Imagine a world where everyone gets cash from the government every month, no strings attached. It’s a proposal called
universal basic income, or UBI for short. The idea is to provide an
economic safety net for everyone, with as little bureaucracy as possible. And supporters of the policy say it could reduce poverty and decrease inequality. While capitalism has led to a ton of economic
growth around the world, that wealth is increasingly
concentrated at the top. Currently, the combined fortunes of the 26 richest individuals on Earth equals the total amount of wealth as the poorest 4 billion. And the gap widens every year. As for poverty rates, you might be closer to the edge of poverty than you think. Maybe, like 40% of the
American population, you don’t even have $400 on
hand to cover an emergency. Or, like 70% of UK workers, you describe yourself
as chronically broke, despite working full-time. Universal basic income imagines a future where people have a fairer starting point, and everyone benefits from the
wealth generated by society. While sometimes portrayed as
a crazy utopian fever dream, UBI is actually based on some
of the pillars of capitalism, like the premise that individuals, rather than the government, know best what they need to spend on, and that open, competitive
markets shouldn’t be disrupted. In fact, UBI has garnered
support from people on both sides of the political spectrum. Conservatives see a solution to the dreaded welfare state. Present Richard Nixon came pretty close to passing a bill that provided
a basic federal income. And on the left, people see it as a way to address not
only wealth inequality but also long-standing
forms of discrimination. In 1967, Dr. Martin Luther King Jr. wrote, He went on to propose that the civil rights movement organize for a guaranteed
minimum income for all people. Today, UBI is picking up momentum. U.S. presidential candidate Andrew Yang has made a “Freedom Dividend” the cornerstone of his campaign. And big tech, which is building the future of automation and AI, knows that machines are
coming for your jobs. Facebook co-founder Chris Hughes is even funding a UBI experiment
in Stockton, California. Stockton is a typical American city. It’s diverse, built on industries
which no longer thrive, and, here, one in four
people lives in poverty. For a year and a half, the city is giving $500 a month, no strings attached, to 125 people living at or below the poverty line. The goal is to see how having extra cash affects their spending habits, their health and the labor market. So far, UBI looks promising. Preliminary data shows that people are spending most of their money on basic needs, like
food and paying bills. And if you zoom out, people report that they’re less stressed, happier, and healthier. This was true in Finland, too, which ran a 2-year trial offering a monthly stipend
to 2,000 unemployed citizens. Those who received the money reported improved well-being, better in every way
than the control group. See, poverty is literally
toxic, especially to children. Studies confirm that when you’re poor, you’re in a constant fight-or-flight mode. And increased cortisol
levels can increase your risk of heart disease or behavioral issues. Statistics show that people also become better members of their community if they have a guaranteed
income to rely on, and they don’t stop working. In Alaska, via something
called the Permanent Fund, every resident gets a dividend, and almost no one stopped working. While a truly universal basic
income would be expensive, there are many proposals that
address how to pay for it. Spending on UBI could mean spending less on state
health care programs. Supporters of UBI say poverty is caused by lack of cash, not character. So the solution here could be simple, some might even say basic. And it will surely cost more to ignore growing inequality.