A UK think tank has proposed unconditional payments for all citizens under 55 as a step towards a Universal Basic Income
The Royal Society of Arts has proposed a universal payment plan that would pave the way for a new model of Social Security in the UK. Every citizen under the age of 55 would receive £10,000 from the government, with the only requisite of showing how they intend to use the money. This policy proposal seeks to address the challenges that the next decade will bring as a consequence of automation, population ageing, and Brexit, to name a few.
The Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), is a British organization dedicated to carrying out research and sharing ideas in order to find innovative and practical solutions for the challenges of today’s societies. In a recent report, the RSA proposed the creation of a Universal Basic Opportunity Fund (UBOF) in the UK.
As the RSA puts it, the “premise is simple: fund every citizen under the age of 55 with a £5,000 opportunity dividend for up to two years, taken at a time of their choosing over the course of a decade”. Payments would take the place of most state welfare; in other words, other benefits given by the government would be removed for individuals in the years in which they receive an opportunity dividend.
The payment could be administered through a range of accredited organizations, affirms the RSA. Furthermore, citizens who apply for it would not be means-tested; they only need to meet with a representative of the accredited institutions and discuss how they intend to use the money.
Now, of course, the key question is: where does the money come from?
“The fund would be built from public debt, levies on untaxed corporate assets and investments in long term infrastructure projects, and be similar to Norway's $1 trillion sovereign wealth fund”, BBC News reported. Other countries that are trying unconditional payment plans are Canada, Scotland, Finland, and Namibia.
The proposal comes at a time when the UK faces important challenges. The automation of jobs, for instance, will lead to a reconfiguration of the job market and require many workers to adapt and obtain new skills. In addition, the changing demographics of the country suggests that caring for the elderly is a national concern as population is ageing rapidly. And on top of that, the uncertainty created by Brexit makes it necessary for citizens to be more resilient to shocks.
In that context, the RSA believes that unconditional payments would give citizens the opportunity to make decisions with a potentially great impact on their lives and also bring broader social and economic benefits. For example, a low-skilled worker could work fewer hours per week and acquire new skills that would enable career progression. Similarly, someone who has an entrepreneurial idea could turn it into reality once economic constraints are reduced.
The UBOF has been proposed as a step towards a whole new model of social security. Rather than being an end in itself, it constitutes a practical way of advancing the UK towards a Universal Basic Income (UBI) system. While this is not a new idea, it is one that has recently began to be taken seriously in economic circles that once regarded it as radical.
According to CBS News,
“The economic arguments in favor of basic income are rooted in data that show the planet's population is on track to outpace the number of jobs by several hundred million. Giving people enough income to meet their basic needs, such as affording food and housing, would help preserve social cohesion and make it easier for them to take risks, such as starting businesses or leaving abusive relationships”.
The RSA has made it clear that their scheme represents only a potential contribution that needs to be complemented with other state interventions. However, these types of proposals should not be underestimated given the fact that inequality is rising everywhere and countries all over the world need to come up with more redistributive policy instruments.
Latin American Post | Paula Bautista
Copy edited by Susana Cicchetto