Basic Income in Argentine News

Basic Income in Argentine News

The issue of the basic income, its pros and cons and the feasibility of its implementation have occupied space in media outlets in recent years, mainly due to the visibility it gained after the referendum in Switzerland and the experiment started this year by the Finnish government. However, this discussion has not reached all corners of the planet. Or at least not until recently.

On February 1st of this year, the Argentine conservative-leaning newspaper La Nación published an opinion piece entitled “An universal income that compensates for poverty and unemployment”. The author of the article, Eduardo Levy Yeyati, is an economist, writer, and civil engineer, with a PhD in Economics from the University of Pennsylvania. Yeyati introduces the concept of universal income and describes the historical dimensions of this idea, as its discussion has spanned the centuries, from Thomas More, to Martin Luther King, to its contemporary promoters such as the British Labour leader Jeremy Corbyn and the French presidential candidate Benoît Hamon.

However, the text mainly discusses three fundamental complications surrounding the idea of basic income. First, despite having multiple detractors and defenders, the basic income is still an idea in search of a design. According to Yeyati, there is a rather classic proposal such as an unconditional basic income (the model advocated by the most ardent supporters of the initiative), a conservative proposal that would be represented by the negative income tax defended by Milton Friedman and a compromise third-way between these more extreme positions that seeks to guarantee a basic salary floor for those who already receive some type of income.

Second, the author identifies two moral dilemmas that must be addressed and answered by any definition and operationalization of the basic income. First, should it be paid only to those who have a registered job, in the style of an addendum and prize to effort, or should it be paid to everybody, even to those who have no intention of working? Second, should the person who has a lower income receive more money, should everybody receive the same amount or should the person who works the most receive more? For many advocates of this initiative, a basic income basically implies answering these dilemmas in the most “generous” way: it should be paid to everybody and everyone should receive the same. In this sense, it seems that Yeyati uses the term more broadly than a lot of speakers in other countries, not compromising to any of the possibilities.

Finally, the author ventures one last idea in which he discusses the feasibility of thinking and discussing the implementation of a basic income in Argentina today. And despite some pessimism on his behalf and considering that it would take several years of political maturation to reach the appropriate level of discussion, Yeyati does believe that it is possible to move towards the realization of a basic income today through the design and implementation of a Finnish-style pilot in Argentina. Basically, the author argues that this would not be very costly, that the twin challenges of poverty and unemployment will dominate the development agenda in the coming years and that, in order to move forward, this debate needs information that we do not currently have. In this sense, despite the fact that this issue it not yet in the agenda in the Latin American and Argentine context, at least there are people who are encouraged to discuss its implications and there are media outlets, however conservative they may be, willing to publish them.

 

Featured Image CC Mike Ramsey (via flickr, Scott Santens)

CANADA: Council of small town Smiths Falls rejects basic income trial, residents disagree

CANADA: Council of small town Smiths Falls rejects basic income trial, residents disagree

Councilors of the small Ontario town of Smiths Falls voted on December 19 last year to reject participation in its province’s basic income pilot, to the objection of residents and the town’s mayor. A petition requesting a re-vote is currently circulating online. The story begins, however, in 2008.

That year The Hershey Company shuttered its Canada operations, at the time based in Smiths Falls, largely for cheaper Mexico-based labor. This exit of the area’s biggest customer precipitated the same by other businesses, and although the ensuing purge of jobs merely reflected a manufacturing decline already underway in the province, the disappearance of five hundred positions at Hershey’s alone, accounting for nearly 6% of the town’s population, catalyzed especially forward-looking pain. That year the town operated at a surplus of C$11.2m, and by the town’s most recent reported fiscal year, its once budget excess had trudged through increasingly tight leverage to a deficit of C$1.3m (albeit improved since 2013). Today the town struggles with unemployment above the national rate, and a third of children live below the poverty line.

