by Karl Widerquist | Nov 26, 2017 | Opinion, The Indepentarian
This post is one of several previewing the book I’m writing on Universal Basic Income (UBI) experiments, and it is the second of two reviewing the five Negative Income Tax (NIT) experiments conducted by the U.S. and Canadian Government in the 1970s. This post draws heavily on my earlier work, “A Failure to Communicate: What (if anything) Can We Learn from the Negative Income Tax Experiments.”
Last week I argued that the results from the NIT experiments for various quality-of-life indicators were substantial and encouraging and that the labor-market effects implied that the policy was affordable. As promising as the results were to the researchers involved the NIT experiments, they were seriously misunderstood in the public discussion at the time. But the discussion in Congress and in the popular media displayed little understanding of the complexity. The results were spun or misunderstood and used in simplistic arguments to reject NIT or any form of guaranteed income offhand.
The experiments were of most interest to Congress and the media during the period from 1970 to 1972, when President Nixon’s Family Assistance Plan (FAP), which had some elements of an NIT, was under debate in Congress. None of the experiments were ready to release final reports at the time. Congress insisted researchers produce some kind of preliminary report, and then members of Congress criticized the report for being “premature,” which was just what the researchers had initially warned.[i]
Results of the fourth and largest experiment, SIME/DIME, were released while Congress was debating a policy proposed by President Carter, which had already moved quite a way from the NIT model. Dozens of technical reports with large amounts of data were simplified down to two statements: It decreased work effort and it supposedly increased divorce. The smallness of the work disincentive effect hardly drew any attention. Although researchers going into the experiments agreed that there would be some work disincentive effect and were pleased to find it was small enough to make the program affordable, many members of Congress and popular media commentators acted as if the mere existence of a work disincentive effect was enough to disqualify the program. The public discussion displayed little, if any, understanding that the 5%-to-7.9% difference between the control and experimental groups is not a prediction of the national response. Nonacademic articles reviewed by one of the authors[ii] showed little or no understanding that the response was expected to be much smaller as a percentage of the entire population, that it could potentially be counteracted by the availability of good jobs, or that it could be the first step necessary for workers to command higher wages and better working conditions.
The United Press International simply got the facts wrong, saying that the SIME/DIME study showed that “adults might abandon efforts to find work.” The UPI apparently did not understand the difference between increasing search time and completely abandoning the labor market. The Rocky Mountain News claimed that the NIT “saps the recipients’ desire to work.” The Seattle Times presented a relatively well-rounded understanding of the results, but despite this, simply concluded that the existence of a decline in work effort was enough to “cast doubt” on the plan. Others went even farther, saying that the existence of a work disincentive effect was enough to declare the experiments a failure. Headlines such as “Income Plan Linked to Less Work” and “Guaranteed Income Against Work Ethic” appeared in newspapers following the hearings. Only a few exceptions such as Carl Rowan for the Washington Star (1978) considered that it might be acceptable for people working in bad jobs to work less, but he could not figure out why the government would spend so much money to find out whether people work less when you pay them to stay home.[iii]
Senator Daniel Patrick Moynihan, who was one of the few social scientists in the Senate, wrote, “But were we wrong about a guaranteed income! Seemingly it is calamitous. It increases family dissolution by some 70 percent, decreases work, etc. Such is now the state of the science, and it seems to me we are honor bound to abide by it for the moment.” Senator Bill Armstrong of Colorado, mentioning only the existence of a work-disincentive effect, declared the NIT, “An acknowledged failure,” writing, “Let’s admit it, learn from it, and move on.”[iv]
Robert Spiegelman, one of the directors of SIME/DIME, defended the experiments, writing that they provided much-needed cost estimates that demonstrated the feasibility of the NIT. He said that the decline in work effort was not dramatic, and could not understand why so many commentators drew such different conclusions than the experimenters. Gary Burtless (1986) remarked, “Policymakers and policy analysts … seem far more impressed by our certainty that the effective price of redistribution is positive than they are by the equally persuasive evidence that the price is small.”[v]
This public discussion certainly displayed “a failure to communicate.” The experiments produced a great deal of useful evidence, but for by-far the greatest part, it failed to raise the level of debate either in Congress or in public forums. The literature review reveals neither supporter nor opponents who appeared to have a better understanding of the likely effects of the NIT and UBI in the discussions following the release of the results of the experiments in the 1970s.[vi]
Whatever the causes for it, an environment with a low understanding of complexity is highly vulnerable to spin with simplistic if nearly vacuous interpretation. All sides spin, but in the late 1970s NIT debate, only one side showed up. The guaranteed income movement that had been so active in the United States at the beginning of the decade had declined to the point that it was able to provide little or no counter-spin to the enormously negative discussion of the experimental results in the popular media.
