By Marina Pasetto Nóbrega.
We read the recent article by Philippe Van Parijs suggesting a Euro-dividend for all in the EU. That would represent about 200 Euros monthly to each and everyone, unconditionally. And, he points out, this minimum basic income or citizen’s income can be supplemented with income from labor, capital or social benefits. The author calculated that the total expenses amount to 10% of the EU’s GDP. Recently the citizens of Switzerland petitioned their parliament to examine a proposal for a basic income for all adults, amounting to about US$ 2,800/monthly. This is a mighty sum but Switzerland is a rich country with a small population. Iran, among economic changes applauded by the IMF, introduced an unconditional cash transfer that benefits 90% of its population. We would spare the readers of this newsletter the arguments that Van Parijs aligned to justify the proposal as they are most likely familiar to supporters of the basic income idea.
What we want to discuss is the way to turn the utopia into reality. 10% of the GDP is a sum that will be a formidable barrier to implementation of the benefit. We draw from the discussions we are having in a Brazilian city where there is a Municipal Council devoted to devise a way to start a basic income in steps, as required (in Brazil) by the 2004 law that created the benefit but still awaits regulation(1). Our government, as almost every government in democracies, has a bureaucracy that takes care of requests from the unemployed or underemployed. In Brazil 13.9 million means-tested families are receiving help from the Bolsa Familia program. That amounts to about 40 million persons, nearly 25% of our population. We would argue that the easier first step to initiate an unconditional and permanent basic income for all Brazilians is to target the present Bolsa Familia beneficiaries. Just turn the present benefits permanent and unconditional. The poverty trap will be eliminated. The bureaucracy can now search for the remaining poor and families or individuals that fall into economic vulnerability. Those will receive the permanent minimum income. The existing government social security network will be active monitoring those that enter the “precariat”, moving them to the minimum income shelter. We would claim that such a strategy would also be more palatable and less costly to the EU residents.
We also would like to stress the importance of the minimum income not only as a basic human right but as a necessary measure if we want to improve the safety and well-being of rich and poor because want will increase social unrest and crime for all. It will grant people, amidst the modern revolution in the job market, time to wait for new opportunities that we still cannot foresee or get training to qualify for existing or emerging jobs. The right to frugality independent of work seems relevant when a lot of people pay lip service against excessive consumption. A better life, for those without other means except the basic income, will also boost, we hope, communal arrangements to lower costs for all involved.
The modern situation that adds urgency, in our view, to the implementation of a basic income has been analyzed by scholars and we would like to mention just two studies: Brynjolfsson and McFee(2) have shown that notwithstanding a continuous rise in productivity, the last two decades exhibit a marked reduction in job opportunities. This modern decoupling is due to developments like electronic computation, robotics and artificial intelligence. Job openings are being reduced in a very marked way. Frey and Osborne(3) released a very interesting study of 702 occupations, charting out the many that are in the road to extinction due to the modern trends mentioned. In the US the authors estimate that 47% of jobs are at risk of being automated within a decade or two. Also a fundamental psychological barrier exists and resides in the deeply engrained notion that income has to be linked to work. People will have to overcome that as we did in the recent past with slavery, torture and the rights of women and minorities, finally embracing solidarity in the economic realm.
Anywhere we could hasten the arrival of the basic income dream by taking the stepwise approach, using the existing social agencies to permanently move into the unconditional minimum income the vulnerable.
1 Our proposal was presented in BIEN news in 2012 as “A three-step proposal to get to a basic income for all in Brazil”.
2 Race Against the Machine – how the digital revolution is accelerating innovation, driving productivity, and irreversibly transforming employment and the economy. Erik Brynjolfsson and Andrew McFee, 2011, Digital Frontier Press, Mass, USA
3 The future of employment: how susceptible are jobs to computerization?, Carl Benedikt Frey and Michael A. Osborne, 2013,
https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
We thank Jim Hesson for generously reviewing the text
I agree with Drs. Nobrega that an incremental approach makes sense where the sticker shock of a basic income for all might be an obstacle. Incremental approaches will have to be tailored in the context of the existing benefits programs of particular countries.
The potential problem I see with your approach is that if you make the Bolsa Familia, which is currently means-tested and conditional, permanent and unconditional, what prevents everyone in Brazil from applying? If it remains means-tested, it is likely that some part of the poverty trap will remain. If it is not means-tested, then it is not an incremental approach but a universal basic income, and you have the problem of the sticker shock.
Since the Bolsa Familia goes only to families, could an alternative incremental approach be to establish a universal, unconditional child benefit? Is it possible in Brazil to recoup the benefit from the wealthy through the tax system? This is the approach I would suggest in the U.S., but it requires a tax system with a high degree of compliance. Is that the case in Brazil?
Dear Dr. Zelleke:
Thanks for your comment. In our proposal all Bolsa Familia beneficiaries will receive their monthly payments permanently and without further surveillance. Right now every member of 13.9 million means-tested brazilian families receives the average of R$ 35.00 per person, adults and children. We imagine that gradually this average could be raised to the full value set by the government (now it is R$ 70.00). The money due to children should be given to the mother. There will be no flooding of requests because the social bureaucracy will accept applications only for families and individuals that are out of work and/or entered the “precariat”. They will be moved immediately to the permanent and unconditional Basic Income (BI). The system will also look around for the remaining poor in the backlands to rescue then to BI (continuing our current “active search”). As the benefit is now permanent, the poverty trap is elimined. As for children our initial proposal suggested that we could put all newborns in BI, without means-testing and we would be delighted if that is implemented too. Our tax system has low compliance and does not cover almost half of the population that is in the informal sector of the economy, so we cannot use the NIT approach of Milton Friedman. The proposed system is means-tested just at the entrance gate. Afterward the BI recipients that eventually become rich will remain in the BI. The well off will not be rejected because as soon as one of them becomes needy they could apply and get the BI. We think that starting the BI with all would make sense before the industrial revolution when almost everybody was poor… In our times in many countries the poor are a minority and doesn’t make economic sense to hand the BI to people with means.