Given also an aging population and petering labor force – per census data the town’s median age increased by 2.1 years in the five years leading up to 2011, and the overall population declined by 2% – it could be in the interest of Smiths Falls’ residents to entertain a basic income system. Indeed the petition created by resident Carol Anne Knapp has so far gathered 113 supporters, with a goal of one thousand. This is despite the council’s three-two vote, with two councilors absent, against mayor Shawn Pankow advocating to Ontario’s finance minister for participation in the program. Pankow has meanwhile expressed interest in holding a public meeting on the topic this month, health officials in tow.

A prominent councilor, Dawn Quinn, cast one of three “nay” votes. According to Jordan Pearson, writing for Motherboard, her vote was at least partly informed by her credo of frugality, stating that “folks sit around in Tim Hortons all day instead of looking for jobs, and they should consider buying a tin of Tim Hortons coffee to make at home instead of buying a cup.” On that point Pearson continues, “[Quinn added] they could consider shoveling snow to earn some extra money.” Similarly conveying Quinn’s underlying sentiment, Kate Porter quotes her in CBC News: “They need to be able to learn how to take that money and stretch it […] we need more of that kind of thinking.” So it appears the belief that basic income causes squander was, at least for one decision maker, a reason for the council’s vote outcome.

There is, however, some evidence from a bordering province that suggests this perspective is dogmatic, as reflected in Knapp’s petition letter requesting that a “new vote be based on science and evidence.”

Nearly forty years ago, Dauphin, a similarly small town in the Canadian province of Manitoba, underwent a five-year minimum income (dubbed “mincome”) experiment. Mincome was also similarly basic income-lite. Rather than a true guarantee, which is regardless of preexisting income status, mincome subsidized only those poor enough and was reduced for those who earned above a threshold. Likewise, Ontario’s pilot makes whole those earning below a set threshold. Even so, the experiment provides refutation to Quinn’s apprehension of lethargic congregations at Tim Hortons.

Evelyn Forget (credit to: Ecocide Alert)

Evelyn Forget (credit to: Ecocide Alert)

According to Evelyn Forget, an economist at the University of Manitoba and academic director of the Manitoba Research Data Centre, primary earners in Dauphin worked only marginally less within the five-year study, and much of the other reductions in labor force participation was comprised of women who extended maternity leaves and male high school students who simply stayed in school rather than work. Additionally, hospitalizations, in particular for mental health problems, dropped significantly (nearly 9% across the board) and would alleviate the burden on healthcare programs today.

Quinn acknowledges, though remains unpersuaded by, the Manitoba findings and is further dissuaded by cost – a concern currently aggravated by budget shortfalls. She protests that Smiths Falls became financially saddled after a 1970s investment in low-to-moderate income (LMI) housing, giving rise to her concern about opting into another government-borne program. A ten-year housing plan published in 2014 by Lanark County and Smiths Falls, however, notes that 74% of the county’s dwellings requiring major repairs were constructed prior to 1971. Coupling two observations then – 60% of LMI housing was developed under the program to which Quinn is referring; and renting in lieu of owning has been on the rise since Hershey’s departure – the 1970s investment appears to have provided an arguably necessary safety net.

Expenses, furthermore, reflect precarity when business output, curbed by economic disempowerment of consumers, constrains municipal revenues. In pursuing a conservative bottom line, rejecting basic income has a potentially truncating effect on the top, and budget woes thereby persist. On this, councilor Lorraine Allen, one of two “yea” votes, says the proposal would enable residents to “shop more, buy more groceries, perhaps be more involved in things that they couldn’t before.” Hence her vote for the program.

Still, the short-lived nature of the pilot is consistent with another of Quinn’s concerns: that a pilot implemented, then taken away, could prove negligibly meaningful. In the town’s 2015 operations approximately C$2.4m was spent on social and family services. Tucked inside these costs were, in addition to unspecified uses, assistance to the elderly, childcare and the social housing expenses which Quinn resents of the 1970s. If the Ontario program follows the recommendation by former senator Hugh Segal (a monthly allowance of C$1,320), the combined cost to eligible individuals could perhaps exceed the town’s existing social and family services expenditures. This mainly reinforces the need for cooperation between municipality and province-level governments to realize success from basic income. Eating the full burden, what Ontario offers is more generous than that. But in order for such a program to live past a test phase, the council of Smiths Falls would first have to heed the needs of its residents – and try.

