[Seoul-type Basic Income] Professor Kim Nakhoe "System Operation Somewhat Complex but Realistic Financially"

Seoul Ansim Income Pilot Project Advisory Group, Interview with Professor Kim Nakhoe
"Basic Income Faces Major Funding Obstacles; Important Opportunity to Confirm Effects on Polarization Mitigation and Employment"

Seoul Mayor Oh Se-hoon (fifth from the left in the front row) is taking a commemorative photo at the appointment ceremony of the Advisory Group for the Basic Income Pilot Project held at Seoul City Hall in Jung-gu, Seoul, on May 27.
[Image source=Yonhap News]

[Asia Economy Reporter Lim Cheol-young] "Basic income has the advantage of simpler system operation compared to Ansim Income, but since it requires enormous finances, securing funding is the biggest obstacle. From the perspective of fiscal sustainability, Ansim Income is a more realistic alternative."

Kim Nak-hoe, Distinguished Professor at Gachon University Graduate School of Business and a member of the Seoul Ansim Income pilot project advisory group formed by Seoul Mayor Oh Se-hoon last May, stated in an interview with Asia Economy, "It aligns with the idea of guaranteeing a minimum income to citizens to provide economic stability," but argued that although the system operation is somewhat complex, Ansim Income is a more effective alternative compared to basic income.

Experts commonly agree that mitigating income inequality is a global challenge faced by all countries due to the spread of capitalist market economies, global division of labor, and demographic changes such as aging populations.

As measures to reduce income disparity, the ideas of basic income and Ansim Income have been proposed, each with its own pros and cons. Basic income is a policy that provides a fixed income to everyone without exception, making system operation simple but requiring huge financial resources. On the other hand, Ansim Income is paid only to those below a certain income level, which involves issues of fairness in selecting recipients and difficulties in income verification, but it has a lower financial burden.

Previously, major advanced countries such as the UK, France, and Germany responded to polarization through social insurance or public assistance systems. Professor Kim explained, "However, the reality is that these systems face difficulties in operation due to enormous fiscal burdens, complexity, and overlap of welfare programs," adding, "Countries like the United States and Canada have experimented with or implemented new forms of welfare systems such as basic income and wealth income tax."

Seoul City chose Ansim Income. To alleviate income polarization, it will launch a three-year Ansim Income pilot project starting next year. Professor Kim evaluated, "This experiment by Seoul City will be an important opportunity to verify various policy effects such as improvements in income distribution and impacts on labor," and added, "Since this is the first experiment conducted in Korea, we expect to obtain results based on meticulous design."