[Free Speech Forum] Introducing a Basic Income Requires Cautious, In-Depth Discussion

In 2021, as the aftereffects of COVID-19 continued, the winds of the “Fourth Industrial Revolution” began to blow in earnest across our society. As a result, labor is becoming less tied to physical space and digitalization is increasingly centered on data, bringing changes to both the working environment and the industrial structure.

The expanded youth unemployment rate rose from 20.9% in October 2015 to 24.4% in October 2020. This is largely because, amid rapid changes in the labor market, there have been significant cuts in part-time jobs at cafes, convenience stores, and similar workplaces that young people in their twenties—often unskilled workers—can easily access. Naturally, political circles have begun actively debating the introduction of a basic income. Broadly speaking, the progressive camp tends to support universal payments, while the conservative camp favors targeted payments, revealing a degree of disagreement.

In the mid-2000s, Germany opened the door to a proposal to provide every citizen with about 1.05 million won per month on a universal basis, based on calculations that integrating cash-based welfare programs into a basic income system could save approximately 125 trillion won annually. Given that Germany’s per capita GNI is higher than Korea’s and that private welfare spending also accounts for a larger share, such a system may appear feasible there. However, given Korea’s social and economic characteristics, the introduction of a universal basic income would create a number of problems.

Under the criticism that it is so-called “populism,” it would constantly become a target of political strife. In addition, introducing a universal basic income without a proper automatic stabilizer mechanism carries the risk of causing inflation by increasing demand alone in a situation where production itself has contracted. This is why conservatives have proposed selective welfare systems such as “secure income,” based on Milton Friedman’s negative income tax.

But targeting also has its blind spots. The emergency disaster relief payments the government distributed last year were targeted based on health insurance premiums. Because that standard did not properly reflect the current circumstances of small business owners and the self-employed, concerns over the fairness of selection also emerged. This in turn demonstrates that it is difficult for a perfectly targeted system to exist.

Administrative strain and the costs of establishing such a system are also expected to be considerable, and a broad discussion is needed on how and to what extent existing welfare systems should be restructured. Countermeasures will likewise be needed to address the excess demand that could surge in the short term.

The question of how to secure funding must also be considered in depth. Some have already mentioned specific funding measures, but basic income has already been tested or introduced in various countries, and precedents involving failure and side effects must be thoroughly reviewed. It should never be discussed and decided for adoption in a short period of time according to “the grammar of politics.”

Cash-payment welfare benefits may, perhaps, temporarily ease young people’s anxiety and succeed in winning their favor. But young people no longer want temporary welfare backed by debt. Rather, the government should eliminate blind spots in labor welfare and guarantee fair opportunities to enter the labor market through a labor market redesign plan suited to the ontact era.

There are no policies for youth in isolation. The priority should be to create a market environment in which young people can take on challenges without feeling defeated. Discussion of basic income should proceed cautiously and gradually alongside this, through in-depth communication among members of society.

Seoil Jeon, Head of Cheongram

---

Original title: [자유발언대] 기본소득 도입, 신중하고 심도 있게 논의돼야

Author: Seo-il Jeon

Date: 2021-05-28

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=11&idx=23767