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8th Practice - Welfare State

The document discusses rethinking the welfare state and universal basic income (UBI) as a potential solution to job loss due to automation. While UBI could help eliminate poverty by providing a basic level of income security, there are also concerns about how it would be funded and whether it could disincentivize work. Funding UBI on a large scale would be very costly for governments and there are questions around whether revenue sources like taxes could permanently cover the costs and if UBI could alter migration patterns between countries. Businesses may also face new competitive pressures if UBI allows people to turn down poorly paid jobs.

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27 views

8th Practice - Welfare State

The document discusses rethinking the welfare state and universal basic income (UBI) as a potential solution to job loss due to automation. While UBI could help eliminate poverty by providing a basic level of income security, there are also concerns about how it would be funded and whether it could disincentivize work. Funding UBI on a large scale would be very costly for governments and there are questions around whether revenue sources like taxes could permanently cover the costs and if UBI could alter migration patterns between countries. Businesses may also face new competitive pressures if UBI allows people to turn down poorly paid jobs.

Uploaded by

Anonymous rDQjiZm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Rethinking the welfare state - Basically flawed

For many years, the consolidated though based on positive impact of economic growth
have been repeated. Nevertheless, after many years saying the same thing , growth
creates work; work creates wealth and wealth reduces the gap between poor and rich, it
is time to face up to the fact that economic growth have failed to generate that. The way
the current economic system is designed, which is based on constant increasing
productivity, which is what economic growth really is, requires manufacturers to reduce
input costs.
Nowadays, predictions show that, almost half of all jobs are threat of robotisation in the
next 20 years. Having that automation a huge impact within a society which is really
worried about a possible end of human employment.
However, is universal basic income the answer to automation? As it is well-known, the
UBI is a fixed amount, at a level sufficient for subsistence, given by the state to all its
citizens regardless of income or work status. Average proposals hover around $10.000
annually, although that amount varies from country to country.
That proposed solution will have astonishing costs for governments, although, they could
be considerably reduced if countries make exclusion for children, retirees receiving
Social Security and households earning more than $100.000.
But is not enough to think about the UBI as a conceptual term. We have to ask ourselves
how governments plan to cover that basic incomes. In fact, funding would come from
diverse sources: VAT, negative interest rates, income taxes, business taxes, earning
from investments…
The most substantial benefit for UBI would be the elimination of households living below
poverty line as a base level of income security would be provided. As a consequence,
some people believe that it would suppose an explosion in creativity, entrepreneurship
and research. By contrast, other people think an unconditional benefit would
disincentives productivity and ‘legal’ work. Moreover, others fear that governments will
not be able to secure the funds to afford UBI in perpetuity and control the possible
modification of the flow of people across countries. Finally, from business perspective,
maybe they face some kind of competition derived from UBI. For those jobs which are
not properly paid or have not business income, people will not apply for them anymore.
Furthermore, the application of business taxes would damage business sector.

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