Universal Basic Income: Exploring Its Benefits, Challenges, And Global Impact

A hot-topic in the current scenario that impacts global salaried employees is universal basic income. UBI (universal basic income) affects the basics of social and economic policies of any country.

What is Universal Basic Income?

Universal Basic Income (UBI) is a cash transfer program that regularly provides individuals with a fixed amount of money, regardless of their employment status or income level.

The basic agenda of this scheme is to provide financial security and stability through out a set of individuals based on their income, marital status, family status, etc. The result expected is reduced poverty in the country and economic growth.

Social welfare programs are debating throughout the country to implement such transfers, as they find it their right to receive a sum from the government for being part of this economy.


Did you know?

No country worldwide has provided a full-fledged Universal Basic Income (UBI) program till today on a national scale.


Factors that determine the Universal Basic Income(UBI) are:

Various factors are used to come to a conclusion while calculating UBI. Each program is set for various sectors of employees. Here’s a table outlining the key components that influence UBI cost:

Target PopulationWho receives UBI? All citizens or a specific demographic (e.g., adults)?
Cost of LivingUBI may be higher in areas with a higher cost of living.
Existing ProgramsWould UBI replace existing social programs or be implemented alongside them?
Government BudgetThe total cost depends on the number of recipients and the amount provided.

Common Approaches to Determine UBI Amount:

Basic Needs BenchmarkCalculate the cost of essentials (food, housing and utilities) to set a minimum income level.
Replace Existing BenefitsUse the total amount currently spent on social programs as a starting point for UBI funding.
Percentage of Median IncomeSet UBI as a fixed percentage of the median income in a particular region.

Sample Calculation Includes :

Sample Calculation of Universal Basic Income

Potential Benefits of Universal Basic Income(UBI):

  • Reduced Poverty and Inequality: Gets to the core of the discussion, where the facts prove the poverty rate decreases with UBI.
  • Increased Economic Security: A secured income can result in proper future planning. Education, loans, and any venture’s planning can be done meticulously without standing in a non continuous money flow.
  • Stimulated Economic Growth: economic activity is a result of increased consumer spending, which in turn is a result of planned UBI.
  • Improved Well-Being: With reduced financial stress, meticulous planning, and no sudden financial burdens. There are results of better physical and mental wellness. Planning the future beforehand is possible and so the mental health is not disturbed all at a sudden rate. Anxieties are at bay with Universal basic pay planning.

Challenges and Considerations of UBI:

  • Cost: The government is always thinking of improving the situation by funding these schemes. But it’s always a challenge to implement UBIs amongst all the other verticals of improvement in poverty rates. Funding through the government can regulate tax increases and cost-cutting on different other programmes.
  • Work Disincentive: An amazing survey has pointed out that when people are directly given money without any hard work,. They tend to procrastinate. They become lazy. Only because these schemes can directly land them money to survive. It becomes difficult to motivate people to work. Especially the youth. This can be disastrous in the long term. Labor shortages, laziness, no motivation, and lesser GDP can be the results of these schemes.
  • Scheme Design: Scheme implementation with appropriate UBI amounts and funding mechanisms are complex policy issues.
  • Equity Concerns: The impact of UBI on different demographics and income groups needs careful consideration.

UBI and its Global Impact:

UBI causes serious inflation, as stated by some of the economists. The balance of services and money acquired by people takes a toll. The impact is beyond the country. It can adversely affect the GDP and other factors. A successful UBI program can become an inspiration to other nations to implement such schemes.

Also Read: Superannuation Claims Of Benefit For Employees

In Conclusion:

UBI is a complex policy proposal with both potential benefits and drawbacks. Most economists debate on implementing or not the UBI( Universal basic income) policy in many countries. Research panels are set for further investigation and implementation of these campaigns. Much more dedication from the government is needed to implement universal basic income in the country without disturbing the economy of the entire country.

We look forward to further discussion on the same. Comment your thoughts.

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