Thanks to Genevieve Shanahan for reviewing this article.

Cover photo by wyliepoon.

More information at:

AreaScore, “Smiths Falls unemployment,” 2016.

Carol Anne Knapp, “Smiths Falls council reverse the decision regarding basic income,” Care2 Petitions, December 21, 2016.

City-Data, “City data of Smiths Falls,” 2011.

Evelyn Harford, “Basic income pilot project a no-go for Smiths Falls town council,” InsideOttawaValley, December 20, 2016.

Jesse Ferreras, “Ontario basic income should be $1,320 per month, adviser says,” The Huffington Post, November 4, 2016.

Jordan Pearson, “Why a struggling town voted against a basic income,” Motherboard, December 22, 2016.

Kate Porter, “Smiths Falls residents fight for guaranteed income pilot project,” CBC News, December 22, 2016.

Lanark County, “Lanark County and the town of Smiths Falls ten year housing and homelessness plan 2014-2024,” 2014.

Sarah Gardner, “On the Canadian prairie, a basic income experiment,” Marketplace, December 20, 2016.

Statistics Canada, “Census subdivision of Smiths Falls, T – Ontario,” 2011.

The Canadian Press, “Ontario floats idea of guaranteed minimum income to ease poverty,” CBC News, March 14, 2016.

Town of Smiths Falls, “2009 consolidated financial statements,” 2009.

Town of Smiths Falls, “2015 consolidated financial statements,” 2015.

BIEN Stories: Louise Haagh

BIEN Stories: Louise Haagh

Louise Haagh (BIEN Co-Chair)

I first came across basic income in summer of 2001 when instructed about it by Workers’ Party Senator Eduardo Suplicy, at his home in São Paulo. I was doing research on workers’ rights, at the same time undertaking a survey of economic security among residents in poor and middle-income districts (published in World Development, 2011a). Eduardo famously played a key role in the drive to legalise a basic income as a policy goal in Brazil, and in presenting the extension of targeted cash grants as a step towards it (Suplicy, 2002). Eduardo was insistent that I do not go home that evening till I mastered all there was to know about reasons for basic income and how the path towards it was being paved in Brazil. Night fell. I remember enjoying more than a few helpings of food and tea, before Eduardo was satisfied I understood, after which – the gentleman that he is – he accompanied me to somewhere I could hail a cab, making sure to have a long friendly chat with the driver before we were sent off into the night.

The basic income appealed to me then primarily as a necessary foundation for consolidating workers’ rights – and in many ways that is still how I see it, but in a broader context of rights to human development. I had been working on workers’ rights and issues of economic citizenship since the early 1990s, during my PhD on Chile and later work on South Korea, both places I spent a lot of time and in which I did surveys of workers’ condition of precarity and their institutional sources of power. Against this background I was struck by the sanity – the immediately obvious justification for basic income. It seemed to me evident that the most important justification was a basic humanist and democratic one – and I still think that today.

Coming to the BI proposal from the perspective of workers’ movements, and in general the problem of the democratisation of everyday institutions, gives a different perspective on the political character of a BI reform. Above all, it makes it evident that BI intersects with other institutional and political challenges. This is something I am very conscious of when thinking about the question of how a BI might extend the social bases of freedom.

