A Closer Look

Universal Basic Income (UBI) – A primer

What is UBI?

On its face, the definition of a truly universal basic income is pretty straightforward: It’s an amount of cash given to everyone within a geographic area that’s then distributed unconditionally regularly, and on a long-term basis, as Marinescu describes it. (Although, the most recent UBI trials have focused on those with low incomes. There are varying opinions about whether the wealthy should also receive UBI payments, or whether they should be distributed on a sliding scale based on income.)Though it sounds simple, the wording matters, and understanding the term requires breaking down some of the definition’s key phrasing. The crucial conditions are highlighted above, so let’s unpack them.

First, the funds distributed must come in the form of direct cash, as opposed to something like conditional welfare, which requires certain obligations be met, or food stamps. A universal basic income program would mean that the cash received as a result of the program has no strings attached. Those who receive it can choose to spend the cash however they want.

Next, for a policy to constitute UBI, rather than any other kind of cash distribution program, the same cash payment has to be given to everyone within the geographic area, Marinescu notes. So, in order for, say, the state of California to claim it has instituted a universal basic income, the state would have to distribute a set amount of cash (say $1,000/month) to every person living within that territory. This means that everyone residing in California would have to get the same cash payment, regardless of their income or employment status. (Of course, UBI could also be instituted at a smaller scale, such as by county or by city). A universal basic income program would mean that the cash received as a result of the program has no strings attached.

This is what makes the cash unconditional: It’s not subject to a means test, in which there are determined qualifications one must meet in order to get financial assistance or relief. Finally, in order to be a UBI program, these payments must be regular and long-term. This differentiates UBI from the checks sent to Americans in Congress’ stimulus package, Marinescu points out. If the stimulus checks were instead part of a UBI program, it would mean the cash distributed would come on some kind of regular interval (say, monthly), and that monthly cash transfer would be in place for an identified — and longstanding — period of time. (They would also not differ based on income.)With these basic working parts, the way these cash payments would get distributed to individuals might differ, Marinescu notes. For instance, the amount of cash, the intervals between cash transfers, or the length of the program overall could all vary depending on government decisions.

Chosen excerpts by Job Market Monitor. Read the whole story @ Everything you need to know about universal basic income

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