This week: Universal Basic Income (UBI) trials have taken place all over the world from Namibia to Alaska. We talk with researcher and advocate Scott Santens about the future of the basic income and the impact of the pandemic.
Sandra Peter (Sydney Business Insights) and Kai Riemer (Digital Futures Research Group) meet once a week to put their own spin on news that is impacting the future of business in The Future, This Week.
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Intro From The University of Sydney Business School, this is Sydney Business Insights, an initiative that explores the future of business. And you're listening to The Future, This Week, where Sandra Peter and Kai Riemer sit down every week to rethink trends in technology and business.
Sandra Universal Basic Income or UBI, it's one of these issues that just keeps coming up in the news, usually because there's a new trial on the way, there is a politician, someone from the tech world, some business person, who thinks it's a great idea and everyone should hear about it.
Kai UBI is an unconditional regular income for every citizen. It's a small amount of money, not too small. So everybody gets it, it's not means tested, it doesn't depend on your particular situation or profession.
Sandra And in recent years, UBI trials have been running in Finland, in Canada, in Kenya, in the US, in India, basically, all across the world, certain groups of people have been receiving regular payments for, in this case, a set period of time. And the results of all these tests have been analysed for everything from people's health to their happiness to shifts in employment to changes in crime rates, health outcomes, and all sorts of things.
Kai And UBI has lots of fans, lots of proponents. There are currently people like Elon Musk or Mark Zuckerberg, but there have also been Milton Friedman, Richard Nixon, even Martin Luther King was a proponent of UBI. And there's also detractors, people who argue if you give everyone a basic income, people just won't work, they will slack off, the economy will fall apart. And it's way too expensive. Our tax dollars are already stretched as they are.
Sandra So the conversation around UBI is really an ongoing conversation and something that we talk about periodically on The Future, This Week. But today, we've got some help.
Kai Our guest today is Scott Santens.
Scott Santens My name is Scott Santens. I've been a writer and basic income advocate since 2013.
Sandra And Scott has not only been working full-time and researching and advocating UBI for the last decade, he's a senior advisor for Humanity Forward, he edits the Basic Income Today news hub, and he's also advised presidential candidates in the US elections around how to think about UBI and how to put it on the policy agenda.
Kai Most famously in the past election, Democratic candidate Andrew Yang, who shot to fame by proposing a $1,000 a month UBI for every adult citizen in the US.
Sandra His new book is Let there be Money. Scott, welcome to Sydney and welcome to The Future, This Week.
Scott Santens Hello.
Sandra You've come to Australia to spread the word about UBI. Let's start with a definition of what universal basic income is, and also what UBI is not.
Scott Santens Yeah, basic income, otherwise referred to as universal basic income or unconditional basic income or UBI. All of these terms refer to an amount of money that is provided unconditionally, universally, regularly, and individually. It means that basic income doesn't only go to the poor, it goes to everyone regardless of their income status, regardless of their employment status. And it doesn't go to households, it goes to each individual in the household. And this is not just a lump sum amount of money. This is not some kind of one-off thing, this is a regularly provided be it weekly, monthly, quarterly, annually, amount of money.
Sandra That you would get from the government in a certain jurisdiction. There are even people who argue that, you know, maybe children should be getting it or people should get it earlier in life. So how do we think about income that is provided but that is lacking one of those parts of the definition? So it's not unconditional, but it's only for a certain period of time, or it's for certain individuals, members of society. How do they relate to the idea of universal basic income?
Scott Santens Yeah, it's funny people will hear well, basic income and think like, 'Oh, you mean like welfare for everybody?' And it's very different concept between welfare and basic income, because basic income does not have these means test or conditional requirements. And this is actually pretty important. Basic income does not pay you to do nothing, basic income pays you to do anything. So when people think of welfare, they think 'Oh okay, so you are not working, you are poor, and we provide you with assistance in till you can pay for your own survival through employment.' But when you do that, then you're actually basically pulling the rug out from people once they raise their incomes. And this is also raising their marginal tax rates, is a economic way of speaking of it. So with a welfare kind of set up, you would be provided $1,000 a month, as long as you don't raise your income or don't find employment. And then if you are offered a job that pays $1,000 a month, then essentially the choice is do you want to receive $1,000 a month for not working, or $1,000 a month for working? In which case, most people, unless that job is especially enjoyable, would say, 'Well, why would I accept that. I'm not going to be any better off'. But basic income, in that situation, you're getting $1,000 a month, you get a job offer for $1,000 a month, now you actually go up to $2,000 a month total. And so it's a much lower marginal tax rate, there's a much greater incentive, it doesn't have the disincentives to work that welfare system introduces by being conditional.
