Universal Basic Income (UBI) has been in the works for a while, but will it ever work?
Throughout the world, politicians and governments have been pushing for a UBI system, that allows citizens over the age of 18 to receive a set income on a periodic basis. Countries such as the U.S., Finland, and Canada have trialed this UBI system, but no countries around the world are practicing this system, this may be due to 3 major economic problems.
1. If UBI were to be implemented in countries around the world, their economies would become unsustainable. For example, if the United States were to allow UBI, then this system would cost the U.S. government $2 to 4 trillion dollars a year! And that's just for $750 to $1000 monthly! If the U.S. can’t afford this, then countries around the world with lower revenues such as Canada, Mexico, and Chile will never be able to fund this expensive program. Living in a small Canadian city has taught me that government funding shouldn’t be spent on UBI, but instead towards the development of smaller cities. Doing this would not only create more attraction among the tourists and raise city income, but it would also create more jobs.
Another large change UBI would make to countries is that it would raise the income tax up to 30%! And as a 16-year-old who will soon begin paying taxes, a higher interest rate would mean that I would lose a large portion of my earnings. But if the income tax were to be raised by such a high margin not only would it negatively affect 16-year-olds, but also students who take on jobs to support their families.
2. Aside from its cost, UBI also hands money into the hands of teenagers who are vulnerable to making irresponsible choices. As a high school student myself, I am surrounded by a lot of irresponsible teens making careless choices, teens who have the potential to do great things but find themselves exposed to negative temptations. For example, students who live in lower-income neighborhoods tend to have higher drug use percentages. So, by allowing these troubled teens to receive income regularly, the government would not only be funding the irresponsible spending of teens but would also be increasing the number of potential drug abusers in their country. Therefore, I think that a system that promotes mindless spending, especially among teens, should not be employed anywhere around the world.
3. The third reason that UBI should not be employed is because of the reduction in the labor force. According to a UBI experiment done by the Finnish government in 2017, people who received passive income were more likely to quit their jobs or take fewer work hours. I can say as a lazy person myself, this sounds awesome! However, there are more serious problems that lay underneath the blanket of passive income. For example, have you ever been too lazy to get out of bed? Chances are you have, and that feeling of not wanting to go to work and be productive is what most Finnish citizens felt during their trials. They thought that there was no point in going to work if they’re already meeting their minimum income levels needed to survive. So, as a result of this mindset, Finland’s labor force decreased which would have also decreased the country’s GDP if it had not been a trial.
Governments and politicians around the world are still pushing for a UBI system although facts that undermine it have been presented. Instead of pushing for a system that will cost countries trillions of dollars a year, politicians and governments should focus their funding and power on the creation of jobs. Doing this would not only create more jobs for people in need of income, but it would also increase any given countries GDP. This solution would allow my generation, who is currently suffering from high unemployment rates to have a shot at earning income.
