Evaluating the Effectiveness of Universal Basic Income (UBI) Policies

This essay critically analyzes the concept of Universal Basic Income (UBI), examining its potential benefits and drawbacks. The essay begins with an introduction to UBI and the author's argument against it, followed by a summary of the author's viewpoints. The essay then delves into a critical discussion, exploring the pros, such as reducing inequality and poverty, improving mental health, and providing a financial safety net. It also discusses the cons, including the potential for disincentivizing work, the challenges of financing UBI through taxation, and the potential for UBI to be a generic welfare benefit that misses its intended target. The essay references several sources to support its arguments. The conclusion emphasizes the importance of targeted policies and the need for equity rather than equality when addressing poverty and inequality. The essay argues that UBI, while potentially beneficial, may not be the most effective solution compared to targeted welfare programs.

Introduction:
Universal Basic income is a fixed amount of money given by a government to its countrymen based
on a few restrictions. The author wants to argue that why, despite its positives this is not the most
ideal to fight specific issues and is also not much of a help to combat the job loss through the
technological advancement. He puts forth compelling arguments regarding how this is not really
something that is ideal for someone who is actually need government help. We shall see a summary
of his viewpoints in the next section.
Summary:
The main purpose of the article written by Simon Cowan called UBI : Universal Basic Income is an
Unbelievably Bad Idea is pretty self- explanatory. It is an article which examines the Universal
Basic Income and the author wants to prove the idea why this is a bad idea all along and how in
various points in history even when faced with huge events that had potentially changed the labour
force permanently all those who have wanted jobs have mostly always found it. He also questions
the basic foundations of something like the UBI and questions how such a safety net would be
financed noting that it would most probably be taxes, leading to an increase in taxes and thus
leading to further de-motivation of the working force to work. Also the additional taxation required
to have a basic income of 10,000 AUD a year would be huge and something that would de-motivate
the working force. He also thinks the Universal Basic Income is a bad idea because it would to be
beneficial to the right targets. The amount that could be made through this would be very much
lesser than what is currently being made through the welfare programs. In this article he also
explores how inflated the scare about losing jobs to the advancement of technology is and how
much of a misplaced solution having a basic income universally to dispel this is. He believes that
the ones who would be benefiting from such a program would not necessarily be someone who
faces threat to lose their job due to the automation of services. It would mostly be stay at home
spouses , or people who work part time, University students and single men. As the author notes,
these are not the intended targets for the betterment of whom the UBI program is being introduced
specially in light of the technical revolution.
Critical Discussion:
We can discuss ob the pros and cons of the article and the concept of UBI as a whole in the
following ways :

Pros :
1. Universal Basic Income helps in reducing inequality and poverty and makes sure that
everyone would be able to afford the basics of healthcare. It also makes it such that one
would not need to always be anxious about where the next pay check would be coming from
and thus reducing anxiety leading to better mental health (Schiller, 2017). Studies conducted
about UBIs in India for example was a huge success with participants reporting that this
helped them afford medicine, improve the hygiene and sanitation of their house , get clean
water, be able to eat nutritious meals regularly and also be more stress free in general
(Amadeo, 2018). In Namibia with these trials the child malnutrition rate fell from 42% to
17% within the test subjects in six months. However it is to be kept in mind that these are for
developing countries where acute poverty is a problem. In Australia where there are other
welfare schemes which would in general be adding more to the income of the poor than an
UBI it is perhaps not as relevant.
2. UBI also provides guaranteed income for the non working people who are unable to do a job
for a reason, suppose say to raise a child. This also helps caregivers who in order to care for a
very ill person is not being able to work as much as possible. UBI is something which thus
rewards all form of work including childcare and eldercare which would previously go
unnoticed (Dwyer, 2017). It also is a very helpful tool which provides the basic financial
backing if someone is to come out of an abusive situation. Very often , abused individual are
not able to leave their abusers because they depend on them financially. Thus UBI would
increase their chances of getting out of such situations. The author here mentions that for
single mothers are largely eligible for income support so it would not necessarily help them.
But it can very well be argues that just because a caregiver has a spouse who earns it does not
men that they too should not be compensated and empowered for the work they do.
3. An UBI is related to positive job growth rate and lower rate of dropouts. The guarantee that
a person would be able to at least afford to live leads people t not stick to jobs in which the
growth in wages are sluggish and give them the confidence to go outside and search for jobs
better suited to their needs. This is also true for students who are often not able to afford their
colleges or to live in within their means in the college going years (Matthews, 2017). With
universal Basic Income one could also have the freedom to study the domain he or she is the
most interested in rather than look to what would be the most efficient major to get a job.
Lack of job security caused the growth of part time jobs which gives very little benefits to the
students and the people working in such cases. One would also not be scared to further

