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Financially Supported

The digital economy means that many people will have to reconsider their career paths and seek re-education. But where would they find the funds? Megan Ellis investigates whether a Universal Basic Income could be the answer.
Image: ©iStock Image: ©iStock

All around the world, digitisation and automation are disrupting the workplace, rendering old skills obsolete and demanding new ones from workers. Researchers at McKinsey believe that 45% of all activities people are paid to do today could be automated with existing technology.

South Africa is no exception to the global forces putting pressure on traditional workplaces, but as protests across the country have highlighted, education continues to be inaccessible for many due to its cost.

As we’ve examined elsewhere in this supplement, there are problems enough with training for a first career. How does a society support those who find that their jobs are disappearing and they need to secure new skills for the future? One idea that’s emerging is Universal Basic Income (UBI), a stipend paid to every citizen that replaces traditional social security, in that it is both unconditional and enough to live above the poverty line.

Why UBI?

The concept of UBI isn’t new – the 18th Century revolutionary, Thomas Paine, proposed something similar in 1795 – but it is increasingly popular. UBI is currently being trialled in Canada, the US and Finland.

Advocates of UBI in one form or another include Microsoft founder Bill Gates, and the grandfather of modern free-market economics, Frederick Hayek. The main argument for UBI, from a skills point of view, is that it gives unemployed workers a safety net to engage in training without the pressure to take on a job that may deliver no real career progression, and trap people in relative poverty because they don’t have the time to engage in personal development.

UBI is pitched as an alternative to the types of low-security, low-income, low-dignity jobs that have been blamed for the rise of populism in France, the UK and the US in recent years, and a way of simplifying complex social grants systems. Critics, of course, point out its potential cost.

UBI in southern Africa

UBI isn’t just for highly developed economies; in fact, it’s been tried very close to home.

Prof Karl Widerquist is an associate professor at Georgetown University’s School of Foreign Service in Qatar, and one of the founding editors of Basic Income News, a website that tracks UBI projects and discussions around the world. “Educational opportunities are a way that UBI can raise wages – especially in developing countries. The most desperately poor people in the world spend their days trying to meet their immediate needs. It’s exhausting. They have no time for education,” Widerquist says.

Omitara Settlement, Namibia

“Children who grow up poor are very likely to grow up poorly educated and to become poor themselves as adults. We need better schools, but if we want children to perform well in school, we need every family to have enough money to make sure every child is well fed and well rested. Even in the developed countries, the evidence is clear: the less poor children are, the better they do in school and the more they thrive as adults.”

Widerquist notes studies which have proven the benefits of a UBI, including one conducted in a rural village in Namibia, where every resident received a basic monthly income. According to, the village Otjivero-Omitara was plagued by poverty, alcoholism and crime. However, after one year of a basic income, child malnourishment dropped by 32%, crime dropped by 36.5% and the poverty rate decreased by almost 20%.

Furthermore, unemployment dropped by 15%, despite the fact that residents were receiving the basic income regardless of employment status, and people were attracted to the area because of the trial.

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