Universal Basic Income | A parenting Challenge - India Parenting Tips - To deal with common parenting issues

Thursday, June 11, 2020

Universal Basic Income | A parenting Challenge

Imagine a situation when the government of your country gives you 1000 dollars or rupees every month. Not just once. The government plans to give you the same amount for free every month. To make the situation more striking imagine every citizen of the country gets the privilege of getting this free amount. This is called Universal Basic Income

Wouldn't that be a wonderful idea to think? 

What would you do? 

As parents and especially having kids around, it would be a great happy moment, I am sure. 

But will this be ever possible?

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Universal Basic Income

By this time I am sure a lot of my readers might be thinking that perhaps lockdown has made my brain go nuts and crazy. But this is not true. This is not sheer madness but in fact, it is such an economic policy that is now being under research and it has been taken quite seriously across the world today. Infect this has also been implemented in many places today across the world. This economic policy is known as
Universal Basic Income. Universal as we know means for all and basic income means the basic level of income that every citizen must get for free.

Universal Basic Income

In this article, I have planned to discuss to check and analyses the pros and cons of Universal Basic Income and then find out ways in which this could affect our parenting challenges.

The agenda for today's discussion would be:

  1. Arguments in favor  of Universal Basic Income
  2. The Drawback of Universal Basic Income
  3. The consequences of UBI
  4. Why do we need Universal Basic Income?
  5. How universal Basic income is related to Parenting stress and challenges?
  6. List of FAQ on UBI.

I shall try covering the above topics in this article. So stay hooked in and try giving it a read. 

The most important question that comes to our mind is why do we need Universal Basic Income?

It also addresses the question, "if there is any need for any government of any country to distribute money free to its people?"

One of the most important reasons that have been argued in favor of Universal Basic Income is the excessive jobless and recession that is currently hitting the employees due to automation and Artificial Intelligence.

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Artificial Intelligence

Experts are of vision that in the future because of the current challenges there would be so many job losses that everyone may not be privileged to have a secured job. When people do not have a basic job they will not be able to bear the basic expenses. Hence it is important to give them some money for free so that everyone can afford a basic standard of life and living. That means being able to live in a house, eat basic food, and somehow be able to manage. Of course, as parents, we know having kids throws you into a host of other challenges and finance as a matter is of big concern.

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Job loss & Recession

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A secured office job is a dream now

Let me give you some quick examples of job loss due to automation.

One example that I could think of is self-checkout counters. Nowadays we have self-checkout counters installed in many supermarkets and malls in many developed countries of the world. A machine has replaced a man’s job.

There is no need for a counter person to scan the bar codes of your items and help for billing. Everything is done by machine.

Another example is Self-checkout kiosk is another example where we can order food items without any intervention of humans.

We have a Robot Vacuum (RoboVac) which has replaced our domestic helpers and workers. That employment might no longer be needed in the future as it takes in the market.

Self-driving cars are also been manufactured today. A famous complaint Tesla has to some extend have become self-driving. If such self-driving vehicles are manufactured there would be no need for cab drivers.

So you can notice now that in every sector, there is a good chance of job losses at various levels.

And there is no end to this. As technology would progress, the automation would also progress rapidly. This same phenomenon would become evident in almost every sector soon.

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Job loss due to automation

(I am not here to scare you. I intend to enlighten you and make you aware of the current global economic challenges).

Therefore to compensate and address these circumstances and situations Universal Basic Income is being so much talked about today.

Recently in the current global pandemic crisis of the coronavirus, we can understand that there have already been so many job losses and so many businesses have been forced to close. The idea and vision of UBI is now being considered in a rather fast-forwarded manner. This is a crisis we all are facing. We need to come out if this.  The government of many countries has started thinking on these lines.

For instance, in a recent article, I have read that Spain has declared that it has already started working in the implementation of the scheme of Universal Basic Income. In this scheme, 462 Euros would be given to every citizen of Spain. (Whoa!)

Not only this, but many famous entrepreneurs have also promoted this idea of Universal Basic Income. Richard Branson, Elon Musk.

It is worth to mention here that there was a recent presidential candidate named Andrew Yang, whose entire political campaign was majorly based on Universal Basic Income. He had promised a sum of 1000 dollars to every citizen of the United States.

