UBI solves inequality – devalues labor while providing economic security.

Advocates for UBI argue that modern work no longer provides economic security that it once did. UK wage growth (before tax and benefits) for the bottom quartile has averaged at less than half a percent for the past two decades (see below). Whereas higher income households have seen an average increase of 1 – 2 per cent. Changes to the minimum income laws have helped push wages up at the very bottom of the income distribution, but broadly speaking, low skilled workers in low paid work have had to rely on welfare to support their stagnating incomes. There is also a growing consensus among advocates of UBI that technology advancement will continue to make manual labour redundant as it automates routinous roles across the economy. Carl Frey and Michael Osborne from the University of Oxford used an algorithm to predict the computability of different jobs within an economy15. They found nearly half of all American jobs could be automated eventually. These jobs included telemarketers, insurance underwriters, tax accountants, and certain machine operators. Social Policy commentator Richard Reeves said in a Brookings Institute article that “The labour market continues to work pretty well as an economic institution, matching labour to capital, for production. But it is no longer working so well as a social institution for distribution. Structural changes in the economy, in particular skills-biased technological change, mean that the wages of less-productive workers are dropping. At the same time, the share of national income going to labour rather than capital is dropping” 16. UBI would therefore plug the gap between increased hours of work and wages, allowing for employees to work an honest day’s work for a decent days pay. The Royal Society of Arts believe UBI could increase an individual’s economic security, “Its purpose is to enable people to better adapt to changes in their lives… through the creation of a more solid foothold on which to make changes, provide mutual support and care, and try out creative ideas… Basic Income provides people with a basis for economic security from which to find good work, not no work”17 . Productivity Growth Providing citizens with a UBI would allow each individual to invest more in their own economic capacity. This is most clearly understood in terms of accessing graduate and nongraduate education opportunities that increase the opportunity for work and wage progression. The Royal Society of Arts state in their 2018 report on UBI, “A low skilled worker might reduce their working hours to attain skills enabling career progression… [or] provide the impetus to turn an entrepreneurial idea into a reality” 18 . Assuming the future will be one with a much greater reliance on technology and therefore much greater need for technical skills that complement technology, UBI would allow all people to improve their skill capacity and raise their productivity. Inequality and social division UBI could help reduce economic inequality. Assuming UBI is distributed pre-tax and higher incomes are taxed on their UBI, the gap between poor and rich households would theoretically shrink. Scott Santens predicts that by introducing a $12,000 UBI to all US adults and taxing higher incomes at a 40 per cent flat rate, the Gini coefficient would fall by 0.1419 . This model assumes a significant burden of tax on both wealthy and middle-income households, which seems politically unfeasible in the current UK political climate, and no change in the labour capital share that has disproportionately benefited the wealthy.