April , 2021
Universal basic income in a global context during pandemic
12:10 pm

Kuntala Sarkar


Guaranteed income that is popularly known as Universal Basic Income (UBI) is a concept that provides people certain amount of money monthly. With this money, the underprivileged section of a country’s population can get a relief from poverty. Pranab Bardhan, Professor, Graduate School at University of California puts it perfectly that UBI is not meant for removing economic inequality but for relieving economic insecurity. Since 2020, the notion of UBI attracted more attention as a large number of people experienced financial uncertainty, suddenly.

Latest reports in 2021 by Pew Research and the World Bank has revealed that more people were pushed to poverty from the middle class during 2020. The World Bank predicted that the number of people in extreme poverty can increase by 70-100 million in 2021. So globally, economists proposed that providing people with a basic income can meet the sudden healthcare or other necessary needs of poor people. 

The UNDESA World Social Report 2020 examines the impact of four megatrends on inequality, namely technological innovation, climate change, urbanisation and international migration. The pandemic was an additional threat to the economy and mostly for the poor.  

Global experiences during pandemic

During the first stage of the last US presidential campaign candidate Andrew Yang proposed the idea ‘Freedom Dividend’ that would give every adult American $1,000 monthly. Earlier, a 2019 report by the Brookings Institution showed that a quarter of overall US jobs was vulnerable to automation. And due to the pandemic millions of people lost their jobs and a large section experienced pay cuts. So this idea got popularised and it became a key pillar of his 2020 campaign. However, the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed in March 2020. It provided a one-time payment of up to $1,200 for every qualified adult in the US. Recently, in March 11, 2021 President Joe Biden's American Rescue Plan provided $1.9 trillion pandemic relief package. The stimulus payments will be $1,400 for most eligible recipients. 

News house Guardian in an article reported that, “Oakland is set to become the latest city in California to launch a guaranteed income program, a privately funded program for low-income families of colour. The Oakland Resilient Families program will give families that meet a certain threshold $500 a month.”

The Spanish government has given $1200 monthly to 850 000 households who needed the most.

Californian assemblyman Evan Low proposed to give $1,000 monthly to adults with certain incomes. Canada, Germany, South Korea, Finland have also marked their names to provide UBI.  

In India, the union and state governments initiated numbers of relief measures to combat the economic uncertainty due to Covid-19. But economists are raising theories that India is in immediate need to initiate a regular UBI programme. 


The major criticisms against UBI are surrounded by the fear that if UBI programmes are initiated, the basic social safety measures will be thrown away. Another challenge is the cost. It has been measured that if the UBI programme is implemented it would cross the government’s budget. For example, Andrew Yang’s $1,000 monthly Freedom Dividend project could cost $2.8 trillion each year which is far too high to stand for. 

Also, some people raised the issue that it would impact negatively on the employment scenario. But in reality, it has been tested that with UBI programmes, the employment situation actually improved and the poor people could meet their other necessities. In Brazil, poverty has dipped to lowest level in last 40 years as about a quarter of the population received monthly $110 since March 2020. 

On the other hand, before pandemic, from five out of six trials in Latin America was tested. It showed a considerable reduction in short term poverty with UBI. 

In World finance Charlotte Gifford wrote an article titled ‘Universal basic income gains support during the pandemic’ (September 14, 2020) mentioning, “In a working paper for the United Nations Development Programme, Eduardo Ortiz-Juarez and George Gray Molina estimate that the cost of providing temporary basic income to all people living below the poverty line could cost between $200bn and $465bn per month depending on the specific policy. Considering this could keep 2.78 billion people out of poverty, it’s a relatively modest amount.” When a large number of people are being pushed to poverty, the UBI programmes can be their relief.

However, the government must ensure considerable employment for all to cast away poverty from the society. Otherwise UBI programmes will remain as temporary relief for them and would not impact in long term. 

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