Birutė Visokavičienė. Universal basic income in light of the outcomes of the coronavirus pandemic

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Caught by the coronavirus pandemic, many governments are quickly reorienting themselves towards what was previously viewed as a utopian experiment – universal basic income. This idea now seems to be one of the few valid options available in the fight against COVID 19, recession, poverty, and inequality.

Such an income distribution and division idea is present in many countries around the world, and is quickly becoming a global view. Universal income is being used, in one form or another, to fight social and economic threats by the US, Canada, the UK, Italy, India, and others.

The US’ Donal Trump proposed to pay 1200 USD to every American. Is this relevant to Lithuania, whose scientists, after almost five years of neither receiving proper attention from the government nor the understanding of the scientific institutions, are now coming together to form research groups and networks?

It is time also to make decisions in Lithuania

There is no time for moaning or criticisms in an emergency situation, but some type of reminder is in order.

Since 2015, the Lithuanian parliament, two prime ministers, and two previous presidents of Lithuania have received from our researchers’ proposals on the implementation method of universal basic income in Lithuania.

Only the office of the current president has thanked us. Lithuania’s scientific council received four project proposals during the 2017-2020 period. Foreign experts who did the evaluation, gave high marks to the recommendations. However, the council remained deaf and blind to the latest directions of the economic and social transformation processes.

Scientists of the Kazimieras Simonavičius University state

The global economy is affected by two forces – demographics and productivity. The demographic situation in Lithuania is in a bad state. An ageing society, falling birth rates, high levels of emigration and brain drain are hitting the economy hard.

The latest available technologies determine productivity growth, however, Lithuania’s achievements in these areas are also very poor. Manufacturing is dominated by micro and small businesses, which are not receptive to digitisation and robotization, because they often make small intermediary parts and not the final products that reach the end user.

Consequences show that the economy has reached a development threshold when the universal income distribution has gone from being a historic utopia to being the single tool best representing current realities, and an opportunity for state progress.

Albert Einstein has once said that you need to change your habits and thinking if you want to solve a problem, which occurred due to your previous thinking. Similar thoughts were expressed by visiting Lithuanian scientist, Nobel prize laureate, R. Šileris: “Universal basic income is important for the economy, but economists care little for it.”.

Does Lithuania need this?

Universal Basic Income first reaches without intermediaries the person. It only then naturally moves up into the broader economy: to the doctors, hospitals, teachers and schools, food and medicine manufacturers, writers, actors, painters, media and, via taxation, into the government budget, financial sector and so on.

A person usually knows how to use the money most rationally. In such a fashion, the economy grows sustainably. Everyone is safer, living in a country and global space. It is much more useful than launching economic rescue measures, no matter how good they are, just on the state level, when banks and big business will mostly absorb them.

The most important thing today and tomorrow is the fact that Universal Basic Income solves the problems of poverty, exclusion and backwardness. How can 36,9 per cent of Lithuania’s population survive when they live below the poverty line? How will the downturn affect Lithuania’s economic recovery? A European social studies poll done in 2016 shows that 80,6 per cent of respondents in Lithuania (largest portion among all EU countries that took part) are in favour of Universal Basic Income, while in Estonia that number is 46,7 per cent (below EU average.

We can’t claim that the government doesn’t understand the role of Universal Basic Income. In the last couple of years, beginning with child support benefits, several universal payments were introduced. However, they do not create a systemic effect, that is fully functioning. We are proposing Universal Basic Income as a necessity for fighting COVID-19. If needed, there will be a deeper and broader presentation of how to implement it, making use of not only the government budget, but also financial sector capabilities and money. We can present over 15 real financing sources and methods (Visokavičienė, 2018, 2019).

Perhaps, to begin with, it would be sufficient to formulate a position that would allow avoiding the consequences of poor decision making by the government during the 2008-2012 financial crisis. The decisions had severe economic consequences when, during the crisis, people’s income and pensions were taken away. This time is different and definitely more terrifying.

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