TL;DR – Will Universal Basic Income save us from the automation apocalypse?
The rapid disruptions to the economy is threatening the jobs of many people. In a recent dialogue session with union leaders from the Building and Facilities Management (BFM) Cluster, Second Minister of National Development Desmond Lee said:
“In this day and age, disruption comes fast and furious. We can keep doing the things that we do, but someone will come along and take away our lunch.”
No one can be certain whether their job will still be around in the future. In other words, we can’t be sure that we will always have our rice bowl. That’s why the idea of a universal basic income is so attractive.
Universal Basic Income sounds good…
Universal basic income (UBI) is typically described as a new kind of welfare program in which all citizens (or permanent residents) of a country receive a regular, livable and unconditional sum of money, from the government. From that follows, among other things, that there is no state requirement to work or to look for work in such a society. The payment is also, in such a pure basic income, totally independent of any other income.
It sounds really good. And expensive. And we don’t know if it will work. Or if there will be any negative effects (e.g. will it discourage people from working?).
To study the idea, Finland conducted an experiment of providing basic income to 2000 unemployed Finns.
The experiment started in January 2017, and is supposed to end its two-year trial at the end of 2018. Currently 2,000 unemployed Finns are receiving a flat monthly payment of €560 (SS$900) as basic income. The Finnish government will not extend or expand the experiment after this year.
It is now over a year into the experiment. The latest news is that the Finnish government decided not to extend or expand the programme after this two-year trial ends at the end of 2018.
Why does the Finnish government not want to continue with the experiment?
One reason could be because the 2019 parliamentary elections approach in Finland, and boldness is being replaced by timidity and politics. This could be because a predominant segment of Finnish society fear that with basic income, young people lacking secondary education and don’t have work would just stay at home and play computer games.
Another related reason is the cost of funding a basic income. A study by the Organisation Economic Cooperation and Development (OECD) found that income tax would have to be increased by 30% to fund a basic income. It also argued that instead of decreasing income inequality and poverty rate, a basic income would actually increase Finland’s income inequality and raise poverty rate from 11.4% to 14.1%.
Whatever the reasons, the Finnish government has decided that this universal basic income experiment is coming to an end this year.
Academics say that the experiment is too short to come to any concrete conclusion about the impacts of a basic income. Regardless, we will have to wait out for them to complete the experiment, crunch the numbers and share the findings.
But other countries are conducting their own experiments. Other trials are underway or being explored in the San Francisco Bay Area, the Canadian province of Ontario, the Netherlands and Kenya. So we may still have a chance to find out whether universal basic income is indeed the magic bullet we all need, but in the meantime, we just have to wait.
So… instead of waiting…
And even after those other trials are complete, we are unlikely to have basic income in Singapore any time soon.
So meanwhile, it looks like our best bet at a better chance of having a ricebowl in the future is to keep building and deepening skills that are relevant to the economy.
Editor’s Note: I personally prefer this version of telling the Finland’s UBI story.