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Universal Basic Income
A Paradigm Shift in Economic Policy
By Shaffay Nawaz
In recent years, the concept of Universal Basic Income (UBI) has gained traction as
a potential solution to various economic and social challenges. UBI is a system
where all citizens receive a regular, unconditional sum of money from the
government, regardless of their employment status or income level. While
proponents argue that UBI could alleviate poverty, reduce inequality, and provide
economic security in an era of increasing automation, sceptics raise concerns about
its feasibility and potential economic consequences.
One of the primary arguments in favour of UBI is its potential to reduce poverty and
inequality. By providing every citizen with a basic income floor, UBI ensures that
none falls below the poverty line. This can lead to improved living standards,better
access to education and healthcare, and increased social mobility. Additionally, UBI
can address the growing income inequality gap by redistributing wealth and reducing
the concentration of resources among the wealthy.
Moreover, UBI has the potential to stimulate economic growth by boosting consumer
spending. With a guaranteed income, individuals are more likely to spend money on
goods and services, which in turn stimulates demand and drives economic activity.
This increased consumption can lead to higher production levels, job creation, and
overall economic expansion.
Furthermore, UBI could address the challenges posed by automation and
technological advancements in the labour market. As automation displaces jobs and
changes the nature of work, UBI provides a safety net for individuals who may
struggle to find employment. By decoupling income from traditional forms of work,
UBI encourages entrepreneurship, innovation and the pursuit of creative
endeavours.
However, critics of UBI raise several concerns about its economic implications. One
common argument is the potential cost of implementing such a program. Financing
UBI would require significant government expenditure, which could strain public
finances and lead to higher taxes or increased government debt. Additionally, there
are concerns about the potential for UBI to disincentivize work, as some individuals
may opt out of the labour force altogether if they can rely on a basic income.
Moreover, there are questions about the broader impact of UBI on inflation and the
broader economy. Critics argue that providing a universal income could lead to price
inflation, as businesses may raise prices in response to increased consumer
demand. Additionally, some economists question whether UBI is the most efficient