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.”
“There will always be hope”. Picture credit: Alex Gi.
On the 11th and 12th of October 2018, the University of Freiburg, in Germany, holds an interdisciplinary Conference titled “Basic Income and the Euro-Dividend as Sociopolitical Pillars of the EU and its Member Countries”. It will be organized by the Department of Economic Policy and Constitutional Economic Theory and the aim is to gather relevant leading researchers and thinkers in Europe to discuss an EU wide approach of a basic income.
In Europe, the public debate about a universal basic income (UBI) is usually a national one. In recent years a European version of a UBI has attracted more and more attention – primarily pushed by the suggestion of Philippe Van Parijs titled a “Euro-Dividend”. This conference aims to shed some light at pros and cons of a EU wide UBI regulation and its relation to national approaches from an interdisciplinary perspective. Both UBI approaches shall be analyzed and discussed with respect to justice, economic and migration effects, legal aspects, creation of solidarity in the EU, and political viability. On the first day, the conference will address general issues about UBI, while the schedule of the second day contains EU-related concepts just like the Euro-Dividend.
Papers are invited from areas such as Philosophy, Sociology, Political Science, Law, and Economics and even Technical Sciences addressing one or more of the following topics:
o UBI and arguments of freedom, solidarity, social and gender justice
o Changing time allocation and shifting time sovereignty, voluntarism and creativity
o Legal aspects of UBI
o Experiments and microsimulations on UBI’s level and impact
o UBI in the digital age / Robots, AI, Labor, and the Welfare State
o The European Pillar of Social Rights, UBI, and Euro-Dividend: Creating European
Solidarity
o Financial feasibility of a UBI and financing concepts of a Euro-Dividend
o EU labor market effects and migration (on international level and within the EU)
More information at:
The “Basic Income and the Euro-Dividend as Sociopolitical Pillars of the EU and its Member Countries” Conference website
A new video has been released by Geoff Crocker, on a “radical concept of funding basic income by perpetual deficit”. This video is a result of a presentation done at the Asia Pacific UBI Conference, which was held of the latest 17th and 18th of March 2018.
In this short video, Geoff Crocker generally reviews the most typical arguments for and against basic income, focusing on the financing issues. Particularly, he conceives a thought experiment where all economic goods and services are produced by machines. The question then arises: how to distribute these among the population? Crocker’s conclusions, from this onset, are that basic income becomes “essential to maintain consumer demand”, and that “financial deficit is inevitable”. This, apparently, derives directly from the fact that modern economies operate at a permanent deficit and that “unearned income [is] necessary in high tech economies”.
Geoff Crocker’s ideas had already been mentioned on Basic Income News, in a paper he called “The economic necessity of basic income”.
World Bank building. Picture credit to Financial Express.
The World Bank has released a draft report, published on the 20th of April, titled “The changing nature of work”, in which basic income is suggested as policy to “be read through the lens of ‘progressive universalism’”. This progress to a universal system should depend, according to World Bank analysts, on “basic social insurance” and also on a reliance on “flexible labour markets”, in a relationship that would not do without, though, targeting social assistance schemes.
The reason for maintaining conditional social assistance is, in this context, to “prioritize those at the bottom of the [income] distribution”. This maybe contrary to the (universal) basic income principle, but World Bank analysts consider important to identify those “who are the most vulnerable, where they live, and how vulnerable they are”. To address rising inequality and profound changes in the nature of work in the next few decades, basic income-like schemes are seen in this report as having “pros and cons”, which “may address challenges in coverage and take-up programs”. The advantages referred relate to more coverage and reduced stigmatization, but at the same time warnings are made to new possible challenges in administrative ruling and financing.
The report underlines the need to relax strict work regulations, stating that “stronger social protection systems can go hand in hand with more flexible labour markets”. A particular concern for labour costs to firms is expressed, especially when compared to technology. The World Bank’s view is that labour costs should generally go down (including unemployment benefits and minimum wages), associated with a “reformed social assistance and insurance systems”.
On the other hand, basic income – in the report often stated as “guaranteed minimum” – “may also ameliorate possible work disincentives”. That is clearly connected with the usually known as “poverty traps”, where people choose to remain eligible for social assistance, rather than risk going into formal employment and end up with less money (due to taxation). It is also linked to reduced administrative costs. Moreover, the report recognizes the importance of maintaining typical welfare services, like public health and education, and be careful in scrapping existing benefits, as some are not as prone to be immediately replaced by a basic income.
From a definition standpoint, World Bank analysts defend that basic income “is a process that serves the poor first, it recognizes that wider coverage is desirable (…) and allows countries to claw back benefits from the rich.” However, in their view, the progressive system envisioned should be a three-legged stool, as mentioned above: basic income, to cover “against catastrophic losses”, mandated social insurance, to “achieve an adequate level of savings”, and market-based voluntary savings, to complement the previous two.
Historically, the report recognizes, conditional benefits have gone a long way in achieving social security in many regions, both high and low income. That, combined with generally low uptake rates (60% in high-income countries and 20% of the poorest households in low-income countries), shows that there is room for improvement, although it remains unclear how conditional and unconditional social assistance should play out together, given this context, in the near future. Also, for financial reasons, the report advises low income countries to increase coverage (estimates put the elimination of poverty on a double-digit spending percentage relative to GDP, for those countries) of existing programs and enhance delivery platforms, instead of opting right now for a basic income. As far as financing is concerned, a particular emphasis is put on taxing “superstar corporations”, limiting their ability to escape taxation through loop-holes and tax havens, plus levelling the tax grounds between them (e.g.: Google, Facebook and others, which are usually less burdened with taxes than most other companies) and other companies. Eliminating energy subsidies, introducing or expanding carbon taxes and imposing inheritance or estate taxes are also possible routes for funding the “new social contract”, as envisioned by World Bank analysts.
The Finnish basic income (BI) experiment proceeds as planned. According to Kela, the Finnish social security agency, results will only start being analysed at the beginning of 2019, and their publication at the end of that year, or early 2020.
As already known, the purpose of the experiment is to evaluate participants behaviour in terms of employment, particularly employment rates. An intention exists, in spite of that, to evaluate “the wellbeing of the participants and their experiences when communicating and conducting business with the authorities”. To this end, questionnaires and interviews are being contemplated, but only when the experiment is over. Here, Kela officials are more cautious, stating that “timing the data collection requires detailed planning and an evaluation of the factors to be measured as well as an assessment of the potential impact of the various stages of the experiment, such as its conclusion, on the measurements”.
Finland has no plans to further the experiment after 2018, although is already experimenting with participatory social security, beginning this year. In fact, according to Miska Simanainen, a Kela researcher, “right now, the government is making changes that are taking the system further away from a basic income”, referring to an ‘activation model’ which the government is pushing through. That model is designed to partially cut benefits to people receiving assistance from Kela, if they don’t succeed in working (in a formal job) for at least 18 hours in three months.
It seems that these changes are contrary to what the initial proposition was, within Kela’s framework, which involved the expansion of the experiment (in early 2018) to include also workers, allowing for capturing information on life options, such as entering training or education. That, according to Olli Kangas, Kela’s director of Community Relations, would mean “have been given additional time and more money to achieve reliable results”.
On a comparative basis with other basic income like experiments around the world, for instance in Ontario and in Barcelona, the goal of these experiments stands out as a fundamental difference: while in Canada and Spain the (basic income) trials are aimed at testing whether people’s life conditions are improved, for instance in health, education and economic security, in Finland the goal is only to check whether people get into formal employment or not.
