[The Editors' Verdict] Preconditions for Introducing Basic Income

Kang In-su, Professor, Department of Economics, Sookmyung Women's University.

The debate over basic income has reignited in the political arena. Shortly after the 21st National Assembly began in early June last year, Kim Jong-in, the Emergency Committee Chairman of the People Power Party, mentioned that "it is time to fundamentally review the issue of basic income," prompting prominent politicians from both ruling and opposition parties to voice their opinions one after another.

Gyeonggi Province Governor Lee Jae-myung, who wants to promote basic income as his signature brand, is the most proactive. He argued, "Basic income is an inevitable policy in the post-COVID-19 era and the Fourth Industrial Revolution, but it is opposed due to misconceptions that it is a welfare policy, citing reasons such as lack of funding, increased tax burden (tax hikes), abolition of existing welfare, decreased labor motivation, and public backlash."

Considering that the ultimate problem brought about by the Fourth Industrial Revolution may not be a supply revolution but rather issues of consumption and distribution, there is a need to discuss the introduction of basic income. As digital transformation accelerates and artificial intelligence and robots replace human labor, the unemployed will experience reduced income. If the number of people losing jobs increases, the dramatically increased supply volume achieved through super productivity cannot be consumed, which may accelerate economic recession. Proponents of basic income argue that this structural recession can be resolved by providing basic income funded through resources raised by data tax, carbon tax, robot tax, land ownership tax, and basic income earmarked taxes.

However, for such claims to gain persuasiveness and effectiveness, several prerequisites must be met. First, the total number of jobs must actually decrease due to the Fourth Industrial Revolution. However, there is no precedent of job reduction through the three previous industrial revolutions. During the First Industrial Revolution in the UK, there were concerns about job losses due to machines, leading to the Luddite movement, but many more new jobs were created afterward. The same was true for the Second and Third Industrial Revolutions. In a world where becoming a YouTuber is a future aspiration, new jobs that we cannot even imagine will emerge. Rather than falling into excessive pessimism about job losses, active efforts should be made to create new jobs.

Second, it must be clarified that the core purpose of the currently discussed basic income is not to provide income equally to everyone. It should be emphasized that the goal is to prevent structural low growth and economic recession caused by decreased household income and consumption demand, and to maintain the capitalist system and promote the sustainable growth of the market economy. The dictionary definition of basic income is a system where the government provides all citizens with the same minimum living expenses periodically, regardless of property, income, employment status, or willingness to work. However, if the dictionary meaning of basic income, especially the notion of 'equal for all,' is fixated upon, basic income risks becoming a political slogan and is vulnerable to criticism as populism.

Third, there must be national consensus on securing funding for basic income. Providing 300,000 KRW monthly to all citizens as basic income requires 180 trillion KRW. Even with the introduction of new tax systems, it is difficult to secure this amount without a comprehensive reform of the current social security system. More than 10 million people currently receive benefits from existing social security programs. Contrary to the purpose of introducing basic income, there is a high possibility that it could deepen polarization. We must not forget the case where a sharp increase in the minimum wage actually reduced jobs, and the forced push for regularization of non-regular workers resulted in an increase in non-regular workers.

In a situation where uncertainty due to COVID-19 persists, mistaking emergency disaster relief funds for basic income makes it difficult to establish proper policies. Creating conditions where effectiveness can be realized should come first.

Professor Kang In-su, Department of Economics, Sookmyung Women's University

This content was produced with the assistance of AI translation services.