by Benjamin Sadlek | May 17, 2017 | News
Benoît Hamon. Credit to: L’opinion.
Though Socialist candidate Benoît Hamon did not make it to the second round of the French presidential election, he has attracted attention through his proposal for a version of universal basic income (UBI).
An article by the French Economic Observatory (OFCE) explores the way Hamon’s UBI proposal might be implemented into an existing French system that already has redistributive programs such as the RSA (Revenu de Solidarité Active), which provides a level of income for households without a source of it. Hamon’s proposal for basic income may effectively supplant these programs, but it does not describe how a basic income will interact with them. Nonetheless, with certain conditions applied, the plan should give benefits to 11.6 million people, or 17.5% of the French population. The amount paid will adjust to various conditions such as marital status and dependency on parents.
The version of the plan as described by the OFCE describes a basic income of 600 euros per month, starting for those with no income, and then gradually tapering the payments off to incomes 1.9 times the French minimum wage, which is 9.76 euros per hour as of 2017. The base system will taper off payments by using a formula, which subtracts 27.4% of the total income of a taxable household from the monthly payment of 600 euros. Because the payments are adjusted and distributed in a single step, this system more resembles a negative income tax than a universal basic income, where a UBI system would pay an equal amount to everyone first and then take taxes out. This system is not automatically individualized for everyone either, as married couples can choose to file their taxes jointly or individually depending on their financial situation. The implementation of this proposal will also matter greatly, specifically as it is overlaid onto the existing French system or proposed in addition to it.
Using a micro-simulation model (see OFCE article for details), the authors provide estimates of the net benefits to tax households composed of one adult, using the latest available data (2015).
They use a model which assumes that the UBI will overlay the existing French system, and therefore subtracts benefits already provided by the state. This model also excludes individuals aged 18-24, who still report under their parents’ tax household.
Given the model’s parameters, households within the first decile of living standards would see a rise of 38%, or 257 euros/month, to their income. The second decile would increase 13%, or 137 euros/month, and so forth until it expires for those making about 2,800 euros/month, or 1.9 times the French minimum wage. As a result, the poverty rate, as defined by the share of French households who live on about 1,000 euros per month, is projected to drop 4.9% down to 8.5%. The Gini coefficient would also drop by 0.04 points to 0.26, and would put France from an average level to one of the least unequal nations in the European Union.
Average monthly gains by consumption unit and livings standards decile
Much still depends on the implementation of the program. As it stands, the OFCE model projects total expenditures of 30 billion euros; close to Hamon’s projection. However, if young adults ages 18-24 who still report under their parents’ tax household are given a basic income, expenditures would rise to 49 billion. These features suggest that certain groups will be given new incentives within this system, such as individuals within the age range of 18-25 and married couples who can choose to file jointly or individually.
To finance this UBI program, the authors make clear that hikes in tax rates for the highest incomes would be necessary. Personal work income taxes alone bring 74 billion euros annually, but France’s state expenditures are already quite large. New tax bases, like France’s ISF wealth tax which draws revenue from assets like real estate, may be needed to help finance this proposal.
More information at:
Pierre Madec and Xavier Timbeau, “Universal basic income: An ambition to be financed”, OFCE Le Blog, April 5th 2017
by Genevieve Shanahan | Mar 15, 2017 | News
Benoît Hamon, French presidential candidate for the Socialist Party, was the subject of France 2’s political programme, l’Émission politique, on March 9. He here offered a revised version of his much discussed basic income proposal, which has been seen by many as backpedalling on earlier, more ambitious plans.
Previously covered by Basic Income News here and here, the prior iterations of Hamon’s proposal involved the gradual introduction of basic income in steps. The first would provide a basic income without means testing for those between the ages of 18 and 25 (who are currently excluded from un- and underemployment benefits in France), while later steps would expand the non-means tested basic income to other segments of the population and increase its amount.
With last week’s update, Hamon has indicated that the payment to young people would in fact be means tested. “All workers who receive a net salary up to 1.9 times the SMIC [minimum wage] each month” would receive an additional income, reaching up to 600 euro “for those who have nothing,” he said. “For a student who would work one day in five, the net gain would be 500 euro.”