pursue studies and participate in skill improvement courses because they know that even if
their same job they were in now is not there for them after, they would at least have some
kind of income.
4. Basic income would also have the benefit of downsizing the administrative side of the
welfare grants. As this would be a very simple model and would replace all the other welfare
programs , it simplifies the entire process and save costs for the government in this process
(Guarino, 2017).
5. This would also help by making sure that there are no Fraud cases who claim benefit for
them even when they do not meet the criteria ("Ten Reasons to Support Basic Income",
2018). As everyone will be handed the same income it would very much reduce the unseen
burden of people who commit such frauds.
6. Basic income would be fair redistribution of the technological advancements happening in
today’s world in which some of the sectors are the ones to gain enormously by this while
some face losses and would possibly lose jobs. The author mentions that these individuals
would end up finding jobs elsewhere but it is very clear that they would not be getting a
share of the pie.
Cons :
1. UBI distributes equally to all the people rich or poor alike. Thus it is not a targeted system
and as mentioned by the author also, being such a large scale generic welfare benefit often
misses its intended target (Rentoul, 2017). They take money even from the poor to distribute
it to everyone. UBI is something that goes for equality rather than equity. Equity would mean
that those who are poorest get the most support while those who are rich forego such support
because they would not necessarily need it. There are certain hardships that characterises
poverty and the targeted programs for these help alleviate them much more than a lumps
amount of money can, specially when even the poor would be taxed for this.
2. As already mentioned by the author and reinstate his point UBI would ultimately remove the
incentive to work. This would affect the economy adversely and lead to a labour and skills
shortage. Even in target studies if people have not ben demotivated that would be because
they are not having to finance this universal income yet (Goodman, 2017). Once they

increase the taxation to the level to which would be needed to carry out this scheme, people
would see that no matter how hard thy work, their actual dispensable income would increase
by very less. Also for people to be motivated to work hard, there is required a certain element
of uncertainty which when removed could cause a lot of hardships for the economy.
3. The biggest problem perhaps in all of this is to fix the amount that would be the UBI and then
to decide how to finance it. As can be seen from the article that even a income of 10,000
AUD a year would result in massive increase in the amounts of taxation that people would
have to face to make this a reality (Dunlop, 2017).
Conclusion :
Universal Basic Income is an amazing idea to bring forward equality among the people of a
country. However to truly help this who need it we must be looking at equity not equality. Giving a
basic income to someone who is already earning way above the median income does not make
sense. Similarly, taxing someone who is close to the poverty line to finance this basic income is also
senseless (Henley, 2018). It would be very nice if there was one stop solution to the poverty and
inequality that enriches society now but that is very much not the case. Targeted policies are to be
taken into account so as to really alleviate the worries of those who need it.
References :
Amadeo, K. (2018). Should Everyone Get a Guaranteed Income?. Retrieved from
https://www.thebalance.com/universal-basic-income-4160668

Dunlop, T. (2017). 'Something big has to change': could Australia afford a universal basic income?.
Retrieved from https://www.theguardian.com/australia-news/2017/sep/08/something-big-has-
to-change-could-australia-afford-a-universal-basic-income
Dwyer, P. (2017). Universal Basic Income. Retrieved from
https://www.bloomberg.com/quicktake/universal-basic-income
Goodman, P. (2017). Retrieved from
https://www.nytimes.com/2017/11/15/business/dealbook/universal-basic-income.html
Guarino, A. (2017). Universal basic income: Can it work to provide income for the future? | GRI.
Retrieved from https://globalriskinsights.com/2017/07/universal-basic-income/
Henley, J. (2018). Money for nothing: is Finland's universal basic income trial too good to be true?.
Retrieved from https://www.theguardian.com/inequality/2018/jan/12/money-for-nothing-is-
finlands-universal-basic-income-trial-too-good-to-be-true
Matthews, D. (2017). Study: a universal basic income would grow the economy. Retrieved from
https://www.vox.com/policy-and-politics/2017/8/30/16220134/universal-basic-income-
roosevelt-institute-economic-growth
Rentoul, J. (2017). Basic income is a bad idea that refuses to die. Retrieved from
https://www.independent.co.uk/voices/basic-income-pilots-scotland-ubi-glasgow-finland-
canada-ontario-switzerland-referendum-refuses-to-a7505561.html
Schiller, B. (2017). A Universal Basic Income Would Do Wonders For The U.S. Economy.
Retrieved from https://www.fastcompany.com/40463533/a-universal-basic-income-would-
do-wonders-for-the-u-s-economy
Ten Reasons to Support Basic Income. (2018). Retrieved from
https://www.basicincome.org.uk/reasons-support-basic-income