The Basic Need for Basic Income

 

Much has been said about income inequality and how the problem continues to grow. Every year more of the global wealth gets shifted to the 1% and the struggling classes gain more members. The situation is likely to become even direr as automation increases. According to an Oxford University study, 40 percent of all current jobs are at risk of automation within 15 years.

In order to prevent a global catastrophe we need to find a viable solution to temper rising poverty levels. We may not be able to quickly and dramatically shift the balance of power in order to immediately solve the crisis, but there are potential solutions that we should be examining.

Improving access to education, reducing gender inequality and encouraging entrepreneurship are three major steps that could help stem the tide and a simple step could help us reach these goals. All we need to do is introduce a basic income.

Although inequality is rising in North America, Poverty is a universal problem and basic income is far from solely a western concept. Asia has been making inroads towards a basic income and examining their systems could help us perfect a system for North America.

China has been running a dibao system for over 10 years, a program meant to help recipients maintain a basic level of income by topping them up as needed. India ran a year-long test from 2012-2013 and a recent follow-up showed that the positive effects of the UBI initiative were still being felt 5 years later. In South Korea, a successful basic income experiment run by Seongnam has led to several similar programs being set up across the country. Beyond just reducing extreme poverty, these initiatives are improving health rates, an important factor to maintaining a functioning economy and society.

There are many ways being explored to fund basic incomes, but Altrui.st’s system definitely deserves attention. Recognizing the potential that exists within the new cryptocurrency technology, Altrui.st uses the cryptocurrency mining process to fund a (limited) basic income. Participating websites run the altrui.st software in the background as users visit the site, generating tokens that are then used to fund the basic income program. The approval and prioritization of recipients is calculated based on a custom algorithm that determines need.

This system, should it take off, will be a fantastic way to fund a basic income program and this use of FinTech definitely needs more attention.

That being said, Altrui.st isn’t the only FinTech player in the game. The Pineapple Fund, an initiative using bitcoins to fund nonprofit agencies, has stepped in to help GiveDirectly fund its UBI experiment. This is excellent news, as GiveDirectly’s trial is making incredible inroads in areas heavily hit by poverty, helping needy populations in Kenya and Uganda by providing eligible participants with funding. The money is transferred via a mobile payment system (M-Pesa in Kenya and MTN in Uganda) and is already showing positive results in terms of important markers like food security and psychological well-being.

Poverty and income inequality are issues that touch every corner of the globe and we should be uniting to uncover a solution to the problem.

The good news is we have solutions in our reach—we just have to choose to use them.

Technology has given us incredible power and, as they say, with great power comes great responsibility. Let’s take the incredible gains that come from FinTech and use them to implement a universal basic income. This is our best route to finally change the uneven balance of the world and help those in need.