Argumentative Essay on Universal Basic Income Assessment Answer

Introduction

Universal basic income is the most controversial issue due to its economic and ethical uncertainties. The other challenge is the significant disparity that occurs between the high and low-income earners. Experts have postulated that the universal basic income will impact gender equity, disruption of power relations and labor markets, and fairness in social contracts. On the other hand, some scholars argue that the universal basic income will address the challenge of massive job losses brought about by automation. The theme of this essay is to find out if it is ethically justifiable to have a universal basic income.

Controversial issues of universal basic income

The associated effect of embracing universal basic income has not been approximated and may have an ethical impact on the economy. No country in the world has used universal basic income before, and thus its effects are not known (Gentilini et al., 2019, 34). Only the Islamic Republic of Iran and Mongolia tried universal basic income but discarded the system after a short while. Alaska also tried but complained about the intricacy of the associated features like the related transfers' frequency and adequacy. Therefore, the analysis of these three countries has provided valuable insights that it is not ethical to embrace universal basic income.

Upon realizing that universal basic income is unethical and impractical, India tried embracing quasi-universal basic income to provide minimum income to the citizens. However, it was also beset with challenges because it reduces public resonance accuracy as it polarizes the debate on its application (Gentilini et al., 2019, 34). It also increased the risks of unwisely spending the cash due to the increased reinvention. This scheme was also found to widen the rift between the expected outcome and the planned action course. As a result, the citizens were discouraged from being productive. In addition to that, the system lacks social protection, which means that inflation could set in.

It was also challenging to make the moral choice about who to include in the program. The experts seemed not to agree on the frequency of pay and if non-citizens and children should be included in the scheme (Gentilini et al., 2019, 35). There are also tensions between the high and low-income countries. This disparity will affect international programs like food-based aid programs. Therefore, it will be unethical to abruptly stop foreign aids as it will adversely affect poverty-stricken countries, those facing natural calamities and war.

The definition of coverage and universality is also relative. There are multiple ways of achieving universality, and it may not be uniform in all regions. While the standard definition of universality is interpreted in terms of the related outcomes, there are numerous other means to measure it. The existence of multiple measures will create disparities and thus make it unethical. Coverage means that everyone is covered or included. The health and social schemes define coverage in terms of risks (Martinelli, 2017, 125). Others define coverage in terms of independence like social schemes. It is, therefore, certain that the measures are not of equal standard.

On the issue of universality, there are challenges which if not adequately assessed, can be unethical. The biggest challenge is the eligibility criteria. Apart from citizenship, the age of inclusion is a great challenge (Martinelli, 2017, 125). This is because of the varying needs of the people. If the criteria choose to include those over 18 years, there are those less than 18 years but need attention. The second challenge is the associated shame and stigma. The eligible beneficiaries may feel ashamed to embrace this noble program. The third challenge is the ever-changing positions of people. The potential beneficiaries may not remain in the same place for long. The involved universal transfers also are costly and unjustifiable.

The high costs associated with universal transfers may lack financiers. The consequence could be a reduction in the spending on social protection and regression of subsidies. Other fiscal policies like an increase in taxation may come into play (Spies-Butcher, 2020, 511). The high universal transfer costs may also not meet the poverty and inequality levels. This is because the structure used is flat and does not respond well with short-run changes. All these challenges are attributed to a lack of understanding of the current transfer system and its performance. Not so much research has been done about them.

The planning committee has not accordingly devised their plan. For instance, the universal basic income cannot address the massive loss of jobs due to automation. The committee has also failed to ensure a minimum living standard by providing adequate income levels (Mulvale, 2008, 31). There is also little research that has been done about the eight crucial metrics. These metrics include; political economy, financial options, coverage, household incentives and their responses, adequacy of transfers, costs, level of progressivity, and delivery. Lack of making comparisons with the existing systems means the system under design will be ineffective. Lack of comparison will lead to placing weights on particular metrics and forgoing others.

There is a shortage of policymakers and experts who are involved in the implementation of universal basic income. This means that the considerations are not accurately made. The involved trade-offs, scope, and expected performance will thus be erroneous (Gentilini & Grosh, 2020, 76). A proper assessment should be done against the interventions to be replaced and at the system level. Analysis should be done at all levels. This will give a broader picture and a detailed one. It will also ensure that overall strategies are developed and those that target different levels.

