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Universal Basic Income System to be Tested in Wales

Updated: Jul 4, 2021

Kate Byng-Hall reports as Wales plans to trial a Universal Basic Income system to cover the population’s basic living costs.

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The First Minister of Wales, Mark Drakeford, has announced that the country will be trialling a Universal Basic Income (UBI) system. Under this system, every adult in the country will receive a regular sum of money to cover basic living expenses, regardless of income or employment status.

This pioneering trial aims to alleviate poverty and ensure that everyone in the country has sufficient funds to allow a basic standard of living. It also has the objective of giving people who are out of work the time to find employment or retrain without worrying about basic living costs in the meantime.



Wales’s Plans

Mr Drakeford said a pilot would aim to “see whether the promises that basic income holds out are genuinely delivered” to the Welsh people, and would “need to be carefully designed to make sure that it is genuinely adding income for the group of people we are able to work with”. As he goes on to say:

“It'll have to be carefully crafted to make sure that it is affordable and that it does it within the powers available to the Senedd. We need to make an early start on designing the pilot to make sure that we have the best chance of operating a pilot that allows us to draw the conclusions from it that we would all want to see.”

However, the Conservatives have said that Wales should not become “a petri dish for failed left-wing policies.” Nevertheless, research conducted in Finland has found that receiving UBI left people happier and less stressed, but did not aid them in finding employment.



UBI: A Good Idea or a Pipe Dream?

A Universal Basic Income system has multiple potential benefits which have led people like Elon Musk to publicly advocate for it. Many believe that UBI promotes equality among the population, with some choosing to work less because of the added financial safety net, thus opening up more vacancies for the jobless to find employment. The greater financial freedom allowed to families because of the regular pay-out would also create more time for families, as well as more equal distribution of unpaid domestic labour.

Others see the UBI system as a means of future-proofing the economy, meaning people can still afford to invest in leisure culture and commodities even if economic hardship means they temporarily lose their jobs or choose to retrain. It is also projected to improve working conditions, since having basic living costs unconditionally covered by UBI means that workers will have more freedom to challenge unacceptable workplaces without having to worry about losing their entire income. It could mean workers take on a more powerful position in relation to big corporations.

However, others may have concerns around the dis-incentivisation of work which may arise as a result of the introduction of Universal Basic Income – if basic living costs are already covered, some members of society may choose to give up work altogether, instead relying on the government to fund their lifestyles. This would potentially promote laziness and delinquency, and undermine the value of work as an invaluable social institution.

Others take issue with the fact that even the richest in society would receive UBI pay-outs, as they argue that giving money to those who really don’t need it detracts from the level of funding which could be invested in assisting those in need. Additionally, there are concerns that those already living on low incomes may have their salaries reduced by employers if they know they’re receiving UBI, essentially cancelling out any benefit the scheme may have brought.

Although Universal Basic Income sounds an advantageous idea on the surface, allowing greater financial freedom and preventing more people from descending into poverty, it’s more complex than it sounds. Time will be needed to discern whether the system will improve the average quality of life in Wales, or have a catastrophic effect on the country’s economy.


 

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