by Matthew T. Johnson and Elliot Johnson
The article “What is a basic income and how does it promote well-being?” appeared in Greater Good Magazine on June 16, 2023. It originally appeared in The conversation on June 12, 2023 and is republished here under the Creative Commons license (CC BY-ND 4.0).
Read more about the unconditional basic income:
Study describes “transformative” results of a pilot project in LA that guaranteed families $1,000 a month (LA Times))
Three reasons why pilot projects on unconditional basic income have not led to political change despite their success (The conversation)
California announces pilot projects for guaranteed income for former foster children (The imprint)
In October 1936, 200 men marched from South Tyneside to London to protest against poverty and unemployment in their town of Jarrow.
Almost a century later, Jarrow is taking part in a small-scale pilot to test how a universal basic income (UBI) can tackle the financial insecurity and health inequalities that still plague the town. Under the scheme, two groups – 15 people in Jarrow and another 15 in East Finchley, London – will receive £1,600 a month for two years.
This micro-pilot will provide new UK-wide data on the impact of basic income in these communities, particularly the stories and experiences of participants. This data can be used for further research on the impact of UBI on a larger scale in these communities. This will show whether there is a case for a national basic income, or at least for wider UK-wide trials.
UBI is generally a regular cash payment to all adult citizens. It differs from existing welfare systems that depend on people’s assessed needs.
In this pilot, participants will receive the same amount as in another Welsh Government pilot looking at people leaving care. The pilot in Jarrow and East Finchley will focus on a broader, locally representative pool of people in each of these communities.
The project builds on our research into basic income, which suggests that tackling financial insecurity is essential to promoting public health. This is a particularly important issue at the moment as the impact of COVID and the cost of living crisis on Britons who are employed, self-employed or running small businesses has put many at risk of impoverishment.
Financial insecurity has reached levels not seen for generations. Data from the Child Poverty Action Group shows that millions of Britons suffer from fuel poverty, while campaign group End Fuel Poverty Coalition found that 1,047 people died in England in December 2022 because they lived in cold, damp homes.
The Bank of England’s commitment to a gradual and sustained increase in interest rates has led to an increase in the number of foreclosures without, however, tackling inflation, which is caused by factors largely beyond consumers’ control.
This has triggered a second pandemic that will only get worse: mental illness. Our recent report shows that only through bold interventions can we end this current crisis.
Universal Basic Income is a radical but, in our view, feasible alternative to the existing failing welfare system. It could reduce poverty to unprecedented levels, reduce inequality within and between regions, and massively improve the health of the nation.
A radical approach
The UK government is committed to transforming the health service so that it is not just about treating the sick, but about preventing disease in the first place. One of the best ways to do this is by eradicating poverty and reducing inequality.
The idea that the state redistributes resources by providing citizens with adequate, regular and predictable payments is radical. It turns the discussion of welfare on its head: from a payment to a select minority who have no other way of meeting their needs, to a payment that protects both the employed and the unemployed from the risk of impoverishment.
One of the most important but often overlooked consequences of this is the potential contribution to public health. An appropriately set basic income could promote public health in three ways.
First, by reducing poverty, it would increase people’s ability to meet their basic needs by helping them afford better food and housing.
Second, by reducing financial inequality, it would also give people the opportunity to leave abusive, harmful environments. This would reduce stress and stress-related illnesses. The pandemic has highlighted the dangers of not being able to escape these environments, and the potential long-term health impacts are significant.
And third, a more predictable and secure future would enable people to improve their perception of their lifespan, which could in turn lead to behavioral changes. People with clearer long-term futures may be less likely to engage in hedonistic activities such as drug and alcohol abuse, and more likely to engage in exercise and health-promoting activities, according to our research.
While there are examples of people spending “inflatedly” after receiving large welfare payments, some evidence suggests that those who believe they have a future ahead of them spend money on activities that promote their health, such as eating healthier and exercising. On the other hand, people experiencing poverty are more likely to engage in short-term, hedonistic behavior because they do not believe they will face the long-term consequences.
Such impacts would be felt most strongly in those parts of the UK most affected by low incomes, inequality and general hopelessness that contribute to poor health, such as the north of England, the Midlands and Wales.
This generation’s NHS equivalent
The NHS provided free healthcare locally, and three decades after its introduction, the Labour government sought to understand why health inequalities persisted.
The resulting report highlighted that people’s social and economic circumstances influenced their outcomes. To reduce health inequalities, we need to address these circumstances, which have declined rapidly since the global financial crisis of 2008. And UBI can do this in the three ways described above.
Future generations may look back on recent debates about UBI with the same bewilderment that we feel when we think of the resistance to the NHS in the 1940s.
The solutions Britain needs are as far-reaching as those implemented in 1945. Basic income is one such solution that could be as popular and transformative as the NHS.
Matthew T. Johnson is Professor of Public Policy at Northumbria University in NewcastleProfileArticle
Elliot Johnson is a Senior Research Fellow in Public Policy at Northumbria University in Newcastle
