Universal basic income is the answer to the inequalities exposed by COVID-19
In the COVID-19 outbreak frenzy, several countries are considering massive fiscal stimulus packages and printing money, to blunt the concurrent crises underway: the pandemic and the unraveling economic depression.
These plans are essential, but they need to be strategic and sustainable. Because in addressing the current crises, we must avoid sowing seeds of new ones, as the stakes are incredibly high.
It is time to add a new element to the policy packages that governments are introducing, one we know but have abandoned: Universal Basic Income (UBI). It is needed as part of the package that will help us to get out of this yawning pit.
The naysayers, and there are plenty, will point out that it won’t work because no country can afford to regularly dole out money to every citizen. They will argue that we will run unsustainable deficits, which cannot be financed.
This is a valid concern. But the alternative – not strongly addressing COVID-19 repercussions – will result in a greater surge in inequality, increasing social tensions that would cost governments even more and open countries to heightened risk of societal conflict.
The pandemic that began in China has raged across Asia and beyond, exposing inequalities and vulnerabilities of huge populations in the region. This includes informal workers – estimated at 1.3 billion people or two-thirds of the Asia-Pacific workforce – as well as migrants, with almost 100 million dislocated, in India alone. If a large part of an entire generation loses its livelihood, with no social safety net to catch it, the social costs will be unbearably high. Economic instability will follow the flare-up of social tensions.
During these times, when we need to kickstart sputtering economies, the payoff of social stability would be tremendous, making an even more powerful argument for UBI.
So a new social contract needs to emerge from this crisis that rebalances deep inequalities that are prevalent across societies. To put it bluntly: The question should no longer be whether resources for effective social protection can be found – but how they can be found. UBI promises to be a useful element of such a framework.
Countries like the United States and Canada are already making such plans. Alaska, in fact, has been making annual UBI-type payments, to every state resident, for decades. Canadian prime minister Justin Trudeau pledged CAD$2,000 a month, for the next four months, to workers who have lost income due to the pandemic – a short-term form of UBI. Now we need to expand it and make it work in the long-term, and we can.
We must approach it differently from how we have in the past. We should neither view it as a hand-out, nor as a Band-Aid solution to add on to systems already in place. Instead, we should use the current twin crises to re-evaluate where we are “still digging”.