by Andre Coelho | May 11, 2018 | News
This is the preliminary program for the North American Basic Income Guarantee (NABIG) Congress, which will happen at the Michael DeGroote Center for Learning and Discovery, in the McMaster University, city of Hamilton, in Ontario, Canada. Registrations can still be made here. The venue will take place from the 24th of May (at 6:30 pm) onto 11:30 am on Sunday the 27th.
The program highlights “conversation among national public champions”, including Canadian Senator Art Eggleton; Canadian Member of Parliament Guy Caron; famed Manitoba Mincome researcher and population health expert, Dr. Evelyn Forget; Basic Income Canada Network (BICN) Chairperson, Sheila Regehr; and potentially also U.S. entrepreneur and 2020 presidential candidate, Andrew Yang (running on a basic income-anchored platform).
Other highlights include the Friday night’s premiere screening of a new and original documentary film on the famous Manitoba Mincome experiment in Dauphin, Manitoba, in the 1970s, followed by discussion with the American filmmakers and Mincome’s executive director, Ron Hikel.
There will be plenary speakers from Canada, the U.S., Mexico, Belgium, and Portugal. Over 30 other presentations and workshops addressing either of the Congress’s two main themes: (1) the converging paths leading to basic income (e.g., health, human rights, automation, sustainability, democracy, etc.); and (2) making basic income a reality, through pilots, policy, and public support.
More information at:
Rob Rainer, “Register for the 2018 NABIG Congress, May 24-27 in Hamilton!”, Basic Income Canada Network, April 10th 2018
by Quentin Mathys | May 10, 2018 | News, Research
District of columbia Lincoln memorial Washington monument. Credit to: History Channel.
The district of Columbia has released on the 27th February 2018 a policy analysis that examines different approaches and strategies for providing a locally-funded guaranteed minimum income or universal basic income for its residents.
The study, named “Economic and policy impact statement: Approaches and strategies for providing a Minimum Income in the district of Columbia”, starts by evaluating the cost of living in absence of public social safety net assistance for three types of low-income households, 1) single adults without children, 2) single adults with one child, and 3) single adults with two children. The results show that a single adult without children would approximatively need an annual income of US$ 36 988 to meet their basic needs. For a single parent with one child, the annual income need is roughly US$ 66 113, while a single parent with two children would need about US$ 96 885 a year.
The paper then discusses the existing monetary and in-kind entitlements benefits, supports, and maintenance provided by the federal and District governments to low and moderate-income residents. According to the authors, the existing social safety net is strong enough to allow households who have full access to the public benefit programs to meet their basic needs. However, as Ryan Harrison underlines in his article about the report, households most in need for assistance do not qualify for the cash grants available, due to the work requirements of these means-tested policies.
In the next section of the study, the economic feasibility of implementing a basic income in the District is discussed. The authors explore three amounts for basic income where the first one is set at 100% of the Federal Poverty Line (FPL), the second one at 300% and the third one at 450% of the FPL. The associated gross cost of the three policies is estimated at 7, 21.5, and 32.2 billion US$ per year, respectively. According to the authors, the implementations of a basic income set at 450% of the FPL is the only approach that would allow all the households to meet their basic needs. This is debatable, since being above the FPL would, in principle, mean that basic needs were covered. However, the authors fear that such amount would lead to many households deciding to drop out of the workforce and making this implementation expensive and inefficient. This is also questionable, considering existing results from performed basic income pilots. Based on these issues, the report does not simulate the impact of providing a universal basic income in the Columbia district.
Furthermore, the authors only discuss the gross cost of implementing a basic income. Mentioning the net cost would have been relevant, as cost reductions can be expected in existing social assistance programs, and a restructuring of income taxes and /or other forms of taxes to finance the reform. The report, nevertheless, introduces an important discussion about the feasibility of a basic income implementation of in the district of Columbia.
More information at:
Susana Groves and John MacNeil, “Economic and policy impact statement: Approaches and strategies for providing a Minimum Income in the district of Columbia”, Office of the Budget Director of the Council of the District of Columbia, January 27th 2018
Ryan Harrison, “District of Columbia releases policy analysis for basic income”, Medium, April 8th 2018
“Council Budget Office releases Economic and Policy Impact Statement: Approaches and Strategies for Providing a Minimum Income in the District of Columbia”, David Grosso DC Council at-large, February 28th 2018
by Karl Widerquist | May 9, 2018 | Opinion, The Indepentarian
This essay was originally published on Basic Income News in December 2011.