Whether the low information content of the discussion in the media resulted more from spin, sensationalism, or honest misunderstanding is hard to determine. But whatever the reasons, the low-information discussion of the experimental results put the NIT (and, in hindsight, UBI by proxy) in an extremely unfavorable light, when the scientific results were mixed-to-favorable.
The scientists who presented the data are not entirely to blame for this misunderstanding. Neither can all of it be blamed on spin, sound bites, sensationalism, conscious desire to make an oversimplified judgment, or the failure of reports to do their homework. Nor can all of it be blamed on the people involved in political debates not paying sufficient attention. It is inherently easier to understand an oversimplification than it is to understand the genuine complexity that scientific research usually involves no matter how painstakingly it is presented. It may be impossible to communicate the complexities to most nonspecialists readers in the time a reasonable person to devote to the issue.
Nevertheless, everyone needs to try to do better next time. And we can do better. Results from experiments in conducted in Namibia and India in the early 2010s and late ’00s were much better understood, as resulted from Canada’s Mincome experiment that sadly did not come out until more than two decades after that experiment was concluded.
The book I’m working on is an effort to help reduce misunderstandings with future experiments. It is aimed at a wide audience because it focuses the problem of communication from specialists to non-specialists. I hope to help researchers involved in current and future experiments design and report their findings in ways that are more likely to raise the level of debate; to help researchers not involved in the experiments raise the level of discussion when they write about the findings of the experiment, to help journalists understand and report experimental findings more accurately; and to help interested citizens of all political predispositions see beyond any possible spin and media misinterpretations to the complexities of the results of this next round of experiments—whatever they turn out to be.
[i] Widerquist, 2005.
[ii] Widerquist, 2005.
[iii] Widerquist, 2005.
[iv] Widerquist, 2005.
[v] Burtless, 1986.
[vi] Widerquist, 2005.
by Micah Kaats | Nov 24, 2017 | News
In recent years, basic income has found support across the political spectrum. While some have justified it as a human rights issue, others believe it to be necessary in the fight against poverty and rising inequality. According to many supporters, these are sufficient justifications in their own right. However, many basic income proponents also cite the growing threat of automation to employment. Put simply, as robots become smarter and cheaper, more and more workers will find themselves out of a job, and basic income programs will be required to offset rising unemployment and job displacement. This view is particularly popular in Silicon Valley and has been championed by the likes of Elon Musk, Richard Branson, and Mark Zuckerberg. However, a new report from Pearson, an education publishing company, challenges this line of reasoning.
Pearson’s analysis, with help from researchers at Nesta and the Oxford Martin School, diverges from previous reports on automation (Frey & Osborne, 2013; Arntz et. Al, 2016; McKinsey, 2017; Richard Berriman, 2017) in two key respects. While previous studies have tended to focus exclusively on the potentially destructive effects of automation, Pearson’s report also incorporates the potential for growth in jobs and skills that may be complemented by automation. The study also considers how automation may interact with seven specific global trends to affect supply and demand in the labor market over the next decade: (1) environmental sustainability, (2) urbanization, (3) increasing inequality, (4) political uncertainty, (5) technological change, (6) globalization, and (7) demographic change.
Pearson’s report relies on a combination of expert testimony and, perhaps fittingly, machine-learning. Two panels of artificial intelligence experts in the United States and United Kingdom were asked to rate the future prospects of thirty occupations in the context of the seven global trends identified by the researchers, and to report on how certain they were in their predictions. This information was then fed into machine-learning algorithms, along with data from the U.S. Department of Labor, to generate predictions for more than 1,000 occupations in the United States and United Kingdom.
Using this model, the researchers at Pearson reached the following six conclusions:
- 20% of the workforce are in occupations that will shrink.
This figure is smaller than previous high-end estimates of 47% (Frey & Osborne, 2013), but also larger than more conservative estimates of 9% (Arntz et. Al, 2016). In line with previous findings, Pearson reports that routine, physical or manual abilities will become less valuable over time. However, Pearson also notes that certain sectors typically considered doomed by automation such as agriculture, trades, and construction, may actually show pockets of job growth where new skills are required to complement new technologies. So, it can be said that there cannot be a complete elimination of people in the workforce. Instead, building skill sets to work alongside automated machines could be the way to go. For example, with large industries adopting newer technologies and automation to improve the production process, an automation parts supplier could be the need of the hour, as there will always be a requirement for people who have the necessary knowledge to handle new machines and implement efficient functionalities.
- 10% of the workforce are in occupations that will grow.
