The Institute for Policy Research (IPR) at the University of Bath published its latest report on the effects of basic income — titled “Exploring the Distributional and Work Incentive Effects of Plausible Illustrative Basic Income Schemes” — on May 18, 2017.
Authored by IPR Research Associate Luke Martinelli, the report builds upon the working paper “The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK” (March 2017), in which Martinelli used simulation techniques to model four different types of basic income schemes (varying according to the amount of the benefit and accompanying changes in the tax and benefit system) and their effects on poverty and inequality.
The new report carries out a more detailed analysis of basic income schemes set at the three levels found to be most plausible in the earlier report: the level of the tax saving implied by the UK’s personal income tax allowance (which it would replace); the level of the UK’s existing social assistance benefits (many of which would be replaced); the level of existing benefits plus premiums for the disabled.
In this new contribution, Martinelli examines the predicted impact of these schemes on financial work incentives, including both financial incentives to work at all and incentives to increase work marginally. Martinelli looks in greater detail at the distributional consequences of the basic income schemes, including the effect on women and disabled individuals.
According to Martinelli, “Both of these elements are crucial to efforts to evaluate whether basic income has desirable effects and what types of design features would help make the policy politically feasible. The models we examine in this paper present a number of issues that basic income advocates will have to address as they think about implementation and policy design more closely.”
The report concludes that, with respect to distributional consequences, each scheme results in both winners and losers, stating, “Our core insight is that for the most part, even when particular groups gain (lose) on average, there are usually still non-trivial numbers of individuals and households who are worse off (better off).”
Concerning work incentives, each scheme sees a reduction in financial work incentives for most individuals. However, the distribution of effects was such that “we can imagine the effects of stronger work incentives on particularly sensitive groups to outweigh the more generalised effect of weaker work incentives over the wider population.”
Edwin G. Dolan is an economist and educator with a Ph.D. from Yale University.
[Craig Axford]
In this two part series Ed Dolan takes a look at the impact a basic income guarantee would likely have upon the incentive to work. In part 1 Dolan considers the theory behind an income guarantee and its impact on work. In his second post he considers some of the available evidence.
Research published by the Institute for Fiscal Studies shows that ‘Universal Credit will strengthen financial work incentives for some people, as intended, but weaken them for others. In general, incentives to work will be strengthened for the main earner in a family who works part-time or has low earnings, and will be weakened for those with higher earnings and for second earners in couples’ and that ‘moving from the current system of benefits and tax credits to a single benefit will require major administrative and IT changes. It is noteworthy that the government is attempting this at a time when spending on benefit administration (and public service spending generally) is being cut; the fact that such a major reform is being attempted at a time when benefit entitlements are being cut, overall, rather than increased, also increases the political risks to its implementation.
Below is the a copyedited version of the speech I delivered at the Basic Income March, New York, October 26, 2019 in the Bronx, New York, October 26, 2019. Pierre Madden ranscribed and copyedited it, in Montreal, Quebec, September 2020. Then I copyedited it again, at St. Elizabeth’s, Napoleon Avenue, New Orleans, September 11-13, 2020
I march for UBI because it’s wrong to come between anybody and the resources they need to survive and that is exactly what we do in just about every country in the world today. Poverty doesn’t just happen. People don’t get themselves into poverty. Poverty is a lack of access to resources. The world is full of resources. The only reason you can lack access to the resources you need to survive is because somebody else controls them whether it’s an owner, whether it’s a politburo or whether it’s a bureaucracy. It doesn’t matter who controls them. If it’s not you and they say you can’t use them unless you do what we say, you are not free.
A video of the actual speech, October 26, 2019
Freedom is independence. Freedom is the power to say no to anybody who wants to give you orders. But we’ve set up the world so it seems so natural that some people should just own the earth. And the rest of us, the 90%, the 99%, we all have to go to them to get our job or we have no resources to keep us alive. And we call that “work.” We act like there’s no other kind. As if the only thing work could possibly mean is going and taking orders from somebody who has more privileges than you do. Working for yourself has become impossible. It’s been impossible since we kicked the peasants off the land and enclosed the commons. Working for yourself has been impossible since we killed the buffalo. Working for yourself has been impossible since we abducted the slaves. And the freed slaves knew this at the end of the Civil War. That’s why they asked for 40 acres and a mule. Unfortunately, their masters knew it too: that’s why they didn’t get it.
Marching from Harlem to the South Bronx October 26, 2019
There’s nothing wrong with a job. Jobs don’t make you unfree. What makes you unfree is when instead of saying I want you to work for me so I am going to pay you enough that you’ll want to work for me, they say I’m going to take everything starve you into submission. A small group of owners took all the resources. They didn’t invent these resources. These resources were here before all of us. And this group of people, this tiny little privileged group of people are going to take all the resources and they are not going to share with anybody until the people who have nothing provide services for the people who already own everything. That’s why when you control resources, you don’t get just the resources; you get to control other people.