The sense in which I first found BI intuitively important was in relation to occupational freedom. I had been studying the economic liberalisation and institutional restructuring of the Chilean economy during the years of Pinochet and found that the precariousness among workers it generated, both economically and institutionally, had become embedded in a way that the new democratic regime of 1990 could not overturn (Haagh 2002a, 1999). The result, I argued (Haagh, 2002b), was that Chile deepened political rights without this leading to the expected deepening of social rights, given the absence of economic rights. This marked an evident contrast to the formation of welfare states in Europe in the 20th century, as discussed in T.H. Marshall (1949). Before I knew about basic income – during the mid-1990s – I had been working on a concept of ‘occupational citizenship’ – first in my PhD and then during a later British Academy post-doctoral fellowship at Oxford University. Essentially, what sparked my enquiry was the contradiction within liberal economic theory – so manifest in the labour market outcomes I studied in Chile – between the expectation of worker mobility– and the lack of underlying forms of economic security – in the forms both of money and services – that would make this sustainable.

I argued the atomised labour market regime not only predictably led to weak investment in skills, and thus a low-wage, low–skill equilibrium economy (Haagh 1999). In addition, it undermined workers’ freedom in a way that denied them effective citizenship within the polity at large (Haagh 2002a,b).

Having theorised a ‘gap’ in terms of absence of occupational citizenship (Haagh 1999, 2002a), it seemed obvious to me that basic income (BI) would be a necessary but not sufficient element in improving persons’ control of their lives.

There are important lessons from Latin America about the political conditions for a BI reform that are important to consider as the debate on BI is gaining force in Europe today. These are of both a practical and analytical kind. Like the case of Chile’s in part stunted democratization, the story of BI in Latin America is not a straightforward one of cash grants turning into rights (Lo Vuolo 2013). Similarly, one cannot be sure prospective transitions into partial forms of basic income through experimentation in Europe will turn into secure bastions of freedom, given the overall context of austerity and preceding roll-back of public sector protections (Haagh 2015).

It is ironic to think that Friedman – who advocated a form of constant basic security in the shape of the Negative Income Tax essentially on freedom grounds as rooted in an idea of independence – also indirectly was architect of Chile’s economic experiment.[1] The irony lies in the fact that that experiment was not complemented with a set of basic rights outside the market. On the contrary, deregulation of unions’ functions – detailed in Haagh (2002a,b) – along with other mechanisms of economic security, was paralleled with the implementation a state organised system of individual insurance, too weakly subsidized to afford real protection (Haagh 2002a, 2006). Given the underlying precarity of workers’ income streams, the individual insurance model was unable to offer effective cover.

The case of Chile shows why basic income has moral appeal, yet the basis of that appeal that lie in destabilisation, precarity, inequality, and loss of workers’ democratic rights may not be a likely political basis for a sustainable BI reform. Moreover, time has shown that in conditions of high inequality and weaker public finances, such as in Latin America, political preferences are likely to continue to be for targeted and conditional benefits (Lo Vuolo 2013, Haagh 2007, 2011a, 2013, Haagh and Helgø 2002).

The practical contradiction – as demonstrated in Chile – between the two seemingly symbiotic elements of Friedman’s advocacy, for economic liberalisation, and for basic security, is then not that surprising from a political and institutional perspective.

This is because the destabilisation of institutions that the first project entails destroys the basis for everyday cooperation within society that gives legitimacy to the second project to extend universal rights. Although Friedman did not see the Negative Income Tax as a welfare right, but as a kind of money mechanism to promote agency and ensure against basic risk, even something ostensibly simple like the NIT, depends on quite complex institutional development and political agreements. The fact that Friedman did not like the welfare state does not mean it did and does not exist in the United States. It is its more hierarchical – interclass-distributive- form that makes it more incoherent and punitive (Haagh 2012, 2015).

In short, the conditions of precarity in Latin America – now more common in the developed world – showed me why basic income is morally necessary for the market economy (as Friedman knew), but not itself sufficient for freedom in a democratic polity.

The Chilean case also showed me that the moral appeal of basic income is not the same as a political foundation for basic income reform. The two may even be contradictory if moral appeal is linked with conditions of crisis and compensation, as distinct from equality as equal standing in a more complex sense, which gives to BI a key but partial role in democratising institutions’ form.