BIEN’s French affiliate, the French Movement for Basic Income (MFRB), offers their analysis of this development. They explain that the first step of the new proposal would still be an improvement of the existing benefits system (the RSA) by automating its payment, increasing its amount to 600 euro/month and making it available to those between the ages of 18 and 25. Means testing would apply to all recipients under this revised proposal, however, such that only those receiving a net wage of less than 1.9 times the minimum wage (i.e., 2165 euro) would stand to benefit. The payment would then be on a sliding scale according to income – for each euro earned through work, the amount of the basic income would decrease by 28 cents.
Nicole Teke, public relations coordinator for the MFRB, highlights that this first step thus does not constitute a basic income:
“It is regrettable that Benoît Hamon has mainly focused on the first step. For the MFRB, it is essential not to forget the second step in the next five-year term, as this is the point of interest for basic income: to be fully effective, it must be universal, individual and unconditional.”
Hamon continued to defend the idea of basic income during the week, noting that, in pricing the benefit, “we have thought about it on the basis of gross financing, but the universal income also yields money.” Julia Cagé, Hamon’s economic adviser, made similar claims, arguing that, while the deficit may increase at the beginning of Hamon’s term to fund the basic income, it will quickly fall due to, among other factors, the positive effects of the basic income boosting the economy.
The first round of the presidential election will take place on 23 April. If no candidate wins a majority at that point, the second round will take place on 7 May. Hamon is currently polling at fourth place and has lost some Socialist Party support to Emmanuel Macron, who split from that party and formed his own, En Marche!, towards the centre of the political spectrum. It is therefore perhaps unsurprising that Hamon would seek to make his proposals more palatable to such elements.
Watch the full programme here (in French):
Read More:
“Revenu universel : le MFRB analyse la proposition de Benoît Hamon” [Universal income: the MFRB analyse Benoît Hamon’s proposal], Le Mouvement Francais pour le Revenu de Base, 14 March, 2017.
Claire Rush, “Socialist candidate Hamon backtracks on universal basic income”, RFI, 10 March, 2017.
Rémi Clément, “Comment Hamon justifie son revirement sur le revenu universel” [How Hamon justifies his turn-around on universal income], Challenges, 10 March, 2017.
“Revenu universel. Benoît Hamon revoit sa copie” [Universal income. Benoît Hamon revises his copy], Ouest France, 7 March, 2017.
Genevieve Shanahan, “FRANCE: Hamon becomes Socialist Party presidential candidate following basic income-focused campaign”, Basic Income News, 30 January, 2017.
Stanislas Jourdan, “FRANCE: Pro basic income candidate set to win socialist primary election”, Basic Income News, 22 January, 2017.
Stanislas Jourdan, “FRANCE: Minister of Economy says he is open to basic income”, Basic Income News, 26 January, 2016.
Reviewed by Russell Ingram
Photo: Benoît Hamon at meeting in Brest, CC BY-NC-ND 2.0 Benoît Hamon
by Genevieve Shanahan | Feb 9, 2017 | News
The French Minister of Ecology, Sustainable Development and Energy, Ségolène Royal, has expressed some support for Socialist candidate Benoît Hamon’s basic income proposal, and noted that the idea has been “unjustly caricatured”.
As recently covered by Basic Income News, Hamon’s proposal involves introducing an unconditional basic income of 600 euro per month for young people in 2018, before eventually rolling out to all citizens and increasing to 750 euro per month.
In a television interview for France 3, Royal had the following to say:
“I find that this idea has been unjustly characterised. Eminent economists have shown that it’s not about calling into question the society of work, that it wouldn’t be a tool to discourage work – on the contrary, it’s a symbol that underlines the necessity of securing employees. […] I think that the idea is interesting – that ambiguities must be lifted, [but] that unjust attacks have been directed against universal income.”
A prominent member of the Socialist Party, Royal was famously defeated in the 2007 presidential election against Nicolas Sarkozy.
Her position in 2017, however, remains uncertain. Royal says that she remains open to supporting either Hamon or the more centrist Emmanuel Macron in the upcoming presidential election, depending on the candidates’ finalised manifestos.
Macron still hasn’t publicised his full platform. Although he previously indicated openness to basic income, the former Minister of Economy has since dismissed basic income on the ground that it might promote laziness. Macron now instead backs the proposal for a decent minimum income that has been pushed forward by the Leftist think tank Terra Nova.
The two-round election will take place on 23 April and 7 May. These candidates go up against the far-right Front National’s Marine Le Pen, the Conservative’s François Fillon, and the Left Party’s Jean-Luc Mélenchon.
The full interview, in French, can be viewed here (discussion of basic income begins at 6:45).