Sandra So the argument there would be then I would be free to choose what I work on, and how I engage in work, or whether I continue to study, or to do jobs that might not pay as well but that might be more meaningful for the life I want to lead.
Scott Santens Absolutely, yeah, you are more free to choose the type of work you want to do, both paid and unpaid. And I really think it's important to emphasise the unpaid part of it, because there is a lot of work being done out there that is not recognised as work, especially unpaid care at home, mostly done by women. This is work that's completely unrecognised. So you can see in our language, the way we even say, like, are you working or not, and that is defined by a job. But I like to differentiate those as being you know, unpaid work or paid work where employment is paid work. And there are costs of working too, where you have to be able to afford to be attached to the labour market, or you have to be able to afford to do volunteering in your community. Like, you can't volunteer in your community even if you wanted to, if you don't have your basic survival needs met, like you have to actually already have income in order to do that. So it's really important to actually make sure that people have the ability to choose the work that's best for them.
Kai So it recognises in a way that a lot of this work is important, that is valuable to society, but it is unpaid, and therefore also unrecognised in status, which comes with all the kinds of issues around you know, your identity, are you doing something that is valued? When work is commonly defined as just labour for money for income, which would not only alleviate the problem of poverty, of being in an insecure status, but also get rid of the stigma of not doing labour or work that is unpaid.
Sandra We'll get in a moment to what I'm sure some of our listeners are thinking, which is, 'okay, within that does not advise people not to work or to stay at home or to take advantage of the system?' Because those are things that are often brought up when people mention UBI. But before that, I just want to ask how you came to UBI because you have a history of being employed. Of, you know, not coming from a background that would necessarily, you know, spark an interest in UBI. So it seems like a strange career choice. You're now one of the big proponents of UBI. You've influenced political campaigns and thinking in government around this, how did you end up with UBI?
Scott Santens I'm actually kind of living the basic income story, because I actually was able to crowdfund my own basic income. I started the process in 2015. And it took about a year to collect enough patrons on Patreon in order to provide this ongoing basic income floor. And so I have a basic income. And it enables me to focus on basic income. And I've also learned more about basic income through actually having it. It was actually very interesting, the process of crowdfunding, that along the way, I noticed a difference even with a small amount. A rampant problem is that society doesn't know how insecurely it's living, because it doesn't really know what security feels like. When I started feeling the security, and that was even possible through just not worrying about, let's say the worst happening, and let's say not having enough income for food to eat. That's something that you only need a couple $100 per month, and that provides this greater feeling of security, of not worrying about your most basic survival needs when it comes to food. It wasn't until I had some amount of security that I realised how little security I had felt before that. And so one of the things I learned from this is just how much of a difference it would make to all of society to actually have this greater feeling of security, even when it comes to just being able to afford food. And to get back to how I actually got into this. It was back in 2013, and it was through the automation angle. It was a discussion that hit the front page of reddit about how quickly technology was advancing and how no one was talking about it. And at the time, nobody really was talking about it. This was before the infamous Fran Osborne Oxford report that claimed that within 20 years, about 47% of jobs could be automated. And that got me thinking about, well, what happens when we automate a bunch of labour, and it was recommended to read this book named Manna by Marshall Brain. And it painted this picture of this kind of fork in the road where things can get either very dystopian, or very utopian. The author believed that the way to get to the more utopian path was to actually provide a basic income. And that got me thinking about what is this idea? And what is its history? What are the arguments for this? I was fascinated to learn that there had been pilots done, both the US and Canada in the 70s. I was fascinated to learn that Nixon himself had proposed a guaranteed income for families. So it wasn't a universal basic income, but it would have actually gone to essentially every child, and it would have gone to many women. So this would actually have greatly reduced poverty, and would have been a big difference from the existing welfare scheme. You can actually see speeches where Nixon actually talks about basic income. And we were close, like we actually passed it at the House of Representatives in 70 and 71, for this Family Assistance Plan, and it never made it through the Senate. But we were close. As a result of this too, we actually did experiments of the negative income tax variant of basic income around the country in the US and cities like Seattle, and Denver, and others. This was all like, unknown to me, like I didn't learn this in school that we had experimented with actually, essentially, greatly reducing poverty by direct cash. Canada had also done this too, also in the 70s, where in the town of Dauphin in Manitoba. They essentially eliminated poverty for about five years in this city. And this was a saturation site. One of the biggest findings, and it was actually not discovered at the time, but years later, from Evelyn Forget. She looked into this and found that a hospitalisation rates decreased by 8.5% as a result of this, and she also found that high school graduation rates exceeded 100%. So actually, students who had dropped out actually came back to school to actually finish and graduate from high school. So this is like, clear impacts on both health and education from actually just eliminating poverty.
