COVID-19: Basic income for the hardest hit

In Colombia, the proposal would allocate close to 40.5 trillion pesos (4% of GDP) to benefit close to 34.5 million Colombians affected by COVID-19.

For ECLAC, the basic emergency income should be implemented immediately, with the prospect of remaining in place for a longer period of time.

The Economic Commission for Latin America and the Caribbean (ECLAC) proposed that governments guarantee immediate temporary monetary transfers to meet basic needs and sustain household consumption, which will be crucial to achieve a solid and relatively rapid reactivation.

“In the long term, the agency reiterates that the scope of these transfers must be permanent, going beyond people living in poverty.”

In the long term, the agency reiterates that the scope of these transfers must be permanent, going beyond people in poverty and reaching broad strata of the population vulnerable to falling into poverty, which would make it possible to move toward a universal basic income.

The proposal was made on May 12, 2020, during the presentation of the special report The social challenge in times of COVID-19, which provides an estimate of the social impact and related challenges that the current crisis would leave for the countries of Latin America and the Caribbean in the short, medium and long term.

From the point of view of Alicia Bárcena, executive secretary of the entity, the basic emergency income -IBE-, as the proposal has been called, “should be implemented immediately, with the prospect of remaining in place over time according to the situation of each country. This is especially relevant given that overcoming the pandemic will take time and societies will have to coexist with the coronavirus, which will hinder economic and productive reactivation”.

What does the basic emergency income consist of?

The entity explains that the transfers would be for each person for an equivalent to an extreme poverty line, which represents the per capita cost of acquiring a basic food basket, or to a poverty line, which also covers other basic needs.

However, it is considered that its minimum duration should be three months, although six months or a year would provide better protection to the population.

However, a transfer for an amount equivalent to one poverty line for six months would require an additional expenditure of 2.1% of GDP to cover all the people who will be in poverty this year.

The idea has already been proposed in Colombia.

In our country, a group of 50 senators have already presented a proposal for a basic income to mitigate the effects of the contingency. The proposal consists of allocating about 40.5 trillion pesos (4% of GDP) to benefit about 34.5 million Colombians affected by COVID-19.

Several of the proposing senators expressed their positivism, since the Minister of Finance, Alberto Carrasquilla, accepted the proposal and it would be discussed.

The proposal seeks that the Government allocates resources to provide a minimum salary with all social benefits ($1,409,000) to the people affected by COVID-19, which are around 3.5 million.

Likewise, it is contemplated to deliver a minimum wage to 9.5 million poor households in the country, a measure that would cover nearly 31 million Colombians.

Measures taken by governments

The ECLAC report explains that since March 13, the governments of the region began to announce social protection measures in response to the abrupt fall in workers’ and households’ incomes.

These have included:

– Cashtransfers.

– In-kindtransfers(such as food, masks and medicines).

–Suspensionor exemption in the payment of basic services (water, electricity, gas, telephone, internet, etc.).

– Social protectionmeasuresfor formal workers.

–Otherdirect support to individuals and families (such as tax relief and price controls, among others).

To date, a total of 126 social protection measures have been implemented in 29 countries for the poor and vulnerable population. Among them, cash and food transfers reach 90.5 million households, or around 58 % of the regional population.

Source: Actualícese