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Due to the COVID-19 epidemic, the economy continues to suffer as the consumption by small business owners and self-employed people has decreased significantly as people are mostly staying indoors. At a time when the situation is expected to be prolonged, people have come up with the introduction of a Basic Disaster Income. The majority of those in favor believe that a basic disaster income could revive the slowing economy. Will introducing a basic disaster income really help the economy recover? Unfortunately, others believe that the introduction of a basic disaster income will only add to social chaos. Let's find out in detail why negative public opinion exists to the introduction of a basic disaster income and what side effects can be caused by its introduction.

 

When it comes to economic welfare resulting from the COVID-19 epidemic, selective welfare is more urgent than universal welfare. Universal welfare would be provided to all people, regardless of their social status. This is the case for free school meals for example. On the contrary, selective welfare is welfare provided to only qualified people, which is an example of economically supporting low-income residents. In basic disaster income, the word "basic income" corresponds to “universal welfare”. Thanks to the fact that the government pays all people, a basic disaster income has received a lot of favorable responses. However, some feel that a basic disaster income should be provided as selective welfare, not universal welfare. Small business owners and self-employed people are expected to suffer the most during the COVID-19 epidemic. In fact, 97.6% of the respondents said their sales declined after the COVID-19 epidemic, according to the survey conducted by Korea Federation of Micro Enterprise in February this year. Relatively less affected professionals and high-income earners all receiving the same support will only widen the economic gap between the two groups. Therefore, we should discuss a basic disaster income after first implementing selective welfare to support the people who need the help most. Emergency loans for small business owners, which need to be paid as soon as possible, are not yet even fully implemented due to a lack of funds. This is the reason why some point out that a basic disaster income is premature.
 
The second reason is due to the payment method of a basic disaster income. Let's take a closer look at the methods proposed by politicians who approve of a basic disaster income. In the case of Gyeonggi-do Governor Lee Jae-myung, he proposed a local currency that expires three months after the payment date as a means of basic disaster income, similarly with Seoul Mayor Park Won-soon who proposed a mobile regional love gift card or prepaid card. The method of payment of basic disaster income is generally expected to use local currency or gift certificates available only at small businesses that promote rapid consumption instead of simply giving cash. However, neither method can be considered completely risk free. This is because it has already been criticized for its low effectiveness before the COVID-19 epidemic. Consumers who are not familiar with the local currency are likely to find it difficult to actively use, although they seem to offer averagely 100,000 won to all Gyeonggi residents at no cost. If so, the 100,000 won provided in local currency cannot be regarded as a genuine basic income, also it is difficult to bring about the effect of boosting consumption through the local currency, and gift certificates suggested by politicians need to be replaced if they fail to function properly, but no measures are in place to do so at the moment.
 
The fact that it is impossible to secure the budget needed for basic disaster income also makes us hesitate to introduce basic disaster income. First, let’s look at the case of Gyeonggi-do, where the provincial council recently passed a bill to introduce a basic disaster income. As of February 2020, Gyeonggi-do had a population of about 13.26 million. It would take 1.3 trillion won to provide 100,000 won each to member the population, the Maeil Business Newspaper estimated. How to secure the budget is the most important part for Gyeonggi-do Gov. Lee Jae-myung, who claimed that the budget can be covered by the Disaster Management Fund, the Disaster Relief Fund and the Regional Development Fund. However, this is a problem that is limited to Gyeonggi-do, which can ensure a smooth budget procurement. Gyeonggi-do topped the revenue budget list, according to the Ministry of Public Administration and Security's integrated local financial disclosure system in 2019. Unlike Gyeonggi-do, which is economically secure, local governments that cannot fulfill such large budgets cannot provide basic disaster income well. As a result, all local governments need support from the federal government to properly implement a basic disaster income, but the federal government's budget is currently not enough to execute these additional demands. Hong Nam-ki, deputy prime minister for economic affairs, said, "There is a possibility that it will be an off-beat policy to release money when the use of basic disaster income is not clear," and that the urgent COVID-19 epidemic should be strategically responded to in order.
 
As mentioned above, however, the basic disaster income disregards the logic of selective welfare, which provides welfare only to those in need, no stable payment method has been prepared for the basic disaster income, and budget execution for a basic disaster income is difficult. People who are tired of the COVID-19 epidemic may be happy to hear that economic aid is coming, but welfare is not free. If the current basic disaster income is introduced, it will suffer losses in either place. Forcing a basic disaster income could have a negative impact on the future economy. Therefore, if we do our best on the original economic policies before proceeding with basic disaster income and carry out the support policy using government funds sequentially, as Deputy Prime Minister Hong Nam-ki mentioned, we will be able to smoothly resolve the current situation that seems difficult to overcome.
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