With the coronavirus pandemic causing a sharp rise in unemployment, one idea is rapidly growing in popularity: universal basic income (UBI), in which the government pays people a regular sum, no strings attached.
A Finnish study published in May (although carried out in 2017 and 2018) with 2000 unemployed people found that UBI boosted recipients’ financial well-being, mental health and cognitive functioning, and also modestly improved employment rates.
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People who received €560 per month, rather than regular unemployment benefits, reported higher levels of confidence in being able to control their future. The researchers involved say that regular guaranteed payments could alleviate stress in periods of uncertainty, such as the pandemic.
Elsewhere, the idea is also gaining traction. A suggests that giving all Australians earning less than $180,000 annually a payment of $18,500 a year would reduce wealth inequality by 20 per cent. The study’s authors estimate that UBI would cut poverty by 1.9 per cent, lifting half a million Australians above the poverty line.
Meanwhile, in the US, 25 cities are launching pilot UBI initiatives across the country to support low-income families, funded by philanthropic donations.