Read more:
“Ségolène Royal soutient le revenu universel de Benoît Hamon” [Ségolène Royal supports the universal income of Benoît Hamon], BFMTV.com, 6 February, 2017.
“Royal salue les «idées neuves» de Hamon et «attend» le projet de Macron” [Royal salutes the “new ideas” of Hamon and “awaits” Macron’s project], 20 Minutes, 5 February, 2017.
Genevieve Shanahan, “FRANCE: Hamon becomes Socialist Party presidential candidate following basic income-focused campaign”, Basic Income News, 30 January, 2017.
Stanislas Jourdan, “FRANCE: Pro basic income candidate set to win socialist primary election”, Basic Income News, 22 January, 2017.
Stanislas Jourdan, “FRANCE: Minister of Economy says he is open to basic income”, Basic Income News, 26 January, 2016.
Additional reporting by Stanislas Jourdan
Photo: Ségolène Royal CC 2.0 by Ségolène Royal
by BIEN | Feb 4, 2017 | News
(Image Credit: Le Monde)
Thomas Piketty, Professor in the Paris School of Economics and author of Capital in the 21st Century, in his blog (in Le Monde) reports “there is a degree of consensus in France” on the provision of a minimum income. French citizens are for it.
For the minimum income, Piketty says disagreements exist around the amount. The consensus for the provision of a basic income is seen in “numerous other European countries,” Picketty claims. Piketty notes the problem with discussions about basic income is the “real issues” are not explored and can represent “social justice on the cheap.”
“The question of justice is not simply a matter of 530 Euros or 800 Euros a month,” Picketty said, “If we wish to live in a fair and just society we have to formulate more ambitious objectives.”
Piketty said, “The debate on basic income has at least one virtue, namely that of reminding us that there is a degree of consensus in France on the fact that everyone should have a minimum income.”
In a previous interview, Piketty supported some arguments for a basic income (financing access to basic goods) and remained skeptical about other arguments (substitute for basic goods) for a basic income.
Read the full article here:
Thomas Piketty, “Basic income or fair wage?“, Le Monde, December 13th, 2016
by Genevieve Shanahan | Feb 3, 2017 | News
Renowned French economist Thomas Piketty, best known for his 2013 book Capital in the Twenty-First Century, has been making headlines for his positive comments regarding basic income in a number of blog posts. However, the approach he proposes is not basic income as it is commonly understood.
In a blog post published on 13 December, Basic income or fair wage?, Piketty states that while he’s pleased to see such consensus across the political spectrum on the idea of a minimum income within France, discussions of a basic income and its specific level are not radical enough – that such conversation “leaves the real issues unexplored and in reality expresses a concept of social justice on the cheap.” He points instead towards progressive taxation, fairer approaches to education and fair pay and control within corporations as topics deserving focus.
Returning to the question of basic income, Piketty raises what is essentially an important administrative concern. He notes that, at present, employees earning the minimum wage rate in France have their taxes and social contributions deducted from their wages at source, putting their net wage below the threshold for social assistance. However, the worker must herself apply and wait several months to receive the social assistance necessary to bring her income back up to the minimum level. Piketty seems to be concerned that such inefficiencies and poverty traps would proliferate under a basic income scheme.
Then, on 25 January, a collection of prominent researchers, including Piketty and famous sociologist Dominique Méda, published in ‘Le Monde’ a call in support of Benoît Hamon’s basic income proposal – Pour un revenu universel crédible et audacieux [For a credible and audacious universal income]. Some news organisations quickly followed with headlines claiming Piketty had endorsed basic income, yet the scheme it describes is not what we would ordinarily understand as basic income (and certainly strays from BIEN’s definition on a number of points).
To begin, the researchers defend an interpretation of Hamon’s basic income scheme that may not be entirely accurate, stating:
“Benoît Hamon never said that he would pay 500 euro a month to 50 million adults. On the contrary, he has explicitly noted the fact that the new system could be subject to resource conditions and concern only wages of less than 2000 euro, with amounts that would clearly not be the same for all.”
However, as we have covered here and here, Hamon does indeed hope to ultimately offer a full basic income, and while his steps towards such full implementation have been modified somewhat over the course of his campaign, the first step he proposes is for a basic income to be paid to those between the ages of 18 and 25, unconditional on resources or low wages.
A two-speed social security scheme?
