Universal Basic Income

Updated: Jun 22, 2020

Finland experimented, California's trialing a limited version, but Spain is implementing it. That's really great news for its impoverished people.

The idea of giving everyone money through a universal basic income has been gaining momentum in recent years, and the coronavirus has added further impetus to the debate. Former Democratic presidential candidate Andrew Yang renewed his call for a UBI after, he said, the US stimulus package fell short. California’s Santa Clara County recently declared that it will give $1,000 a month to people transitioning out of foster care, and it hopes to expand that to people adversely affected by the coronavirus pandemic.

Finland’s two-year scheme, which ran in 2017 and 2018 and attracted widespread international interest, paid 2,000 randomly selected unemployed people across the country a regular monthly income of €560 (£490), with no obligation to seek a job and no reduction in their payment if they accepted one.

Aimed primarily at seeing whether a guaranteed income might encourage people to take up often low-paid or temporary work without fear of losing benefits, the scheme was not strictly speaking a universal basic income trial because the recipients came from a restricted group and the payments were not enough to live on.

But it was watched closely by other governments who see a basic income not only as a way to get more people into some form of work, but also as a route to reducing dependence on the state and cutting welfare costs. The idea has gained traction amid predictions that automation could threaten up to a third of current jobs.

Amongst the nations watching Finland with interest was Spain. This week we hear that Spain has decided to implement what it’s calling a national minimum income, ensuring that people in the nation’s 850,000 lowest-income households receive a monthly income.

The plan aims to reach 2.3 million people and is expected to cost the government about €3 billion a year. People between 23 and 65 years old with “assets of less than 16,614 euros,” (approx $18,300) not including house and discounted loans, will be eligible for the basic income plan, according to Reuters, and will include incentives for finding “a formal job,” though it’s not yet clear what those incentives are.

Though the minimum amount the government is guaranteeing is €462 a month ($506), that amount will increase with the number of family members, up to a total of €1,105 a month ($1,213). A family is defined as “vulnerable” and eligible for the plan if its monthly income is €10 or more below the minimum income. At the point, the government will give them enough cash to meet the thresholds (but won’t exceed them).