Ben Dolbear reviews Spain's decision to trial universal basic income in the wake of the Coronavirus pandemic, and its wider implications for society.
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The month of March saw Spanish unemployment hit a record high after the jobless claim rate rose by 302,265, due to a national lockdown that was introduced halfway through the month thanks to the Coronavirus pandemic.
Now, the European nation of 47 million people is implementing unprecedented steps to introduce a permanent universal basic income.
Finland Was First
In December 2016, the centre-right Finnish government led by Juha Petri Sipilä trialled the policy with 2,000 unemployed people across the Scandinavian nation, providing them with €560, or £500, of free money. Though in Finland this cash sum amounts to less than one fifth of average private sector earnings, the safety net that this basic income provided allows the recipients to avoid the fear of falling into poverty and frees them up to do meaningful work rather than engaging in unstable and poorly-paying employment practices.
The trial went on until the end of 2018, and participants responded by saying that they felt 'happier and less stressed' as a result of the pilot scheme.
The universal basic income worked in Finland as it provided unemployed people with the time they needed to apply for jobs and learn essential new skills to improve their employ-ability. Though short-term employment did not see a surge as a result of the scheme, a comprehensive analysis is due to be revealed later this year.
It's Not Exclusive
Universal basic income pilot schemes are actively being trialled in every continent except Australasia and Antarctica, with programmes in Canada astonishingly finding that those participating in the negative income tax scheme experienced an 8.5 percent decrease in hospitalizations. Results from an extensive study by the Roosevelt Institute entitled 'No Strings Attached: The Behavioral Effects of U.S. Unconditional Cash Transfer Programs' concluded:
There is either no impact on or a moderate decrease in labor participation and a significant increase in other quality-of-life benefits (mental and physical health, education outcomes, parenting, reduced criminal activity, etc.).
Between 2007 and 2009, the government of Namibia, a southwestern African nation traditionally susceptible to high levels of poverty, trialled a universal Basic Income Grant which saw positive results in 'reducing poverty and crime and in raising levels of school attendance'.
A Societal Safety Net
Now, Spain is introducing the policy to help those struggling from money problems during the Coronavirus pandemic, and are considering making the cash handouts a permanent measure in Spanish society, if successful. Speaking on national television last Sunday, economy minister Nadia Calviño said, 'We're going to do it as soon as possible [...] so it can be useful, not just for this extraordinary situation, and that it remains forever'.
Coronavirus has so far claimed more than 15,000 lives in the Mediterranean nation, and as the recovery operation begins in coming months, the left-wing government hopes to provide 'a permanent safety net for the most vulnerable' in the form of unconditional payouts to those vulnerable to, or already experiencing, economic hardship.
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