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Can Universal Basic Income Work? Germany is Starting A New UBI Experiment

Can Universal Basic Income Work? Germany is Starting A New UBI Experiment
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In Germany, an economic experiment has been launched in recent days, which seeks to examine the success or failure of universal basic income, and the consequences to the lives of those who will unconditionally receive about €1,200 per month for three years.

While previous experiments in Finland and Switzerland have focused on basic income as a form to upgrade unemployment benefits, and in Spain, it was is used to provide an additional basic income for the poorest groups in society, the experiment in Germany is, in fact, the first time the pure concept of UBI will be tested.

Funding for the project was achieved through an online crowdfunding campaign that asked the Germans to participate in this economic-scientific research and donate money to the experiment in order to develop a new social-economic system. Behind the campaign is an organization called “Mein Grundeinkommen” (My Basic Income), which is driven by the notion that this is the future of European welfare countries, and is the next step in the evolution of the “redistribution of wealth” already formed in Scandinavian countries. At the time of writing, about 140,000 donors have participated in the project.

The 120 applicants will receive about 1,200 euros a month for three years, and 1,380 people will serve as a control group. The researchers of the study will compare the experiences of 120 applicants during the period of time of three years with another group of 1,380 people who will not receive the payments. The Basic Income amount of about 1,200 euros was set by the researchers as it could theoretically replace an existing job for German citizens.

The only condition for participation in the project is to be a resident of Germany over the age of 18. Of course, those who receive the income will not have to change stop working and will receive the money without any conditions other than the willingness to participate in the study.

Germany’s Basic Income Experiment – Can It Work?

Germany is the perfect playground for testing the debate about basic income. More than half of Germans said they were in favor of a certain type of basic income, according to a preliminary survey conducted by the DIW Institute. Globally and domestically, the support for this view is mostly from the left side of the economic map, and also from Silicon Valley. Elon Musk, for example, has stated several times his belief in the idea of ​​universal basic income. Mark Zuckerberg has also expressed his view saying that universal basic income is a model that should be considered positively in the future when technology will replace much of the work. Even Pope Francis said that ‘This may be the time to consider a universal basic wage’.

Michael Bohmeyer, the head of the “Mein Grundinkommen” project, has explained that the purpose of this experiment is not only to examine the results in terms of the financial condition of the participants but also the state of the applicants’ relationship, health, and their social connections.

The experiment in Germany might be the most crucial one in determining whether Universal Basic Income can actually work in a developed (perhaps even more in undeveloped) country. Additionally, UBI also gained huge momentum since the emerge of the Covid-19 pandemic.

Among the critics of this unique model are those who believe that it is not financially viable, and it will ultimately slow down economic growth. Moreover, it may negatively motivate work, and will also be unfair to the wealthy sections of the population who will have to finance basic income taxation.

Nevertheless, the UBI experiment in Germany will be closely watched to see if it may have a positive impact following the unsuccessful experiments conducted in Finland and Switzerland. One thing is certain, the basic income debate is here to stay.

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