We have previously discussed proposals by economists and political scientists that would substitute universal basic income (UBI) policies as credible alternatives to existing social programs such as unemployment insurance. (See blogs titled Universal Basic Income, Universal Basic Income Revisited, Universal Basic Income – A Setback?, Universal Basic Income: Now India? and Universal Basic Income for America?).
The concept of UBI was raised by several participants in the recent Democratic primaries, although most of the discussions appeared to view UBI as an addition to existing social programs, rather than a substitute. Some recent legislation, particularly the $2 trillion stimulus package, incorporates some of the basic elements of UBI, at least on a temporary basis.
Now it appears that the Vatican is weighing in. In a recent letter to members of social movements around the world, Pope Francis suggested that it might be time to consider a universal basic wage as the pandemic impacts low-income workers “twice as hard”. It should be noted that it is not entirely clear whether the papal letter was an endorsement of UBI or more general support for a “living wage” or “just wage” for workers, which Catholic activists have pushed for years.
Investors should remember that the U.S. economy is consumer based.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA