From Pope Francis to the Bond King, universal basic income is gaining support around the world

Supporters of "basic income" schemes range from Libertarians to Milton Friedman to Pope Francis. Critics call it an expensive give-away that few governments fan afford.

From Pope Francis to the Bond King, universal basic income is gaining support around the world

On Easter Sunday, the lockdown was weighing heavily on Pope Francis. There were no throngs of pilgrims below his window in Saint Peter’s Square, no visible celebration of any kind to be found inside the walls of Vatican City.

The pope’s mind was far from all that, anyhow. Frustrated by the slow-footed response of governments around the world to help the out-of-work survive the coronavirus pandemic, the pontiff sat down and drafted a letter. He wanted to rouse the spirits of the global army of grassroots activists who’d been mobilizing to manage the food banks and soup kitchens that are overflowing these days. Such a letter was hardly extraordinary for Francis, a pope who’s put social justice at the forefront of his papacy. But what he called for surprised economists.

Now, he wrote, is the time for a kind of universal basic income (UBI) scheme. His words seemed carefully chosen, as if he were singling out the gig economy.

“You who are informal, working on your own or in the grassroots economy, you have no steady income to get you through this hard time … and the lockdowns are becoming unbearable,” he wrote. “This may be the time to consider a universal basic wage which would acknowledge and dignify the noble, essential tasks you carry out.”

Pope Francis created a stir on Easter Sunday, writing in a letter of the need for a basic income scheme to help those most at risk from the economic ravages of the coronavirus pandemic. Wire photography: Vatican Media/Vatican Pool via Getty Images.
Vatican Media / Vatican Pool via Getty Images

“Bolder ideas are needed”

Since governments started shutting down the global economy to fight the coronavirus pandemic, calls for basic income programs have rung out from Brazil to Britain. The reasons are easy to spot. Downsizing company have laid off or furloughed tens of millions. At the same time, policymakers’ fiscal fixes have mostly been a case of too little too late. The crisis could plunge a half-billion people into poverty around the world, aid organizations warn.

“The spread of COVID-19 has fundamentally shaken economies, and people are beginning to question existing economic models: this pandemic has really thrown up the existing levels of both injustice and inequality worldwide. So bolder ideas are needed, including some, that previously, were pushed aside,” writes Kanni Wignaraja, who runs the United Nations Development Programme in the Asia-Pacific, in calling for UBI to be “a central part of the fiscal stimulus packages.” 

UBI just may be the kind of social safety net scheme grand enough to cover the single moms, the adult child caring for an elderly parent, and the out-of-work breadwinner, a growing number of politicians, economists and social scientists say.

“If we had this kind of platform, it could be used e.g. for delivering helicopter money. And most probably this kind of one-off payment would increase economic activity,” Minna Ylikännö, a social scientist, wrote in response to a question from Fortune

“Worth discussing at the EU level?” added Ylikännö, a researcher at the Social Insurance Institution of Finland, which sponsored the world’s biggest UBI trial.

In a webcast discussing the Finns’ two-year UBI experiment, which wrapped up last year, Ylikännö said she saw the pandemic as a kind of make or break moment for such measures. “I think it would bring people security in a very insecure situation,” she said. 

From Libertarians to Lefties

UBI has earned support over the years from surprising places. Bond king Bill Gross and über free-markets economist Milton Friedman have both argued for some form of a minimum income aimed at indigent Americans. 

Supporters see such measures as a possible lever to reduce income inequality, and, more recently, to provide financial support to vast segments of society under threat by a wave of automation-driven job loss.

Critics call it nothing more than an expensive give-away that few governments can afford. The no-strings-attached handouts has even divided the Finns—that’s despite their UBI program becoming hugely popular among participants. The Finnish government is discussing whether to make it a permanent part of the country’s already generous social security regime.

But would it work in a pandemic?

Even as policymakers rush out trillion-dollar COVID-19 rescue plans, swelling deficits to record proportions, UBIs are getting another look.

In the United Kingdom, a group of 100 British MPs recently called for the urgent adoption of “a recovery universal basic income.” In an open letter published in the Financial Times on April 27, the lawmakers wrote, “we need to put in place the mechanism to distribute cash to everyone.” (The big questions— who qualifies? how much they get? how long would the program run?—went unanswered.)

