Reactionary responses to Basic Income

Reactionary responses to Basic Income

  • mdo  Admin
  •   Articles
  •   September 2, 2021

There are a lot of myths (widely held but false ideas) surrounding Basic Income and Guaranteed Income.

Guaranteed Income and Basic Income are types of Cash Transfers.

Here are the Myths vs. Reality of Cash Transfers, provided by the Food and Agriculture Organization (FAO) and UNICEF:

  • Myth: “Cash will be wasted on alcohol and tobacco”

    Reality: “Alcohol and tobacco represent 1-2% of food expenditures - “Across 6 countries, no evidence was found of increased expenditure on alcohol and tobacco” - “In Lesotho, alcohol expenditure actually decreased”

  • Myth: “Transfers are just a ‘hand-out’ and do not contribute to development”

    Reality: “In Zambia, evidence shows cash transfers increased farmland by and the use of seeds, fertilizer, and hired labor” - “As more agricultural inputs were used, overall production increased by 36% and farmers engaged more in markets.” - “Majority of programmes show significant increase in secondary school enrolment and in spending on school uniforms and shoes”

  • Myth: “Cash causes dependency, laziness” - "It will make people lazy"

    Reality: “In several countries, including Malawi and Zambia, research finds reduction in casual wage labour, shift to on-farm and more productive activities.” - “There is little evidence transfers lead to reduction in work effort” - “In fact, cash transfers lead to positive multiplier effects in local economies and significantly boost growth and development in rural areas”

  • Myth: “Transfers lead to price inflation and disrupt local economy” - "it causes inflation"

    Reality: “No inflation detected in 6 case study countries” - Why not?: “Beneficiaries are a small share of community, typically 15-20 %, Local economies can meet the increased demand, They come from poorest households, with low purchasing power and thus don’t buy enough to affect market prices. - “In Ethiopia, for every dollar transferred by the programme, about $1.50 was generated for the local economy”

  • Myth: “Child-focused grants increase fertility rate”

    Reality: “In Zambia, cash transfers showed no impact on fertility” - “Early pregnancy was reduced by 34% in Kenya, 10.5% points in South Africa”


Further details:

What about "It will cost too much"

Before considering the cost of a large basic income program, it is important to consider the immense costs of NOT implementing basic income programs. There would be significant systemic savings and advantages to having a large basic income program in many areas such as: Significantly reducing and preventing crimes, reducing prison populations, reducing hospitalizations, increasing social entrepreneurship, and significant re-investments in innovation through education and proper health of citizens among many other cost-saving societal investments. The question really becomes “how much are existing policies spending to maintain poverty and regression right now?” On a national level the answer is likely trillions. The immense cost-savings would offset the total cost of basic income programs, and this is being seen in programs already. Here is one example:

What’s more, according to Foundations for Social Change, giving out the cash transfers in the Vancouver area actually saved the broader society money. Enabling 50 people to move into housing faster saved the shelter system $8,100 per person over the year, for a total savings of $405,000. That’s more than the value of the cash transfers, which means the transfers pay for themselves. Via Vox

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