South Korea Mulls Universal Basic Income Post-COVID

The concept of universal basic income (UBI) is simple: provide a set amount of “basic income” for survival to every citizen regularly with no strings attached. Supporters on the left believe that it will lift people out of poverty and increase the quality of life. On the right, supporters believe that UBI could reduce the burden on the state’s welfare system and maximize individual choices instead. 

In recent years, UBI has attracted more considerable attention with increased concerns over growing economic inequality and the effect of automation upon the labor market. Switzerland ran a national referendum on UBI in 2016, which was ultimately rejected. Finland recently completed its smaller-scale UBI experiment, which yielded mixed results. Most recently, Andrew Yang ran a remarkable U.S. presidential nomination campaign that inserted his model of UBI, a “freedom fund,” into the mainstream, but Yang did not win the nomination. So far, no country has a national-level basic income policy. 

The COVID-19 outbreak has forced many states to hand out emergency basic income and consider more drastic policies for post-pandemic recovery, potentially lowering the mental barrier around the idea of UBI. In particular, various factors seem to be aligned in South Korea for the beginning of a tangible action for the introduction of UBI.

COVID-19: A Paradigm Shift?

While the basic income movement is not new in South Korea, the pandemic seems to have added considerable momentum behind it. Like other countries around the world, South Korea introduced an emergency basic income scheme (“anti-disaster basic income”) to address the unprecedented economic fallout of the pandemic. Several provinces and municipalities introduced their local versions, and Seoul announced in late March that it would provide a selective emergency benefit to those whose income falls under the 70th percentile. 

Interestingly, the timing of the announcement coincided with the April 15 parliamentary election campaign period, which led to a national deliberation on the proposal of the anti-disaster basic income. During this period, public opinion on emergency basic income shifted quickly in favor. In early March, public support for emergency basic income was at 42.6 percent, but it increased to 48.6 percent in mid-March, and then to 65.5 percent by the end of April. Even the leader of the conservative United Future Party supported the introduction of emergency basic income – in fact, urging the government to make it universal, instead of selective. Following these discussions, the government changed course to roll out a universal emergency basic income in May. 

Through this experience, the South Korean public and policymakers seem to have opened up to the concept of basic income. Prior studies suggest that those who have experienced first-hand the benefits of basic income are likely to support it, which will likely add momentum to the movement. Further, the prospects of the post-COVID economy have forced policymakers to explore policies that address both recovery and pre-existing structural problems. South Korea’s government already announced the Korean New Deal, which seeks to accelerate digitalization and climate change action through a combination of fiscal, industrial, and social policies. In this context, recent discussions suggest that South Korean lawmakers across the political spectrum have found appeal in UBI.

“The Next Big Thing”: Interest in UBI Across the Political Spectrum

South Korea’s political landscape has recently become more polarized, sharply divided on all issues along party lines. However, on UBI, there seems to be a shared interest across the political spectrum or at least an acknowledgment that it is poised to be one of the most critical public policy topics for the next few election cycles, including the presidential election in 2022, that they must seize.

On the side of the left-leaning Democratic Party, which is the current ruling party, there has been a consistent interest in the policy. Lee Nak-yeon, former prime minister and the leading candidate for the 2022 presidential election, said that he understands the “purpose” of UBI and welcomes “further discussions” on it. So Byung-hoon, one of the elected members of the Democratic Party, is preparing to introduce a bill on “basic income law” during the new parliamentary session. The proposed bill aims to create a legal basis for national-level basic income, and at this stage, it seeks to start a discussion around the issue. So will also set up a multiparty “Basic Income Forum” to promote research, discussion, and action on national basic income policy.

Within the conservative United Future Party, the main opposition party, there is widespread acknowledgment that the public supports UBI, and they will have to propose a “right-wing” approach to it. An influential conservative policy expert advised the United Future Party that “UBI will become the most important topic in the next [2022] presidential election.” He further warned that the “right will have to respond to the left’s tax handouts and acknowledge people’s right to the profit from public wealth.” The interim leader of the party, Kim Chong-in, has expressed support for a “conservative” UBI proposal, saying “it is time to seriously consider basic income,” and it has been reported that there are serious considerations within the party to make UBI the flagship policy in the new parliamentary session.