The positive points of UBI:

  1. Level the country with a basic standard of living
  2. Poverty would be eliminated
  3. People in low profile job would leave their job and go for jobs based on passion and interest
  4. Productivity
  5. Innovation
  6. Happiness
  7. More of family time
  8. New opportunities to study
  9. No child labor
  10. Govt's administration cost will be less as this is universally supposed to be applied.

The negative points of UBI:

  1. Free money would lead to laziness
  2. Higher inflation in the economy because of more spending. Prices will increase.
  3. The basic income value will fall.
  4. There is an assumption that over-dependent citizens as they would fail to be self-sustained.
  5. Disadvantages for very poor people as free money will be free for all.
  6. Where would the money come? That means the government has to compromise on something else which could also be a public service requirement.

Real-life testing of UBI

The first experiment was done in Finland which is the first European country to test the scheme of Universal Basic Income. The period of testing was from January 2017 till December 2018. The government of Finland chose 2000 unemployed people and they were given 560 euros per month (without any conti3ons attached). The analysis of this study is still ongoing and probably by the end of this year, we might be getting it. However, the preliminary results are out and it has been found that people who were given the basic income, in general, showed marked improvement in health condition and happiness but nothing remarkable in terms of employment.

Another experiment that was conducted in Ontario in the year 2017 was supposed to continue for three consecutive years but in July 2018 with the change of the government this experiment was taken back and the experiment was stopped in the middle. However, whatever time that it was implemented there were certain observations done by experts. According to the observation it was found that health care cost has been significantly improved. The government could save a lot of money in health care because if this. People felt healthier.

Similarly, another such scheme of Universal Basic Income was observed in Sikkim, India. The SDF party of Sikkim said that in Jan 2019 that Sikkim would be the first state to be declared with to implement universal basic income. However, this party lost the election in May 2019 and a new party formed the government.

To some extent, we can say that Rahul Gandhi's Nyay scheme was like UBI. Although this was not a universal scheme and there were some conditions attached as the poorest 20% people of India would be given a basic income was the idea of Rahul Gandhi. Implementing this scheme could be a huge problem because we need to selectively give benefits to only 20% of the poorest population. 

What about those who are right at the margin? Like 21%? 

One of the huge advantages of UBI is that it reduces the bureaucratic influence and oversight. So what was proposed by Sikkim's SDF party was a scheme to implement UBI.

Coming back to the already conducted experiment, it can be said that indeed there was already an experiment conducted in India as well. It was in 2010 Madhya Pradesh, India, 20 villages were chosen for the experiment. 8 villages were given Universal Basic Income and the rest 12 were kept separately as a control group to observe and understand the differences in one case where basic income is given and in other cases no basic income was given.

What was surprising is that it was one of the first experiments of basic income where results were remarkably positive. It showed that the villages where basic income was given had better spending behavior on food and healthcare. The performance of children living in those villages improved by 68%. The children spent more time in school as they were not forced into child labor due to poverty and basic requirement. In some cases, savings had tripped and new businesses started to flourish in those 8 villages who were under the scheme of Universal Basic Income. Sanitation and nutrition had improved.

In this experiment refuted the negative impacts of UBI as laziness and lack of interest amongst people if they get money for free.

Similar positive results were noticed in Uganda where random 535 people were selected and were given grants of 382 dollars. Not only did the job opportunities increased, but many people had started their businesses and overall there was a happy picture of the economy.

Where does the money come from?

A very important question that might strive for some of you is that "what would be the cost of implementing such a scheme by the government?"

This means we need to find out:
The amount spent per citizen x population of the country.

The population for the United States, for an example, is 330 million if we take 300 million as adults just for assumption, we would find that if the government plans to spend 10,000 dollars per citizen per year, then the total cost to be incurred by the government would be 3 trillion dollars per year which is a huge amount to think of. The entire U.S. economy could be around 21 trillion dollars. 

However, it has to be acknowledged that it was a very simplistic calculation technique. Many experts are of the view that in reality, the cost of implementing UBI could be much lower than the figure stated. It is because in the basic calculation many things are not taken under consideration like for example the rich classes of the society would probably use the UBI only to return the same to the government as taxes. The same would also happen to the upper-middle class and middle class. So the real benefits would be reaped by the poorer sections of the society.

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UBI is a Tax Money

At present, many experiments are being conducted by countries like the UK, France, Germany, Finland, Sweden, Canada, U.S, Neither lands to test the impact and influences of Universal basic Income.