Sandra When was the study done?
Scott Santens This was in the late 70s.
Kai So there have been a lot of studies that we've been hearing about, Canada, Finland, many other places, some in Africa. Which ones are good ones, and what have we learned, and how does that advance the course? Does it help being stuck in perpetual pilot mode with UBI? Is it helpful?
Scott Santens Again, when I first got into this, I was fascinated to see that we already had this evidence out there, I was fascinated to not only look at what's happening in the US and Canada, but also in the early 2010s there was a full test of UBI in Namibia. This was a fully universal, village-wide, basic income for a 1000 people. Then there was also multiple villages fully universal in India, that also happened someone recently. Namibia, very large report after you know the result of this, and it's fascinating how, let's say some of the key factors, crime was reduced overall by 42%. And a very specific kind of crime was reduced by 95%, and that was illegal hunting. So this was, you know, hunting endangered animals. And I like to mention both of those, because first of all, people should be asking, 'how much do we spend on crime as a result of both poverty, and also chronic insecurity, high inequality, these things lead to crime, how much is society spending on crime, instead of preventing it through actual reduction of poverty insecurity?' In Namibia, that answer was, well, they were spending 42% on more crime as a result of not having a basic income, providing basic income, reduced crime by al lot. But there's also forms of crime that you can tell are purely out of desperation. And I think illegal hunting is a good example where human beings don't want to be killing endangered animals. It's something that for the most part they're doing to feed Give their families because they feel they don't really have a choice, they're willing to take the risk to do something illegal in order to feed their families. From that perspective, I think that people should consider what are these other kinds of acts of desperation that people do, purely because they don't have a basic income in both Namibia and India. And also, if you look at unconditional cash transfer programmes in general around the world, one of the most like universal kind of findings that I see is quite large bursts in entrepreneurship. People have a lot of good ideas, they want to invest in this idea, but they lack the capital to do this. So you see over and over again, that people when provided basic income, they will start their own businesses they will self-employ. So under a traditional program, you'd say, 'Oh, well, an entrepreneurs wants to start up a business, well, let's give them a loan'. If you start up a business, no matter how great your ideas, if you don't have customers then it's most likely to fail. So in UBI, experiments, you see that not only do entrepreneurs gain capital, and also reduces their risk of failure, to actually take that risk to see what will happen if this succeeds or not, they also gain customers. So an entire village will suddenly have money to actually spend at a new business. As an example of this, one of the most successful recipients of the basic income in Namibia was this woman who on her first payment, went out and bought like a bunch of flour, and yeast, and then she built like her own makeshift oven. And she started baking these little breads, using like old empty tins, like anchovy tins or something along those lines. That became like the most successful business in the village, not only because she was able to start it, but because everyone had this money. And they're like, 'What do I spend it on? Like, oh, look at the, this is some delicious bread'. Because of that, like her income from her business, by the end of the year, it was like two to three times the amount of the basic income she was receiving. So then not only was she received his basic income, but she was able to build this income on top of that basic income. And that was possible through the all the others that had received a basic income.
