Yahoo Finance Germany to trial giving away £1,000 a month in universal basic income
German researchers are to give a group of people just over £1,000 ($1,307) a month each, in a trial looking at the potential benefits of introducing a wider universal basic income (UBI).
The experiment will asses how giving 120 people €1,200 (£1,085) a month will affect work patterns and leisure time. They will be studied against a comparison group of 1,380 people who do not receive the payments.
UBI involves unconditional cash payments to all citizens whatever their income, either replacing or complimenting other targeted welfare benefits or tax allowances.
Supporters of UBI argue the policy is the most effective way to keep every household above the breadline by helping to tackle poverty, encourage more flexible working practices, and allow some people to devote more time to caring for older family members.
Campaigners argue UBI is more effective and less bureaucratic than most targeted support schemes, which often fail to reach all their intended recipients.
The concept has drawn growing interest around the world as millions of households have taken an economic hit from coronavirus lockdowns. Some advocates also argue that it would prevent those who need income to survive from going to work when sick and risk spreading COVID-19 further.
Researcher Jurgen Schupp, who is leading the “My Basic Income” project at the Berlin-based German Institute for Economic Research, said he wanted to discover how a “reliable, unconditional flow of money affects people’s attitudes and behaviour.”
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“So far, the debate about the basic income has been like a philosophical salon at best and a war of faith at worst. It is, on both sides, shaped by clichés,” he told Germany’s Der Spiegel newspaper.
“Opponents claim that with a basic income people would stop working in order to lie on the couch with fast food and streaming services.
“Proponents argue that people will continue to do fulfilling work, become more creative and charitable, and save democracy. We can improve this [debate] if we replace these stereotypes with empirically proven knowledge.”
The researchers want to expand the study and are looking for one million applicants for wider participation by this November. From that group, 1,500 people will then be selected for a three-year income experiment.
The majority of the British public support giving people UBI during the coronavirus pandemic to ensure their financial security, according to a YouGov poll.
In April, UK chancellor Rishi Sunak ruled out introducing a universal basic income (UBI) in Britain, dashing the hopes of some campaigners.
He said it was not the “right response” to the COVID-19 pandemic and defended the existing welfare system.
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Over 9.5 million people have since been furloughed by their employer under the government’s job retention scheme which sees the state pay 80% of furloughed staffs’ wages up to a maximum £2,500 per month.
The scheme is set to run until the end of October but is already winding down, with employers having to contribute to the cost of the scheme from August. Experts fear the end of the scheme could herald a surge in redundancies as many find they don’t have a job to return to.
In April, Scotland’s first minister Nicola Sturgeon said the coronavirus had “strengthened immeasurably” the case for UBI. She welcomed a report by the Reform Scotland think tank that proposed giving every adult £5,200 a year and under-16s £2,600 a year. Sturgeon said at the time that she hoped to discuss UBI with the UK government.
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