Universal basic income

DURING the past few weeks, international reports have surfaced that the Finnish experiment with basic income will not be extended, disappointing many progressive thinkers. This is because the Finnish experience has been looked at as a potential model for similar programmes worldwide which have grown in popularity as a potential solution to many modern-day anxieties.

Put simply, universal basic income means everyone would receive a small paycheck, regardless of whether working or not, and of income. In particular, there is a very great fear that automation will replace most jobs, and artificial intelligence almost all the others eventually. Universal basic incomes would ensure citizens earn their fair share of national wealth, even if a group of wealthy corporations produce most goods and services, employing few.

It would also prevent the mass concentration of wealth, and perhaps even political power, in the hands of those savvy enough to understand the technology’s intricacies. Guyana is, to be sure, some distance from seriously contemplating such a national policy, but this does touch on an important local issue, that of whether there should be robust unemployment benefits. We may not have robots hungrily clawing after our jobs, but that certainly doesn’t mean Guyanese don’t face great uncertainty and economic hardship when employed.

This relates to what former President Jagdeo didn’t really articulate, but tangentially addressed when he said he would pay sugar workers a monthly income from oil revenues until they found work. While that may or may not be the right policy for Guyana, it is important to recognise the difficulties our brothers and sisters in that industry have faced, and be open to ways of helping smoothen their transition to other forms of employment.
Instead, robust unemployment benefits would surely go a long way in cushioning any economic shock we see locally. The question that does need to be asked though, is whether such benefits might create a perverse incentive. After all, some might never want to stop receiving benefits, preferring to relax at home rather than actively contribute to the economy. This has often been the criticism levelled at Scandinavian countries, which feature some of the most lavish benefits to be found anywhere.

Further, what would such a robust scheme cost the taxpayers? Would it mean an increase in VAT? Or would it be funded entirely from oil revenue? These would definitely be critical questions as any policy is sculpted and indeed unemployment benefits is one of the most complex public-policy questions, with a wide array of options and approaches available. These many options come with their own philosophies on the role of government as well, so debates can be both detailed and difficult to resolve.

Perhaps the biggest impediment Guyana faces is that our economy remains a mid-level one, and thus has a relatively high number of unemployed people. The Census Bureau put unemployment at 12 per cent, many times that of the developed economies that most commonly feature good unemployment programmes. This would mean a much wider segment of the population regularly drawing funds from government coffers, a cost that is likely to be unsustainable.

Sympathy for our working population fallen on hard times is thus something we should certainly all embrace, even if the particular form it takes remains uncertain. The world awaits further comment from the Finnish government on its basic-income scheme, and on the academic papers that must surely follow this brave experiment. Who knows, maybe it will yield insights that can guide even Guyana’s far distant circumstances.

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