Imagine receiving a pile of cash each month from the government, no strings attached.The concept sounds radical, but it’s an economic theory gaining traction from Silicon Valley to the Nordics, called universal basic income. Free money experiments are underway in a handful of countries as governments face evolving workforces and strained welfare systems.
What is universal basic income?
The International Monetary Fund defines universal basic income as “a cash transfer of an equal amount to all individuals in a country.”Universal basic income differs from other government transfers, like tax refunds or welfare payments, in that every individual receives the same amount. Recipients can spend the money however they like, and they aren’t required to report how they spend it.
Who supports it?
Tech titans in Silicon Valley like Tesla CEO Elon Musk and Facebook CEO Mark Zuckerberg are some of the biggest advocates of universal basic income. They say free money could provide flexibility for workers who could lose their jobs to robots or automation.
The mayor of Stockton, Calif. wants to provide a universal basic income for the city’s poorest residents.Starting this year, an experimental program called the Stockton Economic Empowerment Demonstration (SEED) will pay $500 a month to a few hundred of the city’s low-income residents, no strings attached.
The idea behind universal basic income, or UBI, is to provide a degree of economic security for the most vulnerable people in a community. The goal is to counteract the destabilizing forces of globalization and technological innovation that have lead to job loss and wage stagnation for countless workers, according to CNBC.
It’s no accident that much of the support for UBI comes from Silicon Valley, where the potential for mass unemployment is starker than most other places in the U.S. Major companies there are in neck-to-neck competition to create labor-saving technologies — such as self-driving cars — that will inevitably replace greater numbers of humans with automation and robots.
Stockton is a town already facing these problems — the city has been plagued by a lack of job opportunities, low wages and high housing prices as Silicon Valley exploded around it, replacing once attainable middle-class security with a job market that requires highly skilled workers and relies heavily on automation, according to KQED News. The Bay Area city even had to declare bankruptcy in 2012.