There could come a time when Brits don’t need to work to earn a living – they’ll be paid to do nothing.
The Universal Basic Income (UBI) is an economic system in which every citizen is paid the same amount of money by the government regardless of whether or not they are in paid work.
Proponents say it’s a solution to a broken welfare system that ensures no one who may not be able to work is left behind.
The concept dates back to the 16th century but has gained popularity in recent years after high-profile trials in Scandinavia seemed to produce promising results.
Presidential candidate Andrew Yang’s recent campaign revolved around implementing the UBI in the United States, and he gained a loyal base of youthful supporters for it.
Labour, the Liberal Democrats, the Green Party and the SNP have all supported trying out the UBI in Britain.
Some economists are also on board with the idea, even if it means not as many of us have jobs.
The UK’s employment rate is currently at a record high, with about 75% of us between 16 and 64 currently in work.
Dr Steve Davies, head of education at the Institute of Economic Affairs(IEA), says fewer people in the workforce would be a good thing for the country.
“We are close to total employment now, where every adult that can work is working,” he told Daily Star Online.
“Economists see this as an unmitigated good. I think that is clearly incorrect.
“I think we actually have too large a proportion of our adult population in paid work – this is mainly because of the high cost of housing and other essentials – so I actually welcome a reduction in that.”
Dr Davies says thanks to the principle of diminishing marginal returns, we now have an economy with high levels of employment but “low to zero productivity growth”. This leads to stagnant or declining wage growth and living standards, and means employers have little incentive to invest in productivity-enhancing equipment as it’s cheaper to use poorly-paid human labour instead.
Because so many of us are working, we have less time to engage in the unpaid labour of domestic chores, childcare and gardening that “underpins the monetised exchange economy”.
“Not only does the output gain per additional worker decline as more people enter the workforce, each additional person becoming a paid employee also means a cost, because the things they used to do on an unpaid basis in the domestic sphere will either be done less well or not at all,” he said.
“In the latter case they will shift into the monetised part of the economy so that you get the ridiculous situation of people (mainly but not entirely women) going into the labour force and then spending a large part or even most of what they earn net on paying other people to look after their children.”
This contributes to social problems such as the obesity epidemic, as households have less time and so are more likely to make unhealthy choices when it comes to nutrition.
Dr Davies says the optimum level of employment among adults in the UK is about 55% to 60%.
He’s not opposed to the UBI, although he says it would have to pass some rigorous standards to have a chance of working, as it would need to adequately replace the entire benefits system as it currently exists.
The payments would also need to be high enough to cover the average Brit’s basic needs, but low enough not to encourage too much of the population to stop work altogether.
“The sweet spot is to make it a subsistence income, that you can survive on but no more, but that is hard to calculate, not least because of significant local variations.”
Hull recently applied to trial the UBI but those plans were rejected by the government– but that doesn’t mean other cities won’t get to try it.
‘UBI Labs’, think-tanks exploring the potential for UBI, have been set up around the country to identify good candidates for trials.
Sam Gregory, chair of UBI Lab Sheffield, told Daily Star Online that all recent modelling has shown the UBI would “dramatically” reduce inequality and poverty.
“But no-one can know for sure without testing it out, which is why we want to see pilots launched in the UK,” he said.
He expects more communities across Britain will follow Hull and ask to hold pilots – and not just big cities but towns and rural areas too.
“As automation accelerates over the decade and claims an increasing number of British jobs, the case for a basic income will grow stronger by the day. But before we think about rolling it out we need to test it.”
The Scottish government has commissioned a feasibility study into their own UBI test, and Mr Gregory believes pilots will be launched in England and Wales before 2030.
“UBI is not the silver bullet to fix everything, but what we have at the moment obviously isn’t working for the most vulnerable people in our society. It’s time to start testing something different.”