For me it is very important to stress the compatibility of basic income and the interests of workers’ movements. The demands made by workers’ organisations historically can be argued to have played a transitional role in a process of democratisation to consolidate more universal rights. At the same time, the interests they channel in terms of institutions’ stability and democratic form represents something constant and deeper. This is important to remember today when – in a context of growing precarity in the developed world – there is a risk that the defence of basic income comes to be thought about as compensation for loss of – or an exchange for – other rights.

Coming back to that evening in 2001, it was not at all a surprise to me then that it was a Senator of a Workers’ Party advocating for basic income who was trying to convince me of the. To me, it was intuitive that workers’ movements should and would embrace the idea – at least in the context of a family of rights-based institutional changes. Having come to BI via work on unions, I was therefore quite surprised when – after going to the BIEN Congress in Geneva in 2002 – I became aware of the polemical nature of the BI debate concerning the relationship of that proposal and the established welfare state – hereunder social democracy and the union movement. Although it is painful to acknowledge, I think an important basis for that real life tension lies in the academic basis of the BI proposal as couched in fairly abstract and idealistic terms (Haagh 2011b).

In short, coming from the comparative institutional tradition of historical enquiry it seems evident to me that basic income is an element in a wider process of democratisation of institutions in society. The success, substance, form, and stability of that proposal is likely to stand or fall with the level of democratisation of society as a whole.

That is why we should not be surprised that BI experiments and debates are happening today in some of the most institutionally developed welfare states in Europe. It is far from given however how they will turn out.

 

[1] Explaining the purpose of the Negative Income Tax that closely resembles a basic income, Friedman (1979, 120) argued that the ‘basic amount’  (or ’personal allowance’) would “..provide an assured minimum to all persons in need regardless of the reasons for their need, while doing as little harm as possible to their character, their independence, or their incentive to better their own condition” (italics added) 120 He further (ibid. 121) noted, “[t]he negative income tax would allow for fluctuating income… but that is not its main purpose. Its main purpose is rather to provide a straightforward means of assuring every family a minimum amount…”

 

Friedman, M., 1990[1979/1980], Free to Choose, San Diego: Harvest.

Haagh, L. (2015) Alternative Social States and the Basic Income Debate: Institutions, Inequality and Human Development,’ in Basic Income Studies, Special Issue on Thomas Piketty’s Capital in the Twenty-First Century, August, ISSN (Online) 1932-0183, ISSN (Print) 2194-6094, DOI: 10.1515/bis-2015-0002, August 2015, https://www.degruyter.com/view/j/bis.ahead-of-print/bis-2015-0002/bis-2015-0002.xml

Haagh, L. (2013) ‘The Citizens’ Income and Democratization in Latin America – A Multi-Institutional Perspective‘ in Rubén Lo Vuolo (Ed.) Citizen’s Income and Welfare Regimes in Latin America. From Cash Transfers to Rights, Exploring the Basic Income Guarantee Series, Basingstoke and New York: Palgrave Macmillan.

Haagh, L. (2012) ‘Democracy, Public Finance, and Property Rights in Economic Stability: How More Horizontal Capitalism Upscales Freedom for All’ in Polity, October, Volume 44, No. 4. pp.542-587.

Haagh, L. (2011a) ‘Working Life, Well-Being and Welfare Reform: Motivation and Institutions Revisited’, World Development, March, Vol. 39, No.3.  pp.450-573. Also available Basic Income, Social Democracy and Control over Time at: https://econpapers.repec.org/article/eeewdevel/v_3a39_3ay_3a2011_3ai_3a3_3ap_3a450-473.htm

Haagh, L. (2011b) , Policy and Politics, January, Vol. 39, No.1, pp. 41-64.

Haagh, L. (2007) ‘Basic Income, Occupational Freedom and Anti-Poverty Policy’ in Basic Income Studies, Vol. 2, Issue, 1, June.

Haagh, L. (2006) ‘Equality and Income Security in Market Economies: What’s Wrong with Insurance?’’ in Social Policy and Administration, Vol. 40:4, 385-424.

