The idea of a universal basic income, a guaranteed minimum payment for all citizens, is gaining momentum as a potential solution for an increasingly stratified society—one in which technology and other forms of progress generate enormous wealth for some and unemployment and economic despair for others.
Despite trials in the 1960s and 1970s in the US, Canada, and India, we still don’t know if it reduces poverty while enhancing the quality of life. The earlier experiments, although promising, were incomplete and inconclusive.
The latest benefactor to invest in proving out the idea is eBay founder Pierre Omidyar. On Feb. 7, the Omidyar Network announced it was putting up nearly half a million dollars to test a universal basic income (UBI) program in Kenya run by a program called GiveDirectly. The money will go towards a 12-year pilot program that aims to be the largest UBI experiment to date.
Although still fundraising, GiveDirectly plans to give cash, with no strings attached, to more than 26,000 people in 200 villages in Kenya. About 6,000 of them will get a long-term basic income for the full 12 years. Payments of about $0.75 per day, or half the average adult income in rural Kenya, should be enough to give researchers at Princeton and MIT fresh data to help determine whether the program is effective.
Omidyar says he’s making the investment to see if UBI can be as successful as other forms of unconditional cash transfers in reducing poverty and lifting up families in developing countries. The foundation is worried today’s social safety net is not up to the task in an age of automation and globalization, while poor countries, especially in Africa, may suffer from “premature deindustrialization,” eliminating stable manufacturing jobs that historically have lifted the poor out of poverty.
Dustin Moskovitz, a co-founder of Facebook, is also backing Give Directly. And both the Silicon Valley startup fund Y Combinator and the US-based Economic Security Project are doling out millions of dollars to test and promote UBI around the world.