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July 23, 2020 / by Jerome Kusters / In Sustainability

TSC Thursdays - Will drawbacks of raising the minimum wage pave the road for UBI to be adopted in a post-COVID era?

TSC Thursdays is a weekly TSC blog post with top trending news and issues pertaining to UN Sustainable Goals. TSC’s SDG COVID Impact Dashboard applies our proprietary models and methodologies to filter the global chatter through a dynamic issue taxonomy to track and visualize COVID-19's impact across 17 SDGs in real-time. For more insights on global SDG commitment, sentiment and activity explore our SDG COVID Impact Dashboard here: https://sdg-covid.tsc.ai



This week TSC's SDG COVID Impact Dashboard highlights "minimum wage" and "Universal Basic Income" as key discussion topics within the Economics and Social & Humanitarian Theme.


The pandemic has laid bare social inequalities like no other event in recent history. Not only will we be facing the economic consequences of the second financial recession in eleven years, on a social level we are expected to see a drastic set back in the progress made to reduce poverty worldwide. With governments currently at the drawing boards to frame recovery plans and economic stimulus packages, what will prove to be the most effective and sustainable social safety in a post-COVID world? What will be the role of minimum wage hikes, and could there be a future for Universal Basic Income?


Minimum wage hikes—a suitable safetynet and reward system, or fiscally unsustainable and detrimental to the unemployed?

The SDG COVID Impact Platform has identified "minimum wage" as an emerging debate as local and state-level legislatures across all continents have commenced talks to raise the minimum wage as part of their post-COVID recovery plans. Besides a key method to boost purchasing power and thereby an attempt to kickstart economic recovery to some extent, it is also considered a much needed safety net for society's most vulnerable groups, as well as a "reward" for the pandemic's frontline workers. Nevertheless, the sentiment coverage of these debates tends to lean to the negative side - some consider it a fiscally unsustainable solution, others are outraged about minimum wage cancellations or the limited application of the measure. There are also critical voices pointing out that minimum wage hikes would make it even more difficult for currently unemployed people to get back in the workforce.


Some of this week's key updates on minimum wage across the globe:

  • Colombia: Senator of the Democratic Center, María del Rosario Guerra, assured that the bill that seeks to create a basic income of a minimum wage for the families most affected by the pandemic, is not sustainable for the State from a fiscal point of view. (here)
  • United Kingdom: Doctors, teachers and police officers are among 900,000 public sector workers offered a pay rise after working on the front line of the coronavirus pandemic. Unions have pointed out privately-employed social care workers would not be included as their wages are set by employers and paid for by local authorities, and called for them to get a pay rise. (here)
  • Nigeria: The Delta State chapter of the All Progressives Congress criticized Governor Ifeanyi Okowa for allegedly slashing the minimum wage of civil servants. (here)


Universal Basic Income - the right solution at the right time?

The SDG COVID Impact Platform compares minimum wage vs. Universal Basic Income (UBI) debates and finds the latter is less emerging across, but covered more positively especially in the Northern hemisphere. Long considered a fringe topic or a sporadically applied economic experiment, UBI might slowly make its way towards the mainstream as it is increasingly being mentioned as a possible viable solution for socio-economic recovery post-pandemic.


Some of this week's key updates on UBI across the globe:

  • Global: UN Secretary-General Guterres recently called for a "new global deal based on fairness and a revamped social contract", he mentioned universal health coverage and the possibility of a universal basic income as key factors to successfully achieve these goals (here). Earlier, the UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific Kanni Wignaraja stated in a recently published opinion piece that a modest UBI could be tightly and reasonably dispensed across the world if the top 1,000 corporations in the world were fairly taxed. (here)
  • United States: Twitter CEO Jack Dorsey pledges $3 million to Mayors for a Guaranteed Income initiative to help test free cash payment programs for Americans as a tool to close the wealth and income gap, level systemic race and gender inequalities, and create economic security for families. (here)
  • Canada: In their review of the massive emergency federal spending in response to COVID-19, released Tuesday, the Senate national finance committee said Ottawa and the provinces should consider a universal basic income as a longer-term option of relief. (here)


Previous articles in the TSC Thursdays series


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