Associated effects

Even after doing the simulations, challenges were identified that could not be solved through the simulations. The simulations indicated that the existing program was under-budget since the universal basic income had a lower impact than that of the world poverty level (De Wispelaere & Yemtsov, 2019, 183). It was also evident that the already laid programs, which are not related to universal basic income, were too far more appropriate in addressing poverty than the universal basic income program. The existing programs were efficient in covering an impoverished population and are more progressive. This program is unethical because, according to the experts, it will take away poor households’ resources and pile them on to those who do not need assistance. The universal basic income does not also offer to measure leakages, stigma, and access to benefits.

The budget-neutral universal basic income reform is beset with distributional challenges. This program is structured in a way that will generate more winners than losers. The effect will be felt much in developing countries (Hanna & Olken, 2018, 211). For instance, 70% of the population from a sample of ten countries indicates that most citizens will gain from this reform. However, this percentage increases to 92% when the decile moves to the more affluent populations. On the other side, the losers of the budget-neutral universal basic income reform will lose more than others' gains.

The regression measure also seems to benefit very few people. If the universal basic income would replace the regression measures, it will only increase the poor households' living standards (Terbonssen, 2017, 133). A flat universal basic income reform would benefit the population at the bottom of the distribution. This reform will virtually make 40% of the poorest households better at the expense of others who would start to feel the impact. Therefore, some challenges may set in. For instance, the experts and policymakers may find it hard to recalibrate the distribution. This was evidenced in the Islamic Republic of Iran. After realizing that the universal basic income reform is not equitable and had recalibration challenges, they opted to replace it with energy subsidies.

The measures put in place by the policymakers and the implementation experts on poverty effectiveness can make the fiscal system unsuitable. The impact will be severe among low-income countries (Erreygers & Cunliffe, 2018, 17). Nepal and Mozambique are the two countries that are likely to bring this imbalance. The computer simulations indicated that for the universal primary income reform to move all the citizens past the poverty line, it would cost the program around 20% of the budgeted amount. The middle-income countries will cost an estimated amount of 8% of the budgeted amount. This is evident that the universal primary income reform will be unethical since poverty in the low-income countries will be alleviated at the expense of other countries.

The financing of the universal basic income reform would mean an increase in the rate of taxation. The effect will be felt more in the affluent countries than the poor ones (Igel, 2017, 221). The overwhelming richest deciles will make overwhelming contributions to the tax revenues. The middle-income countries will also be affected as they will contribute hugely but have little benefits. The implementers of the program are more likely to have challenges in mobilizing the necessary resources. The developing countries will be compelled to mix other sources to meet the required standards. The countries that are unable to meet the targets will be obliged to rely on the country's natural resources. As a result, overexploitation of the non- renewable resources will deplete the cores and degradation the environment.

The implementation of the universal basic income reform may beset with challenges from the rich countries. Political barriers are also the other challenges that the committee may face. To meet the planned target, the rich countries' taxation would have to be increased from 3% to 70% (Abbas & Chrisp, 2018, 44). For instance, in South Africa, there will be an increment in taxation from 20% to 41%. The only country that will receive moderate effect is the Federation of Russia which will experience 5% rise. Apart from direct taxation, the rich countries will also be subjected to indirect taxation, which will increase their overall burden. The middle classes that pay for consumption taxes will also be affected.

The policymakers are also confronted with the challenge of employment-related incentives. The experts have postulated that the universal basic income reforms will negatively impact the labor market and cash transfers (Cowan, 2017, 16). It is likely to be cases of workers' reduced bargaining power and affect informal and formal employment. The expected changes in livelihoods as a result of reduced purchasing power will impact negatively on the market. There would be reduced sales and thus reduced standards of living among the traders. The consequence could be a reduced supply of commodities to the market. The consumers will, therefore, have limited varieties of commodities to choose from.

With the international market being increasingly unstable, inflationary risks will set in. The increased amount of money in circulation will reduce the commodities' prices due to the increased competition among the market actors (Cowan, 2017, 17). This will necessitate short- term adjustment of the market prices. The suppliers will respond to the additionally provided cash, which will be a positive impact. However, some countries like the Philippines, Australia, Kuwait, and Mexico will experience contrasting effects. The international market competitiveness will also be affected as individual countries will encounter different rates of inflation. Some may be advantaged and exploit others.