If you ask my opinion, I would say that it would be too early to conclude if UBI would be a successful scheme or not. We would need more experiments and more experiences from the experts in the field to enlighten us.

As a parent, I would say that yes Universal Basic Income is a positive idea. A lot of stress and the financial burden would be relieved of such schemes are implemented. Children are the worst affected in case of stress and financial deadlock. This not only affects physical health but also mental trauma. In the current situation of the COVID-19 crisis, we have seen so many people losing jobs. Their families are badly affected. This also affects parenting as the challenges of life drive people in very vulnerable situations. Schools, food, necessities get impacted. When the stress of basic living is taken up by the states, it would give out a more happy, healthy, and progressive society as a whole.

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COVID-19 Attack

My list of 20 FAQ that I had gathered on UBI are as follows: 

Q1. Which country has a Universal Basic Income?

According to Wikipedia, its Brazil as since 1980’s Basic Income has been discussed. Other countries would be Kenya, Iran, and Alaska.

Q2. How much is universal basic income?

It might differ from country to country. Generally, it comes to a modest amount of $1000 to $2000 annually.

Q3. Is universal basic income a good idea?

While superficially it looks very attractive empowering marginalized sections of society especially the poor and the needy and also women in many countries; however it is too early to conclude.

Q4. What's wrong with universal basic income?

It would lead to laziness as easy money would eventually, make the workers stop working.

Q5. Has any country tried UBI?

Yes. Iran was one country to start UBI way back in autumn 2010. Also, Alaska gives its annual income dividend to everyone in her state.

Q6. Does Germany have UBI?

Germany guarantees its unemployed citizen a monthly amount of $330 for an indefinite period which looks like UBI.

Q7. Does Canada have a universal basic income?

This is still under debate and trials which started from the 1930s when a movement called social credit movement proposed ideas on the lines of UBI.

Q8. Can UBI work?

It is still under experiments and reviews by the scholars.

Q9. What do you think of universal basic income?

I think it is an awesome idea but we need to check if this could be applied positively.

Q10. What are the best arguments against a universal basic income?

Lack of interest in work and laziness. Also, more buying capacity might lead to an increase in price and lead to inflation.

Q11. Will Universal Basic Income work?

It is too early to come to any conclusion. We need more research and experiment on UBI.

Q12. Won't a universal basic income raise inflation?

This is again a matter of research and experiment. According to one group, more money in the hand of the people would lead to more spending, and the price would increase leading to inflation. According to other schools of thought, the net effect of UBI would be neutral and it might benefit the poor section of the population since the money that comes back to the people is tax money that is again pushed back into the economy.

Q13. Would you want universal basic income in India?

Yes, I would like universal basic income in India as the majority of the people are poor and marginalized who struggle for basic livelihood.

Q14. What is a universal basic income? Will it be useful in the Indian context?

The details have already been discussed in this article given above. Yes, I feel UBI would be useful in the Indian context.

Q15. Would you want universal basic income in India?

Yes, I would want UBI in India especially after the pandemic COVID-19 attack.

Q16. What are the pros and cons of Universal Basic Income in the Indian context?

The pros and cons of UBI have already been discussed in this article. Please read for more details.

Q17. What is the difference between basic income and negative income tax?

Negative Income Tax means the money that is transferred to the poorer section of the population like the low-income group.

Universal Basic Income is the transfer of money to all citizens of a country by its government.

Q18. If Universal Basic Income becomes a thing, why wouldn't landlords immediately raise their rents to equal the monthly allotted income since 'anyone can pay that rent'?

Nothing can stop a house owner to increase the house rent. It is purely demand and supply. If you live in an area where there is good demand for houses then prices might go up and vice versa.

However, since you have UBI you may not be tied up to a particular area and can move to an area that you can afford to pay and live since you have the basic income with you.

Q19. Why is there so much support for Universal basic income?

It is because it would give a sense of support and reliance that survival would not be a problem. Also, it eases a lot of stress and pressure for people who are struggling to get the basic needs to accomplish or are forced to work out of the bare necessity of existence.

Q20. Will Universal Basic Income work?

That is still under research and experiment. Read my article written above to get a clearer open-minded vision.

I hope you find my article informative and interesting. If you find my content helpful please support me with your feedback as comments.

Read, share, and comment to support.

Happy Parenting!

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