What’s the Buzz from Rheinau?
Earlier in the month, headlines made such proclamations as “Swiss municipality to offer guaranteed income” (SWI), “Swiss village considers a crowdfunded basic income for all inhabitants” (Toronto Star), and “Swiss town set for universal basic income experiment” (The Local Switzerland), referring to Rheinau, a town of about 1300 people in the north of the country.
To preclude misunderstanding about what is happening in Rheinau, it should be stressed that the village is not enacting a basic income, nor is its government deliberating an implementation of the policy, nor is it running a state-sponsored trial. Moreover, to avoid possible confusion, it is specifically worth noting that this latest news from Rheinau is unrelated to previously reported discussions of basic income pilots by Swiss political bodies, such as the investigation of municipal basic income pilots initiated last year in nearby Zurich.
Instead, the news is this: the city council has agreed to permit an independent filmmaker Rebecca Panian to make the village the site of privately funded one-year trial of a program similar to basic income, involving at least half of the town’s population, which would serve as the basis for a documentary. The project’s main purpose is to provoke interest, discussion, and further research into the idea of basic income.
While the village’s council has given the green light to the documentary project, the ultimate execution of the project remains contingent on enrolling the desired number of participants and raising sufficient funds. Moreover, the design and duration of the trial remains liable to change during the course of discussion with the local council and inhabitants of Rheinau.
The Payment Scheme: Unconditional, Subject to Repayment
If the trial does come to fruition as currently planned, it will not, strictly speaking, test a basic income: participants in the trial over the age of 25 will be given a cash payment of 2500 Swiss francs (CHF) (about 2151 EUR) at the start of each month, with reduced amounts given to minors and young adults, irrespective of income, household status, work, or need; however, if participants receive additional income during the month, they will be expected to repay this money in part or full.
Stated otherwise, participants over age 25 will be granted 2500 CHF at the start of each month, but will be permitted to keep only as much as necessary to ensure that their total income for the month is at least 2500 CHF (with lower amounts for younger age groups). If they earn above 2500 CHF, they will repay the entire amount of the grant.
To many, this feature of the design might cause the project to seem not a test of basic income at all; after all, according to the Basic Income Earth Network, a basic income is by definition delivered without means test. For the project’s initiators, however, the repayment requirement is a way to attempt to more accurately simulate what a basic income would feel like if actually implemented in Switzerland, where many individuals, earning high salaries, would presumably “repay” any amount paid out as a basic income in personal income taxes. “[It] is important to us not to spread the illusion that an unconditional basic income simply means more money in your pocket,” Panian tell Basic Income News, “It just means that the basic income is unconditional. Everybody gets it so nobody needs to fear angst (existenzangst) again.”
Since the cash allowance is paid upfront, the plan is distinct from a negative income tax or top-up scheme in which individuals are “reimbursed” if there earned income falls below a certain threshold. One might say it loosely resembles a basic income accompanied by an increase in individual income tax.
That being said, this provisional design has not been set in stone, and documentary team will consult with residents of Rheinau later in the year to produce a finalized design.
Motivation: “Too Many Questions Unanswered”
Like many in both Switzerland and abroad, Panian first heard about basic income when a referendum to enact the policy was put on the ballot in the 2016 Swiss general elections. Although the referendum left open the amount of the basic income — it stated only, “Legislation will determine the funding for the system and the actual amount of the basic income” — a monthly payment of 2500 CHF was often discussed during the campaign.
Panian was intrigued by the idea as a possible solution for challenges posed by the future of work. In her view, a society based on the goal of full employment is unsustainable in the face of accelerating automation, and attempting to maintain such a system will result in “mass unemployment and lots of people with no money, no support, and no perspective.”
At the same time, she was not surprised that the referendum failed at the ballot box, telling Basic Income News, “there were too many questions unanswered, and in the mind of many people this idea remained a crazy, non-realistic vision.”
Panian herself does not express certainty that basic income is the new system needed by Switzerland and other nations facing the threat of automation, but she believes that “we better test it as well as we can before we throw it in the bin and do nothing.”
This goal — opening people to the idea of basic income as a serious proposal — provided the motivation that would ultimately lead the filmmaker to Rheinau: “I figured out that in order to become more open to the idea, people need more time, and they need to ‘see’ it happening. That’s how I came up with the idea to start a test it in a village. … Everybody who watches the experiment going on in a village can sympathize with the villagers and with that get more connected with the idea.”
The Village: A “Mini-Switzerland”
Other privately financed and administered “basic income” projects, including Germany’s lottery-style Mein Grundeinkommen and the in-progress US documentary Bootstraps, have focused on individual-level effects of unconditional monthly cash grants.
Like the directors of Bootstraps, Panian hopes to document the lives of individual participants in the Rheinau project. But Panian is also interested in the community-level impact of a basic income, and for this reason decided to situation her study in small village in which the majority of residents would be able to take part.
