Could Universal Basic Income end poverty?

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Bernie Sanders made the “Fight for $15” a central part of his campaign in 2016.

But a new method to increase wages and reduce poverty is gaining traction in the U.S.

Universal Basic Income, or UBI, is a form of social security where the government provides every citizen with monthly cash payments - no strings attached - to cover their basic expenses.

Most supporters propose $1,000 dollars per month - enough money to keep every citizen in the U.S. above the poverty line.

The concept is actually not new. In 1795, Thomas Paine, one of America’s Founding Fathers, wrote about the need for a basic income in his pamphlet Agrarian Justice.  

UBI also gained popularity in the 1960s and 70s when it was advocated by thinkers as disparate as Martin Luther King, Jr., free-market economist Milton Friedman, and even President Richard Nixon. 

Now, UBI is in vogue again - especially in Silicon Valley. 

Some see it as a way to protect workers who will become displaced by widespread automation.

At the World Government Summit in Dubai, Tesla CEO Elon Musk said, “I think ultimately we will have to have some kind of universal basic income. I don’t think we are going to have a choice.”

Others think UBI can spur innovation and entrepreneurship.

Mark Zuckerberg, CEO of Facebook, said in a commencement speech at Harvard, “We should explore ideas like universal basic income to give everyone a cushion to try new things.”

Strangely enough, some conservatives like the idea as well. Libertarian backers of UBI see it as a way to eliminate social welfare programs and reduce bureaucracy.

Some states have already adopted measures that incorporate elements of a guaranteed basic income. 

Alaska has distributed some of its revenue from drilling oil to every resident (including children) since 1982. This takes the form of an annual payment ranging from $1,000 to $3,000 dollars.

This past June, Hawaii’s state legislature unanimously passed a bill commissioning state agencies to study UBI as a way to provide financial security to all Hawaiians.

 

Only time will tell if universal basic income is truly the answer to reducing poverty in an uncertain economic future.

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