Dieter wants to start a company and finally do more with art. Brigitte says she wants to continue her studies and get involved in a social project. But under one specific condition - if the two are among the chosen ones who will receive an unconditional income. Such a project in Germany should establish whether it makes sense, writes the “Frankfurter Allgemeine Zeitung" (FAC).
Participants will receive 1,200 euros per month free of charge - regardless of their other income. The idea is that when the financial pressure is off, people can do things they find more meaningful and thus become more self-reliant. The initiators are convinced that “unconditional income strengthens the person, and it in turn strengthens the society".
But is that really the case, FAC asks. In Germany, the test phase of the project is still going on, while researchers in the US have already studied the effect of unconditional income in detail. With sobering results.
We work less
In America, money “from the sky" were given to 1,000 randomly selected people between the ages of 21 and 40 with an average annual income of $29,900. Since 2019, they have received through non-governmental organizations for three years 1,000 dollars per month - tax-free and without impact on the rest of people's income. Another group of 2,000 people received $50 each. After that, the beneficiaries filled out questionnaires and in a special application provided information on how much they work, how they spend their free time and how much money they earn.
The first thing that the researchers found is that those who received this money worked less - on average by 1.3 hours a week, respectively their labor income fell. The same applies to the other able-bodied members of the household. Overall, it turns out that every dollar given away reduced labor income by 21 cents. “This is by no means small," says the head of the study, Eva Vivalt.
Other negative effects
And how did the recipients of the unconditional income use their extra free time? Not at all according to the expectations of the supporters of the project: they traveled back and forth by car and public transport, looking for variety. I.e. did not use free time at all for “useful" things like childcare, sports, job hunting or self-improvement. The additional time was not used to improve the position of the relevant person on the labor market, writes FAC.
Another implication is that access to easy money does not make people more entrepreneurial. The researchers also found another negative effect: those of the unconditional income recipients who were unemployed remained unemployed longer. Economist Eva Vivalt's summary: “In general, for the three years of the program, people did not try to look for better jobs".
And another conclusion cited by the FAC: the unconditional income did not lead to an improvement in the health of its recipients. However, there was a short-term positive impact - they began to give more money for medical care and visited a doctor more often. But that was for a short time. It was also found that the taxed did not even begin to sleep better.
Turns us into "subjects of the welfare state"
In an analysis of the arguments for and against unconditional income, the economic edition “Business Insider" points out that it is in this way that people's lives without material fears become possible, and this is a prerequisite for individual freedom and self-realization. People have more time for family and friends as well as social commitments. They should be more willing to take economic risks, respectively become more enterprising, also - the possibilities of choosing a job should increase, without having to accept the first one offered.
But the publication does not fail to list the downsides, such as the fact that for many, the granting of an unconditional income seems unfair, which is why it also faces criticism from the trade unions. This money reduces the incentives for education and qualification, as well as the desire to work, in the context of a shortage of personnel. The economic publication also comes to the conclusion that unconditional income tempts people to turn from citizens into subjects of the welfare state.