Could basic income play a role in the fight against unfree labour?

Could basic income play a role in the fight against unfree labour?

Credit Picture CC(Paul Domenick)

A series of articles concerning the role which basic income (BI) could play in the fight against unfree labour in now on openDemocracy.

The introduction by Neil Howard sets the tone for the debate: even though many thinks that coercion by evildoers is the main cause for modern day slavery and human trafficking, this is not the case. Exploited workers often consent to their situation because is their only option to make ends meet.  The question arises: “if we really want to end ‘modern slavery’, and indeed if we’re serious about protecting people from all forms of exploitation, then why not simply ensure that everyone always has a minimum amount of money in their pocket such that they can say no to bad work?” Which is exactly what Universal Basic Income advocates maintain.

The debate starts with an article by Guy Standing, “Basic income and the three varieties of freedom”, libertarian, liberal, and republican freedom. As “freedom costs money”, the impact of the introduction of a Basic Income is greater than its monetary value. Guy Standing explains that the BI works by changing structurally the society in which it is implemented, ant its “emancipatory value is greater… than the money value”.

Simon Binrbaun and Jurgen De Wispeleare, with “The power to walk away: is basic income a bridge too far?”, are concerned with whether basic income really enhances workers’ freedom or not. Their point is that the rationale of BI as an instrument of freedom is clear, as it would endow workers with more contractual power, but when the proposal is faced with reality, some concerns arise. Firstly, the monetary amounts provided with UBI under current proposals seems insufficient to give workers true exit power from their job. Secondly, even if workers were to opt out from a job, the structure of the job market is such that it allows for horizontal but not vertical transfer. And thirdly, it remains to be seen how employers would react to more contractual power from their employees, having them the possibility to use automation as a substitute for human workforce.

Karl Widerquist’s article, “End the threat of economic destitution now”, focuses on how
“UBI is not something for nothing. It is the just compensation for all the one-sided rules of property and property regulations that society imposes on individuals.” Because governments enforce property rights systems that block many from accessing naturals resources, poverty and destitution are not the result of personal choices, but of the lack of freedom implied in this allocation of resources. UBI would thus acts as “… the just compensation for all the one-sided rules of property and property regulations society inherently imposes on individuals”.

Ana Cecilia Dinerstein, with “Basic Income bows to the master”, accuses basic income of just confirming the domination of money over our lives. The elephant in the room, she says, is the lack of a discourse about money per se. Pointing her finger not at the lack of money nor at its unfair distribution, she states that the problem is human dependence on money; one that cannot be solved with UBI. UBI, in her view, “will contribute to the perpetuation and subordination of humans to money”, and it wouldn’t bring dignity to people, as it would only assure material subsistence.

Feminist politics and a case for basic income”, by Kathi WeeksandCameron Thibos, considers the potential for UBI to fix the severance of work and wages.
“Wages do not compensate workers, and especially women, for most of the work they do. A basic income could change that.” Inspired by the Wages for Housework movement in the 1970s, the authors discuss of how much of the activities people (and especially women) have to perform are not remunerated. UBI can be the right tool to enhance freedom in the household and in society as a whole.

In “Basic income can transform women’s lives”, Renana Jhabvalaexplores the result of basic income pilots in India. Starting from a small study in Delhi to the one of Madhya Pradesh, with eleven thousands taking part, we learn how the Self Employed Women’s Association (SEWA), a women’s trade union, became one of the earliest advocates of basic income in India. This happened because the introduction of UBI brought on positive welfare effects, an increase in equity, and generally economic growth effects.
“Our pilots showed that basic income has the power to transform the lives of whole families, and especially those of women. Now it is time for India to take the next step and make basic income a reality for all.”

More information at:

Universal basic income, a way though the storm?”, openDemocracy, September 16, 2019.

