Why a universal basic income is a poor substitute for a guaranteed job – ABC News

Extract from an article by Claire Connelly

Creating a universal basic income as a means of addressing unemployment and productivity problems has become the topic du-jour as workers become increasingly separated from the means of production, with even modest salaries failing to cover the cost of living.

Consequently, Australian taxpayers have had to take on a greater burden of debt to support themselves.

What is basic income?

  • A system where all citizens receive an unconditional sum of money
  • Income is supplied by either government or public institution
  • Supporters say it would end poverty
  • Those against it argue it would destroy the incentive to work

A universal basic income works as a partial or complete substitute for the existing welfare or social security system, in which every adult citizen is paid a flat rate fee by the Government – regardless of whether they are already working, and regardless of their age, ability, gender, health status or skill level.

Leading economists claim creating a universal basic income is throwing money at a problem in lieu of actual solutions.

Besides which, from a cost of living standpoint, it could lead to inflation by increasing demand for goods and services.

They claim a job guarantee program would better address both inflation and unemployment.

“We forget the most valuable commodity is people,” Fadhel Kaboub, Associate Professor of economics at Ohio’s Denison University said…(continues)

SOURCE: Claire Connelly, “Why a universal basic income is a poor substitute for a guaranteed job”, ABC News, 19 jan 2016

Link to full article

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