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universal basic income (UBI)

Universal basic income (UBI) is a model for providing all citizens of a country or other geographic area with a given sum of money, regardless of their income, resources or employment status. The purpose of UBI is to prevent or reduce poverty and increase equality among citizens.

UBI is also known simply as basic income. According to the advocacy group Basic Income Earth Network (BIEN), the essential principle behind basic income is the idea that all citizens are entitled to a livable income, whether or not they contribute to production and despite the particular circumstances into which they are born.

BIEN lists the following five defining characteristics of basic income:

  1. Periodic: Distributed in regular payments.
  2. Cash payment: Distributed as funds rather than, for example, vouchers for goods or services.
  3. Individual: Each citizen (or adult citizen) receives the payment, rather than each household.
  4. Universal: All citizens receive the payment.
  5. Unconditional: Recipients are not required to demonstrate need or willingness to work.

In the most common UBI implementation, identical periodic payments are made to all individuals and the tax system ensures that funds are returned to the system from those with higher incomes. Usually, the amount is gauged for subsistence: enough to take care of the individual’s basic needs but not enough to provide a lot of frills.

UBI is one example of a guaranteed income model. The main alternative model is a guaranteed minimum income (GMI) system, sometimes called a basic income guarantee (BIG), which involves varying needs-based supplements designed to ensure that all citizens have enough to live on. In that system, only low-income individuals receive payments.

Thomas More introduced the concept of guaranteed income in his 1516 book, Utopia. Since then, proponents have included Thomas Jefferson, Thomas Paine, Abraham Lincoln, Bertrand Russell, Franklin Roosevelt, Pete Drucker, Margaret Mead, Milton Friedman, John Kenneth Galbraith, Martin Luther King Jr., Marshall McLuhan, Elon Musk, Sam Altman, Chris Hughes and Mark Zuckerberg – among many others.

Recently, UBI has been in the news as one way proposed to support a workforce displaced by Automation. Musk, Zuckerberg and many others believe that robots and AI-enhanced software may replace most human labor in a not-too-distant future scenario sometimes called the robot economy.

Critics of guaranteed income argue that it would be too expensive to implement and would create a disincentive to work. Proponents, on the other hand, believe that it could be cheaper in the long run, considering the effects of poverty, and that, furthermore, it would promote creativity and entrepreneurship among those freed from the struggle to survive.

Watch historian Rutger Bregman’s TED talk on how basic income can benefit the world:

This was last updated in October 2020

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