And, in recent days, Spain’s center-left government moved closer to creating what it’s calling ingreso mínimo vital, a monthly payment of up to €1,015 ($1,103) per couple, and up to €462 per single adult. There are plenty of conditions: only adults between 23 and 65 from lower income brackets qualify. The government is moving as quickly as it can to pass the measure as it now calculates there are 1 million Spanish households in which all members are unemployed, a figure that could triple in size should the economic crisis triggered by the pandemic deepen. 

Spain is trying to become the second country in Europe, behind Italy, to pass a minimum income measure. Last year, Italy’s populist government passed into law the reddito di cittadinanza (or, citizen’s income) plan. Under the Italian scheme, a beneficiary’s income is automatically topped up to €780 via a special government-issued prepaid debit card. If you work, and earn less than that, you get the difference between your wage and €780. If you are unemployed or retired, you get the full €780.

As Ylikännö points out, the Spanish and Italian plans are not UBI as they are not universally distributed; the monthly payments are designed as a top-up for those who slip under the poverty line.

A true UBI would be something like Andrew Yang’s “freedom dividend.” The former Democratic presidential candidate campaigned on the promise to give $1,000 per month to every American adult—no questions asked—in what would have been the planet’s first truly universal basic income plan.

Yang has probably done more than anyone to thrust UBI into the national conversation as a potential policy solution to address inequality, cushion economic collapse brought on by a pandemic-sized shock, and even spur entrepreneurialism.

One of Yang’s legacy to American politics: UBI is proving more popular than his longshot candidacy.

By Easter Monday, the pope’s UBI message was trending on Reddit and the hashtag #popeforUBI was cutting through the gloom of COVID-19 death numbers. 

Some saw it as a what-would-Jesus-do moment.

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The CEO who keeps animal pharm growing

A surge in pet adoptions is helping Kristin Peck and animal health company Zoetis ride out the pandemic.

The CEO who keeps animal pharm growing

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When Kristin Peck became CEO of Zoetis in January, the animal health company was growing rapidly, thanks in part to steady growth in spending on pets. Just a few weeks later, coronavirus lockdowns turned the global economy upside down. But they also prompted Americans to adopt pets in record numbers, enabling Zoetis and Peck to face their first big crisis with what you might call a tailwind.

Zoetis, which makes medicines, vaccines, and other products, was spun off from Pfizer in 2013 and joined the Fortune 500 in 2019. It’s the market-share leader in “companion” animal health, with 22% of the market, and in several livestock categories too. With the pandemic doing only minor damage so far to commercial livestock or pet spending, Zoetis’s business has held up relatively well. The company’s stock is down roughly 5% this year, while the S&P 500 has fallen more than 9%.

The drugmaker has an “incredibly diversified business,” says James Tierney, chief investment officer of concentrated U.S. growth at AllianceBernstein. Its portfolio is split roughly 50/50 between companion and livestock, with about the same split between U.S. and international sales. And unlike many human drug companies, notes Tierney, it isn’t dependent on blockbusters. Zoetis’s bestselling product, dog itch medication Apoquel, generated less than 10% of its total sales of $6.3 billion in 2019.

Peck, who grew up in Connecticut around animals (“We had horses, four dogs, two cats, birds,” she recalls), was an executive at Pfizer before joining Zoetis to shepherd it through its IPO. She’s adjusting to the new reality in part by boosting advertising for pet products and building veterinary telemedicine partnerships.

Kristin Peck, center, along with members of the Zoetis Board of Directors visits a poultry hatchery.
Courtesy of Zoetis

Peck says the newly minted pet owners of the pandemic era “engage differently”: They’re largely digital-first millennials, she says, and are more likely to heavily research products before buying. That’s already giving a boost to some of Zoetis’s specialty products like its dermatology line (Apoquel and Cytopoint), as well as products for pet pain like Rimadyl. Another promising product expected to add hundreds of millions in sales: a new combination flea, tick, and heartworm medicine for dogs, Simparica Trio—currently the only such combo product available in the U.S.

Like pet spending itself, Zoetis isn’t entirely recession-proof, and the company recently lowered its growth forecasts for the year. Amid the pandemic, its livestock business faces short-term challenges, especially in beef and dairy, where supply chain problems involving plant closures and interrupted processing of beef have caused hardship, even leading to some animals getting euthanized. But Peck says she doubts the coronavirus will curb the long-term trend toward eating more protein. And if lean times lead consumers to focus on cheaper meats, Zoetis could benefit from products like Zoamix, an additive that takes the place of antibiotics in chicken feed—one more example of diversification feathering the company’s nest.

A version of this article appears in the June/July 2020 issue of Fortune with the headline “The CEO who keeps animal pharm growing

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