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examBoard: Cambridge
examType: IGCSE
lessonTitle: Welfare states - universal basic income
Universal Basic Income (UBI) represents one of the most radical approaches to welfare reform in recent decades. It's a simple but powerful idea: give everyone in society a regular cash payment, regardless of their income, employment status, or any other factors. Unlike traditional welfare systems that target specific groups, UBI is given to everyone - from the poorest to the richest citizens.
Key Definitions:
Universal: Given to everyone in society
Unconditional: No work requirements or means testing
Individual: Paid to individuals, not households
Regular: Paid at consistent intervals (e.g., monthly)
Cash payment: Not vouchers or services
No means testing: Everyone gets it regardless of income
No work requirements: Recipients don't need to be looking for work
No stigma: Universal nature removes the stigma of receiving benefits
Simplicity: Single payment replaces complex benefit systems
Freedom of choice: Recipients decide how to spend the money
Supporters of UBI argue it could be a powerful tool for reducing social inequalities. By providing everyone with a financial floor, it aims to ensure that no one falls below a basic standard of living. Here are the main arguments in favour of UBI:
UBI provides a guaranteed income floor that prevents extreme poverty. It ensures everyone can afford basic necessities like food, housing and healthcare.
Recipients have the freedom to use money as they see fit. This respects their autonomy and dignity, unlike systems that dictate how benefits must be spent.
In a changing job market with increasing automation, UBI provides security during career transitions, job losses, or when pursuing education.
A single universal payment is simpler to administer than complex welfare systems with different eligibility criteria and application processes.
Since everyone receives UBI, there's no stigma attached to claiming benefits, which can prevent eligible people from accessing support.
Money given to lower-income individuals tends to be spent locally, boosting demand and potentially creating jobs in the community.
Despite its potential benefits, UBI faces significant criticism and practical challenges:
The most common criticism is the high cost of providing payments to an entire population. Critics question how governments would fund such a programme.
Some argue that guaranteed income might discourage people from working, though evidence from trials suggests this effect is minimal.
There are concerns that giving everyone more money could drive up prices, especially for essential goods like housing, reducing the real value of the UBI.
Several countries and regions have experimented with UBI-like programmes. These trials provide valuable insights into how UBI might work in practice:
Finland conducted a two-year trial giving 2,000 unemployed people €560 (£490) per month with no conditions. Key findings included:
While the trial was limited in scope, it challenged the assumption that UBI would discourage work and suggested potential wellbeing benefits.
How might UBI specifically address different forms of social inequality?
UBI provides a floor that narrows the gap between the richest and poorest. If funded through progressive taxation, it could redistribute wealth more evenly across society.
UBI could value unpaid care work predominantly done by women. It provides economic independence that may reduce financial dependence in relationships.
By providing universal support without discriminatory eligibility processes, UBI could help address systemic disadvantages faced by minority groups.
The debate around UBI has intensified in recent years, particularly following the COVID-19 pandemic, which exposed vulnerabilities in existing welfare systems. Key questions in the current debate include:
During the COVID-19 pandemic, many countries implemented emergency cash transfer programmes that shared features with UBI:
These emergency measures demonstrated that large-scale cash transfer programmes are administratively possible and sparked renewed interest in UBI as a permanent policy option.
Universal Basic Income represents a bold approach to welfare that could potentially address social inequalities in ways that traditional targeted systems cannot. By providing everyone with a financial floor, it aims to ensure that basic needs are met while giving people the freedom to make their own choices.
The evidence from trials so far is promising but limited. UBI appears to improve wellbeing, reduce poverty and may have positive effects on health, education and community participation. However, questions remain about its affordability, long-term effects and political feasibility.
As automation continues to transform labour markets and economic insecurity persists for many, the debate around UBI is likely to intensify. Whether it becomes a mainstream policy or remains an experimental idea will depend on political will, economic conditions and society's values regarding equality, work and the role of the welfare state.
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