Haagh, L. (2002a) Citizenship, Labour Markets and Democratization – Chile and the Modern Sequence, Basingstoke: Palgrave, St. Antony’s Series.

Haagh, L. and Camilla Helgø (2002) (Eds), Social Policy Reform and Market Governance in Latin America, Basingstoke: Palgrave. St. Antony’s Series.

Haagh, L. (2002b)  ‘The Emperor’s New Clothes: Labor Reform and Social Democratization in Chile’, Studies in Comparative International Development, Vol. 37, No.1, Spring, pp. 86-115.

Haagh L (1999) ‘Training Policy and the Property Rights of Labour in Chile (1990-1997): Social Citizenship in the Atomised Market Regime, Journal of Latin American Studies, Cambridge University Press, 31, 429-472.

Lo Vuolo, R. (Ed.)Citizen’s Income and Welfare Regimes in Latin America. From Cash Transfers to Rights, Exploring the Basic Income Guarantee Series, Basingstoke and New York: Palgrave Macmillan.

Marshall, Thomas, H., 1949, Citizenship and Social Class, Cambridge: Cambridge University Press.

Suplicy, E. (2002), Renda de Cidadania – A Saída é Pela Porta, Cortez Editora

 

Photo credit: Enno Schmidt


At the end of 2016, the year in which BIEN celebrated the 30th anniversary of its birth, all Life Members were invited to reflect on their own personal journeys with the organization. See other contributions to the feature edition here.

BIEN Stories: Karl Widerquist

BIEN Stories: Karl Widerquist

(photo credit: Enno Schmidt)

 

Karl Widerquist (Co-Chair)

When I first attended a BIEN Congress in 1998, I’d already been a Basic Income supporter for 18 years, but it was exhilarating for me just to find out that there were enough dedicated Basic Income supporters to fill an auditorium. I was a young researcher looking to get noticed. I sent my proposal in months before the deadline. The leaders of BIEN, especially Robert van der Veen, made me feel that my work was notable. I’ve been involved ever since, and I’ve watched the Basic Income movement growth, slowly, barely noticeably until about 2010 or 2011, but very quickly since then. I don’t think BIEN should try to grab credit for the takeoff. We should all just be happy it’s happening and do what we can to build on it.

It’s exciting to see BIEN growing along with the movement. We now have affiliates all around the world, some of which have been instrumental in activism and research about Basic Income. Our news service has grown from a quarterly snail mail newsletter with a few dozen subscribers to a daily updated news website and an email newsletter with over 4,000 subscribers. We have moved from conferences every two-years to conferences every year. Our membership and interest just continues to grow.


At the end of 2016, the year in which BIEN celebrated the 30th anniversary of its birth, all Life Members were invited to reflect on their own personal journeys with the organization. See other contributions to the feature edition here.

Feature coordinator: Kate McFarland.

BIEN Stories: Jenna van Draanen

BIEN Stories: Jenna van Draanen

Jenna van Draanen (News Editor and Outreach Coordinator)

Working with BIEN has been a wonderful experience for me. Not only are there extremely dedicated people here, but they are also talented and kind. With BIEN, I get to talk to people all over the world who are working on basic income in their respective countries and policy contexts – and learn from what they are doing.

This year, we started a new Outreach Task Force. The goal of the Outreach Task Force, which is evolving, is broadly to have more connections between affiliates and more communication between BIEN and the affiliates. We plan to organize a session at the next BIEN congress, where all of the affiliates can meet each other and update each other on activities and strategies in their countries. As a group, we will also develop some shared projects to work on this year.

I am personally excited about the energy already forming with this task force of people. It is neat to have so much participation from groups around the world.

Jenna van Draanen is a PhD student at University of California – Los Angeles. She has been writing for Basic Income News for over five years, and is now a member of the Executive Committee and Outreach Coordinator. 


At the end of 2016, the year in which BIEN celebrated the 30th anniversary of its birth, all Life Members were invited to reflect on their own personal journeys with the organization. See other contributions to the feature edition here.

Feature coordinator: Kate McFarland.