Could the COVID-19 crisis revive the idea of a Universal Basic Income?


Picture of Minna Ylikännö
Minna Ylikännö

Senior Researcher at the Social Insurance Institution of Finland (Kela)

The concept of ‘basic income’ seems to be making a comeback in Europe. Portugal, Spain and Italy have recently called for a common EU minimum income. Spain has also announced its plans to introduce a basic income for its citizens, and in many countries the Universal Basic Income (UBI) is, to some extent, being discussed. From 2017 to 2018, Finland experimented with basic income, and Scotland intends to carry out similar tests. Trials of a smaller scale have already been introduced in the Netherlands and in Germany.

As a concept, UBI is not new. It has been debated for decades with varying names and definitions. In the 1970s, UBI was experimented with in the United States and Canada, but not much has happened beyond public debates since then. While various political groups and NGOs have advocated for it, the concept has yet to be applied in national social security systems.

Usually, UBI refers to unconditional financial support for all, without means testing. Although this is the widespread definition, for practical reasons UBI has taken various shapes in the implemented experiments. In Finland, a partial UBI was tested, with a rather low level of benefits. It replaced basic level unemployment benefit and sickness allowance paid by Kela, Finland’s social insurance agency. Furthermore, recipients of the UBI could keep the entire sum, even after receiving income from work. Before the experiment even started, it was clear to all that the UBI model tested in the experiment was not realistic.

But is UBI ever going to be a realistic choice? The proposal is seen as a sustainable solution to address the existing flaws in our national social security systems. Especially according to its advocates, it would abolish all the incentive and bureaucracy traps, and increase the wellbeing of society by empowering recipients.

For many, UBI would mean a drastic change in their lives

From the completed UBI experiments, we know that wellbeing may indeed increase. This comes as no surprise, however, if we are comparing the UBI system to the present unemployment benefit systems in Europe. The criteria required to access unemployment benefits are getting more stringent as we speak, and too many people fall through the safety nets. For many, UBI would mean a drastic change in their lives: more certainty, less financial stress, and increased freedom of choice.

But again, is UBI a realistic choice? What about funding? How can we ever afford paying everyone a basic income, if we already struggle with austerity and empty state treasuries? Will implementing UBI mean new taxes or cuts in public services? Is that what we want?

When it comes down to it, the future of our social security systems remains murky. Do we fancy basic income, because it sounds so basic? Is that what we crave – simplicity? Yes, for sure. However, in that case, is UBI the best solution? Is it even feasible?

Even in Spain, universal basic income is not considered a realistic option. On the contrary, the Spanish version is neither universal nor unconditional. Their ‘UBI’ is akin to the Nordics’ ‘social aid of last resort’, which guarantees a minimum income for poor families. Again, it may be a basic income, but it’s definitely not granted to all.

The case can be made that we are seeing something more revolutionary than UBI

The argument being made here is not that UBI is incapable of solving issues in our social security systems. Rather, what we’ve seen so far has not been UBI. It has not replaced all benefits, it has not been unconditional and it is still making use of criteria and means-testing. The current national minimum income systems target poor population groups and are paid for a specific period, according to certain conditions.

However, the case can be made that we are seeing something more revolutionary than UBI – a rise of solidarity in the face of the pandemic. We now have a common enemy that threatens our very lives. We are in desperate need of empowering people against this enemy. This concept of basic income can provide a powerful weapon in the policy toolbox.

Regardless of what form it takes, if EU member states are able to boost the wellbeing of the most vulnerable population groups, it would do no harm to call that financial benefit UBI. As the old saying in Finland goes, “the name does not make the man worse”.

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