Panian first announced her plans in January of this year, putting forth a call for Swiss municipalities to serve as the site of the documentary. In some cases, city councils placed bids to be the site of the basic income test. In others, individual residents wrote to Panian to nominate their own communities.
Panian ultimately selected Rheinau out of more than 100 applicants, in part on the basis that its demographic structure reflects Switzerland as whole. As she describes it to Basic Income News, the community is “small but like a mini-country.”
According to Panian, Rheinau was also a favorite due “fantastic communication with the local council” and the council’s “real interest in the experiment.” Neue Zürcher Zeitung reports that the village rejected the country’s basic income referendum with 72% no vote in July 2016, but that its mayor and councilors have been receptive to involving the community in a small-scale test of a similar program. In a statement quoted on the official website of the planned documentary, the council declares that basic income “deserves to be tested” and “encourage[s] the population to participate” in the trial and film project.
The Research Team
In addition to Panian, a team of social scientists — including an economist (Jens Martignoni), organizational psychologist (Theo Wehner), linguist (Aleksandra Gnach), and sociologist (Sascha Liebermann) — is fronting the basic income project in Rheinau.
The four scientists are currently designing a study about of the effects of the program on the community. However, as Martignoni stressed in correspondence with Basic Income News, the research project is in an early stage of development, and it is too early to tell what can be learned from the trial.
In addition to assessing the effects of the program on the well-being of participants and the community, the researchers hope to examine its effects on their opinions on basic income itself. Liebermann tells Basic Income News, “I am curious to find out how the people in Rheinau think about the basic income and how their thinking about it might change during the trial and in what direction,” which he plans to investigate through in-depth interviews.
Like Panian, both Martignoni and Liebermann emphasize that cooperation with the local community is an important aspect of the Rheinau experiment, in contrast to other past and ongoing trials of basic income and negative income tax, with the people of Rheinau to themselves be included in the development of a final model. The researchers also emphasize that the Rheinau project is unique in that its goal is not to fight unemployment or poverty.
Basic Income in a “Rich Country”
In regions where governments are currently sponsoring or overseeing trials of basic income or other income guarantees — including Finland, the Netherlands, Ontario, Barcelona, and Stockton — the main objective is to address unemployment or poverty.
While Switzerland is not without poverty, it is known as a relatively wealthy nation. The median salary was reported in 2015 as 6189 CHF per month, and the average household income was reported in 2017 at 6957 CHF per month. According to the Federal Statistical Office, only 10% of people living in Switzerland have a monthly disposable income below 2243 CHF — suggesting that relatively few might stand to benefit from a monthly 2500 CHF grant subject to repayment.
Panian herself believes that, for this reason, a Swiss experiment would have the potential shed a fresh perspective on the basic income debate, “Switzerland is famous as a ‘rich’ country. If we test it, we don’t do it primarily to fight unemployment or poverty.” Martignoni also points out that the trial planned in Rheinau would be unique among basic income experiments as one that is “not restricted to a poor part of the population but to all in a developed (‘rich’) country.”
That said, if the filmmaker believes that main reason to implement basic income in rich nation like Switzerland would be as a sort of insurance against future automation and digitization, then one might wonder what impact she hopes or expects to observe during a one-year trial in 2019. Indeed, if it most Swiss workers are already earning well above 2500 CHF per month, one might wonder if the trial will have any effect on participants (except, perhaps, the minor inconvenience of the required monthly repayments). Asked about this concern, Panian noted that, while very few Swiss men have monthly salaries below 2500 CHF, a significant proportion of women still lack their own income. Since the benefit will be paid on individual rather than household basis, women without a personal income will be able to keep the entire monthly payment. Thus, Panian predicts that families with children and stay-at-home mothers will be prime beneficiaries.
She adds, however, that individual monetary benefits are not, in her view, the only “benefit” of basic income: “I talked to many people, and it became obvious that most of them only think about how they could or would not profit on a monetary basis from the basic income. What they seem to forget is that if you live in a society where people don’t have to fear for their basic needs, they might get more content, and this will have a positive effect on the whole community.”
In any case, the discussion of potential benefits to Rheinau itself should not obscure the fact that, for the team behind the trial, the major goal is not to produce measurable results but to reinvigorate discussion of basic income in Switzerland and beyond. According to Panian, the best case scenario is one which the project “inspires others to organize more experiments on their own in their communities and motivates people to think about what future they want.”
Enno Schmidt, the filmmaker behind an earlier basic income documentary and cofounder of the referendum campaign, agrees that the greatest promise of the project is to catalyze further discussion: “it is one first fresh new activity after the referendum; it keeps the topic in Switzerland a little awake. It encourages other communities to think about whether or not they will also introduce a basic income on a trial basis.”
For more information and updates on the Rheinau basic income project, see https://www.dorf-testet-zukunft.ch/page1.html.
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Article reviewed by Patrick Hoare.
Cover image: Rheinau, CC BY-NC 2.0 Wisi Greter