Ms. Yong Goes to Yeouido: Basic Income Party Enters Parliament

Another interesting development in the basic income movement in South Korea is the entry of the newly-formed Basic Income Party to the National Assembly. Running under the Democratic Party’s bloc banner, 30-year old Yong Hye-in won a seat, securing the representation of the Basic Income Party in the parliament. 

The Basic Income Party, founded in late 2019, is South Korea’s first single-issue party. During the campaign, it ran a slogan that twisted the old Korean saying “the bear does the trick and the fox makes money” into “the robot does the trick and let PEOPLE make money,” campaigning for a monthly UBI of 600,000 won (approximately $500). The majority of supporters are voters in their 20s and 30s, struggling with youth un- and under-employment (85 percent of its members are under the age of 40). 

As a single-issue party, the Basic Income Party aims to provoke public debate on basic income policy, to work in a nonpartisan manner to achieve the introduction of a national universal basic income. While the Basic Income Party’s capacity to influence the broader agenda in the National Assembly may be limited, its entry underscores the public’s support for basic income policy, especially among the youth. In early June, Yong called for a joint meeting of all seven parties on basic income policy, positioning herself to play a critical role in the national debate. 

Local Experiments and a UBI Champion

Finally, it will be important to follow local experiments on the basic income front. In particular, Gyeonggi province, the country’s most populous, has taken concrete steps to introduce basic income at the local level under the support of its governor, Lee Jae-myung. Since his tenure as the mayor of Seongnam, Lee has gained national attention for his progressive leadership, which included the introduction of the city-wide “youth basic income.” This selective basic income policy sought to address youth unemployment by providing regular stipends in the form of local currency (to be spent within the city) to all city residents aged 24. Following the policy’s success at the city level, Lee introduced it at the provincial level in 2019, labeling it as a step toward UBI for all citizens in the province. 

During the pandemic, Lee’s proactive policies have won national praise and turned him into a favorite for the 2022 presidential election. In particular, Lee was fast and vocal in implementing one of the first and most generous emergency basic income programs modeled after his youth basic income policy before the introduction of the national emergency benefit.

Now, Gyeonggi province is moving to expand the youth basic income program into a universal basic income program for all its residents. On May 15, a Democratic Party member introduced a draft of “Gyeonggi Province’s Local Ordinance on Basic Income,” thus creating the framework for introducing basic income to all residents of Gyeonggi “regardless of their wealth, income, or labor activities” at the provincial legislature.

In April, Lee wrote, “basic income is an inevitable economic and welfare policy in the era of the Fourth Industrial Revolution after COVID-19.” Lee has been calling for more research and debate on the issue at the national level, while urging the Democratic Party to act before it gets co-opted by the conservative opposition. In this, Lee has positioned himself as the most prominent champion of the basic income policy among mainstream politicians.

Conclusion

Undoubtedly, the actual introduction of the basic income at the national level will be a long-term project. Considering the scale and complexity of a national-level UBI policy, in addition to the relative novelty of the concept for the broader public, the movements in South Korea are certainly promising. However, there are significant hurdles ahead of South Korea’s UBI agenda.

First, a UBI policy will be expensive. The Basic Income Party’s 600,000 won per month proposal would cost 360 trillion won ($300 billion) annually – a hefty sum, even more so in the post-COVID economy. A national UBI policy will require finding ways of funding it sustainably, as well as restructuring existing welfare programs – on which the right and left are likely to disagree. There is also a potential need to amend the constitution to create a legal basis for UBI. Finally, generating public consensus on a concrete UBI policy will be a challenging process as well. While there seems to be broad support for basic income in principle, it has wavered when more details on the how (e.g., tax increase) are listed. 

In short, there will be more debates, elections, and different types of experiments until the full introduction of UBI, if it ever happens. However, following the COVID-19 shock, the alignment of multiple factors — public opinion, bipartisan interest, the Basic Income Party, and local experiments — suggests that there is the potential for something real in South Korea’s UBI movement. Thus far, Seoul has shown a remarkable capacity to govern through innovative policies, showcased globally during the pandemic. Now, it aims to lead and set standards in the post-COVID world through ambitious recovery policies such as the Korean New Deal. In this context, a more serious push for UBI in South Korea soon does not appear far-fetched at all.