I can’t believe the news. We are in the midst of the worst global depression in 70 years, and the governments of almost every major industrialized country are talking about austerity. They’re cutting government services; laying off public sector workers; cutting pay, pensions, and benefits for public employees—all in the name of austerity and balanced budgets.
This astounds me because we’ve been through it before. We’ve seen what works, and we know that austerity is not the way out of a major depression. Austerity makes depressions worse. To get out of a depression, the government needs to spend money—and lots of it. The lessons of history are clear, and the reading of history I’m going to discuss to make my point is not terribly controversial among economists. Let me explain.
In a depression (or a deep recession or whatever you want to call it), we get stuck at the bottom. People can’t spend as much because they’re not making as much, but they aren’t making as much because people aren’t spending as much. Debt is a related problem, and so, I believe, is the real estate market, but there’s no room in this editorial for a full explanation. If you understand the idea of getting stuck at the bottom because of the feedback between spending and income, you get the essence of it. This kind of unemployment is pure waste. Human resources (not to mention idle shops and factories) are simply going to waste unused. We can wait for all that to work itself out on its own—as Japan has been waiting since 1989—or the government can take action.
Austerity is a reasonable response to—say—finding half of our industrial capacity destroyed by aerial bombardment. If our physical capacity to produce goods has fallen, then we’ll all have to make do with a little less for a while. But austerity is the worst possible response to an economy in a depression, because a depression economy is no less able to produce goods than before; it’s simply letting productive capacity go to waste. And that waste exists because people aren’t spending as much. If the governments of the world respond by spending less as well, they simply exacerbate the problem.
We learned how to take action in a big way at the outset of World War II. I wrote a few years ago about “the economic lesson of 1938” (August 2009). Today’s editorial could as well be called “the economic lesson of 1941.” The accompanying graph (at the bottom) shows U.S. per capita GDP for the years 1929 to 1947—from the stock market crash at the beginning of the Great Depression to the bottom of the post-war recession. Per capita GDP is the income of the average American. The figures are in “inflation-adjusted” 2008 dollars, meaning they’re multiplied by an index to show the purchasing power that the incomes of the time would have at today’s prices. No inflation adjustment is perfect, but they give you a rough idea. In general the graph shows we were much poorer back then, but it shows much more about the times.
The austerity years were 1929 to 1933. In addition to many other mistakes, the government responded to reduced tax revenue caused by declining economic activity by reducing its own activity to match. Average income went down from over $11,000 to less than $8,000—a loss of more than 25 percent. You can think of everybody getting a 25 percent pay cut at the same time or of 75 percent of people keeping their entire income while 25 percent of people lose their entire incomes. What actually happened was somewhere in between, a little bit of both. Unemployment went up to 20 percent, and in that sense the Great Depression was roughly twice as bad as what we’re going through now.
In 1933, Franklin Roosevelt was elected and we started spending money to stimulate the economy. He called it “priming the pump.” Years later Keynesian economists would call it “simulating aggregate demand.” Whatever you call it, Roosevelt took what, at the time, looked like big action, spending money trying to help people, to get the economy moving again. And he had several years of success until he returned to austerity measures in 1937 and 1938, suddenly trying to balance the budget. I wrote about that problem in my earlier editorial. Except for that year progress was slow but steady. Yet, by 1941 unemployment was still at 9.67%. After 12 years of waiting for an end to the depression, more Americans were unemployed in 1941 than they are now in the forth year of our depression.
But in 1941 the Japanese bombed Pearl Harbor. The United States entered World War II. And the depression ended virtually over night. We went from a 10-percent labor surplus to a labor shortage in a matter of months. The demand for labor was so great that women entered the labor force in unprecedented numbers. They found good high-paying jobs waiting for them. Average income shot up to $20,000 per year—two and a half times what it was after four years of austerity in 1933.
The depression disappeared because the government spent money and massive amounts of it. The government hired the idle labor (and more) as soldiers and support workers. The government hired the idle shipyards to build boats, the idle automobile plants to build jeeps and tanks, and so on. It was good for people, and it was good for business. The entire New Deal—it turned out—was far too small.
There are dangers to stimulating the economy in the wrong way, at the wrong time, or in the wrong amounts. You can end up with unacceptable debt, inflation, or a delayed depression. This is why I have never thought of myself as a Keynesian, and I do not think that massive stimulus is the best response to a garden-variety recession like most of the ones experienced between World War II and today. I’ve argued in this series (May 2009) that the most important thing government can do during a downturn is the same as during a boom: make sure everyone’s basic needs are met. If that is done, we can often let recessions work themselves out. I guess I’m a last-resort Keynesian. I think most non-Keynesian economists are, although they probably disagree a lot in how bad things have to get before they’ll take up their last resort.
