Germany is beginning a universal basic income trial with individuals getting $1,400 a month for 3 years
From this week 120 Germans will receive a form of universal basic income every month for three years. The volunteers will get monthly payments of €1,200 as part of an experiment into basic income. The study will compare the experiences of 120 volunteers with 1,380 people who do not receive payments. 140,000 individuals have helped fund the study through donations. Universal basic income has gained traction in recent years and has already been tested in Finland. Supporters say it reduces inequality and improves public wellbeing, while opponents argue it is too expensive and discourages work. Visit Business Insider's homepage for more stories.
Germany is about to become the latest country to trial a universal basic income after 1,500 people signed up to a three-year experiment into how it affects the economy and the wellbeing of recipients. As part of the study, 120 individuals will receive the equivalent of $1,430 a month for 3 years, which is just above Germany's poverty line, with their life outcomes compared to another group of 1,380 people who will not receive the payments. The study will be conducted by the German Institute for Economic Research and has been funded by 140,000 private donations. All participants will be asked to complete questionnaires about their lives, work, and emotional state, to see if basic income has had a significant impact. Universal basic income is the idea that a government should pay a lump sum of money to each of its citizens, usually once a month, regardless of their income and employment status, effectively replacing means-tested benefits. Its proponents argue that it would reduce inequality and also improve public wellbeing by providing people with more financial security. Its opponents say it would be too expensive and discourage people from going to work. The idea has gained traction in recent years amid recent financial crises and growing inequality in some Western countries. Jürgen Schupp, who is leading the study, told German newspaper Der Spiegel that it would improve the debate about Universal Basic Income by producing scientific evidence that has not been available before. "The debate about the basic income has so far been like a philosophical salon in good moments and a war of faith in bad times," he told the newspaper. "It is — on both sides — shaped by clichés: Opponents claim that with a basic income people would stop working in order to dull on the couch with fast food and streaming services. Proponents argue that people will continue to do fulfilling work, become more creative and charitable, and save democracy. "Incidentally, these stereotypes also flow into economic simulations as assumptions about the supposed costs and benefits of a basic income. "We can improve this if we replace these stereotypes with empirically proven knowledge and can therefore lead a more appropriate debate." A pro-basic income lobby group called Mein Grundeinkommen is funding the experiment. The group has used donations from its supporters to fund monthly €1,000 ($1,194) payments of for 668 people since 2014. Finland experimented its with own form of Universal Basic Income for nearly two years between January 2017 and December 2018 but concluded that while it led to people out of work feeling happier, it did not lead to increased employment, the BBC reported. During the experiment, 2,000 unemployed Finns received €560 ($667) a month.Join the conversation about this story » NOW WATCH: We tested a machine that brews beer at the push of a button
More like this (3)
Twitter billionaire Jack Dorsey just announced he will be funding a universal basic income experiment that could affect up to 7 million people
On Thursday, Jack Dorsey, the billionaire CEO of Twitter, announced he is working with 14 American...On Thursday, Jack Dorsey, the billionaire CEO of Twitter, announced he is working with 14 American mayors to fund universal basic income (UBI) trials in their cities. The pilot programs will be run city by city and have not yet launched. Former presidential candidate Andrew Yang helped bring the idea of universal basic income into the mainstream and is funding his own UBI pilot program. Proponents say guaranteed incomes could help close America's growing wealth gap, while others say they could compound America's financial crisis by encouraging people to stop working. Visit Business Insider's homepage for more stories. Billionaire Jack Dorsey, the cofounder of Twitter, is spending millions to experiment with universal basic income. Dorsey's experiment is part of a larger initiative called Mayors for a Guaranteed Income. On Thursday, the group announced the program could impact as many as 7 million Americans across 14 different cities, including Los Angeles; Atlanta; Newark, New Jersey; and Jackson, Mississippi. The involved mayors say they plan to launch guaranteed income pilot programs in their cities at an unspecified future date and lobby federal lawyers to consider a national one, too. The coalition behind the experiment says giving people a guaranteed income could lift people out of poverty and cushion the economic and career blows of the coronavirus crisis. Dorsey, who has built up a net worth of $7.5 billion, will sink $3 million from his nonprofit into the program, according to the announcement. The UBI program comes shortly after Dorsey's widely publicized pledge to donate $1 billion to coronavirus relief efforts. The group did not specify who will be eligible for payments and how much they will receive each month under their plan. In a statement, it said that it envisions the basic income as a flexible supplement to existing social programs. At least two cities — Jackson, Mississippi; and Stockton, California — represented in the mayors' coalition already have working guaranteed income pilot programs, while Chicago, Newark, and Atlanta have task forces exploring programs of their own, according to the group's website. Proponents and past research claim that a guaranteed income could be the best way to level the wealth divide between the richest and poorest Americans, a chasm that has grown even wider during the coronavirus pandemic. Critics of basic incomes say the economic effects of such proposals haven't been thoroughly researched and could stop recipients from working, Business Insider previously reported. Still, Dorsey isn't the only wealthy American experimenting with universal basic income. Entrepreneur and former presidential candidate Andrew Yang announced in May that he will give $500 to 20 New Yorkers every month for the next five years through his nonprofit in an effort to test the effects of the policy. Yang made his universal basic income proposal — a scheme, called the Freedom Dividend, that would pay every American adult $1,000 monthly — a central part of his presidential campaign. Once considered an unlikely policy proposal championed only by Silicon Valley titans like Mark Zuckerberg and Elon Musk, guaranteed income has since gained traction with lawmakers on both sides of the aisle. UBI proposals can be traced back as far as the 16th century, but have been floated throughout American history by a wide range of leaders including Thomas Payne and Martin Luther King, Jr. The one-time $1,200 stimulus checks Americans received earlier this year as a part of the CARES Act were essentially an interim universal basic income, Business Insider previously reported.SEE ALSO: The founders of Panda Express built a $3 billion fortune off of the Chinese food empire. Here's why the first-generation immigrants say the key to achieving the American dream is giving back. DON'T MISS: Lin-Manuel Miranda has made millions off 'Hamilton' in its 5-year run. Here's how the composer makes and spends his fortune, from luxury Manhattan real estate to philanthropic work in Puerto Rico. Join the conversation about this story » NOW WATCH: Tax Day is now July 15 — this is what it's like to do your own taxes for the very first time