Should Europe implement universal basic income?

Should Europe implement universal basic income?

Switzerland has voted against a universal basic income (UBI), but the debate continues across Europe. Does a guaranteed wage to all citizens bring opportunity to Europe’s troubled workforce, or only impose greater risk?

When 77% of Switzerland voted against universal basic income for all citizens earlier this month, it was not — as the outcome might suggest — the death of a progressive idea. Across Europe, debates about introducing a flat sum to all citizens, regardless of employment status or income, are taking place at all levels of government.  

While Switzerland is the first country to hold a referendum on a universal basic income, Finland and the Dutch city of Utrecht have actively begun planning pilot programs to study the potential effects of a basic income on society. Even in Switzerland, the “no” vote is not predicted to spell the end of the basic income discussion, but rather open the floor to further referendums in the future. The idea of a universal basic income is not new but it has found particularly fertile ground in Europe in the past year and — it would appear — heading forward.

Europe’s economic problems and universal basic income

Universal basic income aims to replace the antiquated and cumbersome system of social assistance. Since the end of World War II, European states have introduced social safety nets to assist citizens in a variety of manners — from healthcare to easing the burden of unemployment. This is a costly endeavor for a state, and has historically been one of the prime reasons taxes in European states are relatively high.  

Since the 2008 financial crisis, providing these safety nets has become increasingly expensive in the midst of increasing unemployment. Finland, which has formed a working group to investigate the feasibility of a basic income, is facing 10% unemployment with 22% youth unemployment in a country of 5.4 million. As a result, the Finnish government is paying more in welfare than its social safety nets were designed to.

The high unemployment in many European states is compounded by another component of the evolving economy. Traditional employment is beginning to give way to new, less predictable employment in the form of part-time jobs and new service-based industries.  

This phenomenon can be seen around the world, but it is most prevalent in the United States and Europe — where youth are seeking employment in less secure markets.  Those employed part-time often do not make enough to leave the safety net, leaving states to support those with jobs but are still not employed “enough.”

Opportunities and risks of UBI

Taken together, new employment and outdated welfare systems across Europe have brought the idea of a universal basic income to the forefront. Supporters of a basic income say that the consistent supply of money to every citizen would ease the burden and bureaucracy of the current welfare systems by alleviating a portion of the need for unemployment assistance.  

Critics of the idea fear that a guaranteed income would discourage citizens from seeking employment and would end up costing states more to maintain than the current welfare systems. It is these criticisms that the city of Utrecht plans to address in a basic income experiment set to begin in 2017.  

This experiment will split the city’s social welfare recipients into five groups to test how different welfare schemes perform and how recipients respond. Ultimately this experiment is planned to last two years, and should help move the dialogue on basic income forward, no matter the outcome.

Europe is, without a doubt, a continent in flux. The only consistency, it can be said, is that everything is changing, and how states respond to these changes can and will vary. Whether a universal basic income is the answer to evolving employment and old welfare systems is difficult to decipher prior to its actual implementation.  

However, as long as Europe faces changes in these sectors, the universal basic income debate can be expected to continue going forward.

Categories: Economics, Europe

About Author

B. Blythe Brady

Blythe Brady specializes in international organizations and conflict management and negotiations. She graduated from DePaul University, where she studied political science and economics. She received her Master's from Seton Hall University's School of Diplomacy and International Relations. She has worked at the European Parliament in Brussels and the New York Peace Institute.