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How Much Should A UBI Payment Be?
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Africa

How Much Should A UBI Payment Be?

There has definitely been an increase in the amount of attention being given to potentially implementing a Universal Basic Income (UBI) or Basic Income Grant (BIG) in various countries all over the world. The focus seems to be on how much you pay for it, however, and not how much you would get paid. So just how much should a UBI payment be?

Determining how much a UBI pays out in South Africa will need to consider various factors, such as the poverty line, the cost of living, rental costs, and what the collective agrees can morally be considered as a necessity.

As a proponent of the UBI, I have written several articles about how a UBI has the potential to alleviate the suffering of South Africa’s most vulnerable, how you can pay for it, and how it’s actually the best way to preserve the system of neoliberal capitalism and not just a socialist utopia. However, one factor that I’ve neglected to discuss at length is how much a UBI would pay out to everyone that receives it.

Different Opinions

Some people believe that the amount paid out by a UBI should be the same as the poverty line, while others argue that it should be a higher amount, such as the basic cost of living. My argument for paying South Africans R6,460 per month was based on Oxfam’s 2017 “Reward Work Not Wealth” report, which calculates that to be the cost of maintaining an acceptable standard of living in South Africa. But it is far more than the R1,200 per month that Jonny Steinberg proposes in his Business Day article in favour of a UBI, while the size of the grant that the Institute for Economic Justice uses in their policy brief is a measly R500. The good news is that the cost of “my” UBI proposal, which I had set at roughly R3 trillion a year just decreased radically and the R2.3 trillion that I believe that we can raise through various new taxes (but without raising income tax or going into debt) would be more than enough to fund the program a few times over if we went with the alternate proposals.

On the other end of the scale, a former Democratic Presidential candidate in the United States, who’s now running to be the mayor of New York, proposed giving all Americans a $1,000 “Freedom Dividend” (a more palatable name for his UBI grant) every month. That’s R13,761 at the current exchange rate, but also consider that the cost of living in the United States, particularly in big cities like New York or Los Angeles, is significantly higher than it is here.

First Choice: Cost of Living

If you compare Yang’s Freedom Dividend to the monthly cost of living in the United States ($2,589 for a single person, $4,530 for a family of four), it falls well below the cost of living. So where does he get the $1,000 per month amount?

The 2021 Poverty Guidelines released by the DHS stipulate that $12,880 per annum is the threshold for a single-person household, while it stands at $26,500 for a family of four. That works out to $1,073 per month for the single person household and $2,208 for the family of four, monthly. So this gives you an idea of where Yang found his magic, round number (when Yang’s campaign began in 2019, the data was very similar). It’s a statement which says “No matter what, you’ll never be very poor, I’m going to make sure you’re not living in extreme poverty and the rest is up to you.”

And it’s nice to know that someone only has to scrape together an extra $73 every month to fall above the poverty line, rather than the $1,073 that they’d need without the program. The IEJ’s suggestion of a R585 per month UBI in South Africa seems to follow the same logic. They are, however, calling for an immediate extension of the Covid-19 grants payments and are aiming for a phased implementation of the program that would lift the UBI payment to the upper-bound poverty line’s value (R1,268). But it’s still not enough…

The same data that we used for the United States, ranks South Africa as the most expensive country to live in, in Africa. The monthly cost of living for a single person is estimated to be R18,667 for one and R38,837 for a household of four people. Now, from my personal moral perspective, that R18,667 number is the figure we should be targeting (even though it’s also triple my already over-stretching R6,460) for every citizen, but that’s a pipe dream reserved for the days when South Africa is a wealthy, developed country (which I believe we will inevitably become after implementing a well-funded UBI program).

However, it’s important to understand how that cost of living figure was calculated. The value incorporates costs such as groceries, rent, medical care, utilities, transportation costs and entertainment activities. I suggest you inspect the source to get the full picture… but I think, as a privileged member of the South African middle-class, it’s not an extravagant lifestyle, but a comfortable one. And if we’re fighting for a UBI, should that not be the height of our ambitions? Should the bare minimum not be a value that can meet critical requirements like rent, three meals a day (not simply for enough calories that you can simply survive on), transport, and just pure necessities? R500 doesn’t even come remotely close to meeting that standard. For that matter, neither does R6,460. I respect that R500 per month is a lot of money to many South Africans, but I cannot condone the idea that that’s all they deserve.

The other option

There is no other option. You need to ask yourself about the way that you perceive a UBI. Is it a matter of just stopping people from physically starving, or is it about restoring dignity and creating room for opportunity. Ask yourself, if I lose my job today, will my UBI check keep a roof over my head, even if I can’t keep up what I consider to be an acceptable standard of living? If the answer is no, what’s the point? 

In a matter of decades – years even – all of our jobs will be automated. So when Jeff Bezos releases some kind of software that’ll make your job redundant, what are you going to do? This is what Andrew Yang’s campaign was all about… Automation. A lot of people will be losing their jobs and none of us are able to compete with a super-fast, rational computer that works 24 hours a day, seven days a week. Stop kidding yourself if you think this future is far away – it isn’t. So if you’re struggling to show empathy for the most vulnerable members of society today and aren’t willing to fight for them to have the right to a comfortable standard of living, never forget that that can very easily be you one day. You may live to regret it.

But that’s just one person’s opinion. Perhaps I’m not pragmatic and am living with my head too far up in the clouds, perhaps my expectations are detrimental to garnering support for the UBI and you have to meet people halfway. But the second we give an inch on this, the rich and powerful who strongly oppose this program will take a mile.

The IEJ has already spoken about only giving their UBI payments to 18-59-year-olds that are not formally employed. How is that universal? Do 60-year-olds not have needs? Should we not be looking after our working poor population? Where does it stop? “No, R6,460 is too high”, “we only need to protect people without jobs” is how South Africa finds itself in the position it is in the first place.

Money is meaningless in our economy without people. And people who can’t afford anything are not stimulating the economy. The sooner we understand that the people, not black, not white, not poor, not rich, not male, not female, but all of the people deserve this money, the better. The more you compromise today, to put this in a self-centred way, the worse your lifestyle will be tomorrow when a handful of tech billionaires are the only people left with any money to spend at all in the not-so-distant future.

What do you think? How much should a UBI payment be? Let us know in the comments below or find me on Twitter at @sejanus_

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