Piketty’s administrative concern again arises here, with the authors claiming that “it would hardly make sense to pay 600 euro a month to those earning 2000 or 5000 euro a month, to then immediately take back the same amount by increasing their taxes.” This leads the piece to end with an argument for “basic income” to be provided essentially as tax credits on the payslips of the stably employed.
In response to requests for clarification following this post, Piketty published another blog post on 30 January – Notre revenu universel est-il vraiment universel? [Is our universal income really universal?]. In this article, Piketty clarifies his recommendation, suggesting that it would be most efficient to establish different methods of payment of the basic income dependent on different employment circumstances:
“We believe that it is high time to move away from the comfortable abstractions that often characterise this debate, and finally to say precisely how it is possible to proceed. In this case, the solution we propose is to pay the universal income in a mixed form. For all those without jobs, or who only have a very part-time job, or indeed whose job is divided between multiple small employers or contractors, then there is no other solution than to pay the universal income in the form of an allocation managed by public agencies.”
Piketty claims, however, that direct payment of an income top-up on stable employees’ payslips is to be preferred, where feasible, because it links the idea of basic income with that of a fair wage and because, in practical terms, he does not believe the basic income payment would be as simple and automatic as the top-up.
Nicole Teke, public relations coordinator for the French Movement for Basic Income (MFRB), has the following to say:
“Even though he clearly shares the spirit of UBI in terms of establishing an income floor for everyone, his proposal would create further polarisation of the labour market by having a two-speed system for stable workers vs. unstable workers and the unemployed. This contradicts the principle of universality of basic income.”
MFRB have laid out a number of responses to Piketty’s comments here. This includes a useful side-by-side comparison of one of MFRB’s basic income proposal and Piketty’s suggested scheme, and an analysis of the potential perverse effects of the latter.
Looking at basic income from a narrow perspective
A common thread through these three articles seems to be Piketty’s belief that basic income, when implemented, would amount to a mere increase of the amount of money eligible citizens could apply for, with no change to its bureaucratic system of administration. He then repeatedly contrasts a system whereby the full “basic income” is listed on stable employees’ payslips, along with the relevant taxes that partially or fully outweigh this amount, with his preferred system of simply listing the balance, if any, owed to the worker.
This preconception of how basic income would be implemented seems to be partially motivated by his own preference regarding the message a basic income would communicate: that work is valuable, and basic income is a way of offering a just salary and equitable remuneration for work. He also espouses a belief that working life won’t change in response to automation and “Uberisation” as much as others suggest, so we should prefer top-up payments on payslips to a separate, standardised basic income system for all, paid directly by the government.
In this way, while Piketty begins by chastising basic income proponents for lacking radical vision, he ultimately endorses just a minor part of the basic income proposal – that of automatic payment. And while, in the joint letter, we are entreated to offer a concrete basic income proposal, the system put forth caters only to a subsection of the population, with hand-waving regarding how this would connect to basic income for the rest.
As Nicole Teke of MFRB concludes:
“By focusing on the financial distribution effect of UBI, Piketty misses the bigger point of UBI: to emancipate citizens. Despite his good intentions in fostering the debate, Piketty has created somewhat more confusion on the definition of universal basic income, which MFRB has tried to establish as a standard in the debate in France.”
Read more:
Thomas Piketty, “Basic income or fair wage?”, Le Monde, 13 December, 2016.
Thomas Piketty et al., “Pour un revenu universel crédible et audacieux” [For a credible and audacious universal income], Le Monde, 25 January, 2017.
Thomas Piketty, “Notre revenu universel est-il vraiment universel?” [Is our universal income really universal?], Le Monde, 30 January, 2017.
Jean-Éric Hyafil, “Commentaires sur le ‘revenu universel’ de Thomas Piketty” [Comments on Thomas Piketty’s universal income’], Le Mouvement Francais pour le Revenu de Base, 2 February, 2017.
Adrien Sénécat, “Revenu universel : Valls et Hamon se disputent la référence à Piketty” [Universal income: Valls and Hamon disagree over Piketty’s reference], Le Monde, 26 January, 2017.
Stanislas Jourdan, “FRANCE: Pro basic income candidate set to win socialist primary election”, Basic Income News, 25 September, 2016.
Genevieve Shanahan, “FRANCE: Hamon becomes Socialist Party presidential candidate following basic income-focused campaign”, Basic Income News, 30 January, 2017.
Photo: Thomas Piketty, CC 2.0 Universitat Pompeu Fabra
