UBI: A Model of Economic Stability Since the 1970s - Essay Sample

Introduction

The Universal Basic Income (UBI) might sound like a new economic model, but in reality, it has been present since the 1970s. The model has received much support from politicians such as President Nixon to radical thinkers like Mark Zuckerberg. Different people support the model due to their ability to contribute to the economy positively. The implementation of universal basic income in an economy will bring about positive effects to an economy such as the reduction in the unemployment rate, elimination of poverty, an increase of minimum wages, and a guarantee for financial security. In an era where most of our population is unemployment, the implementation of UBI will help lower the unemployment rate. The UBI is a powerful tool for combating poverty since it ensures everybody is employed. Implementation of UBI also guarantees individuals' financial security since it provides employment for everybody and increases the minimum wage received.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The implementation of UBI will significantly reduce the rate of unemployment in an economy. With an extra source of income, people can use it to invest in new business or create a small business, and this will lead to job creation. Research indicates that an individual who has been unemployed for quite some time has a very slim chance of eventually getting a job. Once implemented, UBI will provide the jobless with a steady income, which will support them until they can land on their feet. According to Annie (2019), in an era where advancement in technology is causing rapid unemployment, implementation of the UBI will act as a safety net to people who are rendered jobless. This demonstrates that if people had an extra source of income, they would use it to open up businesses, therefore, creating jobs in the economy. With the income from UBI, people who lost their jobs due to lack of technical skills can go afford to go back to school and learn new technical skills.

The implementation of UBI serves as a way to eliminate poverty in an economy. Once implemented, UBI will provide everyone with an income, which will result in profits that are above the poverty line. In 2010, the government of Iran ran a UBI trial. According to Weller (2019), during the trial, 29% of the monthly median income was transferred to its citizens. At the end of the trial, poverty and inequality were reduced, and there was no sign of large amounts of people leaving the labor market. Unlike the critics' expectations, people used the funds to invest in their businesses, encouraging the growth of small enterprises. The implementation of UBI in Iran demonstrated that UBI has a role to play in the reduction of poverty.UBI also led to economic growth since people used the money to invest in their businesses. Indeed, the implementation of UBI will help in eliminating poverty and even leading to economic growth

The application of UBI will lead to an increase in minimum wages in an economy. People won't settle to work for someone offering minimum wage, knowing they have another source of income. This perspective will give employees leverage and make employers increase the minimum wage. UBI will provide employees with bargaining power. As Annie Lowery says (2019), "why take a crummy job for 7.25 an hour when you have a guaranteed 1,000 dollars a month to fall back on?" As humans, we always want the best of everything; having another source of income makes us not settle for low minimum wages. It also makes us reject crucial hours and no benefits, making employers step up and increase their minimum wage, work environment, and interests. Due to the leverage, UBI offers employees, UBI will be a great tool to increase minimum payments

Most economies today are characterized by rampant unemployment, low minimum wage, and large numbers of people living in poverty. Implanting the UBI model is vital for such savings to have a positive turn around. In conclusion, if the implementation of UBI is successful, it will lead to a reduction in the unemployment rate, elimination of poverty, and an increase in minimum wages in an economy.

References

Pros and Cons of Universal Basic Income | UBI. (2019). Retrieved 22 November 2019, from https://www.penguin.co.uk/articles/2018/universal-basic-income-pros-cons/

Weller, C. (2019). Iran introduced a basic income scheme, and something strange happened. Retrieved 22 November 2019, from https://www.weforum.org/agenda/2017/05/iran-introduced-a-basic-income-scheme-and-something-strange-happened/