Due to the economic fallout of COVID-19 a city in South Korea decided to create its own kind of universal basic income. Instead of just getting cash, the payouts are done on a special credit card that only works with local owned businesses, meaning you have to spend locally and help your local businesses survive the economic downturn. In the video above you can see how successful this program has been and that one federal politician is hoping to make the program national.
To stimulate its pandemic-hit economy, a province in South Korea has been experimenting with universal basic income programs by regularly giving out cash, no questions asked. Now, some politicians want to go national with the concept.
Ontario Premier Doug Ford was elected earlier this year and already started implementing his plan to increase inequality in the province. Obviously, this is a bad a plan. One of the things Ford cancelled thus far was the basic income pilot program which was praised around the world, and before the study showed results Ford axed. As a response to this stupidity, CEOs have responded by demanding that the basic income pilot continue and that the concept of basic income needs support. The good thing here is that CEOs are openly supporting basic income despite the “pro-business” Ontario government stopping the basic income test.
Here’s part of the open letter from CEOs to Doug Ford:
As Canadian business leaders, we urge the Ontario government to continue the Ontario basic income pilot. We see a guaranteed basic income as a business-friendly approach to address the increasing financial precarity of our citizens and revitalize the economy.
It is urgent that we let this pilot run because we see basic income as part of a solution that could help Canadians stay competitive in the face of:
Accelerating technological job displacement due to advances in automation, software, and AI1
Globalization of jobs which has gone beyond manufacturing and textiles to entry and mid-level information work2
The ongoing transition of work to part time, contract, and gig-work3
Winner takes all markets where companies such as Amazon are absorbing greater shares of economic activity4
These global trends are causing structural changes to the economy that are depressing wages,5 reducing the number of middle class jobs available to Canadians, and affecting a decline in entrepreneurship.6
Basic income is a concept that is being tried in Finland and now in Canada. The idea is to give people just enough money to live off of regardless of their situation. People can live a barebones life using basic income, but in order to afford things like travel or fancy objects a job will still be necessary. In previous tests in the 70s people with a basic income were able to improve their health and their overall quality of life all while decreasing costs on social services (like hospital visits and police calls).
Proponents on both the political left and right are embracing a minimum or basic income as a way to reduce poverty, support workers faced by the challenges of automation and precarious employment and reform excessively punitive and bureaucratic welfare programs. Some say unconditional cash transfers to individuals could even help staunch the rise of alt-right populism blamed for last year’s Brexit vote in the U.K. and Donald Trump’s election as president in the U.S.
Opponents worry it will be used to dismantle the social safety net, subsidize bad employers and take the pressure off government to develop effective labour strategies. But that hasn’t stopped global interest.
Finland launched a two-year pilot project in January and more than half a dozen other communities around the world are actively pursuing experiments of their own.
This year the idea of a basic income is growing in popularity, it’s even going to be tested in Ontario. The core concept that every citizen should be able to make a living regardless of their job (or lack thereof) is not new but it has never been done on a mass scale. A new book, Raising the Floor, explores how a basic income could be implemented in the USA.
As the discussion and research around the basic idea increase there is a greater chance that a region will adopt it. If you’re new to the idea be sure to read the wikipedia article on basic income.
Paying everyone $1,000 a month would cost roughly $2.7 trillion a year, which is about 15% of the GDP and four to five times the size of the defense budget. To pay for this, Stern would cash out most existing antipoverty programs, which cost about $1 trillion a year, including food stamps ($76 billion a year), housing assistance ($49 billion), and the Earned Income Tax Credit ($82 billion). Then, he would cut military spending and phase out most tax expenditures (tax breaks), which currently cost $1.2 trillion a year. In addition, he also supports a federal sales tax (which we currently don’t have) and a financial transaction tax (which some European countries are now introducing).