As automation takes more and more jobs with workers being displaced from employment there have been many proposals on how to transition the economy in order to help those who find themselves permanently removed from employment. One such suggestion has been a state guaranteed basic income for all adult citizens. Finland, Alaska, Kenya, Stockton, California among other places have done experiments in adopting this novel idea.
From 2017, two-thousand randomly selected individuals were chosen to receive monthly payments of the equivalent of six hundred and thirty-five US dollars. The results in Finland were positive. Recipients reported “significantly fewer problems related to health, stress, and ability to concentrate than those in the control group,” according to the official report. A similar experiment in Kenya found that recipients also experienced a greater sense of well-being.
One of the common criticisms related to a basic income is that it will discourage people from working. Without an incentive, these critics argue, people will not work which it would be very bad for the economy. However, this did not happen in Finland. The report found that recipients continued working.
America Gives It A Try
Alaska has, in fact, had a basic income since 1982. This income is paid for through oil and mineral leases (Alaska has both in abundance). What have been the effects of this? More than one-third of Alaskan children live in poverty. This may or may not have anything to do with basic income. Other factors could be at play, but it is not a sign of a healthy economy.
Researchers investigated the effects of Alaska’s basic income on employment and were quite surprised to find that there was no change in employment status and that the number of Alaskans with part-time jobs increased by seventeen percent. According to the researchers, “Given prior findings on the magnitude of the income effect, it is somewhat surprising for an unconditional cash transfer not to decrease employment.” It seemed to have increased employment in fact. The researchers theorized that increased consumption due to increased income led to a corresponding rise in service jobs.
The most recent area to try a basic income is Stockton, California. Stockton has decided to give monthly payments of five-hundred dollars to one-hundred residents funded by a private organization called the Economic Security Project. It is too early to say what the effects of this will be.
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