Kai So it seems to me that we've been doing lots of pilots, there's lots of evidence that shows that UBI has all these positive outcomes. And it also seems to me that there are two big arguments for basic income. One is what you could call the negative argument to say, you know, there's all these problems like insecurity, poverty, that basic income could alleviate, which should speak to one side of the political spectrum. But there seems to be also a very positive argument around creativity and entrepreneurship and all these enterprise that you would get from having a floor of basic income. Why is it then that we're stuck, and we don't seem to have real momentum politically, to actually get UBI over the line in more than just pilots. Is it vested interest, for example, of the current systems that we are running in our societies?
Scott Santens Yeah, so one of the ways I like to describe basic income is the power to say no, and the freedom to say yes. Once you have a basic income, then you are able to say to an abusive employer, 'No. I'm not going to work for you, I'm not going to work for that wage, I'm not going to work these hours, I'm not going to work under these conditions'. You have the power to actually essentially individually strike, you're able to withhold your labour until conditions are met. And who doesn't want that? Well, if you have an economy even built on desperate people willing to accept anything they can get, because anything is better than nothing, then you're going to alter the power structure. So I think one of the big problems is this knowledge, this understanding from those empowered by the status quo, that this would actually empower the people in a like a real direct way. An example of this is actually again, through history. To go back when I mentioned about why it didn't pass through the Senate. The chair of the Senate Finance Committee in the US, that was really one of the key figures of stopping it, because the way that it's set up is it doesn't get through the committee, it doesn't go on to the Senate to be voted on. The Chair of the Senate Finance Committee was Russell Long, who was a senator from Louisiana. And his response in one sentence as to why he didn't want it was, "who will iron my shirts?". So you can tell that this is a question of, if people have money unconditionally without any work requirements, then they will be able to refuse the work for low wages from people who want to do that. It's interesting we're even seeing that now. Like we are definitely seeing a situation where workers suddenly have more power in a way that they didn't before that is one of the outcomes of COVID, where power has been tilted. And of course, the result of this is that employers are going, 'I can't find anybody to work, people must be lazy. No one wants to work anymore'. And the asterisk is, 'for the pay I'm offering'.
Kai Or the conditions.
Scott Santens Or the conditions, yes. So people right now have the power to say, 'No, I'm going to actually look for a better wage, I'm going to look for a better job, I'm going to look for something that's better for me'. And so those employers who aren't raising the wages have these empty jobs. But the employers who are raising their wages, and are even offering new things like flex weeks, and more benefits, better hours to the employees, they're finding people.
Sandra So has COVID changed this conversation? Because this is one of the impacts of COVID on the UBI conversation, the one you just mentioned. But also at the beginning of the pandemic, everyone was saying, 'Well, if we only had universal basic income, we would be in a very different situation. Because, you know, there would be no need for the government to think about, well, how do we rescue people from the effects of locking down entire cities in Australia, we've been in and out of lockdown for almost a couple of years. How has COVID changed or impacted this conversation? Are you seeing any meaningful change? Are you seeing new pilots coming out of this? Or are you seeing any shift in how the conversation is had? And then maybe following on from that we're now in a period of rising inflation and increasing economic upheaval. You know, housing costs, energy costs going through the roof, how is that impacting the UBI conversation?
Scott Santens So COVID is just such an interesting example of how important basic income was to already exist. Like as soon as it hit, I already believed that we should have had this for decades, but I really wish that we'd already had it prior to COVID. Because it just would have absolutely been a game-changer to the way that countries responded to COVID, and how people were impacted.
Kai It would have made us so much more resilient.
Scott Santens Absolutely.
Kai It have allowed us to lock down much harder because we wouldn't have had that fear of people falling into poverty, or lacking basic needs.
Scott Santens Yeah, there were ginormous lines in the US for food banks. Like there were photos of just miles long lines.
Kai Which in itself become super-spreader events, right, those lines. people having to congregate in food banks, which doesn't really help the spread.
Scott Santens Right, yeah, yeah. I was even thinking of how there were like lines and lines of cars, which is also interesting from like an environmental perspective of how many people need to hop in their cars to drive to these huge lines where they waited hours.
Which wastes money for petrol as well.
