Spain Is Deploying a Basic Income to Citizens to Ease the Coronavirus Impact

Source: CNBC »

Some Spaniards are about to receive additional financial help as the government pushes through the first nationwide basic income, but there are doubts the initiative will reduce high levels of unemployment and inequality.

The Socialist-led coalition government will be spending about 3 billion euros ($3.29 billion) every year to support poorer citizens. The basic income is meant to reach 850,000 households and 2.5 million citizens. Spain has a population of about 46 million people. The plan to install a basic income was a pre-electoral promise, but it was accelerated due to the coronavirus pandemic and its economic fallout.

Households will receive financial help based on their income and the number of children or dependents it has. Government officials have said the minimum amount an adult will receive will be about half the minimum wage, which is 1,108 euros per month. However, the final details are being ironed out this week in parliament.

“I don’t see what problem it can solve,” Zsolt Darvas, senior fellow at the Brussels-based think tank, told CNBC Friday.

He said that the aim shouldn’t be to give people an incentive to stay home without work. Rather, the stimulus should target those losing their jobs or for companies to avoid having to lay people off, Darvas said in a phone call.

In an interview last week, Spain’s Social Security Minister Jose Luis Escriva said the new basic income would not discourage people from searching for jobs.

“It is compatible with having a salary. In Spain, there is a significant portion of workers having a very, very low salary or sub-employment,” he told Reuters…

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