Specifically, the researchers argue that jobs involving judgment and decision making, teaching, active learning, interpersonal skills, complex problem-solving, originality, fluency of ideas, and systems thinking will all grow in value. Jobs in high demand will include teachers and education professionals, sports and fitness workers, caregivers, managers, hospitality workers, legal professionals, and engineers. Occupations in the public sector, as well as those resistant to globalization, emerge as particularly resilient. Further, jobs in the construction sector and those that involve outdoor manual work could also need constant manpower, as we see companies such as Crane Renovation Group reaching out to potential workforce to increase hiring and provide consistent jobs. Pearson also points out that jobs and skills that will become more valuable are not specifically confined to any one particular income bracket or skill level.
- 70% of the workforce are in occupations where their future is uncertain.
- So-called “21st century” skills will experience higher demand.
- Both knowledge and skills will be required for the future economy.
- Occupations can be re-designed to pair uniquely human skills with technology.
A global leader in education publishing itself, Pearson argues for sweeping reforms to education systems so that they may adapt faster to the changing needs of labor markets, and begin offering more flexible pathways to employment including credentials and microdegrees. Pearson also advises business leaders to start thinking of ways to redesign roles to balance technological and human resources. Finally, the researchers encourage individuals to develop skills that are “uniquely human” and commit to becoming lifelong learners.
However, the report is not without limitations and the researchers note the large degree of uncertainty baked into any analysis of job creation, which is notoriously more difficult to predict than job destruction. Critics have also argued that Pearson greatly underestimates the difficulty of implementing public and private reforms in the context of the political and social turbulence accompanying severe job displacement.
Nevertheless, despite these limitations and the challenges that lie ahead, Pearson’s researchers remain optimistic about the future of work. They summarize their findings rather succinctly: “The bottom line of our research, we can all stop agonizing about machines taking our jobs.”
You can download the full report here, or visit the microsite.
by Guest Contributor | Nov 22, 2017 | Opinion
Portuguese basic income activist Miguel Horta is pushing for a basic income “for all.” Horta wants to ensure that the people control their basic income, not the government.
Horta is an employee of Portugal’s Finance Ministry, where he deals with tax avoidance issues. He originally heard about the “gratuity of life” from Agostinho da Silva. Eventually he came across basic income, and believed there was a close connection between the two ideas.
From there, Horta developed a financing scheme for Portugal.
In October, Horta was interviewed by Basic Income Korea Network’s Hysong Ahn. The interview was originally published in Korea’s The Times. The full interview can be found below.
Miguel Horta, on left. Hyosang Ahn , on right.
First, can you tell us about your previous employment, and your current role in the UBI movement?
I worked as a tax inspector for the Portuguese government since 1995.
My position in the movement Basic Income of All for All is that of a member equal to all the others. Our movement does not assign specific functions to its members, nor does it have any kind of hierarchy.
What are your personal and group activities since you adopted the basic income idea in the early 1990s?
Despite being ready for it since the 1990s, as I said before, personally I had no activity related to basic income before 2013. That’s when I heard about an organized activist group on the internet for the first time, and I joined it.
In the first two or three years of activism, my activity was essentially to participate in public discussions about basic income, especially on the internet, and to study the question of its financing.
Later, we founded our local movement in Lisbon and began to organize public events to discuss the idea; to get in touch with other organizations and activist groups from other causes, to show them the basic income proposals; and, whenever we have the opportunity, organize debates on basic income with students in secondary schools.
We are also active on the internet, with a blog, a YouTube channel and a Facebook page.
Explain the differences between the movement “Basic Income of All for All’ and the other groups or persons in the basic income movement in Portugal.
Other groups and individuals generally conceive of basic income as the demand for a “right” made by the people from the State or, if not from the State, from central banks, the financial sector, or large corporations. This is a conception of basic income as a “top-down” program, a program of power, be it political, monetary, or economic power.
In contrast, our movement conceives of basic income as a construction of ordinary people, who will emancipate themselves and make a different society happen, by their own efforts and for their own good.
So, our basic income model is different because it is a people’s program. This has important implications. One is this: we are convinced that a basic income made by any of those “powers” I mentioned will probably end up being put to the service of that same power. In a matter of time, a basic income offered by a government will eventually be used by that same government, or, if not the same, by other future governments, for their own electoral purposes or, in a worse scenario, to keep population under its control. Similarly, a basic income offered by an economic power will likely be put at the service of the economy; one offered by a monetary power will most probably be used as a mere tool to manage inflation rates, and so on. The basic income we propose, on the contrary, being directly financed and controlled by ordinary people, is much more likely to remain at the exclusive service of the people.
Moreover, the basic income models other groups and individuals advocate are often shaped to fit in and to be friendly to their previous ideologies or causes. For instance, that’s the case of a basic income financed with taxes over capital, as a way of favoring the working class; or with taxes over speculative financial operations, as a way of favoring a moralization of financial practices; or with taxes over alcohol, as a way of favoring people’s health, and so on.