I don’t think we should wait any longer because the possible dangers of a government stimulus can be overblown. None of them manifested themselves during or after the Second World War. Except for the obvious losses to war, the spending was good for people. After the war people got married; they used the money they saved to make down payments on houses, to start families, and to build better lives than they had in the 1930s.
The depression never came back. This is why I end the graph in the recession year of 1947. That year was as bad as the economy got after the war, but yet, per capita income was still nearly $15,000, not quite twice what it was after four years of austerity in 1933 and still 25 percent higher than it was in the boom year of 1929. After 1947 we got good healthy growth punctuated by short, forgettable, recessions. It was one of the best periods of economic growth in American history. The Second Word War spending worked, and there was no post-stimulus hangover, not in the short, not in the long run. The most massive government stimulus we’ve ever had—perhaps the largest in world history—did not cause any significant problems with debt, inflation, or delayed depression.
You can look at the income and unemployment figures for almost every industrialized, capitalist nation at the time, and you will see the same pattern: as soon as they began massive war spending, the depression ended in their country. But we don’t need a war to stimulate the economy. We just need to break the political obsession with austerity and start spending money.
Without the need to spend a stimulus on war, we can spend on schools, bridges, public transits, infrastructure, or on services to help the needy through a basic income guarantee or through something else. What we spend on is less important for stimulating the economy than the need to spend. The basic income guarantee movement now needs to be part of broader movement around the world against the austerity craze. This is one reason I support the Occupy Movement in the United States and the anti-austerity movement in Europe. We must focus the world’s attention on the need for government to spend money to help people. Once we open that door, the possibilities are great. But until then, we practice austerity against the lessons of our history.
-Karl Widerquist (karl@widerquist.com), the Second Cup Café, Doha, Qatar, December 2011
by Andre Coelho | May 8, 2018 | News, Research
Since 2016 that Congresswoman Araceli Damián has supported and “presented an initiative to reform the Mexican Constitution and create the right to [a] universal citizen’s income”. In the latest version of this proposal, it is framed as an intrinsic human right, arguing that no human being’s survival should be dependent on any condition, “not even by the idea that a person should be socially useful”. The purpose has been to deliver basic income as a “central element for social policy, to face this crisis and to check the implications of including it in the Mexican Constitution”.
The problems faced by the Mexican society are generally the same in many other regions afflicted by the capitalist system: unemployment due to automation and globalization, lower economic output (to restore some equality in resource redistribution), rampant labour precarity and failure of present social policies to reduce poverty. Given this grim scenario, which has been aggravating for the last decades, it has already been pointed out by the Mexican Consejo Nacional de Evaluación de la Política de Desarrollo Social (National Council for Social Policy Evaluation), or Coneval, that basic income-like policies should be looked into, in a 2014 document titled “Informe de Evaluación de la Política de Desarrollo Social en México 2014” (2014 Social Policy Evaluation Report).
Reporting back to the 1948 Universal Declaration of Human Rights, this basic income implementation proposal for the United States of Mexico is intended to be based on the basis that “every person shall have a standard of living compatible with their wellbeing”. This, according to Araceli Damián, would allow Mexico to “engage in the construction of a Social Rights Welfare State”, and would align the Mexican constitution with international legal standards on human rights.
As a first stage of implementation, the proposal suggests an individual monetary transfer covering basic (normalized) food necessities. This first step would be implemented in 20 years, and according to four sub-stages (extending coverage every five years), accounting for residency (urban/rural), age and sex. On a second stage, and for another 20 years period, basic income would be gradually distributed until normalized basic needs are met for all people. The purpose being to meeting all Mexicans basic needs by 2050.
Araceli Damián and her partner Norma Colín have calculated both costs and benefits for this kind of gradual basic income implementation in Mexico. Costs are associated with extra fiscal efforts to finance such a policy, while benefits also include avoided costs with public health, safety and social security.
For the first step of the proposal’s implementation, covering basic food necessities, an individual amount of 1765 Mexican Pesos per month (92 US $/month) would be enough. That would also include a 15% margin for affording conservation, preparation and consumption of food. According to the sub-stages referred above, priority would be given to rural population, elderly and children, which are already covered in part by existing social assistance programs. Coverage of (adult) women would also take priority over (adult) men, due to known structural disadvantage gaps and the need to reduce women’s economic dependence from men.
Araveli Damián. Credit to: El Colegio de México A.C.
