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The Challenges and Controversies of Implementing a Guaranteed Minimum Income

ECOLOGYThe Challenges and Controversies of Implementing a Guaranteed Minimum Income

The concept of a Guaranteed Minimum Income (GMI) is currently largely theoretical and has not been implemented or adopted anywhere in the world. Even a wealthy country like Switzerland rejected this idea in a referendum. It is a highly controversial solution because, on the one hand, it assumes that every person, regardless of financial status, receives the same amount of money regularly every month. This mechanism is extremely costly. Therefore, even a country like Switzerland could not decide on it— all calculations show that it leads to massive debt or necessitates the creation of substantial streams to the state budget, often associated with new taxes.

A few years ago, the Polish Economic Institute conducted a survey among Poles about their views on this concept. The opinions were quite divided. On one hand, the awareness of such a solution was quite high. On the other hand, most Poles, when asked if they would quit their jobs if they received such a benefit, categorically said no. However, in subsequent waves of research, these declarations changed, making it difficult to assess the real attitudes of citizens.

“This mechanism can be seen as a kind of utopia. Even if all social benefits that we have today in Poland were eliminated, implementing this solution would be more expensive than the current social welfare expenditures,” said Andrzej Kubisiak, Deputy Director of the Polish Economic Institute, to “And let’s remember that, to some extent, we would be taking away benefits from people, such as the disabled, who receive pensions or necessary and essential assistance. On the other hand, experiments conducted on small groups worldwide have confirmed that Universal Basic Income (UBI) can lead to the social inclusion of people threatened by poverty, long-term unemployment, or detachment from professional activity. Experiments have shown that a guaranteed minimum income provides these individuals with the necessary starting conditions to temporarily escape exclusion and find employment. Without initial capital that is stable and predictable, it is difficult to recover from a very challenging life situation. However, such a mechanism has not been introduced on a large scale anywhere, so we do not fully know how it would function. Of course, there are predictions that in the era of the fourth technological revolution, people’s work will be replaceable by machines, robots, and artificial intelligence. In that case, we could tax these machines and use that source to finance Universal Basic Income for people who might, for example, fall into digital unemployment. However, today, this is largely futurism and a thesis that is very hard to either confirm or refute,” Kubisiak emphasizes.

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