A New Road to the Welfare State: Discussion on the Viability of Universal Basic Income in Germany and the United States in the age of the Fourth Industrial Revolution

Abstract

The rapid advancement of technology (The Fourth Industrial Revolution) is expected to result technological unemployment, and job polarization, which will deepen inequality. The current welfare state worldwide has faced much criticisms, as it lost its ability to prevent worsening inequality. This paper follows to show how Universal Basic Income (UBI) serves as an alternative to the current welfare state particularly in this age of technology. Drawing from GøstaEsping-Andersen’s concept of decommodificationthis paper suggests that the failure of the current welfare state in Germany and United States has encouraged public desire for higher decommodification. This investigation shows how the cases of major contemporary redistributive policies in Germany (The Hartz IV reform) and in the U.S. (Earned Income Tax Credit) exemplify the welfare state crisis and spur discussion on UBI, which has the potential for higher decommodification, on the public sphere in each country. This paper suggeststhat UBI can be a convergent alternative to Germany and the U.S. that have traditionally had disparate welfare state regimes, and examines the viability of UBI in two dimensions: ideological acceptability and fiscal sustainability.