10 Basic Benefits of Basic Income

The most fundamental benefits of Basic Income are often overlooked.

Debates about Basic Income frequently focus on some of the myths that opponents of the idea spread around the internet — such as that it is unaffordable or that it would destroy work incentives. These claims are nonsense and I do a lot of work explaining why they’re nonsense. And I think that’s important work.

Nevertheless, there is a risk that such myth-based concerns can so dominate the overall Basic Income debate, that the principal benefits of a Basic Income system are largely ignored. Sometimes even some avid participants in Basic Income debates are rather sketchy about what the key benefits of a Basic Income system are supposed to be.

This confusion often becomes visible when I explain to people that Basic Income is perfectly affordable and is not likely to cause either inflation or mass worklessness. I explain that Basic Income will replace many other welfare payments and some tax allowances. Consequently, it doesn’t necessarily involve giving people any more money, on average, than they get now.

A typical response is for people to say something like,

“Well, if that’s true, what’s the point of it?”

It seems, therefore, that there are many people who aren’t sure what the answer to this very basic question is. Sometimes, they may have incorrectly assumed that the principal purpose of Basic Income is to give people more money. And sometimes they’ve just become confused by the misinformation that some people love to spread as far and wide around the internet as they can.

But whatever the cause of this confusion, it’s clearly important to restate what the fundamental benefits of a Basic Income system are supposed to be. And so here’s what I think they are:

1. Basic Income could improve the quality of life for many millions of people, simply through providing them with basic financial security and the peace of mind that goes with it.

People will be able to know that they will have enough money to meet their fundamental needs, even though their circumstances may change quite substantially. If they become unemployed or if their business is struggling, Basic Income will be there for them. If they are unwell or pregnant or if they need to care for a relative, Basic Income will be there for them.

That basic financial security would mean a great deal to a lot of people. They may not end up receiving any more in financial support than they would do under existing welfare systems, but they should have greater peace of mind — and be able to feel less stressed, more confident, more secure and happier as a result.

2. Basic Income could ease the difficulties and stresses of many relatively poor people who might otherwise suffer from unfair means-testing and unfair welfare sanctions.

Means-testing is inherently unfair. One person spends all their spare cash on cigarettes and alcohol. When their income falls, they may receive welfare payments, because they have no savings. Another person saves diligently when they can and as a consequence may find they are ineligible for some welfare payments when their income falls. That’s obviously unfair.

And it’s unfair if you face having your welfare payments reduced, or even stopped, because you missed an interview through no fault of your own or because some administrator has incorrectly judged that you didn’t try as hard as you could to make a successful job application.

If you’re unemployed, you might have to apply for literally hundreds of jobs without success. You may, in effect, be working full time for an awful lot less than minimum wage, never knowing how long it will take to finally secure a job. That’s depressing enough without being threatened with welfare sanctions.

Basic Income can get rid of much of this unfairness. It would make most means-testing and welfare sanctions redundant, thus freeing people in poverty from the injustice, indignity and stress that current welfare arrangements frequently impose.

3. Basic Income could enable us to get rid of huge swathes of needless bureaucracy.

Most existing welfare systems rely on extensive means-testing. There are many forms to fill in and assessments, interviews, reviews and appeals to be conducted. This is financially wasteful, because it involves thousands of government administrators whose wages must be paid by the taxpayer.

Even more importantly, however, it is wasteful because those administrators could have been far more usefully employed elsewhere — actually producing something of value, instead of being kept busy with unnecessary bureaucracy.

With Basic Income, a large chunk of all this expensive bureaucracy could be scrapped, enabling greater efficiency and a better deal for the taxpayer.

4. Basic Income could greatly improve work incentives.

Under existing arrangements, people may see their welfare payments reduced if they find work, gain promotion, work more hours or gain better-paid work. This may be discouraging them from doing the very things we say we want them to do.

People on low incomes may want to earn more, but they risk making themselves worse off if they do. And we lose out on the work people could have done — and wanted to do — if those damaging disincentives hadn’t been in play.

People find themselves in a poverty trap — a poverty trap that’s been created by the very welfare system that is supposed to be helping them out of poverty. And that’s crazy.

Under a Basic Income system, however, people will no longer be penalised for finding work or working harder. Finding work or increasing their hours won’t result in any reduction whatsoever in their Basic Income payments.

5. Basic Income could boost productivity by enabling people to become better-educated and better-trained.

With a Basic Income to support them, many people could have greater freedom to take time away from work to pursue educational and training opportunities. This could potentially lead to a better-educated, better-trained workforce and higher overall productivity levels. 6. Basic Income can boost enterprise, by supporting the self-employed as they start and grow their businesses.

It is well-known that even the most successful businesses often had a tough time making a decent profit in their early years. But to have a dynamic, enterprising economy, we need people to be able to take the risks involved in starting a new business. And a Basic Income would enable more people to take those risks.

There may be more failures than successes amongst these new business ventures — but people being able to take risks is an important factor in enabling our society to develop the new products and services that can drive progress and produce long-term improvements in living standards. 7. Basic Income could improve the negotiating position of many workers.

In truth, many employers treat their workers rather badly. And they get away with it because the workers ultimately need to work — and may have no better job options available to them.

But Basic Income gives workers more options. It would give all workers the power to say no. If they feel they are being exploited, they can say to their employer, ‘No. I don’t have to work for you. And I’m not going to, unless you treat me better and pay me a fair wage.’ And having this option could give them the negotiating power they need to get fairer pay and better working conditions.

Employers might then be encouraged to find better ways to increase profits; ones that don’t rely on exploiting their workforce.

8. Basic Income could enable people to have a better work-life balance.

Many people work such long hours that considerable harm is done in terms of their relationships and their family life. Basic Income would give people the opportunity to address that problem — or perhaps to avoid it occurring in the first place.

People may not necessarily reduce the amount they work overall, but they would have more freedom to cut back on their working hours at critical times, when their families need extra care.

9. Basic Income would help support the many thousands of unpaid carers and community volunteers who make such a big contribution to our society, despite not being financially rewarded for their efforts.

Basic Income would not specifically reward them for their efforts, but it would at least help to alleviate any financial stresses that might arise as a result of them giving so much of their time to helping others.

10. Basic Income could unlock the creative potential of the population.

People will have more freedom to take time to develop their talents and explore their potential. Inventors can take the time to invent. Designers, engineers, artists, musicians — whatever your talents, you’ll have Basic Income to support you as you indulge your creativity and explore your interests. The long-term economic and social benefits could be enormous. 11, 12, 13, 14, 15…. And there are many more possibilities. Basic Income could cut depression rates, make suicide less common and reduce crime levels, for example.

It’s true that we don’t know exactly how substantial these benefits will be. Some potential benefits might turn out to be more substantial than we currently imagine. Others might turn out to be less substantial. Basic Income might have a significant impact in terms of unleashing people’s creativity — or it might not. We can’t be sure.

It is clear, however, that there are many very substantial benefits that could arise out of introducing a Basic Income system — which helps explain why so many people from different parts of the political spectrum find the idea so appealing.

In short, Basic Income is supposed to make people happier, by making them more secure, taking away some of their stress and giving them more freedom to choose for themselves the directions that their lives will take.

And Basic Income can help us build a more productive, more efficient, less bureaucratic, fairer, more creative and more compassionate society, in which everyone is supported and everyone gets access to life’s necessities, without having to justify their existence to the state, to exploitative employers or to anyone else.