dm CEO Advocates for Universal Basic Income of EUR1,200 Per Month

In a recent interview, Christoph Werner, the CEO of dm-drogerie markt, discussed the potential benefits of implementing a Universal Basic Income (UBI) in Germany, suggesting that a monthly payment of EUR1,200 for every citizen could be a viable solution for the country's social welfare challenges.

The concept of UBI has gained traction in various discussions surrounding the simplification of the German social welfare system. This proposal suggests that every citizen would receive a guaranteed monthly income sufficient to cover essential living expenses without any requirements for work or financial need assessments. Research from the German Institute for Economic Research estimates that this amount would be approximately EUR1,200 per month for adults and EUR600 for children.

Proponents of UBI argue that it serves as a humanitarian measure to address social issues, while critics express concerns that such a system may undermine productivity and economic stability. A pilot study conducted by the organization 'Mein Grundeinkommen e. V.' examined the effects of UBI in Germany, highlighting it as a potential alternative to the current citizen's basic income.

Werner, who follows in the footsteps of his late father Götz Werner, a well-known advocate for UBI, expressed his belief in the concept's effectiveness. He mentioned the need for forward-thinking solutions to adapt to evolving economic landscapes, especially in light of innovations that may reduce the number of jobs available due to advancements in technology such as generative AI.

Addressing concerns regarding existing welfare systems, Werner noted that unlike traditional welfare payments, UBI would not diminish when individuals take on work. This fundamental difference could encourage people to pursue employment opportunities without the fear of financial penalties that exist with the current system.

Werner emphasized that most individuals are driven to work not solely for financial reasons but for personal fulfillment and contribution to society. He acknowledged that while a small fraction may choose not to engage in work, society can manage this minority effectively.

When questioned about the impact of UBI on low-wage jobs, he suggested that if financial necessity were removed, the labor market could adapt in several ways. Low-paying jobs might see increased wages to attract workers, or the roles could be automated if that proves to be more cost-effective.

Furthermore, he highlighted that the implementation of UBI could lead to greater employee mobility, as individuals would feel less constrained by financial obligations when considering job changes. This increased flexibility could foster innovation and creativity within the workforce.

On the topic of financing UBI, Werner mentioned that significant tax reforms would be necessary. He proposed a shift towards higher consumption taxes rather than taxing income, arguing that this approach might alleviate the financial burden on workers while ensuring adequate funding for the UBI.

To balance the potential regressive effects of increased consumption taxes, he suggested instituting a tax-free allowance on basic consumption, alongside higher taxes on luxury goods. This strategy aims to ensure that low-income individuals are not disproportionately affected while still generating necessary revenue for the UBI.

As discussions around UBI gain momentum, Werner's insights contribute to the ongoing debate about how Germany can adapt its social welfare systems to meet the challenges of an evolving economy.