Scott Santens Right. So you saw these people queued up for food banks, and yet stores had plenty of food. So why don't you just make sure that people have money to buy the food in the stores? But there was actually a great example in Chelsea in Massachusetts, where they learned that why are we doing it this way? Like, why are we having people queue up risking COVID? The amount of time we're wasting of people, why don't we just trust them with money. So they started actually providing people directly with $200 to $400 per month to buy food. This was a very successful COVID program. In the news connected to this is a massive fraud that took place in the US by an organisation that essentially took was around $250 million worth of federal money, and did not spend it on food for people who needed food. They just defrauded those people and took the money.
Sandra So this was imaginary food for imaginary people.
Scott Santens Right, yeah. And so that is this comparison of what happens when you have middlemen, handling money for other people. And then what happens when you trust people with money? Instead of wondering, 'oh, they're gonna use it on drugs instead of food, or like, 'oh, they're just going to be lazy or whatever. They're going to spend it on all these horrible things'. Like, no, they bought food.
Kai So that goes to the vested interests of the current system again. Not only the illegal tapping into the honeypot of welfare, but also the agencies and businesses who benefit from those programs, administering them or being beneficiaries of the payments. And then also the criminal economic system in running prisons, for example, both in Australia and in the US is big businesses, to some large extent privatised, so there are again, private vested interest in keeping current system going even though it is broken for millions of people.
Scott Santens Yeah. When people asked me about, say the negative impacts or negative potentials of basic income, I like to say that it's in the eye of the beholder, because there are definitely people who would not want to see let's say, lower crime rates. There are abusive spouses who would not want their spouse to be able to leave them and flee to safety because of their violent abuse. There are businesses who are part of the poverty industry that rely on people being desperate and poor, let's say, payday loans, high interest loans, that no one would accept unless they weren't desperate. So, do payday loan lenders want basic income? Absolutely not. In fact, that's another one of the findings from the pilots is that moneylenders tend to be the ones who dislike it. Because what happens is that people pay off their debts and build up their savings, and they don't need those anymore.
Kai I want to just push back, just for the sake of it, and get your answers on the two big criticisms that we often hear with UBI. Before we move on, and some of it you've answered already, in a roundabout way. But on the one hand, critics say we cannot afford this, this is too expensive, it will just bankrupt the state, the country. And arguably some of those programs during COVID, the stimulus, has been very expensive. And the other one is, it will just lead to people not working, slacking off, and therefore there's going to be a lot of productivity and creativity lost in the economy. What do you say to those two criticisms?
Scott Santens Yeah, concerns about work is definitely one of the top most concerns. Prior to COVID even happening, we already know from meta analyses of dozens of programs and studies that we just don't see significant decreases in work and in fact, can see increases in work. What happens is we tend to see decreases in paid work among say, new mothers and students. And again, like to emphasise that, if a student decides to go back to school, get their degree, is that not work? It seems like it is work, and it's also an investment in future work. And then if a new mum decides that she wants to care for her child at home, especially right after having a baby, is that not work? Obviously, that's work. And it's an investment in future work too, for all of society. That's the kind of thing that we see. And also we see people who are outside the labour market actually able to join the labour market, either because the basic income either pays to attach them to it, let's say you need to have gas money, you need to have a vehicle, you need to buy a suit, you need to get to places to get your job. Basic income enables people to do that. One of the things we learned from the Stockton pilot, as a result of this, we saw that comparing the recipients of basic income to the control group, full time employment doubled. This was actually people who were either in part-time employment or were unemployed, that the income enabled them to get full-time employment, able to work more. And that's what I see over and over again, again, even through that or entrepreneurship. So work increases.
Kai So we have the evidence for that, we can point to all those pilots.
Scott Santens Right.
Kai What about the cost argument?
Scott Santens Again, I like to get people to think about what are we spending right now on not having a basic income? What is the cost of not having a basic income? I encourage Australia to do this, I encourage every country to do this. This is actually something I rarely find. It's hard to find studies and estimates of economists trying to figure out what is the full costs of poverty? What are the full costs of chronic insecurity? What are the full costs of high inequality? You don't see this.
Kai Mental health, crime. All this.
