UN calls for basic income to boost 2.7 billion people living in poverty

A temporary basic income is a “feasible and urgently needed” answer to protect the world’s poorest people from Covid-19, says a new UN report, by allowing three billion people to stay at home instead of risking transmission in the work place.

A UN Development Programme study estimates that it would cost $199 billion (£156bn) per month to provide a time-bound guaranteed basic income to 2.7 billion people living below or just above the poverty line in 132 developing countries.

Bailouts and recovery plans cannot only focus on big markets and big business

Warning that Covid-19 cases are spreading at a rate of more than 1.5 million new cases per week, particularly in developing countries, where seven out of ten workers cannot work from home, meaning that they are forced to risk catching the virus working in informal markets.

Based on assessments in 60 countries, UNDP found that a basic income would be the only way to support the huge numbers of people not covered by social insurance programmes. That includes informal workers, women and young people, people on low wages, refugees and disabled people who have been hardest by the crisis.

The research found that a temporary basic income would be achievable – if it ran for six months, for example, it would require 12 per cent of the expected total financial response to Covid-19 or equivalent to one-third of external debt payments owed by developing countries this year.

But offering the world’s poorest people a vital lifeline would mean that they are able to buy food and pay for health and education, says UNDP administrator Achim Steiner.

“Unprecedented times call for unprecedented social and economic measures. Introducing a Temporary Basic Income for the world’s poorest people has emerged as one option. This might have seemed impossible just a few months ago,” he said.

“Bailouts and recovery plans cannot only focus on big markets and big business. A Temporary Basic Income might enable governments to give people in lockdown a financial lifeline, inject cash back into local economies to help keep small businesses afloat, and slow the devastating spread of COVID-19.”

However, the report does warn that a temporary basic income is not a “silver bullet solution” and that jobs must be protected with beefed up support for micro, small and medium enterprises as well as a focus on digital solutions.

With up to 100 million more people being pushed into extreme poverty in 2020, 1.4 billion children affected by school closures, and record-level unemployment and loss of livelihoods, UNDP predicts that global human development is on course to decline this year for the first time since the concept was introduced.

However, a basic income is still one of the solutions to Covid-19 hardship that is being considered around the globe.

It was dismissed by the UK Government back in March with Chancellor Rishi Sunak opting for increased welfare payments citing the speed of implementation. “We’re not in favour of a universal basic income, although we have strengthened the safety net for the most vulnerable in our society with over £7bn invested in improving our welfare system,” said Sunak, speaking in parliament at the beginning of the Covid-19 crisis.

That view wasn’t shared in Spain where the Spanish Government introduced a new minimum income in May worth £416.92 a month to help 850,000 households and 2.5 million people through the crisis at a cost of £2.7 bn (€3bn) a year.

Announcing the scheme, Deputy Prime Minister Pablo Iglesias said: “Today is a historic day for our democracy. Today this government is showing that its political choice is social justice and that it takes the Constitution seriously.”

While a basic income has been investigated in Scotland for some time, it has not played a role in Nicola Sturgeon’s Covid-19 response just yet. But it could be on the cards in Norwich where the local council this week agreed a motion put forward by Labour’s Karen Davis to test out a new Universal Basic Income (UBI) system and to increase child benefit by £15 per week.