UBI or the minimum wage?
3.4
Summary of UBI schemes
In summary, a UBI has the potential to reduce inequality and improve the quality of life of the poorest in society, as well as boosting productivity and efficiency. However, it comes at a high cost, and is not something that could be implemented straight away; building up an income large enough to fund a UBI would be extremely challenging and would take many years, requiring a long-term plan stuck to by multiple governments. Whilst a UBI would bring many social benefits and help a large majority of the population, funding one is very difficult and may create just as many problems as the UBI would solve.
4.
Conclusion
In conclusion, UBI schemes have numerous advantages over minimum wage policies and implementing one in the UK could bring several social and economic benefits, including improved education, mental and physical health of the future generation and improved productivity. However, the major drawback of a UBI is its extremely high cost, and there is a danger that funding one may cause more problems than it would solve. On top of the unlikeliness of multiple governments agreeing to work towards funding a UBI, the higher taxes needed to do so would disincentivize work and may lead to firms and skilled workers emigrating to lower tax havens. Since a UBI has never been fully implemented before, it is difficult to determine exactly how detrimental this would be, but it is nearly certain that a reworking of the tax system of the scale needed to fund a UBI would have unintended side effects. Most economists would agree that it is necessary to have social policies that reduce inequality and improve the quality of life of the poorest in society, and whilst a UBI would do an excellent job of that if implemented, it is currently unaffordable and unlikely to happen soon. Despite a minimum wage clearly having its disadvantages, the decreased employment it creates in the UK is small compared to the amount it raises the wage low-skilled workers receive, and it brings other benefits such as increased spending and growth. I therefore conclude that whilst a UBI could certainly be a better alternative to minimum wage policies in the future, currently it is unfeasible, and the minimum wage is the best policy available for redistributing wealth and protecting the poorest members of society.
Bibliography
A.I. team. (2021, January 14). Overview of the UK population – Office for National Statistics. Office for National Statistics. https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestima tes/articles/overviewoftheukpopulation/january2021 Akee, R. K., Copeland, W. E., Keeler, G., Angold, A., & Costello, E. J. (2010). ‘ Parents' incomes and children's o utcomes: a quasi-experiment using transfer payments from casino profits ’, American Economic Journal: Applied Economics , 2 (1), 86-115. Cooper, R., John, A. (2012). Microeconomics: Theory Through Applications. Washington, DC: Saylor Academy. Retrieved from https://saylordotorg.github.io/text_microeconomics-theory-through- applications/index.html Costello, E. J., Compton, S. N., Keeler, G., & Angold, A. (2003). ‘ Relationships between poverty and psychopathology: A natural experiment ’, Jama , 290 (15), 2023-2029.
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