- Ethan Wai Chi Leung
UBI Around the World
Updated: Jun 19, 2020
Universal Basic Income (UBI) a type of social security that guarantees a certain amount of money to every citizen within a given governed population, without having to pass a test or fulfill a work requirement according to Democratic presidential candidate Andrew Yang's campaign website. With the 2020 election around the corner, Yang is receiving a lot of attention for his proposal to implement a guaranteed income, the Freedom Dividend, or a form of UBI. The proposed Freedom Dividend is a guaranteed payment of $1000 a month, or $12,000 a year to every U.S. citizen over the age of eighteen. Yang believes that UBI will counteract the impending issue of automation in the workplace. He has stated that by 2015, automation had already destroyed four million jobs and predicts that a third of working-class Americans will lose their jobs in the next 12 years. Yang argues that current prospective policies, like retraining workers, are not suitable solutions to combat this issue, and the U.S. government should implement a form of UBI. His justification states that even though automation relieves workers of dangerous and monotonous jobs, they will not be able to afford basic necessities like groceries, purchase homes, or save up for an education. Furthermore, he endorses the Freedom Dividend to empower Americans to go on extended job searches to find better-fitting positions, start a business, or go back to school. Through the last few decades, there have been more than 35 UBI test programs and cash transfer experiments which illustrate its effectiveness.
The government of Kenya, instead of using food programs, has started to give money to Northeastern Kenyans who suffer from intense droughts in the area. While the government expected the recipients to use the money to buy food, they often instead use the money to start small businesses. For example, a widowed mother of seven opened a retail shop and a slaughterhouse. With the money that she has received, she was able to renovate and rent out a set of small kiosks built from iron sheeting, allowing her neighbors to take advantage of those spaces. Around 90 percent of recipients have used it in similar means and decided to open new retail businesses. This program was supported by the United Kingdom's Department for International Development which aimed to prevent families from sinking deeper into poverty and having to resell their remaining assets due to drought. Recipients have stated that it has been a success. Mary Aking'ol Lokirindi from the Eliyie village stated that "If [she] was given foodstuff worth the same amount, [she] would be having nothing, and instead, [she] would be waiting for more food-aid to come."
In 1976, when oil production began in Alaska, the state established the Alaska Permanent Fund. The purpose of this fund was to save a share of the public revenue generated & om oil. Derived from gas and oil revenue, the Alaska Permanent Fund distributes an annual dividend of $ 1000- 2000 to every Alaskan who registers for it. Due to the funds' popularity, the Alaska Permanent Fund will continue to influence the state economy and seal structure in the foreseeable future. However, it remains a controversial program just as many who would vote to enshrine the state program would likely choose to eliminate it.
Finland held a two-year UBI experiment on 2,000 unemployed individuals from 2017-2018. The randomly selected individuals were granted with €560 ($634) per month, and they would keep that money regardless of whether they managed to obtain a job or not during the experiment Finland concluded that the experiment did lead to increased happiness but not a raise in employment percentage that deviated from those without UBI. With this being said, Finland is still evaluating the benefits of the program, but will most likely not implement UBI ‘for the country.
Brazil has implemented Recitivas, a privately-funded basic income for small, impoverished communities in the rural areas of the state of Sao Paulo, Brazil. Founded by Bruna Augusto Perira and Marcus Vincius Brancalione, the project pays 30 Brazilian reais which is around $15 per month to the community in Quatinga Valho, Sao Paulo, Brazil. Even this small amount of money can be extremely impactful to the people living in the rural areas of Brazil, providing access to clothing, better living conditions, and resources to maintain overall nutrition and health. This progress has been verified and noticed by the coordinators through their interactions and observations with the Brazilian people, as they have found an increase in self-esteem and social interaction, reduction of social insecurity, and a rising expectation for the future. The project creators, including the founders Bruna Augusto and Marcus Vinicus, have also stated that "the point of the project is not to study [basic income guarantee],” as they have not seen an increase in the use of alcohol or illicit drugs, convincing them that the model has proved effective.
In Northern Uganda, the Women's Income Generating Support (WIGS) program strives to help women overcome economic barriers. A study evaluated this program in which citizens are provided cash, business skill training, and advising to help women develop an understanding on how poverty affects new businesses in Northern Uganda. The money from the WINGS program is given to young women and girls who have suffered the most economically and educationally in post-Civil-War Northern Uganda. In 2007, the Association of Volunteers in International Service (AVSL) a nongovernmental organization, conducted a survey which suggested that the development of new economic opportunities and social capital will help to reduce poverty and improve the health, education, and well-being of youth, specifically young women. This was achieved by doubling the WINGS beneficiary monthly cash income from 16,211 UGX to 32,692 UGX which posted a 98 percent increase over controls. Ultimately, the WING program has shown an immense improvement in the lives of these women and the effectiveness of UBI.
NEW YORK CITY
New York City formerly implemented a form of UBI called the Conditional Cash Transfer (CCT). The CCT was a three-year conditional cash transfer to low-income families in New York City. It reduced poverty and material hardship by implementing 20 cash rewards that could be applied to children’s' education, preventive healthcare, and groceries. Not only did the CCT help families in the city improve their financial situations, it also had positive impacts on the educational sector, raising the on-time graduation rate of ninth graders by 12 percent above the 67 percent graduation rate among students who were proficient at reading when they entered the program. However, there were problems with this program as once the reward payments became unavailable, low poverty rates plateaued and material hardships re-emerged. This program also had failed to affect elementary and middle school students. Despite its issues, the program successfully provided many benefits to children in low-income families.