The hot topic in business right now is the idea of universal basic income. This is thanks to Facebook founder and CEO, Mark Zuckerberg, who promoted the idea of a basic income on his personal Facebook page. It is also a popular idea due to the rise in business automation. However, the idea gets some backlash from conservative business owners. So is universal basic income a good thing for business? Take a look at some information regarding the financial impact enacting a universal basic income could have on business below.
What Is Universal Basic Income?
Universal Basic Income, or UBI, is a government program that grants citizens of a country a certain amount of money, regularly and unconditionally. Universal Basic Income is also sometimes referred to as basic income guarantee, universal demogrant or Citizen’s Income. All of these programs are a form of social security that provide a basic income to all citizens, regardless of employment status or other factors. There are two kinds of UBI, full basic income and partial basic income. Full basic income provides an amount that is sufficient to meet basic human needs. Partial basic income offers an amount that is not quite enough to meet basic needs. This is what Zuckerberg, and other CEOs, like Elon Musk, are talking about when they refer to UBI.
How Much Would UBI Be?
Of course, this leads one to wonder what UBI would be in the United States. How much money, hypothetically, would be given out as an individuals UBI? Most proposals set the UBI at roughly $12,000 a year, or $1,000/month. This is, of course, not enough for most Americans to live off of, even the most financially savvy individual. However, it could have a much bigger impact on business in America.
UBI Stimulates The Economy
How does UBI impact business? Universal Basic Income programs are widely encouraged by tech CEOs because research shows they greatly stimulate the economy. When consumers have more money, they spend more money. It is as simple as that. This makes it much easier for businesses to increase sales volume. It also creates a thriving business environment for new startups and increased competition. This, in the end, provides more value to consumers and keeps them buying more and more. Clearly, UBI can have a very positive impact on businesses like yours.
Provides Business A Financial Cushion
UBI could also help provide additional wiggle room for startups with limited capital. If employees are earning a basic income outside of their employer, this provides an opportunity for the employer.
Businesses could take advantage of this at times when they most need to bootstrap business. They could request employees to take salary cuts in the amount of their monthly UBI. They could also choose
to not offer employer sponsored retirement plans. This helps to provide a nice financial cushion for businesses when experiencing difficult times due to losing business.
Enacting a Universal Basic Income program will also help to improve innovation within the country. When citizens have access to a monthly stipend, they do not have to worry about their basic human
needs like food and shelter. That allows them the ability to focus their energies on starting new businesses and inventing new products. Innovation is never a bad thing for the overall economic performance
of a country. This is also helpful to business. Increased competition will lead to a better buying environment for consumers and a better business environment for entrepreneurs.
If you are a business owner, the idea of a Universal Basic Income may not seem like the most financially sound idea for a country to implement. However, UBI programs can actually have a ton of benefits for business owners as well as private citizens and consumers. Use this post to familiarize yourself with the idea of Universal Basic Income. Then, use your newfound knowledge to help lobby for UBI in your country. Your business is almost sure to benefit.
Photo from http://www.wnyc.org/story/guaranteed-basic-income-all/