Scott Santens Right, right. All of that. The best study that I found along these lines in the US was the study of full cost of child poverty. We're spending over a trillion dollars per year on child poverty. So when a program comes up, like the monthly enhanced Child Tax Credit, that again, was a response to COVID in the US, we did it for six months. And we cut poverty by 40%. The cost of this program was around $100 billion per year if we wanted to continue that. So the ROI is 10 to one on this. And yet, you will still see people saying, 'this is too expensive, like this costs $100 billion a year, where are we going to come up with that?' So they're spending a trillion dollars a year on child poverty, but at the same time, looking at $100 billion a year and being like, 'Oh, this is just too expensive'. So I think that's definitely part of this conversation, where they're looking at just the spending, and they're not looking at it as an investment. But that's exactly what basic income is. It is an investment in people, it's an investment in the future, it's an investment with very high ROI. So that's I think one of the biggest problems. The governments need to look at what the current expenditure is and look at it from that perspective. The other point in this too, and this is something that appeals to conservatives, is that you can actually reduce programs that currently exist if you were to do basic income instead. And so I like to look at basic income as being this foundation. And right now it's this missing foundation. So with the missing foundation, we have a lot of different programs trying to help people in some way. And those programs either don't need to exist or have to be much larger than they would need to be otherwise.
Sandra So this clearly seems to be a worthwhile investment. There are proponents and arguments on both sides of the political spectrum, or there have been over time, there's good evidence that UBI works, and if implemented, would accrue benefits not only to individuals but to society as a whole. Yet, we seem to be stuck in these pilots that Kai was mentioning at the beginning, we seem to be stuck in these pilots and in having these cycles of conversations where the same criticisms come up all the time, the same reasoning. We go we do another pilot, we end it after three years or five years. How do we move the conversation forward? What are you seeing as productive avenues to shift this? Maybe not to implementing UBI, but to at least having a better conversation or doing more? And are there any places in the world where you're seeing hopeful advances in this area?
Scott Santens I want to tell a story of Finland's basic income experiment, it feels kind of illustrative. In today's environment, there's a lot of misinformation about Finland. So there's people out there who are even listening to this and they say, 'oh, yeah, the Finland, they tested that. And it was a failure, they cancelled the experiment early, and they decided didn't work. And that's just how it went'. And this is even indicative of like our social media system that's just like rampant, of misinformation being spread. This was a full two year experiment. Some people believe that it was cancelled early, it was not, the full experiment happened. It took about two years for the results to come in. So after one year, there was a preliminary report. And then after another year, the full report was released right during the height of COVID, in 2020. And the results of this was that people actually slightly increased the amount of work per year that they did, and so employment increased. But people believe that there was no such thing, that there was no increase in employment, or that employment went down. Employment actually did increase. And I think one of the most interesting things from it, because I hadn't actually seen this looked at before was actually trust increased. So trust increased in government, trust increased in institutions, and politicians, and each other. So society wide trust increased. It's very kind of common sense, where if the government trusts people enough, it's saying that, 'instead of all these other things we would do instead of tests and hoops we could have you jump through, we trust you, we trust that you are not going to not work, we trust that you are not going to spend this on drugs and alcohol, we trust you to put this the best use for you in a way that we can determine'. And as a result of that, trust increases. And I think that, you know, we're seeing the results of a system, country by country where people are losing faith in government. And I think that's tied to the rising authoritarianism across the world of this, like loss of trust and loss of faith. So to get back to these problems with pilots and things. The question is, is it better? Or is it an opportunity for people to be misinformed? It's not the only case I've seen either.
Kai Let me ask because the evidence seems overwhelming. Is it a matter of how we get it done? Or who gets it done? For the US would it be possible for a single state to bring it in to set a precedent? Is it something that would have to happen federally? And then if so, and you've worked with Andrew Yang, is it a matter of the right candidate in a primary and then in a general election championing it? Is it a president who has to have that as part of their agenda? Or are there other avenues?
Sandra Or is it Finland?
Kai Is it Finland?
Scott Santens Yeah, so a couple things if we're talking about presidents too. A lot of people don't know this, but the first country in the world to pass basic income into law is Brazil, and they passed it in 2004. So a lot of people don't know that there's a basic income on the books in a country. And the issue why it's never been implemented is because the fine text of this is that it's up to the executive to implement. And so the Presidents of Brazil so far have decided not to implement basic income. But as soon as there is a president that does want to implement basic income, then there's no barriers. It's already on the books, they can just do it. So that's one example of a country that can immediately do this, thanks to a president. I was really excited in South Korea, we knew it was going to come down to two candidates. And one of them was running on basic income, a big fan of basic income, he actually was a governor of a province that had implemented this to a degree and ramped it up during COVID. And he was very popular partially too because of his preference for basic income. And so he wanted to do this, and he barely lost the election. So if he had won in South Korea, I think South Korea could have been potentially the first to actually implement it. So it is definitely important for...