Our movement is different here too. For us, basic income should not be the way to serve any other cause apart from everybody’s freedom and dignity. For that purpose, we focus only on people, not on particular population groups (such as the rich and the poor, workers and capitalists, “good consumers” and “bad consumers”, etc.), and the goal is everyone to be treated absolutely the exact same way, as equal peers, through the process of solidarity we conceived, which requires the same effort from all and gives the same benefit to all.
So, the idea that animates our movement differs from others also in this: we do not want basic income to favor one social or economic group over another. We want to benefit all individuals, and we like to see our proposal as a way to reconcile interests and promote the best for absolutely everyone in society.
Is the Portuguese government likely to accept the plan your group proposed?
The Portuguese government doesn’t seem ready to accept it at the moment. I hope that will happen in the future, but it will depend on the support we can find within the Portuguese society, and perhaps abroad.
Of course, we are aware that it will probably be easier for a government to please their citizens by offering them some sort of “helicopter money”, without requiring any active role or effort from them, than to allow a scheme that assigns such role and demands such efforts, as ours does.
Either way, we will be doing our best to present our idea and to encourage people to consciously decide the solution they will support.
What began your interest in Basic Income?
I was ready to adopt the idea since the early 1990s, when I heard an old man declaring on TV: “Men were not born to work, but to create”. The man’s name was Agostinho da Silva, a Portuguese mystic and poet, who used to talk and write a lot about a future in which machines would do all the work, while people would create, contemplate, improve themselves or do whatever they wanted. His message made total sense to me, and so, many years later, when I first heard the name “basic income”, I understood it immediately as the path to the future that Agostinho da Silva used to talk about, and I joined the cause that same minute.
What aspects of Basic Income do you focus on?
When I first started working on the idea, my first focus was on the financial question: how to finance a basic income, from what source, and what financial effects it would have, both for people and for the State sphere.
But I’ve shifted my focus since then. Now my main interest is to understand the profound implications of different models of basic income on people’s freedom, sense of purpose and attitude towards material goods.
Explain the current situation of basic income movement in Portugal. And what is your evaluation?
The movement seems to be growing slowly but steadily. The number of activists and the public actively involved in the discussion, both on the internet and in face-to-face events, have grown in recent years.
And the movement is growing not only in numbers but also in maturity, as people involved become aware of the wide variety of different things “basic income” can potentially become (being possible to classify as “basic income” not only different but even opposite schemes, in their essential features).
This is what enabled us in Lisbon to create an organized group to defend a single one of all these possibilities, something impossible two or three years ago. I’m talking, of course, about the movement “Basic Income of All for All”.
What is the political and philosophical background of your basic income scheme?
It is the conviction that solidarity among people is the right foundation for a society.
A community where people are bound by mutual solidarity will promote the best possible life for all. Although you might say that this is a mere personal inclination – in the sense that I just prefer to believe in this rather than the opposite – the idea is nevertheless reinforced by the recognition that all ancient human societies were based on solidarity. In the tribe, the hunted animal did not belong to its hunter, but to all in the group. In the tribe everybody shared the same luck and resources, and looked after each other. This is how humankind lived for hundreds of thousands of years – the most of our time on Earth – until the rise of the first sophisticated civilizations and empires, and, mostly, before the emergence of the “empire” of capitalism; which now rules everywhere, shaping human societies with the values of competition rather than cooperation, and accumulation instead of sharing. Clearly, this is not fostering our freedom or happiness as the “old” solidarity would.
Do you have any strategy to introduce the basic income scheme in Portugal?
In fact, I developed a plan for that purpose a few months ago, and together with my fellow members of the movement Basic Income of All for All, we took the plan to the Portuguese Minister of Labor, Solidarity, and Social Security.
In very simplified terms, the plan is to create a governmental pilot program, allowing small local communities to apply and, in those accepted, exempt voluntary members from national personal income tax, provided they begin to share a part (half) of their income between them.
So, this would begin to be applied in voluntary communities and, in these, by volunteer persons. In these communities, a common fund would then be created, and the volunteers would start putting half of all their incomes, of any source, in it. At the end of each month, the fund’s accumulated total would be equally and unconditionally distributed by them, creating for the participants a basic income based on local solidarity.
The government would manage the scale of the pilot program at will. It may start with one or two communities and then, if the results turn out to be good and there are other communities willing to do the same, expand the program in succession until, in the limit, it becomes a nationwide program.
In the Portuguese reality, the impact on the State budget of such a scheme should not be negative, mainly because the creation of the universal income guarantee would render a wide range of social programs useless, thus allowing savings of amounts close to the lost revenue of the personal income tax for the State.
As for the Portuguese government’s response, we are still waiting for it…In any case, the plan does not depend exclusively on that answer; it can be applied anywhere in the world.
Interview by:
Hysong Ahn, Basic Income Korea Network
Edited by:
Tyler Prochazka
André Coelho (contributed to introduction)
