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Is Universal Basic Income Feasible?

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As we begin to find ourselves on the tail end of a global pandemic, some things just aren’t going to go back to “normal.” Many jobs, for example, have been irreversibly altered by the need to distance and protect others’ health. In other cases, employees who have been working with the same company for years have suddenly found themselves without income. Much of this is discussed as a sort of evolution of the job market that will, to some extent, straighten itself out in time. And certainly, that’s one possible outcome. But there’s another, more radical solution that might be possible as well…

In recent years, Universal Basic Income (UBI) has evolved from a fringe concept to one that’s discussed a lot more frequently and seriously in the United States. Certainly, it’s nothing we’re on the cusp of just yet. But with the pandemic having both highlighted existing issues in our job market and created new ones altogether, it may be worth asking: Is UBI actually feasible?

What Is UBI?

First, let’s cover the basics. The idea of UBI is that every citizen of the country –– regardless of employment status or income –– can receive a flat monthly payment. “Universal basic income,” as it happens, is a fairly literal name for the concept. Programs that have been experimenting with implementing UBI in small communities have varying ideas and designs on how, specifically, it can be done. But in some of these experiments, there have been indications that UBI yields positive results for communities (though it’s fair to say that nothing close to the scale of nationwide UBI has been tried in America). The most recent version of this program has been proposed in 2020 by presidential aspirant Andrew Yang, who proposed a UBI of $1,000 per month for every individual above 18 years of age. As poverty is defined in the United States as living under $12,000 per year, Yang’s proposal ideally and theoretically eliminates poverty nationwide.

The Need.

UBI is viewed as something of an equalizer, both for existing inequities and with regard to a future in which automation takes over more jobs. As more citizens find themselves without gainful employment –– regardless of their educational background, experience, native language, or general skill level –– poverty and homelessness remain serious problems in the United States.

Additionally, there are numerous jobs that are fundamental to society in which people are thoroughly underpaid:

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Social Workers.

Social workers give a voice to those who don’t have one. They carry society’s burdens and help those marginalized individuals who find themselves in vulnerable situations. A social worker’s job can entail visiting individuals and providing assistance with regard to mental health issues, long-term illness, and even domestic abuse. Specific careers in social work include jobs in healthcare, education, and community outreach, among other fields. Even though there is no shortage of jobs and projects for social workers, however, the pay tends to be on the low side, with only a few exceptions. With the lack of funding and incentives prevalent in the profession, UBI can help mitigate these shortcomings to encourage more people to enter into the Social Work field, which is sorely needed in the United States.

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We’ve heard about the nursing shortage for years, and it has only gotten worse in the last few years due to the COVID-19 pandemic. Too many working hours, not enough money, and ultimately, burnout have all played roles in exacerbating the problem. UBI geared towards healthcare workers would not only help the current nurses on the brink of leaving the field but may also make the profession more appealing to those considering nursing as a career path.

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Teachers are perhaps the most critically underpaid professionals in our society. They teach us vital life skills, help us to hone our interests, and prepare us for both academic and professional pursuits. When you think about it, they help to raise our children! And yet, many teachers struggle to make ends meet and lack resources –– to the point that it’s not uncommon today to hear about them working second jobs, or crowdfunding school supplies. Ideally, we would one day see some manner of shift in wealth allocation toward teachers at all levels. But UBI would also be a positive step and might just encourage many of our brightest teachers to keep doing what they do best.

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As of 2018, data indicated that roughly 25% of people in America take time to volunteer. Volunteering is an unpaid job, but a necessary one. Non-profit organizations exist solely for the public benefit, and even though nonprofits themselves occasionally receive donations and financial gifts from those who support their causes, they often do not receive the necessary funding to hire employees on payroll and pay benefits such as insurance or paid leave. Still, the volunteers they engage are the backbone of such organizations, and as such, should receive some type of stipend to defray expenses incurred.

UBI is viewed by some as the perfect solution for this. One reason for this thinking comes down to engagement. Some experts believe people should have guaranteed paychecks through UBI on the grounds that it would create a "truly free market for labor" –– which in turn would boost social engagement. Some 70% of American workers are "not engaged or actively disengaged" with their jobs, and Gallup research shows that this actually makes them less likely to donate money or volunteer. Added income from UBI would enable at least some disengaged workers to leave jobs they feel "stuck" in and pursue new ones that would be more engaging. Per the aforementioned research, this would then make those same workers more likely to donate or participate in volunteerism.

Additional reasons UBI is often viewed as a solution in this space come down to raw financial numbers. Around the time Andrew Yang was running for president –– and proposing a $1000-a-month UBI –– one write-up ran the numbers regarding the impact on charities, based on a number of different estimates. The article suggested first that charities would have more money to fund projects and support volunteers. This is based on the fact that 69% of people donate to charities, and that if even a small portion of that group donated, say, 10% of UBI income, the financial boost to charities would be massive. Additionally, the article pointed out that volunteer work is valued at roughly $24 per hour as of 2016. Using that figure, it estimated that if only 5% of people over the age of 18 started volunteering just 10 hours a year due to the greater stability provided by UBI, they could account for contributions worth $3 billion. Volunteer work is now valued at approximately $28.54 per hour as of April 2021.

Is It Feasible?

Implementing UBI in a country with 320 million people would be difficult. However, it has been successful in small-scale projects. Proponents of the idea believe that while it will be a challenge, there are ways to make it happen; reallocating taxes, for example, has been one of the most agreed-upon plans so far, and can be viewed as a sort of stepping stone toward UBI. Using the aforementioned Yang plan of providing each American over the age of 18 with $1,000 per month, the specific proposal involved a VAT (value-added tax) as the primary source of funding. This is essentially a process that many countries around the world already implement by which goods and services are taxed by the government at different stages of the development process (as opposed to at the point of sale). Yang proposed raising the money for his UBI via a 10% VAT on goods and services. This in theory is a feasible idea. However, it also isn't as simple as it seems. Some see VAT as a slippery slope toward spiking government spending; consumers might also worry about inflation from companies attempting to make up costs of the taxes. And these are the kinds of complications that will exist in any proposal to establish UBI in such a large country. Other proposals might suggest cutting spending in other areas to fund the tax; some might look to something like Senator Elizabeth Warren's suggested taxes on the ultra-wealthy. In any case, there are ways to make the math work, but there will also be arguments against the reallocation of funds. Ultimately, we have quite a ways to go and a concerning number of underpaid (or completely unpaid) jobs that would stand to benefit. And unfortunately, full implementation of UBI would face many challenges. With the proposals and concepts in circulation today however, there is hope of one day mitigating poverty and homelessness via UBI.

Article written by Renata Jamila

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