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Universal Basic Income and Guaranteed Minimum Income: A Comprehensive Guide

Universal Basic Income and Guaranteed Minimum Income: A Comprehensive Guide
UBI is enough to cover basic social needs and living costs because its amount is set above the poverty threshold. However, GMIs don't always move their recipients above the poverty threshold, so they can't cover basic social needs. (Photo: dreamstime.com)

When people talk about “basic income,” they usually mean one of two different plans that are often seen as incompatible. These are universal basic income and guaranteed minimum income.

Universal Basic Income and Guaranteed Minimum Income

Universal basic income and guaranteed minimum income are both referred to as basic income. A Universal Basic Income (UBI), which is a flat amount paid to everyone, is different from a Guaranteed Minimum Income (GMI), which is based on income and goes to those who need it the most and decreases as their income from work goes up.

A GMI is often called different things, such as Guaranteed Livable Income (GLI), Guaranteed Livable Basic Income (GLBI), Guaranteed Basic Income (GBI), Guaranteed Annual Income (GAI), Basic Income Guarantee (BIG), and Negative Income Tax (NIT).

The Recovery UBI proposal from UBI Works, which has been signed by almost 30,000 Canadians from all federal ridings, does both of these things in a way that helps achieve different goals.

This article helps understand how universal basic income and guaranteed minimum income are different and how they can also be used together.

Recovery UBI has two parts, universal basic income and guaranteed minimum income, that work together and solve different problems:

1. The universal dividend (UBI) recognizes that most people don’t have jobs that work for them.

Universal Basic Income and Guaranteed Minimum Income: A Comprehensive Guide

It is impossible to argue against the goal of a universal basic income (UBI), which is to make sure that everyone has a minimum basic income. (Photo: iStock Photo)

Costs of living are going up faster than wages because technology is cheaper than people. UBI gives each of us a piece of our economy.

This gives all Canadians a raise and creates a foundation for shared prosperity during a time when jobs are being automated quickly and in ways that aren’t always good for society. Western countries aren’t likely to be able to keep a middle class without UBI.

2. The guaranteed minimum income (GMI) keeps us out of poverty and buys us time.

Universal Basic Income and Guaranteed Minimum Income: A Comprehensive Guide

Universal basic income (UBI) is a plan for social welfare in which all people in a certain area get a guaranteed income every month in the form of a transfer payment. (Photo: Stock Photo)

GMI helps people get out of poverty and back into the middle class. It protects against the quality of jobs getting worse by making sure that everyone in Canada, including seniors and people with disabilities, makes more than $24,000 a year.

It could replace programs that help people with low incomes with one that is more effective, costs less, and treats people respectfully.

In universal basic income and guaranteed minimum income, both of these programs are sometimes called “basic income,” but they are usually thought to be run separately from one another.

In universal basic income and guaranteed minimum income, neither alone is enough to fix the structural changes that have made our economy stop working for most people or the forces that will keep making these trends worse.

Together, universal basic income and guaranteed minimum income will make sure that all Canadian adults, including seniors and people with disabilities, have an income of at least $24,000 per year ($36,000 per couple).

Programs like a guaranteed minimum income would move people just above poverty, which would be an outstanding social achievement on its own.

However, this universal basic income and guaranteed minimum income solution doesn’t go far enough to solve the problems in our economy in the 21st century, where wage growth isn’t tied to productivity or economic growth.

 

Check out also: Inflation at 40-Year High: Minimum Wages to Increase in 12 States Amid Pandemic and Economic Recovery

In a time of “winner-take-all” economics, UBI gives everyone a chance to be successful.

A universal basic income (UBI) is a regular payment that everyone gets the same amount of. Different versions of it are already in place in places like Alaska, where each resident gets a share of the state’s oil money. And in the 21st century, technology is like oil.

Basic income is not the same as a social aid. It’s not a handout or a need-based form of charity. It’s how Canadians all over the country can get back their share of the economy. Everyone has a right to some of the money our country makes.

It is a public service, like roads and electricity, that moves money around to make sure the economy keeps doing what it’s supposed to do: make people happier and more prosperous.

UBI is how society is set up to take advantage of the value that technology is creating. It ties together economic growth, more productive technology, and better quality of life. UBI protects and grows the middle class, which is a sign of a healthy democracy.

Canadians have known for a long time that the best long-term policies are ones that everyone pays into and has the same right to, like universal healthcare.

A minimum income that you can get when you need it

A guaranteed minimum income (GMI), also called a basic income guarantee (BIG), is a supplement to income that gradually goes away as employment income goes up. This way, Canadians always make more when they work, which puts an end to working poverty.

A good income guarantee should be set at a level that would end poverty almost wholly. Recovery UBI adds a guaranteed minimum income to the $500/month dividend, government cash supports, and other non-employment income so that every Canadian makes at least $24,000/year ($36,000/couple).

In addition to the $500/month universal dividend, the guaranteed minimum income gives people with low-paying jobs big raises.

This guaranteed income gives Canadians a bonus when they go back to work by reducing by 50 cents for every dollar they earn from work.

 

‍Check out also: California’s Guaranteed Income Programs: Selected Individuals Will Receive Monthly Payouts of $600-$1,200

 

Universal Basic Income and Guaranteed Minimum Income: A Comprehensive Guide

Putting together a UBI and GMI is the best of both worlds. (Photo: iStock Photo)

Putting together a universal basic income and guaranteed minimum income is the best of both worlds.

Together, an equal universal dividend and a needs-based payment can give our economy the update it needs for the 21st century. This can be paid for through realistic tax reforms. (See our article How to Pay for a Universal Basic Income for more on this.)

We can get rid of poverty and grow the middle class at the same time by giving everyone a dividend from the economy with the help of universal basic income and guaranteed minimum income.

The Comeback of UBI Works The UBI proposal combines these ideas to make a foundation for a faster and more fair economic recovery after a pandemic. This would make Canadians much better off.

Two programs, universal basic income and guaranteed minimum income, have worked together in the past. In Canada, seniors can get the Guaranteed Income Supplement (GIS), which is a basic income guarantee based on needs that gives single seniors up to $11,229 a year and couples even more.

Seniors don’t use just one of these programs; instead, they use a combination of universal basic income and guaranteed minimum income. This method has been proven to work for seniors, and if Recovery UBI were put into place, it could work for all Canadians.

Right now, it’s best for Canada to start with both programs, universal basic income and guaranteed minimum income. With enough political pressure, a $500/month dividend and a $2,000/month guaranteed minimum income would help millions of Canadians get through a long recovery with few jobs. These changes could be made today.

But if the amount of a universal dividend was raised to between $1,500 and $2,000 per month, it would have the same effect as a guaranteed minimum income.

It would make government services even easier to use and make people more likely to work since the dividend is kept in full no matter how much money they make with both programs, universal basic income and guaranteed minimum income. Given the gross cost ($720B/year), this kind of change would be very hard to make during recovery from a pandemic.

More Article:

Citizens of Sacramento, Qualified for a $500 Basic Income Program: Here’s how

$500 a Month Amount People will Receive for 2 Years through Alexandria’s Guaranteed Income Program

Universal Basic Income in Michigan: Will It Fix an American’s Poverty Issue?

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