Welcome To The World Of Free Money … Every Month … For All

Look around you. Do you think your job is secured until your retirement? Do you know of anyone who was retrenched and still couldn’t find a job? Do you think jobs are getting scarcer? If you believe jobs haven’t been growing as fast as new graduates joining the job market, you’re not alone. There’re merger, restructuring, cost-cutting and the list goes on.

If that isn’t bad enough, job seekers are competing with robots, and soon AI (artificial intelligence). You might laugh at this but the Western countries are readying themselves for the eventuality where jobs aren’t enough to go around. And what could be the solution? The radical solution is to hand out free money, to everyone – rich and poor – who work and who don’t.

Change Jobs Every Two Years - Retrenchement

The year 2017 will see if the European Union would disintegrate and collapse as speculated. After Brexit and Donald Trump winning his presidency, there’re at least two vital events in the EU – the France and Germany’s election. Incoming President Trump thinks the EU would collapse eventually after this year’s election for both countries.

Unpopular and unwanted, France’s President Francois Hollande, whose approval rating hit a shameful 4%, had announced that he would not seek re-election this year. Two of seven candidates vying to represent the ruling Socialist Party in this year’s presidential election are promising free flow of money to all French adults.

A Jobless Society Based On Universal Basic Income

Some call it “basic income” while others call it “universal income”. Regardless what you call it, France is toying with the idea of giving away a guaranteed monthly living allowance – no strings attached. The proposal plans to give away 600 Euros (US$640; £520; RM2,863) per month for the nation’s poor and 18-25-year-olds before scaling up payments to 750 Euros (US$800; £650; RM3,579) for all adults.

France would need to cough out a total estimated annual cost of 400 billion Euros (US$428 billion; £346 billion; RM1.9 trillion) when all adults receive 750 Euros each. On the other hand, it is estimated that paying everyone 500 to 1,000 Euros (US$530-US$1,100) per month would cost 300 billion to 700 billion Euros (US$745 billion-US$320 billion) annually.

Euro Notes - Giving Free Money - Basic Income

However, France is not the first EU country that wanted its citizens to take monthly basic income without lifting a finger. Finland is already in the middle of such experiment. The country’s social security institution – known as KELA – is tasked with handing free money to 2,000 jobless citizens on a monthly basis for the next two years.

Called the “Basic Income”, the Finnish initiative is to keep people out of poverty. Even if a person has a well-paying job, they still get “Basic Income”, just like everyone else. Kicked off early of Jan, 2017, the trials saw human guinea pigs who were selected randomly are given a monthly payment of around US$587 (£479; RM2,614).

Basic Income Make Poverty History - Flyer on Wall

Everyone would eventually receive the windfall – regardless of income, wealth, sex or employment status – which is enough to prevent those individuals from becoming homeless, but not enough to go clubbing on the weekends or live luxuriously, let alone owning a Ferrari. It acts like a safety net to provide the very basic necessities.

Besides keeping poor people out of poverty, the idea is to offer workers greater security, especially as technological advances reduce the need for human labour. It will also allow unemployed people to pick up odd jobs without losing their benefits. The monthly free money they received through the program will not be taxed hence they get every penny promised.

capitalism-and-globalism-poor-americans

Switzerland had proposed a similar program last year. Due to the high cost of living, the Swiss had suggested a monthly income of 2,500 Swiss francs (£2,035; US$2,500; RM11,150) for adults, on top of 625 Swiss francs (£508; US$624; RM2,790) for each child. The idea was so popular that it attracted more than 100,000 signatures.

Surprisingly, when the plan was put to vote, Swiss voters had overwhelmingly rejected the free money program – 77% opposed the proposal. The Swiss government opposed the initiative too, saying it would have needed to find 25 billion Swiss francs a year to pay for it. The Federal Council and Parliament also feared that “fewer people would choose to work.”

77 Percent Swiss Rejected Free Money Monthly Income Program

To prepare for “a world where technology replaces existing jobs and basic income becomes necessary,” Silicon Valley start-up financier Y Combinator says it plans a pilot study soon in Oakland, California, paying recipients an unconditional income because “we want to see how people experience that freedom.”

But why would France, or Switzerland or Finland for that matter, is so anxious about giving free money every month to their citizens? The short answer – robots. The long answer – France could lose 3 million jobs by 2025 due to automated systems and machines. As work becomes scarcer, a guaranteed income would stop people from fearing the future.

Jobs Taken Over by Robots

Another reason for introducing no-strings-attached free money for all – jobless or otherwise – is to encourage people to take risks, start businesses and try new activities without the risk of losing welfare benefits. Indirectly, the France politicians are telling all and sundry that the previous economic boom times, where everyone was being employed, is not coming back.

So, how does France plan to get the funding to implement such a radical scheme? Well, by taxing goods and services produced by automated systems and machines, of course. Opponents, however, argue that doing so would simply force companies to move robots elsewhere, out of reach of French tax collectors.

Universal Basic Income - Free Money

The French will also have to let go of the present housing, family, poverty and unemployment benefits, in order to free up more than 100 billion Euros (US$106 billion) to fund the proposed basic income scheme. Still, that would not be enough to cover everyone’s monthly living allowance. New taxes would need to be introduced, obviously.

Even if funding is not a problem, there’s one problem. Giving money without any commitment would promote laziness and devalue the concept of work. But just because it might not work in EU doesn’t mean it wouldn’t work elsewhere. Although the amount is small, Alaska (U.S.) has been giving out annual cash payments to all residents since the 1980s, a dividend from the state’s oil revenue.

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from FinanceTwitter http://www.financetwitter.com/2017/01/welcome-to-the-world-of-free-money-every-month-for-all.html

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