In a period of global economic downturn, the world is going through another redistribution of power and money. After World War II, the United States created the most powerful economy, taking advantage of the apparent weakness in other countries. Today, China is expected to grab the title of top global economy. The labor market in the United States also incurs losses: almost a quarter of the working population was left without work. And a confident economic recovery is not yet taking place.
The US economy is suffering from COVID-19 much more than China. This is largely due to the fact that the country is more focused on the service sector, where people have to communicate with each other "face to face". China's economy also depends on the service industry, but most of its domestic economy belongs to manufacturing, which is much easier to restart. In addition, while the United States is trying to recover from the blow of the pandemic, China, as part of a trade war with its opponent, has entered into a Comprehensive Regional Economic Partnership with 14 countries. This agreement means the establishment of the world's largest free trade zone.
On the threshold of the new 2021, it goes without saying that all professions in which a person can be replaced are most likely to be eventually automated. In other words, if a vacancy does not imply a creative approach, then, most likely, it is not people who can work on it, but special mechanisms.
This trend on the global arena and in people's lives will become more evident in the near future, and the difference in income between opposite sectors of society will become even more pronounced. The rich will be even richer, and the poor will become poorer. How can this conflict be resolved? The world is already experimenting with the use of an unconditional basic income - a social concept in which each member of a state is regularly paid a certain amount of money. Such income implies the payment of funds without any conditions and requirements, regardless of the age of the citizen, his/her education, social status and level of current income, that is, to everyone.
Advanced economies are already practicing this concept. For example, in Australia, the JobKeeper program pays 1,500 AUD daily to workers. Germany also plans to launch a long-term experiment to introduce this practice in the country. Starting from the spring of 2021, 120 Germans will receive an income of 1,200 euros from the state every month. This will create a control group of 1,380 people who will not receive such an income. Experts from the public organization "My Basic Income", from the German Institute for Economic Research (DIW), as well as experts from the Max Planck Institute and the University of Cologne will observe the development of this experiment for three years. This pilot project is necessary to determine how the country's economy will react to such practices.
However, how does an unconditional basic income work for a country's economy? On the one hand, it is intended to boost demand because in the modern world without its advance there will be no economic recovery. The goods that are produced simply have nowhere to go. There is no profit without sales and, accordingly, no salary. On the other hand, unconditional payments to citizens can lead to a geographic distribution of the workforce. According to the expectations of analysts from Saxo Bank for 2021, people will no longer need to relocate to large cities in search of money. A lower number of office workers will trigger a sudden drop in office property prices. Rental rates will fall notably, and the demand for shops and restaurants in megalopolises will significantly decrease. Due to high housing prices and the inability to find jobs, the attractiveness of megacities for hired workers will drop significantly.
