Universal basic income in the OECD

By The Data Team

IN A world in which drudgery has been delegated to robots, the welfare state may need to be reimagined. One option is to pay out a universal basic income, a simple cash sum, without any nannyish strings attached. Many have dismissed the idea as a non-starter—to provide everyone with enough money to live on would be cripplingly expensive, they argue. But much of the rich world already raises plenty of taxes to hand back to citizens as benefits. Suppose the government did decide to reconstruct the benefits system—how much basic income would it get for its buck?

The chart shows, by country, how much basic income a government could pay out if it scrapped its non-health transfer payments, and spread them evenly across the population in a single payment. It helps to live somewhere rich, and with a wide-reaching welfare state. Finland comes out near the top—there, divvying up welfare spending equally among the population would mean a $10,500 payment, or about a quarter of GDP per person. Little wonder that the Finnish government is considering experimenting with the idea. In Mexico, $900 a year offers a living standard that's a far cry from the utopian future that basic income advocates hope for.

If a basic income were ever implemented, it seems likely that some existing entitlements would be preserved (good luck to the politician who decides to renege on promises to pensioners). That moment could come sooner than you think—there are experiments planned from the Netherlands to Oakland, California. On June 5th the Swiss will vote on a constitutional amendment to introduce one, and although a precise figure has not been included in the legislation, the sum of 30,000 Swiss francs ($30,300) a year has been floated. Given that its existing welfare state could support an amount of $7,700, if the legislation is voted through (which it proably won't be) then the government would need to raise taxes by almost 40% of GDP. This might seem crazy now, but a hundred years ago, the current distribution of taxes and spending might have seemed just as outlandish.

Read our Leader on rethinking the welfare state and Briefing about universal basic incomes.