“Basic income” has emerged as a hot issue in both ruling and opposition parties with the opening of the 21st National Assembly. As Kim Chong-in, the chairman of the emergency committee of the United Future Party, brought up an idea to introduce basic income as a talking point to overcome the challenges on the conservative side, the ruling party, which wishes to lead all progressive agendas, seems so eager that it may propose a draft bill any time now. As the topic is likely to become an agenda for the 2022 presidential election in South Korea, potential presidential candidates are also jumping into discussions.
Basic income refers to the same amount of income distributed monthly to all citizens without any condition. The proponents argue that it saves administrative costs and protects socially vulnerable groups’ minimum livelihood so that they will more actively engage in job searching. However, an experiment carried out by the Finnish government a few years ago showed there was almost no effect on motivation for job searching while subjects reported slightly lower stress levels, which means the effects of basic income have not been verified.
The problem is funding. Even Kim Chong-in himself said that the idea to provide basic income in a financial deficit is almost a fantasy. Providing 300,000 won per month to each citizen requires approximately 187 trillion won, or 36.5 percent of this year’s main budget. Considering that the total amount of welfare-related budget this year, including three rounds of supplementary budget, is 194 trillion won, it is barely enough to fund such a level of basic income even if all other existing welfare benefits, such as basic pensions, are removed.
However, discussions on basic income would not disappear any time soon. A lot of people are calling for the overall reform of the welfare system and research on basic income to address the problems with the social safety net that have been exposed due to COVID-19. A voice arguing for the introduction of basic income to low-income workers who have been replaced by robots is also growing in Silicon Valley.
If basic income is more than a pork-barrel with the upcoming presidential election in mind, both ruling and opposition parties should begin basic research on the topic along with the government and experts, rather than dividing public opinions with premature ideas.