Universal Basic Income, 2

 
 
 
 

Vocabulary

taker	herring	experiment
gain	poverty	gain traction (2)
gain	pretty (2)	redistribute
similar	income	inequality
cash	transfer	no strings attached
string	argue (2)	handful (2)
trial	hand out	unemployment
fiction	salmon	downturn
afford	scheme	lose/lost/lost (2)
key (2)	cover (2)	libertarian
rent	provide	however (2)
free (2)	propose	mulled wine
impact	flexibility	guaranteed (2)
reduce	suggest	negative income tax
welfare	endorse	bureaucracy
attach	titan (2)	cushion (2)
feature	advocate	estimated
replace	trillions	automation
radical	alleviate	opportunity
pursue	universal	champion
receive	spectrum	workforce
exist	traction	address (3)
critic	crazy (2)	underway
retrain	incentive	pay/paid/paid
per	junior (2)	meaningful
OECD	benefits	eliminated
norm	well-off	anytime soon

 
 
 
 
 

Video

 

 
 
 
 

Transcript

Reporter: “Do you guys want some free money? Excuse me, would you like some free money?

Free money?

Passerby, one: “No.”
Reporter: “No?”

Reporter: “Free money?”
Passerby, two: “Free money?”
Reporter: “It’s free!”
Passerby, two: “I’ll take some for my friend, too.”
Reporter: “You can take some for your friend.”
Passerby, two: “Okay, thank you.”

Reporter: “Would you like some free money, sir? . . . Okay. Wow, we’ve got a lot of takers here.”

Handing out free money sounds like a pretty radical idea.

But it’s actually an economic concept gaining a lot of traction around the world.

We’re talking about universal basic income.

Universal basic income is pretty much what the name suggests: an income for everyone in the form of a cash transfer.

No strings attached.

Finland is among a handful of countries experimenting with universal basic income as a way to address unemployment in the country.

Meet our fictional character, Leena. She works in a salmon factory in Finland.

Then an economic downturn hits. People can’t afford to buy as much salmon, and Leena loses her job.

Under the universal basic income scheme, Leena would get around six-hundred-and-fifty dollars ($650) a month from the government. She can use that $650 to cover living expenses, while she looks for a new job.

But even once she gets a new job, she would continue to receive the cash.

A key feature of the universal basic income is that you can spend the money however you like.

So in the Finland example, you could take that $650 and spend it on about a third of a month’s rent here in Helsinki. Or you could spend it on a hundred cans of smoked herring and twenty-six bottles of red mulled wine mix.

The idea of handing out cash to every citizen isn’t new: Philosopher Thomas Paine proposed the idea of payments to every person all the way back in 1797.

Martin Luther King, Junior fought for a guaranteed income in the 1960s. And even free-market champion Milton Friedman endorsed the negative income tax, similar to basic income, as a way to reduce welfare costs and bureaucracy.

But lately, tech titans in Silicon Valley like Elon Musk and Mark Zuckerberg, are some of the biggest advocates of the idea. They argue a universal basic income would provide a cushion to an estimated millions of people who could lose their jobs if they’re replaced by automation or by robots.

It’s clear robots are already changing the future of work. Some in Silicon Valley say universal basic income could give workers an opportunity to retrain for today’s workforce.

Other advocates say a basic income would alleviate poverty, and help address growing income inequality across the developed world. It could give people freedom to start their own business, or flexibility to pursue creative interests.

The idea has support across the political spectrum, from libertarians who say it would simplify the existing social welfare state, to socialists who want to redistribute wealth toward the lower and middle class.

Finland isn’t the only country experimenting with universal basic income. Other trials are underway in the Netherlands, Kenya, Canada and the United States.

But not everyone is crazy about the idea.

Critics say universal basic income could actually disincentivize people like Leena from getting another job if they know they’re getting paid not to work.

And of course, there’s the Big Fat question of how to pay for universal basic income.

If every person here in Finland got that $650, it would cost the government more than three point five billion dollars ($3.5) billion per month.

That number would be in the trillions of dollars per year in the United States, where the population is much bigger.

And labor economists argue basic income would need to be a lot more than $650 to have a meaningful impact.

Research from the OECD shows that if the existing system of social and unemployment benefits were eliminated or reduced to pay for a basic income, poverty could actually increase.

Other critics say there’s no reason that people who are already well-off should be getting more cash from the government.

So it’s not looking like free money is going to become the norm for everyone, anytime soon.

 

 

Questions

1. Everyone eagerly accepted and took the free money from the reporter. True or false?

2. Is the idea of a universal basic income more discussed these days?

3. Finland has fully implemented a universal basic income. Is this right or wrong?

4. Does universal basic income only go to “poor” people? Can they only spend the money on essential items like basic foods and clothes? Do they have to find get a good paying job as soon as possible?

5. The idea of a universal basic income arose around 2000. Is this correct or incorrect?

6. Why do many people see UBI as a (future) necessity? What are its other advantages and benefits?

7. Are there arguments against UBI? What are the main arguments against it? What are the cons or disadvantages?

 

A. Is there discussion about universal basic income?

B. Does everyone like the idea?

C. What is the economic and financial situation of people in your country?

D. What might happen in the future?

E. What solutions can you propose?