The basic food needs coverage on the first stage would reduce poverty substantially, right from the start. Calculations show that total poverty could be approximately cut in half (72.7% in 2014, compared with 39.5% of the total population, with all four sub-stages of the first implementation step completed). This program would not particularly affect the higher income brackets parts of the population, while reducing extreme poverty almost down to zero (from 36.3% down to 0.7%). This step would represent 13.2% of the gross national product (GDP) if implemented today, which is below the OCDE countries average of 21.9% of GDP spending in social protection. Implementation costs would rise gradually, from 1% of GDP if starting this year (2018), up to 9.4% of GDP after 20 years.
However, according to Araceli and Norma calculations, a full basic income for Mexico, at this moment, would represent around 54.4 % of all state revenue. For the food coverage partial basic income, on the other hand, several financing sources are identified (values per year): savings from restructuring present-day social security (at all levels of government, in about 7000 million Pesos (360 million US$)), cuts in governmental overspending (around 697 000 million Pesos (35 800 million US$)), reduction in fiscal evasion (accounting for more 484 000 million Pesos (24 900 million US$) and progressive fiscal reform (there is room for incrementing fiscal collection, from present-day 19.6% GDP, up to at least 25% GDP).
The study argues that this food coverage basic income would help stabilizing gross demand, particularly among the poorest. This stimulates a better use od existing resources, without rising operation costs for companies, while considerably reducing inequality and poverty. It is also foreseen that implementing basic income in Mexico would increase employment in at least 3%.
Finally, Araceli and Norma propose to rewrite the Mexican Constitution in several articles, highlighting the following addition to article 4th:
“Every person, since birth, has the right to a universal basic income. The State will guarantee this right through monetary transfers, which value shall be enough for all people to reach a dignified minimum quality of life. The Law shall state the amount, periodicity and transfer method, as well as a program for its roll out in a gradual fashion.”
More information at:
(in Spanish)
“Informe de Evaluación de la Política de Desarrollo Social en México 2014 [2014 Social Policy Evaluation Report]”, Consejo Nacional de Evaluación de la Politica de Desarrollo Social (Coneval), February 2015
Araceli Gonzaléz and Norma Colín, “Que reforma y adiciona los artículos 4o. y 73 de la Constitución Política de los Estados Unidos Mexicanos, suscrita por las diputadas Araceli Damián González y Norma Xóchitl Hernández Colín, del Grupo Parlamentario de Morena”, Gaceta Parlamentaria 4864-IV, 12th September 2017
by Micah Kaats | May 2, 2018 | News
76 billion dollars. That’s what it would cost to implement basic income in Canada according to a new report released by the Parliamentary Budget Office (PBO).
The report comes just days after Ontario began testing its own basic income pilot study in Hamilton, Brantford, Brant County, Lindsay and Thunder Bay. As part of the study, 4000 Ontarians will receive unconditional cash transfers of up to $2500 per month for the next three years. The new report estimates how much it would cost to roll out the program nationwide.
Importantly, the policy under consideration would not be an universal basic income, and would only be available to low-income individuals between the ages of 18 and 64. Roughly 1 in 5 Canadians (7.5 million people) would qualify for benefits. The plan would guarantee a minimum annual income of $16,989 for singles, and $24,027 for couples (those with a disability could receive an additional $500 per month).
The report also assumes that the guaranteed basic income (GBI) would replace $33 billion in federal spending already in place to help low-income people, thus bringing the net cost of implementing the program down significantly to $43 billion.
The report has drawn both praise and criticism from both sides of the debate. Opponents of the idea (including Conservative MP Pierre Poilievre, who requested the PBO study) cite the high cost of the program, arguing that the plan would add an additional 13 percent to the current federal budget.
Supporters argue that the report actually underestimates the value of a minimum income by not taking into account potential savings in other areas of the economy. Elaine Power, a professor in public health at Queen’s University, notes that a basic income could save the government up to $28 billion in healthcare costs directly attributable to poverty. Andrew Coyne, a columnist at the National Post, also suggests that local governments would likely share the cost burden, which could knock an additional $20 billion off the federal price tag.
Currently, there are no plans to implement a nationwide guaranteed basic income in Canada. However, the report marks the first attempt by the federal government to estimate what such a program might cost. In order to further assess the viability of basic income in Canada, all eyes will surely be on the Ontario pilot study in the years to come.
More information at:
André Coelho, “ONTARIO, CANADA: Applications for basic income pilot project reach residents at Thunder Bay and Hamilton“, Basic Income News, 29th June 2017
André Coelho, “CANADA: Quebec is implementing a means-tested benefit, not a basic income”, Basic Income News, 24th January 2018
Rob Rainer, “A basic income for working-age adults is within fiscal reach“, 19th April 2018
