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Debate: Universal Basic Income Pros and Cons

The concept of universal basic income has been debated for years but has caught some stem over the last couple of years. This would guarantee each citizen receives a minimum income. The most commonly used reasoning behind having a universal basic income would be to provide people with enough money to cover the cost of living.

Plans for who actually differs some would pay ever citizen 18 and over regardless of income. While others would only pay those who are living below the poverty line whether they currently have a job or not. One proposal made before the COVID-19 virus pandemic would pay just people who were left jobless due to robotics. At the time, 48% of Americans support.

The government would send out the checks, however, who funds the money has become an debate. Some plans seek a tax increase on the wealthy while others want large corporations taxed. Martin Luther King Jr. was a proponent of universal basic income citing it would end poverty.

Economist Milton Friedman proposed a negative income tax according to The Balance. This plan would call for the poor getting a tax credit if their income fell below a minimum level. Simply meaning an equivalent to the tax payment for the families earning above the minimum level.

Chris Hughes Facebook co-founder outlined his plan in his book “Fair Shot” arguing that workers, students, and caregivers making less than $50,000 a year should get a guaranteed income of $500 a month.

“Cash is the best thing you can do to improve health outcomes, education outcomes and lift people out of poverty,” Hughes said. Hughes’ guaranteed would be financed by taxes on the one percent. This would work through a modernization of the earned income tax credit.

Hughes says this is the only solution to an economy where “a small group of people are getting very, very wealthy while everyone else is struggling to make ends meet.”

Below shows some of the program’s pros and cons of implementing a universal basic income The Balance explained:


  • Workers could afford to wait for a better job or better wages.
  • People would have the freedom to return to school or stay home to care for a relative.
  • The “poverty trap” would be removed from traditional welfare programs.
  • Citizens could have simple, straightforward financial assistance that minimizes bureaucracy.
  • The government would spend less to administer the program than with traditional welfare.
  • Payments would help young couples start families in countries with low birth rates.
  • The payments could help stabilize the economy during recessionary periods.


  • Inflation could be triggered because of the increase in demand for goods and services.
  • There won’t be an increased standard of living in the long run because of inflated prices.
  • A reduced program with smaller payments won’t make a real difference to poverty-stricken families.
  • Free income may disincentivize people to get jobs, and make work seem optional.
  • Free income could perpetuate the falling labor force participation rate.
  • It would be difficult especially in the US to get legislation passed because of stiff opposition to handouts for the unemployed.

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