Europe is facing the worst recession since the Great Depression. Millions of workers currently supported by government furlough schemes could lose their jobs once those schemes come to an end. The OECD predicts unemployment in the eurozone may reach 10% by the end of June 2020 (up from 6.5% in February).
At the same time, some are warning that the pandemic may accelerate labour-replacing automation. The labour market may change permanently in the wake of lockdown. In the United States, for example, researchers estimate that 2 out of 5 jobs lost during the COVID-19 crisis may not come back.
Does this strengthen the case for a Universal Basic Income? Proponents of UBI point out that governments (and voters) seem more open to experimentation right now, given such previously-unthinkable amounts are anyway being spent on job retention and unemployment support schemes. Supporters would like to see UBI schemes trialled and introduced across Europe; regular cash transfers granted to all citizens, no matter their income, without conditions attached. Typically, supporters argue these transfers should replace the existing social security system, and should be enough for a person to survive (and “live with dignity”) but not enough to disincentivise economic activity.
Critics, however, argue that UBI would be both expensive and would be less targeted than existing social welfare systems. To pay for a UBI, most governments would have to get rid of the majority of other benefits, including those which are targeted towards the disabled, the sick and the elderly. Opponents of UBI schemes argue this would mean the resources of the state would not be targeted efficiently to support the people who need it most.
Is the case for a Universal Basic Income now stronger than ever? Should European governments trial UBI schemes at the local and regional level? Or are UBI schemes less effective than targeted transfers? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!