Universal Basic Income - not really an alternative

Abstract

24 | International Union Rights | 27/3 FOCUS | IMPACTS OF COVID-19 ON WORK AND THE CHALLENGE FOR UNION RIGHTS Universal Basic Income – not really an alternative The idea of a Universal Basic Income (UBI) sounds intriguing at first: everyone should be guaranteed an income which covers their basic needs. Who would argue with that? Taking a closer look, however, there is much uncertainty as to what exactly is meant and how a UBI should work and be financed. This was also evident during the Covid 19 pandemic, when proposals were made to use a temporary basic income to cushion the economic consequences for the population and especially its particularly vulnerable sections. For example a study for the United Nations Development Programme proposed this for the world’s three billion poorest people. But this would be neither universal nor sufficient – in average US$ 2.50 per person per day. In the paper there is also a positive reference to Spain, where a ‘basic income’ was introduced. There it concerns however an even worse Spanish variant of the German model of basic security for needy unemployed (‘Hartz IV’), which is criticised by the trade unions as too low and too repressive. UBI as a rescue against the crisis? For Germany this discussion makes little sense. This is a country with a highly developed social welfare system, which showed its performance in the ongoing crisis – despite of all problems and legitimate criticisms. This system is characterised by social insurance schemes, which involve the vast majority of the population – in particular, dependent employees and their families – which provide benefits on the basis of contributions paid. Especially, the short-time work allowance saved millions from falling into unemployment. But nevertheless many mini-jobbers, self-employed and small entrepreneurs are particularly hard hit. They often have low incomes anyway and need every euro, but do not receive short-time work benefits or unemployment benefits because they are not covered by unemployment insurance. If they are needy, they can apply for basic security, but this is below the German poverty line. For the German UBI community this is rather a deterrent example, they see a ‘real UBI’ as the fundamental alternative to this means-tested basic provision. A UBI as they mean it is intended to be an income that the government pays unconditionally to each person, regardless of what income that person receives or what assets they possess. There is no means testing and each person receives the same amount (only children less). The UBI should be high enough to cover basic needs and guarantee social participation. The search for gainful employment would not be required. As a response to the Covid 19 crisis more than 400,000 people supported a petition that demands the introduction of an unconditional basic income of 800-1200 euro per person and month in Germany for 6 months. This would cost about 500 billion euro, which would be 3 or 4 times the complete public expenditure on education. But why should everyone receive such an unconditional basic income (BGE) as a measure against the crisis, although for many, fortunately the majority of employees, the income is not at all lost, but continues as before? For the majority of the employees hit by the crisis the short-time work allowance or even the unemployment benefit is better than such a UBI would be. On the other hand, such an UBI would not be a rescue for the many self-employed and small businesses that are on the verge of bankruptcy because their income is lost but they still have to pay various running costs, rents, etc. Targeted aid for those who need it would also make more economic sense so that they can get started again after the crisis. And this would be far less expensive because far fewer people than the entire population would receive it. Arguments against demands for a UBI In principle, the various arguments that speak against a UBI also apply to a corona crisis UBI. Why should the vast majority of the population receive this money, although they do not need it at all? Why should everyone get the same amount, no matter how high their...