Universal basic income and Covid 19

Prabhakar, Rajiv (2020). Universal basic income and Covid 19. IPPR Progressive Review, 27(1) pp. 106–113.

DOI: https://doi.org/10.1111/newe.12198


The Covid-19 crisis promises to be as big a shock to the UK economy as the 2007-08 financial crisis. The Office for Budget Responsibility recently published a scenario of the likely economic impact of the coronavirus shock to the economy. Making a number of assumptions, it suggested that real national income would fall by about a third in the second quarter of 2020. Public sector net borrowing would rise to about 14 per cent of national income, and this would be the highest annual deficit since the second world war.

One idea for relieving the economic effects of the crisis is to implement a universal basic income. A basic income promises: ‘regular, non-meanstested cash transfers to all residents of a political territory on an individual basis, without means-test or work requirement’. A universal basic income has five key parts, namely, that it: is regular; is paid in cash; is provided to the individual; is universal with no means test; and is unconditional with no requirement to work or seek work. Long-standing supporters of a basic income, such as Guy Standing, call for this
policy to help people cope with the economic fallout of the global pandemic.

This piece considers whether Covid-19 affects two key objections to a universal basic income among the left: adequacy and opportunity cost.

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