Spain Mulling Over UBI for the Long Term

Spain said that it is looking forward to introducing Universal Basic Income (UBI) to help provide support to battered workers amidst the COVID-19 lockdown. Minister for Economic Affairs of Spain, Nadia Calvino did not specify any date for the commencement of the scheme but hoped that this would become a ‘permanent instrument’, making Spain the first European nation to implement UBI. Complete Coverage: Coronavirus

Crux of the Matter

What is UBI? Universal Basic Income is a government initiative to provide or rather guarantee each citizen with a minimum income every month or every year. This guarantee comes irrespective of employment status, income level, age, size of household, etc. The idea behind the scheme is to ascertain the basic cost of living, the financial security of everyone and eradicate poverty. There could be slight deviations: amounts may differ according to earning levels, amounts may only be paid to people with income below specified levels, the high-income group pays an additional tax that provides for the payment towards UBI.

Experiments With UBI Finland began a pseudo-UBI programme from January 2017, in which a random sample of 2,000 unemployed people between the ages of 25-58 was paid €560 every month. Even if anyone took up a job, the amount would continue to be credited. However, the scheme, primarily aimed at figuring out whether such provisions reduce anxiety among recipients, failed to provide concrete results. Another such experiment was conducted by the Ontario government in Canada but was heralded as rather premature and insufficient. Brazil and India have also implemented similar programs. In India, it is very much targeted. For instance, the Destitute Widow Pension Scheme of Tamil Nadu provides pension to destitute widows. In Telangana, the government provides Rs. 4,000/hectare per farmer to support agricultural inputs.

During his campaign, @AndrewYang predicted technology would lead to massive job reductions. Now, he tells @newsbysamuels the pandemic might accelerate those predictions, giving more urgency to his universal basic income idea. https://t.co/xG0x8hSjrf — Peter Wallsten (@peterwallsten) March 20, 2020

Spain – Leading the Way Spain has announced its plan for UBI at a time when the world is shattered by the pandemic Coronavirus. It is the second worst hit country in terms of number of cases only after the USA, and it is also the second worst hit country in terms of number of deaths only after Italy. UBI is a measure to provide social security through basic income. For the Left, it’s a tool to reduce poverty and inequality, whereas for the Right, it’s a less bureaucratic welfare system. If Spain implements Universal Basic Income Plan, then it would become the first nation to do so.

Curiopedia

1. UBI was first suggested by Sir Thomas More in his 16th-century work “Utopia” and was championed by free-market economists such as Friedrich Hayek and Milton Friedman in the 20th century.

2. Andrew Yang, who was one of the major contenders for the US presidential run this year, proposed “Freedom Dividend”, a UBI scheme for all American adults, no strings attached – a foundation on which a stable, prosperous, and just society can be built.

3. In January 2019, Sikkim announced one of the largest UBI schemes. Sikkim’s ruling party announced that they plan to implement a universal basic income for every one of its 610,577 citizens.

Curated Coverage

1. Business Insider – Spain is moving to permanently establish universal basic income in the wake of the coronavirus pandemic

2. Business Line – Universal Basic Income: A look at the global models

3. The Guardian – Finland to end basic income trial after two years

4. INSEAD – Universal Basic Income: Lessons From a Failed Experiment

5. The Balance – Universal Basic Income, Its Pros and Cons With Examples

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