Germany is Launching a Universal Basic Income Pilot Program
Universal basic income (UBI) has been a fringe political idea for centuries, but it’s been moving into the mainstream in the past few years. The concept is relatively simple: unconditional money, directly given by the government to citizens on a recurring basis.
Finland tested a UBI from 2017 through 2018, giving 2,000 Finns on unemployment $634 each month without strings attached. Andrew Yang, a former Democratic nominee in the 2020 U.S. election, ran with basic income as his central issue. Now, Germany is testing a small scale UBI program, and the results could impact society’s views of UBI.
Universal Basic Income in Germany
A research group in Germany is launching a three-year study of universal basic income and will provide roughly $1,400 to 120 Germans each month for those three years. The program comes at a time when more than 70 percent of European Union citizens support a basic income, according to the Times of London.
The German Insititute for Economic Research will conduct the study, which was funded by private donors. The recipients of the income must complete regular surveys about their habits and behaviors. That group will be compared against a group of 1,380 Germans who received no additional income from the institute. The researchers hope to field 20,000 applications for the project and thus can choose the 1,500 people with the most similar backgrounds.
The goal, according to researchers, is to track how the “unconditional flow of money affects people’s attitudes and behavior.” The goal is not to interpret greater conclusions about the impact a UBI would have on the overall economy, nor how it relates to larger socioeconomic trends.
“Our subject of study is narrowly defined: the changes in personality and behavior of people who receive unconditional cash payments for three years,” lead researcher Jurgen Schupp told German magazine Der Spiegel.
However, Schupp is aware of the political debate around UBI, and the influence this study may have. Presently, supporters and detractors of basic income both have few facts to base their claims on. Thus, Schupp said, they have little ability for constructive debate.
“The debate about basic income […] is on both sides, shaped by cliches,” he said. “We can improve this if we replace these stereotypes with empirically proven knowledge and can, therefore, lead a more appropriate debate.”
Is Basic Income a Good Idea?
Proponents and critics of UBI generally disagree on one major point: cost. A basic income, whether privately or publicly funded, would be massively expensive. Some argue that basic income would disincentivize work, and further negatively impact the economy.
However, the Finland case study shows that this may not be true. A majority of people who received basic income actually said that the program made them more likely to start their own business. Statistically, they worked about the same as a control group that did not receive any money.
Plus, supporters of UBI argue that the humanitarian value provided offsets economic negatives. Also, a basic income would allow many people to engage with the economy in new ways, potentially sparking growth.
Unfortunately, as Schupp suggested, we don’t have enough research into UBI to have concrete answers. We simply do not know enough now to say with certainty what society would look like with a UBI. This experiment, however, should provide some fascinating results. If you’re interested in basic income at all, the initiative in Germany is one to watch.
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