The Background of Universal Basic Income

What is a universal basic income? A Universal Basic Income, or UBI, isdefined by the World Bank as a “transfer that is provided universally, unconditionally, and in cash.” This model is supposed to provide a given sum of money to all citizens. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens. Programs that have been proposed to fight back against the issue of poverty have been heavily stigmatized due to the lack of public support for tax-funded welfare programs and of organizations providing services for poverty related issues.

The idea of a UBI is not a new one, nor is it one that is exclusive to America. As of right now, no country has a universal basic income in place, but countries have tried it and use it in small and different capacities. Mongolia and the Islamic Republic of Iran implemented a Universal Basic Income nationally. In Mongolia, this plan eventually fell through because of the lack of funds. This resulted in the nation to borrow money or cut the size of the payments. Regardless, the program had a positive effect on inequality and poverty. A Universal Basic Income in Iran also showed positive results: unemployment decreased by 26.3%. A majority of Americans (Republicans, Democrats and Republican leaning independents) are opposed to a Universal Basic Income in America, while the majority of people on favor of it are Black or Hispanic. However, the recent situation that the world is in with the pandemic has made discussion about a UBI in America a more viable option. Andrew Yang is the most popular supporter of an UBI, he suggests to give every American $1000 a month. States, like California, have clearly considered this option.

Proponents of UBI often state that it would lead to people losing their jobs and shrink the labor force even though in Iran when an UBI was implemented, 88.5 percent remained employed and only 4.5 lost or quit their jobs. Others say that a UBI is too expensive, this was the case in Mongolia. Also, there is not enough empirical evidence through implementation to suggest that a nationwide

implementation of it. All of this, they theorize, will severely put the economy at risk. The idea that Americans have to “work” to be successful and that people should not get handouts is also a big reason why people are opposed to it.


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