Business 115(Sat) – Money for nothing: Germany starts basic income experiment

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Article
1. The study, the first of three parts of the Pilotproject Grundeinkommen (Basic Income Pilot Project), will provide 122 participants with €1,200 ($1,420) a month for a period of three years. Participants did not have to prove a financial need and can work as much or little as they like throughout the experiment.
2. “They don’t have to do anything for it except fill in seven online questionnaires during those three years,” says a description of the experiment on the project’s website. Interest in taking part was overwhelming. When the application process began last August,  more than 1.5 million people had volunteered within a week.
3. Organizers then narrowed it down to 1,500 participants. Of those, a randomly selected 122 people will receive the monthly allowance. The remaining participants will serve as a control group. Instead of the stipend, they will merely be compensated for completing the questionnaires.  At the end of the study, researchers will compare the two groups.
4. The money comes from about 150,000 donors and is tax-free for all recipients. In the end, every participant will get €43,200, adding up to a total of €5.2 million for the project. All of this has been initiated by a Berlin-based public charity.

What do you expect will happen to the participants during the three years? What (if anything) will change in their lives?

Basic income just a pipe dream?

5. Officials from the Mein Grundeinkommen(My Basic Income) charity are convinced that an unconditional income for all citizens would solve many current problems. The assumption is that people get more creative and become freer and happier if they don’t constantly face the pressure to earn enough money to get by.
6. Whether this lives up to reality will be explored scientifically during the project. “We’ll analyze what people are doing during a period of guaranteed material security,” project chief Jürgen Schupp from the German Institute for Economic Research (DIW) told DW.

Imagine you have been selected for the trial, Consider the impact on your own life at age 20, 30, 40 what would you have used the money for?

7. Among the questions he’ll look into are: Will subjects spend all the money or will they save a certain amount? Will they stop working altogether or work less? Will they donate money to others? The experiment will give his team all the answers it needs, Schupp said. Even changes in people’s stress levels can be identified with the help of hair samples, he argues.

Ideological barriers

8. The debate about an unconditional basic income has been going on for years, and it has often been marked by people’s ideological bias. The core question is what people do when they don’t have to do anything. Opponents think it’s the idea of left-leaning daydreamers who want to laze about at the expense of the whole community. 

Do you think this is a realistic goal for a government? Do you think it will ultimately be a positive or negative? Why? Please give reasons.

Universal basic income - Pros and cons - Economics Help

Further Discussion

Do you expect the Tokyo Olympics to go ahead this summer?

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