Spain considers implementing Universal Basic Income amidst COVID-19 pandemic. Could UBI work in the US?

Spain considers implementing Universal Basic Income amidst COVID-19 pandemic. Could UBI work in the US?
Source: Burak Akbulut/Anadolu Agency via Getty Images

As Spain struggles to get through the COVID-19 crisis, the country’s leftwing government is considering implementing Universal Basic Income (UBI) to help its citizens weather the resulting economic hardships.

With most of the country’s citizens in lockdown, businesses throughout Spain have largely closed or greatly reduced the size of their staff, leading to mass unemployment claims.

In the United States, UBI entered the political conversation during the recent Democratic presidential campaign in large part due to presidential campaign of businessman Andrew Yang.

While it appears unlikely that a federal policy will become a reality in the US, other countries – and some cities – have already begun talking about rolling out their own UBI programs.

Spain contemplates Universal Basic Income

Source: El Pais

A report from one of Spain’s leading news sources, El País, indicates that the country’s leftwing government is considering implementing a €440 (roughly US$480) monthly UBI for residents.

The idea is to supplement the wages of Spanish citizens so that, even when unemployed, they still have a minimal amount of money to live on.

With 302,000 people claiming jobless benefits, March 2020 marked the worst increase in such claims in the country’s history. Comparatively, in January 2009, at the start of what would end up being a sustained and painful recession for the country, Spain saw an increase of 200,000 claims.

This monthly UBI would be in addition to the €200 billion in aid the country has already allocated to address the coronavirus epidemic. If Spain’s government passed Prime Minister Pedro Sánchez’s current proposal, the UBI would stay in effect even once the crisis had ended.

A UBI proposal was previously on the table in 2019 when Sanchez’s Spanish Socialist Workers’ Party, known as PSOE (Partido Socialista Obrero Español) formed a coalition with the leftwing Unidas Podemos, more commonly known as Podemos (Spanish for “United We Can”).

Spain’s deputy prime minister is Pablo Iglesias, leader of Podemos. Iglesias has said that a UBI measure is needed because, even prior to the pandemic, 30% of Spain’s children were at risk of poverty.

It’s unclear if the UBI could earn enough support to pass through Spain’s parliament. Leaders of Vox, the country’s far-right party and the third-largest political bloc in parliament, have been heavily critical of Sanchez’s coronavirus response, going so far as to demand he resign.

Members of Spain’s government have expressed the hope that the country will return to normalcy soon, with the aim of lifting national containment measures so people can get back to work.

However, after having moved parliament to officially approve an extension of the lockdown from April 12 to April 26, Sanchez is now seeking yet another extension, this time until May 10.

Could the US have a national UBI?

Source: Fox News

UBI was the signature campaign promise of Andrew Yang, the American tech billionaire who was running for the Democratic nomination until dropping out of the race in February 2020.

On his campaign website, Yang called his version of UBI the “Freedom Dividend,” which would have provided a monthly payment of US$1,000 to all Americans over 18.

Another former candidate, Senator Bernie Sanders, has responded to the COVID-19 crisis to push for what would essentially be a temporary UBI.

While Congress was negotiating a stimulus aid package that would give a one-time payment of US$1,200 to many Americans, Sanders was advocating for a US$2,000 monthly payment that would last until the end of the crisis.

But Sanders, who The New York Post has called “the most leftwing presidential candidate ever,” has not called for an ongoing UBI in either of his two presidential campaigns.

Now that Sanders has suspended his campaign for president, it appears all but certain that former Vice President Joe Biden will be the Democratic nominee and will take on President Donald Trump in the general election on November 3, 2020.

In March 2018, well prior to the current presidential campaign cycle, Biden expressed disdain for the idea of UBI. Speaking on the political podcast Pod Save America, which is hosted by former aides to President Barack Obama, Biden said he didn’t agree with UBI because it strips people of their dignity.

“Getting an annual wage,” Biden said, “you sit home and do nothing.”

In recent days, Biden has shown a willingness to move further left on some economic issues, including student debt relief and an expansion of Medicare, in an effort to draw Sanders’ supporters into his coalition.

UBI around the world

Over the last few decades, multiple countries and cities have tried out some form of UBI, generally on a temporary basis. In recent years, a few countries have initiated pilot UBI programs to test out the feasibility of operating such a policy on an ongoing, nationwide basis.

Versions of a UBI policy have been attempted in countries as disparate as Canada, Kenya, Iran and the Netherlands. Even the United States has attempted it to varying degrees.

The US federal government experimented with a program in seven different states from 1968 to 1974. Overall, those states saw a slight reduction in work hours for its residents.

Alaska is the only state that has an ongoing UBI program for its residents, one that has been in place since 1982. The payments fluctuate between US$1,000 and US$2,000 depending on gas prices. The UBI has mostly eliminated extreme poverty in Alaska without any noticeable effect on employment in the state.

One of the most recent tests of UBI occurred in Finland from January 2017 to December 2018.

The study involved a monthly payment of the equivalent of US$685 each month to 2,000 unemployed Finns. Results indicate that while the extra money didn’t help people find work, it did improve the level of happiness reported among Finnish citizens.For the third year in a row, Finland was ranked as the happiest country in the world according to the 2020 World Happiness Report.

Source: World Happiness Report


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