ECONOMY: Universal Basic Income in Latin America: Utopia or Reality?

The concept of a universal basic income (UBI) has recently entered public discourse across the world, including via telling pilot schemes in Latin America. Photo (c) Flurt 2017The concept of a universal basic income (UBI) has recently entered public discourse across the world, including via telling pilot schemes in Latin America. Photo (c) Flurt 2017

Although the concept of a universal basic income (UBI) is not new, it has recently entered into the public discourse of several nations and regions across the world, including Latin America.

UBI consists on a fixed money allocation granted to a person by the government without any sort of set requirements.

This is a stark contrast to the more typical welfare system of conditional cash transfers, where users need to comply with a series of stipulations in order to receive the financial resources.

Pilot Schemes Reveal

Automation could lead to the potential loss of millions of jobs. Photo (c) New Atlas 2017

Automation could lead to the potential loss of millions of jobs. Photo (c) New Atlas 2017

Some economists argue that, in a world where technological breakthroughs are leading to the replacement of millions of jobs, people should be provided with an income that will guarantee enough financial security as to either acquire the skills needed to re-enter the labor force or pursue different endeavors. The three main arguments used in favor of UBI are that it reduces poverty and inequality, that it leads to a positive job growth and lower school dropout rates, and that it guarantees an income for non-working parents and caregivers. On the other hand, voices against the aforementioned public policy argue that UBI actually deprives the poor of needed targeted support, that it removes the incentive to work and that it is too expensive to realistically implement.

Some of the countries that have implemented different sorts of UBI pilot schemes are Brazil, Namibia, Switzerland, Canada, the Netherlands, India, Finland, the United States, Kenya, France, Uganda, China and Mongolia. The Brazilian case is unique, due to the fact that it passed a law in 2004 that states the president’s responsibility on gradually implementing the scheme across the nation. In fact, Brazil is the Latin American country that has made further progress on the issue, mainly due to two important projects, Quatinga Velho in 2008 and Maricá, in 2015.

Quatinga Velho is a Brazilian village that received a basic income from 2008 to 2014. The project was implemented and financed by the NGO ReCivitas and provided volunteers a basic income of 30 Brazilian Reais (approximately 9 USD) per month, paid in cash. The case of Maricá consists of 20 Reais per month. It initially only targeted the 35,000 poorest inhabitants of the region but it has now extended to all 150,000 residents.

How Prepared?

We should learn the lessons brought by the universal basic income debate. Photo (c) Diem25 2017

We should learn the lessons brought by the universal basic income debate. Photo (c) Diem25 2017

A recent example on how much public discourse has been influenced by UBI can be seen in the recent statements of Mexican Presidential candidate, Ricardo Anaya, who openly spoke about implementing the policy should he arrive to power.

Whether this is an empty campaign promise or not is beside the point. The reality is that universal basic income has brought a debate on how societies in all sorts of countries are prepared to tackle the dissimilar distribution of wealth.

Perhaps this debate is the final wake-up call Latin America needs to stop its condition as the most unequal region in the world.