with the support of libertarian economist Milton Friedman, proposed a partial basic income plan to Congress. The plan was passed by the House of Representatives but lost traction in the Senate.

Today, the movement has seen a resurgence across the world. A few countries are piloting basic income projects for a few thousand residents. Tech companies and non-profits have also joined the movement.

Is there any data on universal basic income?

In the 1970s, the Canadian province of Manitoba experimented with a basic income in a small town of 10,000. This MINCOME experiment found that mental health improved, hospitalizations went down, and teenagers stayed in school. Plus, fewer than one percent of men reduced their working hours.

Beyond the MINCOME experiment, there isn’t a ton of data yet on the effects of basic universal income. A few studies have suggested that guaranteed income alleviates poverty and improves health and educational outcomes. It could also empower workers by giving them the freedom to choose work worth doing.

Arguments for basic universal income

There are several arguments in favor of a universal basic income. First, supporters say that it would alleviate poverty and the dangers associated with it. They point to the MINCOME experiment as evidence that basic income can improve physical and mental health and promote education.

It could also stem the tide of rising inequality and increase workers’ bargaining power. With the promise of income no matter what, workers could be more selective about work and wages. Liberals tend to support UBI for these reasons.

Conservatives and libertarians tend to appreciate the straightforward model of UBI. It could replace complex government assistance and social welfare programs while helping aspiring entrepreneurs start small businesses.

Finally, several Silicon Valley and business leaders have been vocal in their support of guaranteed basic income. Their reason? The changing economy. More and more jobs are being automated, yet many employees are working longer hours than ever before.

A guaranteed income could free people from unnecessary work. It could also give people more free time to shape the economy of the future. According to futurist Ray Kurzweil, a guaranteed paycheck could mean “you’ll do something that you enjoy, that you have a passion for. Why don’t we just call that work?”

Criticisms of the movement

One major argument against universal basic income is that it would be too expensive. Opponents believe it would be too great a financial burden to implement on a large scale. Conservatives also suggest that it would disincentivize people from working. Rather than alleviate social problems, they say, it could aggravate them.

Finally, some liberals point to the movement as a distraction from government assistance programs. They favor programs that help those most in need. A universal basic income would provide money to everyone, regardless of socioeconomic status.

Could a universal basic income take hold in the U.S.?

At this point, universal basic income programs remain small and experimental. In San Francisco, tech startup Y Combinator has a pilot project that gives $2,000 a month to a few dozen Oakland residents.

Most other projects are happening in other countries. Finland has launched a pilot project, while Canada and the Netherlands may not be far behind.

In Kenya, non-profit GiveDirectly is raising money to launch one of the biggest experiments yet. It seeks to use a phone-based system to distribute money to 6,000 people over the next 10 to 15 years.

We can’t predict the future, but the movement has been growing. Researchers will continue to collect data on the results of these pilot projects. Who knows what could happen if the results are positive?

A universal basic income may seem overly idealistic, or even utopian. But James Surowiecki writes in The New Yorker that the same was thought of Social Security and Medicare just a few years before they were implemented.

Tesla founder Elon Musk certainly thinks it’s a possibility. During an interview, Musk told CNBC, “There’s a pretty good chance we end up with a universal basic income, or something like that, due to automation. I’m not sure what else one would do.”

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderRates (APR)Eligible Degrees 
Check out the testimonials and our in-depth reviews!
2.65% - 7.14%Undergrad
& Graduate
Visit SoFi
2.99% - 6.99%Undergrad
& Graduate
Visit Laurel Road
2.57% - 6.32%Undergrad
& Graduate
Visit Earnest
2.56% - 8.12%Undergrad
& Graduate
Visit Lendkey
2.57% - 6.49%Undergrad
& Graduate
Visit CommonBond
2.63% - 8.34%Undergrad
& Graduate
Visit Citizens
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.