With the concern regarding inequality and unemployment rising in South Korea, the Korean government is looking to innovate its existing redistribution strategy. There is a growing concern not just in South Korea, but around the world, that monopolies, automation, and AI technology will disrupt the labor force indefinitely. UBI (Universal Basic Income) is considered one of the most ambitious social policies of our time. Some of its renowned advocates include Twitter CEO Jack Dorsey, Mark Zukerberg the founder of Facebook, Tesla Founder Elon Musk, and former U.S. presidential candidate Andrew Yang. UBI in Korea has become a hot issue and it all starts in Gyeonggi-do (Province Surround Seoul).

There are many test trials happening all across the world. More and more countries are considering UBI as an alternative to welfare. Gyeonggi-do has been operating a basic income system called Youth Basic Income. It is the 3rd largest basic income policy in the world and is being used to support young people in Gyeonggi-do that are having a hard time finding employment. In addition, Gyeonggi has established its own local currency in 31 counties and cities within Gyeonggi-do province.

UBI in Korea to Help Fight Youth Unemployment in Korea

UBI in Korea Youth Basic Income projectThe most common form of UBI is to give every citizen enough money to be above the poverty line. UBI in Korea has been a hot topic since 2016. South Korea has even implemented several small-scale basic income experiments run by local provinces. Last year, Gyeonggi-do started the Youth Basic Income project that focused on paying every 24-year-old in Gyeonggi-do a basic income. The goal was to help them develop their skills so they could figure out how they will contribute to society.

Many 24-year-olds have massive pressure in Korea to find a job as quickly as possible after they graduate from university. Many don’t fully know what they want to do in life. Therefore, a vast majority end up working for a company they don’t care about. This can lead to depression and a lack of motivation. With the Youth Basic Income, they can now focus more on their studies or passions. For example, many can volunteer or take on social projects while they figure out what they want to do with their life.

The Youth Basic Income Project in Gyeonggi-do

There are 175,000 24-year-olds in Gyeonggi-do. Through the Youth Basic Income project, they are paid approximately $900 dollars a year (1 million won) in local currency. The local currency can be spent like cash within Gyeonggi-do. Therefore, it not only provided a basic level of income for the youth but also helped support local businesses as the money did not leave Gyeonggi-do. This is the beauty of UBI programs as it stimulates economies and increases consumption. As Andrew Yang points out, it is a trickle-up economy. The Youth Basic Income project has become the most popular policy in the province. They were even able to get actress Cho Yeo-jeong who played Mrs. Park from the Oscar-winning Korean film Parasite to do a TV commercial for basic income in Gyeonggi-do, a place she grew up in as a teenager.

“Basic income, which is the universal welfare system being pursued by Gyeonggi-do, is impressive as it will create a fair starting point so that anyone can enjoy a decent life without anxiety,” said Cho Yeo-jeong from her interview with Gyeonggi Province.

If the data from the program shows promise, there is a high likelihood that this program will be implemented for all individuals in Gyeonggi-do. If we take it a step further and Gyeonggi-do shows positive results from the expanded version of the UBI, Korea will be one step closer to having Universal Basic Income in Korea.

So why start with 24-year-olds for the Youth Basic Income Project?

In Korea, 24-year-olds have just graduated from their university and are looking to enter the job market. However, many have to take additional courses or internships to improve their resume and develop the necessary skills to get a job. Furthermore, with the increase in automation and AI, the job market in Korea is extremely competitive. Therefore Gyeonggi-do decided to run the program for 24-year-olds specifically but will look to expand the program in the future. For now, this program is to help these youths and alleviate some of the pressures of early adult life.

The amount they get (approximately $900) is not enough to live on, however, the positive psychological benefits it provides can’t be measured. Furthermore, these 24-year-olds will now have access to a vast selection of educational lessons online to further develop their skills in whatever field they are interested in. Online education has grown so much in Korea that with the Youth Basic Income these 24-year-olds will be able to gain access to workshops, seminars, and certifications in high paying industries.

In addition, early results show that participants are more interested in politics than before because they are able to see firsthand the benefits the government can provide.

Gyeonggi-do is leading the way in regards to UBI in Korea. They are constantly looking to develop and expand their programs. They will continue the Youth Basic Income project for 2021 and look to develop a new program that will help resident farmers in Gyeonggi-do.

How did Gyeonggi-do Fund their UBI?

Basic Income in KoreaIs it economically feasible? What about inflation? Will products and services in Gyeonggi-do rise in price? These are typically the questions many critics ask when it comes to UBI projects in Korea. The Youth Basic Income project was not done by printing money but rather through a land possession tax. They collected tax from real estate and paid it back to the people. Therefore, this did not lead to inflation. Gyeonggi-do does not see this as a welfare program but rather an investment into their future through their youth. They want to encourage entrepreneurship and new technologies because this will ultimately lead to job creation.

The 2020 Korea Basic Income Fair – Will UBI in Korea work?

Basic Income Fair in KoreaWill UBI in Korea work? We won’t know until we test it. There needs to be a lot more research and bigger test cases. Gyeonggi-do is doing their part. They hosted the 2020 Korea Basic Income Fair in 2019 and 2020. Their mission was to educate the public on the benefits of UBI in Korea and raise the debate about UBI as a global issue.

South Korea needs to think about what kind of UBI is right for Korea. As well as, what they are willing to give up to pay for it. The potential is huge and South Korea could lead the way in showing the full potential/benefit of UBI to the world. They could be the innovators of this highly popular global movement. It might be the most promising model to sustainably eliminate poverty and depression related to work. There are even studies online that suggest that UBI can actually grow a countries overall GDP. This is because it will greatly increase spending and increase the overall demand for goods and services. The benefits are not only monetary but also have the potential to improve mental health and reduce crime.

The Future of Universal Basic Income in Korea

The FutureKorea already has a welfare system that needs innovation. Taxpayer money is already going into this current system. Universal Basic Income in Korea can end these welfare systems. Just by shifting the funds, UBI in Korea can easily be financed. Governments around the world have proven they are not efficient with money. Therefore, putting the money into the hands of the people ensures that the money will be used as efficiently as possible.

In Korea, unemployment programs often come with a lot of strings attached. This includes paperwork, taking part in courses, and showing proof of applying to a certain number of jobs a month. Once they find a job, they will lose their benefits. Therefore there is less incentive to find a job. However, if citizens in Korea were getting a UBI which would be an add-on, there will be a higher incentive to find work. Also, an argument could be made that time could be much better spent looking for the right kind of job, continuing their education, or starting their own business/startup.

COVID-19 Could Accelerate UBI in Korea

UBI is about creating a floor on which people can lift themselves up. COVID-19 in Korea has paved the way for disaster-related basic income during the period of the pandemic. The CEO of the Korean unicorn startup SoCar launched a petition for the provision of basic income for disaster relief for all Korean citizens. South Gyeongsang Province Governor Kim Kyung-soo also called for the need for a basic income for every citizen in Korea. These petitions have raised the awareness of Univeral Basic Income in Korea.

The Korean government has already given tax breaks and vouchers to get citizens through this hard time. However, many feel the ultimate solution is to get the money into the hands of everyday citizens in Korea to effectively boost Korea’s economy. COVID-19 has given a small taste of UBI to Korean citizens and UBI in Korea is rapidly gaining in popularity. Gyeonggi-do is championing Universal Basic Income in Korea and we are excited to see where this road leads.