Subscribe
E-Paper
 |
In the current welfare system, unemployment benefits are paid to unemployed and underemployed people. If an unemployed person gets a casual job and earns a small wage, it will be deducted from their welfare payments. So the underemployed remain dependent on welfare and unmotivated to find employment. This is referred to as the welfare trap.
On the other hand, a basic income is delivered whether you have paid work or not, which theoretically motivates people to work more.
Finland, whose welfare system is known as one of the best in the world, carried out a basic income experiment to examine if an unconditional basic income can solve the problem of the welfare trap.
Also, there are other questions about a basic income, including, whether it would initiate a rise in the price of goods. Nonetheless, if the funds for a basic income are mainly taxes, we don't have to worry about this too much, according to Lee Won-jae's book, "This is Basic Income."
The root cause of inflation is a rise in the amount of money in circulation. But if the government uses tax revenue, to deliver a basic income, the total amount of currency does not increase. Lee explains that even if the price of some products rises in the short term, it will be within a manageable range, because it is not like the total demand for goods and the amount of currency are soaring.
In addition, there are concerns over funds for a basic income. Some people say that the basic income system will cost the country too much money. Can the nation afford it? However, in the early stage of the introduction of this system, the amount of a basic income will be small. In this phase, the government will be able to secure the funds for a basic income by reorganizing its existing budget.
As the amount of a basic income increases gradually, the government can secure the funds through income tax, land tax, environmental tax and so on, according to economists. For example, environmental taxes can include a tax on companies that emit greenhouse gases and worsen the climate crisis and that pollute the ecosystem where all of us live together.
The World Inequality Report 2022 showed that 10 percent of the Korean population possessed nearly 60 percent of the nation's entire wealth in 2021 which shows the high level of income inequality. Introducing a basic income will help reduce such inequality.
Great income inequality causes social unrest, so the introduction of a basic income can be beneficial to those with high incomes too.
Kim Sun-ae (blog.naver.com/dancinglf) wrote "Old Potato, New Potato" and translated "Little Lord Fauntleroy."