The obligation should go in the other direction. Instead of the poor being obliged to work for the rich, the rich should be obliged to work for the poor. The only thing you could possibly do to justify owning resources, to own more resources than other people do, to have more access to resources, to have more control over resources, to use and use up more resources than other people do, is to provide some sort of service for them.
The New York Basic Income March, October 16, 2019
That’s why we need to tax the owners of property. All property is made out of resources. Every single piece of property, even on the internet. You need a place to stand when you make the internet. You need energy to make that internet work. All property is made out of resources.
They’ll tell you they’ve paid for those resources. No, they paid the last guy who owned them. They didn’t pay all of us who don’t own any resources. If you want to take a part of the earth that was here before you, you’ve got to pay back, provide a service for those who own nothing. That’s why you have to pay a tax on resources and the distribution of the revenue from that tax has to be unconditional.
But they’ll say, that’s something for nothing. No, that’s exactly backwards. The system we have now is something for nothing, where people who own the Earth don’t pay anything to those of us who therefore must do without. That’s something for nothing.
The South Bronx, October 26, 2019
We pretend we’re free because we have a choice of which one of these property owners we can work for. A choice of masters is not freedom. Freedom is independence. Freedom is the power to say no to anyone who would want to be your master. When you establish that, everybody gets some of the value of the resources of this earth, enough to live in dignity, enough to survive, enough that you don’t have to work unless somebody makes it worth your while. Oh, but they will say: All those lazy workers won’t work if you do that.
Notice how it’s always lazy workers and never cheap employers. No, that’s never said. So what we’re really doing when we say this, is we’re taking sides in a dispute. When somebody offers a job and somebody else doesn’t want it, that’s a dispute about wages and working conditions. Everyone has their price, right? So, if there’s a good price, people will take it: Good wages, good working conditions. Someone will take that job. But if we say whatever the wage is, if you don’t take that job you’re a lazy worker. Never a cheap employer. It’s like we’re looking at a dispute and pretending it’s not even a dispute. We’re pretending that only this side counts. We’re taking sides in a dispute, and we’re siding with the most privileged person. We’re morally judging the weakest, the least powerful person, the most vulnerable person, and leaving the privileged people beyond reproach, as if they’re not even a party to a dispute.
A video documentary of the Basic Income March, Harlem to the South Bronx, Ching Juhl, October 26, 2019
That’s the way the system works today.
And that’s based on a ridiculous assumption that the privileged people of the world, whether they’re in government or whether they’re private resource owners, they get to judge everybody else. They get to judge the weak and the vulnerable. They say: you deserve to live; you don’t. You go be homeless, you go eat out of dumpsters or do whatever else you have to do to keep yourself alive. That is the ridiculous assumption that there is anyone who doesn’t deserve the basic resources that they need to survive. And they decide who’s deserving on the self-serving assumption that privileged people have the right to judge whether unprivileged people deserve to survive. Those assumptions are self-serving to begin with. And look how self-servingly they use that power! In practice, the number one thing that we ask of the poor is, “if you’re truly needy, are you willing to work for the rich?”
Are you willing to work for people who own property? That’s what you’ve got to do to prove that you’re worthy. That’s so self-serving on the part of the privileged. And for almost all of us, it’s self-defeating, because most of us don’t have enough property to work for ourselves. The vast majority of us have to work for someone who owns enough property to hire us. By creating the situation where the more privileged to get to block the less privileged from the resources they need to survive, we’ve created a situation where just about everybody has to work either directly or indirectly for the wealthiest of us.
Marching from Harlem to the Bronx, October 26, 2020
And that creates this terrible work incentive problem. When they talk about incentives, they only talk about the incentives for those lazy workers to work. What about the incentive for those cheap employers to pay good wages? That incentive problem doesn’t just affect the people at the low end. 41 years ago, real per capita income was half of what it is now. That means we could all be working half as much and consuming the same or we could be working the same and consuming twice as much as we did 41 years ago. But most people are working just as much as their parents were 41 years ago and consuming little if any more than their parents did 41 years ago. We’ve had all this economic growth all this automation in the past 41 years and the benefits have all gone to the top 1%. Basic Income is not just for those other people at the low end, it’s for everybody who has no other choice but to work for a living.
We have owed each other a Basic Income since we enclosed the common lands, since we abducted the slaves, since we killed the buffalo not because some long-dead person stole something from some other long-dead person but because they created a system that privileges some, impoverishes others, and corrupts us all. We all owe each other a Basic Income now. That’s why I’m marching today and thank you for joining me. –Karl Widerquist, the Bronx, New York, October 26, 2019, final edits St. Elizabeth’s, Napoleon Avenue, New Orleans, September 13, 2020
A video interview of Karl Widerquist, by Ching Juhl, June 22, 2020
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All the images and videos above are by Ching Juhl of Juhl Media.
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Pierre Madden, transcribed this text, did some of the copyedting.
UBI is the opposite of something for nothing. It is the just compensation for all the one-sided rules of property and property regulations that society imposes on individuals.
