Emergency Basic Income and Covid-19

In their article “Emergency Basic Income during the Pandemic”, researchers Jurgen De Wispelaere and Leticia Morales are writing about the case for an Emergency Basic Income (EBI) concerning the current Covid-19 (Corona) pandemic. Researchers argue that an EBI would, from an economic and welfare point of view, be a more efficient way to handle economic and social problems during a pandemic period. The authors argue that paying each resident a monthly cash amount for the duration of the crisis would serve to protect them from the economic fallout.

Health and economy

According to researchers, the disastrous impact on the global economy during Covid-19 has been justified by mitigating the spread of the virus to save lives, especially among the elderly population. At the same time, different and often very restrictive lockdown measures come at a severe economic and social cost. For example, the World Bank has estimated that global GDP in 2020 was equal to the largest recession since 1945. The pandemic policy responses across the world resulted in massive working time reductions and layoffs.

The researchers argue also that viewing the lockdown measures as pitching health against economic opportunity and security is mistaken and that the COVID-19 pandemic forces humanity to seriously consider health-health trade-offs, in addition to a host of other social outcomes and moral values. This is because an appropriate response to the COVID-19 pandemic must include strong measures to protect individuals against economic insecurity.

EBI

The researchers argue that an emergency basic income by paying each resident within a country a monthly cash amount with no strings attached for the duration of the pandemic crisis could play a critical and timely role in a robust ethical pandemic policy response. According to De Wispelaere and Morales, EBI is modelled after the more familiar proposal of an unconditional basic income (UBI), which is paid to each individual merely for being a community member, without imposing a means-test or work requirement.

EBI is different from the many pandemic support schemes implemented worldwide by foregoing any of the conditions that characterize selective policy responses. EBI is also paid out in their model without regard for other sources of income or savings, although some variants include an affluence test with a cutoff point for high-income earners.

Researchers also argue that in terms of political feasibility, the better strategy is to advocate for a short term EBI in the first instance and extend it for a longer period once it is already in place. The precise level of the EBI payment is also a matter of political debate and will likely vary from jurisdiction to jurisdiction.

Implementation and system

The researchers write that EBI stands out among the many pandemic support policies by embodying three ethical guidelines that underlie a comprehensive public health response.

For a start, EBI constitutes a rapid response to a situation that requires urgent intervention. As countries worldwide have imposed more stringent lockdown measures on wider swathes of the population, casting an ever wider restrictive net around even the most common social and economic activities, economic support measures must instantly respond to these new realities.

EBI is also suitable to function as a rapid-response economic instrument because of its lack of conditionality. The need for a bureaucratic screening mechanism to determine eligibility is excised by design, minimizing the processing time for ensuring each individual receives his or her much-needed assistance and avoiding backlogs and errors.

Additionally, the researchers argue that EBI is an agile (active) policy because it is light and fast compared to the “waterfall” planning of welfare measures that are decided from the top and then need to filter down through successive implementation stages, often encountering barriers and requiring time-consuming adjustment along the way.

EBI explicitly targets those most vulnerable to the economic fallout of pandemic lockdown measures. In each case, public health interventions are meant to prioritize the most vulnerable in society, and EBI avoids coverage gaps precisely because eligibility is automatic and guaranteed. This is particularly relevant in the case of a COVID-19 response where the vulnerable populations affected are highly diverse and belong to different policy categories: low-wage workers being furloughed or fired, workers facing reduced hours, essential workers maintaining their (often minimum wage) jobs but facing extra costs and risks while working, workers having to take time off because schools are closed and care arrangements no longer available, self-employed and gig workers.

Finally, the researchers argue that EBI expresses the core value of solidarity that underpins a sustained pandemic response. Underlying any comprehensive public health response to COVID-19 is the idea that we are all in it together because the virus potentially affects us all — albeit not equally — and combatting the virus likewise requires a collective effort. EBI does that by granting each individual a regular cash grant for however long the economic restrictions last while using the tax system to fund the scheme in proportion to one’s income.

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Vladan Lausevic

Vladan Lausevic

I am active as a social and policy entrepreneur. SEEDS ambassador. Motto: I have no identity, I have only identities.