The political economy and the effects of universal basic income reforms have not been sufficiently explored. For instance, the impact of resource mobilization when transitioning from the current system has not been simulated (Cowan, 2017, 18). Middle-income countries are more likely to experience effects of universality. For instance, universal basic income does not address political economy challenges. The countries that will benefit first may become a threat to others as they may choose to block other countries.

The features associated with universal basic income reforms may have adverse effects on societal attitudes and preferences, affecting relationships with others. An example of such products is when the designed program may have impacted the moral norms (Gentilini et al., 2019, 35). In many communities, work serves as a lens through which rights and responsibilities are exchanged. Including children in performing duties may impact societal preferences. For instance, some families prefer spending their time together, and employment may take away their precious time.

Numerous countries have also challenged the implementation of the program. They have realized the inherent weaknesses of the universal basic income reform. There are specific bottlenecks that hinder the existing system (Gentilini et al., 2019, 36). Some countries may want to have the program implemented, but they also have fears as some groups are vulnerable to the shift. The developing countries are also affected as the universal basic income reform means more people scrambling for less money. There is also reduced flexibility as individual countries will not be at peace to implement their development plans. There is also reduced cooperation among the nations. There are regional unrests and fights along the territorial boundaries. The frequent political changes in the countries also disrupt the implementation of the laid policies.

Conclusion

Universal basic income has brought about ethical issues on whether it should be implemented or not. Many countries are against this program because Mongolia and the Islamic State of Uren tried to implement it but failed. However, the main reason is that the universal basic income is ethically unjustifiable. It has been proven that the existing programs are suitable for addressing the world poverty challenges than the universal basic income reform. The system tends to create more winners than losers which means that only a tiny population will benefit from the program. The regression analysis indicates that it is only the poor households that will benefit, and therefore the policymakers will have to make recalibration of the scale. The program will also increase taxation, and the rich countries will be the most hit ones. This program also brings some employment challenges that will negatively impact the market. The less explored impacts of this program will bring international instability, and I, therefore, consider universal basic income ethically unjustifiable.

Reference

Abbas, J. and Chrisp, J., 2018. Conditionality at a cross-roads: Exploring public attitudes to universal (unconditional) basic income and in-work conditionality.

Bastagli, F., 2019. Universal basic income and work. Exploring Universal Basic Income, p.99. Cowan, S., 2017. Universal basic income: Unworkable and unaffordable. Policy: A Journal of

Public Policy and Ideas, 33(4), pp.14-20.

De Wispelaere, J. and Yemtsov, R., 2019. The Political Economy of Universal Basic Income.

Exploring Universal Basic Income, p.183.

Erreygers, G. and Cunliffe, J., 2018, April. Was Basic Income Invented in Belgium in 1848? (Exploring the Origins and Continuing Relevance of a Simple Idea). HES Sponsored Session “Basic Income: The Past and the Present” ASSA Annual Meeting, Philadelphia.

Gentilini, U. and Grosh, M., 2020. UBI as social assistance: comparative models and instruments. Exploring Universal Basic Income, p.73.

Gentilini, U., Grosh, M., Rigolini, J. and Yemtsov, R., 2019. Overview: Exploring universal basic income.

Hanna, R. and Olken, B.A., 2018. Universal basic incomes versus targeted transfers: Anti- poverty programs in developing countries. Journal of Economic Perspectives, 32(4), pp.201-26.

Igel, H., 2017. Exploring narratives about the imagination of a flourishing future with a universal basic income (Bachelor's thesis, University of Twente).

Martinelli, L., 2017. Exploring the distributional and work incentive effects of plausible illustrative Basic Income schemes. IPR, Institute for Policy Research.

Mulvale, J. P., 2008. Basic income and the Canadian welfare state: exploring the realms of possibility. Basic Income Studies, 3(1).

Spies-Butcher, B., Phillips, B. and Henderson, T., 2020. Between universalism and targeting: Exploring policy pathways for an Australian Basic Income. The Economic and Labour Relations Review, 31(4), pp.502-523.

Terbonssen, M., 2017. How might universal basic income influence gender roles? Exploring gender similarities and differences in the imagination of a basic income future scenario (Bachelor's thesis, University of Twente).

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