The biggest threat to freedom in the world today is economic destitution. We need universal basic income (UBI) because destitute people are unfree to sleep undisturbed, unfree to urinate, unfree to wash themselves, and unfree to use the resources of the world to meet their own needs. Being unfree in these ways makes them unfree in all their economic relationships.
The destitute are unfree in the most basic sense of the word. The destitute are not unable to wash themselves and they are not unable to use the resources of the world to meet their needs: they are unfree to do these things. Because our governments enforce a property rights system in which some people control natural resources and other people do not, someone will interfere with them if they try to do these things that they are very capable of doing.
Poverty is not a fact of nature. Poverty is the result of the way our societies have chosen to distribute property rights to natural resources. For millions of years no one interfered with our ancestors as they used the resources of the world to meet their needs. No one failed to wash because they were too lazy to find a stream. No one urinated in a common thoroughfare because they were too lazy to find a secluded place to do so. Everyone was free to hunt and gather and make their camp for the night as they pleased.
No one had to follow the orders of a boss to earn the right to make their living. Our hunter-gatherer ancestors were not rich, but they were not in poverty as we know it today. Our laws today make it illegal for some people to satisfy their most natural and simple bodily needs, and our laws make homelessness such a fact of life that we can believably pretend that it’s all their own fault. There are billions of people today who are more poorly nourished than their hunter-gatherer ancestors. It cannot be simply their own fault. We have chosen one way to distribute rights to natural resources; we can just as easily choose a system that does not create poverty as a side effect.
We have created the threat of economic destitution, and we have used it as a ‘work incentive’. In doing so, we have made virtually everyone dependent on their employers or on the government or private charities for which they might be eligible. This policy allows a few privileged people to dictate the terms of employment to virtually everybody.
We need to stop judging people and restore the freedom people had before governments took away their direct access to the world’s recourses.
The most common objection to UBI labels it as something for nothing, and declares that something for nothing unacceptable. They say people have a moral obligation to ‘work’. Lazy people who will not work should not be rewarded with anything. Therefore, supposedly, any social benefits should be conditional on at least the willingness to accept employment.
This argument is filled with problems. I’ll just discuss two. The first problem with it is that UBI is the farthest thing from something-for-nothing. All societies impose many rules on every individual. Consider the discussion of homelessness above. Why can’t homeless people build their own shelter and their own latrine? Why can’t they drink out of a clean river? Why can’t they hunt, gather, or plant and harvest their own food? They cannot do these things because governments have made rules saying they don’t have the right to do these things.
Governments divided the Earth into ‘property’. The wealthy got a share, while most people got nothing but the opportunity to ask the wealthy for a job. Those of us who somehow managed to get a share of the Earth’s natural resources benefit every day from the state’s interference with virtually everybody else (i.e. the people who didn’t get a share). We pay them no compensation, no reparation, nothing to restore the freedom you get from the ability to work for yourself with no boss, no client, and no caseworkers. A state without UBI is the state that has something for nothing.
The wealthy got control of resources without paying their real cost, and control of resources gives them effective control over the labour of virtually everybody. UBI is not, and should never be seen as, something for nothing. It is the just compensation for all the one-sided rules of property and property regulations society inherently imposes on individuals.
The second problem with the work obligation argument against UBI is that it conflates two different senses of the word ‘work’ – one that means toil and one that means employment or time spent making money. In the toil sense, work simply means to apply effort regardless of whether it is for one’s own benefit or for someone else’s. In the employment sense work means to work for someone else – such as a client or a boss. Anyone with access to resources can meet their needs by working only for themselves or with others of their choosing. But people without access to resources have no other choice but to work for someone else. Furthermore, they have to work for the same group of people whose control over resources makes it impossible for the propertyless to work only for themselves.
Working for someone else entails the acceptance of rules, terms, and subordination, all of which are things that a reasonable person might object to. There is nothing wrong with working for someone else and accepting the conditions of work as long as the individual chooses to do so. But there is something wrong with a society that puts one group of people in the position where they do not have the power to say no to the jobs offered them by more privileged people.
When we take away access to the Earth’s resources and make no reparation, we are not forcing people to work, but to work for at least one of the people controlling the Earth’s resources. When we do this, we create a mandatory participation economy the makes people unfree, vulnerable, and miserable.
The evidence is found in every sweatshop, in every ‘trafficked’ person, in every on-the-job instance of sexual harassment, in every homeless shelter, and in every worker who can’t afford any basic necessity of life.
The solution is to create a voluntary participation economy based on truly free trade. In this sort of economy, each person would pay for the parts of the Earth they use and each would receive a share of the payment for the parts other people use. This principle is the basis of UBI. With a sufficient UBI to draw on, each person would have the power to say no to a bad job offer, and the power decide for themselves whether the offers in the job market are good enough to deserve their participation. And that’s what it means to enter the job market as a free person. Nothing protects a worker better than the power to refuse a job. This power will protect not only the poor and marginal but all of us.