Kai So we're a narrow miss away from a country implementing it?
Scott Santens Right, yes, yes. But the way I look at is like a race towards basic income, who will be the first? And that was one of the closest ones so far. To answer your question about states, yeah, anybody can implement this. When people ask me is there a place that has UBI in existence? There is no place that actually does it, except for the state of Alaska. So the state of Alaska in 1982, started issuing a full universal dividend, rich or poor, child or adult, to every resident of Alaska. This is a once-a-year dividend, on average has been about $1000 to $2,000 a year. If you're looking at a household of five $2,000 can be $10,000, that's quite a large chunk of change. So it's nothing to sneeze at. On a side note of what we've learned from that, inflation actually slowed after the dividend started going out, part-time employment went up 17%. And there was no impact on full time employment. Also, the positive impacts like better maternal nutrition, leading to healthier birth weights. This is something that Alaska has done, there are resource rich state thanks to their oil, which is what they are taking about 25% of the revenue putting into the Alaska Permanent Fund. And then the Permanent Fund pays a dividend to each person is calculated based on an average of the previous few years, it varies each year, but it's fully universal. So this is a UBI in practice. There's nothing stopping even a resource poor state from doing this, because the only way is not with oil. There are certainly other natural resources. There are other commonly owned resources, there are things that we create collectively, like let's say, the bandwidth spectrum, the electromagnetic...
Kai Land tax or other usage-based taxes.
Scott Santens Land tax, that's a good one, yeah, yeah. There are lots of different methods to do this at a more local level. And hopefully, some other state in the West will do this, it really depends on the first country actually doing it. I look at it as kind of like dominoes falling, where we're getting closer and closer to the first country doing it. I think when the first country does it, you're going to see positive economic growth impacts, you're going to see reduced expenditures on existing issues like crime and health and all these things, things will work better, people will be happier. And then I think so other countries are going to say, 'well, I don't want to be out competed in the global economy from this country that has provided a basic income, we should probably do that, too'. And then you're going to have other countries doing it. And I think it's going to be like the healthcare system, where a lot of countries are going to do it. And there's going to be countries like the US who refuse to do it still, even though everyone knows that we should.
Kai Maybe we are going to look at today's world and say, how could we ever do without this?
Scott Santens Yeah, I think of this from a like a Maslow's Hierarchy of Needs perspective, where, right now we have a system where people are trying to climb to the top of the pyramid. And the first things they need are their basic survival needs. And so many people are just barely able to cover that. And so you have entire societies of people, with most people at the bottom of the base of the pyramid. So what happens if you actually lift people up towards the top of the pyramid and start them there? If they already have their basic needs met? What's going to happen? Well, they're going to be much more able to self-actualise. They're going to be much more able to connect with their communities and build relationships and engage in the work that is actually more meaningful and avoid doing the work that's harmful ecologically, that's harmful socially, that's harmful in so many other ways. What does that society look like? I like to ask people too, 'what would you do with a basic income? What would you do? Or even what are you doing right now because you don't have a basic income? Like, how does this personally affect you?' And I think that's kind of the best way of looking at what is the definition of basic income because it's always a personal thing. And whatever someone wants to do, and however that would impact and transform their lives, that for that person is a basic income.
Sandra That's a beautiful place to wrap this up. Thank you so much for spending time with us today and hopefully have you back next time to talk about more successes.
Kai Thank you, Scott.
Scott Santens Thank you. It was nice talking with you.
Sandra That's all we have time for today.
Kai Thanks for listening.
Outro You've been listening to The Future, This Week from The University of Sydney Business School. Sandra Peter is the Director of Sydney Business Insights and Kai Riemer is Professor of Information Technology and Organisation. Connect with us on LinkedIn, Twitter, and WeChat. And follow, like, or leave us a rating wherever you get your podcasts. If you have any weird or wonderful topics for us to discuss, send them to firstname.lastname@example.org.