Basic income refers to the compensation that the state or the local government regularly provides to all individual members without any conditions. Countries such as Canada, Finland, and New Zealand reviewed and implemented basic income. Currently, in Korea, as disaster support funds have been given due to the COVID-19 pandemic, attention has turned to basic income, resulting in various opinions. A favorable position on the basic income system says that it can guarantee livelihood stability and self-realization. On the other hand, the opposition advocates fiscal difficulties and low economic effects. Should the basic income system be introduced? I think it should not be introduced for the following reasons.
First, basic income does not have a significant impact on livelihood. There is a joke that reflects the sad reality of Korea, “Everything is going up, except the salary.” Thus, Korea’s inflation rate remains high. In fact, the inflation rate in the third quarter of 2021 was 2.6%, the highest in more than nine years. Inflation is accelerating, but wages are on the decline. If the basic income system is introduced, and everyone is given a certain income, prices will rise as well. After all, basic income refers to the amount of money that everyone receives equally, so it will only cause additional inflation. The position for supporting the basic income system says that money will be circulated through basic income and prices will rise temporarily, but it will rather have a positive effect in the long run. However, when basic income is paid to everyone, there will be a vicious cycle in which shopping cart prices will rise, and, eventually, more money will have to be paid. Moreover, some say that the development of artificial intelligence will increase the number of people suffering from unemployment and increase the need for basic income. It is acknowledged that artificial intelligence and automation can lead to the disappearance of existing jobs. However, unemployment due to several changes or developments in life progressed at a later rate than mere concerns. And scientists say that advances in artificial intelligence and automation may create new jobs. Therefore, claiming that basic income is necessary based on unemployment caused by artificial intelligence or automation is only an excessive concern on the process of the industrial revolution.
Second, it is difficult to secure finances that will help implement the basic income system. Choi Han-soo, a professor of economics and trade at Kyungpook National University, said, “In order to pay up to 300,000 won a month, all economic players must pay 53 percent more taxes than before.” Implementing the basic income system will inevitably reduce the budget for other welfare systems that were previously operating because the budget for welfare is limited. Proponents of the basic income system say that the government can raise finances by applying uniform taxation on land or real estate, or by becoming a shareholder of a specific company and earning profits. It actively argues for taxation on land or real estate. Land has many tax-free benefits, depending on its purpose, and, instead of these policies, there is a position to collect uniform taxes and use them to prepare basic income finances. However, these methods will eventually change the system, and cause further confusion. The application of taxation on land or real estate leads to reverse discrimination against those who own assets because land or real estate owners pay more than others and receive the same basic income. Complaints will arise if some enjoy less benefits than they are paying for, which is likely to lead to controversy.
Third, it is more advantageous to strive for universal social security than to introduce the basic income system. Universal welfare means that anyone can receive sufficient support from the universal social safety net when they face social risks, such as unemployment, disease, industrial accidents, retirement, childbirth, and childcare. For example, in the case of unemployment, it is done by providing unemployment benefits. However, the basic income system has little effect on welfare because it pays money that does not meet the needs of each person despite a huge increase in taxes. Furthermore, since basic income has little income redistribution effect, putting a budget corresponding to basic income into universal social security can achieve a greater economic effect. It is more urgent to protect all citizens when they are in social danger, such as childcare, unemployment, disability, disease, old age, housing, and disaster, so that they can continue living their lives. Wouldn‘t it be possible to realize this through basic income? The question could arise. However, it is not enough to constitute a universal society with basic income. Even if everyone is in danger, the budget is too high if they can solve it quickly or provide enough financial support to guarantee basic living. If we strive for universal social security with the budget to implement basic income, we will be able to live in a more stable society. The priority is to dream and realize an era when social risks are minimized.
I understand some of the positions to form an ideal type of country through the introduction of basic income. However, I think that the establishment of the basic income system is still hasty and can have adverse effects than expected. Therefore, instead of introducing the basic income system, pay more attention to prioritize creating an ideal type of country in the direction of supplementing the existing welfare system. As mentioned earlier, the basic income system is still insufficient as a solution to the future society due to budget preparation problems and unproven economic effects. I think it is just proper for basic income to be discussed only after realizing universal social security to the extent that the public’s anxiety on social risks disappears to some extent.
Jeon Min-young (News Editor)
sharonmy@soongsil.ac.kr