The documentary “UBI, our right to live” is now available on YouTube

The documentary “UBI, our right to live” is now available on YouTube

Credit Picture CC (Generation Grundeinkommen, Stefan Bohrer)

The film, directed by Alvaro Orùs, is now available on Pressenza’s youtube channel.

The 41 minutes long documentary focuses on Universal Basic Income (UBI), retracing its history, explaining its rationale, and investigating why and how the idea has reached a much larger audience and unprecedented support in the last years.

It does so with though many poignant interviews with prominent exponents of the UBI community, as Van Parijs, Guy Standing, Daniel Raventòs, Scott Santens and many others. “UBI, our right to live” makes a compelling argument for the necessity of the measure, is a manifesto for UBI in the present day, and is an excellent introduction to the subject.

The documentary addresses two of the main drivers that are bringing UBI at the center of the public debate: economic inequality and technological development. The two themes are correlated, as economic inequality has reached unsustainable levels, and automation may make it even worse, if not handled in the proper way. The risk is the increase of unemployment and growing inequalities between high and low skilled workers.

UBI could eradicate poverty altogether, and if it were to be financed through progressive taxation, reduce inequalities. Moreover, it would provide an economic safety net for workers, and thus endorse them with more bargaining power when it comes to choose a job. People could decide how to focus productively their energies in order to contribute to society and give meaning to their live, rather than being forced in unfulfilling jobs just to survive. Nobody would be left alone, as it is bound to happen under the patchwork that present-day welfare is.

The fruits of technological advancement, if distributed via a UBI, rather than accumulated in the hands of the few, may help to shape a more just future, as this is what UBI is about (something that the documentary highlights): UBI is about justice and fairness, not charity.

It’s the instrument meant to redistribute what belongs to each and every person, the natural extensions of human rights in ensuring to everybody a standard of living adequate for a human being.

 

More information at:

“The documentary, ‘UBI, our right to live’, now available online”, Pressenza, 15 August, 2019.

Scott Santens: There is no policy proposal more progressive than Andrew Yang’s Freedom Dividend

Podcast:

With an article on medium, Scott Santens, long time Universal Basic Income (UBI) advocate, has explored in depth Andrew Yang’s proposal of a Freedom Dividend (FD).

The Freedom Dividend, one of the pillars of Andre Yang’s campaign for the democratic nomination for the 2020 American presidential election, is a $1,000 UBI for every American. Santen’s article discusses in detail the implications the proposal would have if introduced, and defends it against claims that it would end up increasing inequality or destroying the safety net. In Santen’s words, “The freedom dividend would be the single most progressive policy advance ever signed into law in America history”.

In order to clarify how and why the Freedom Dividend would work as a progressive measure to enhance freedom and as an instrument against poverty and inequality, Santens provides answers to two questions regarding its design:

1) Why to provide people with a choice between existing programs and the Freedom Dividend and not let people keep everything?

People would need to voluntarily opt out from some assistance programs, based on low income, whilst other contribution-based programs would continue to exist on top of the FD (health care remaining a separated issue, not connected with the FD).  Santens’ article points out that this is done in order to maximize unconditionality and the incentive to work by avoiding welfare traps.

2) Wouldn’t the funding of the FD through a 10% value added tax –as proposed by Andrew Yang- make it a regressive measure, thus disproportionately disadvantaging the poor?

Even though a tax on consumption is usually considered regressive, as those with lower incomes tend to spend more of it in consumption when compared with those having higher incomes, the VAT-UBI design ends up making it a progressive instrument. That is, those on the lower part of the distribution would end up receiving more than what they lose because of the VAT, which would be rebated by the FD. Santens quotes a distributional analysis by The UBI Center, that concludes “that the bottom 10% (of the income distribution) would see their disposable incomes increased by almost 120% while the top 10% would see their disposable incomes reduced by 4%.”

Moreover, Santens says, the FD would  strongly reduce poverty with “74% fewer households would have disposable incomes that fall under the federal poverty line” and impact heavily on inequality, causing a drop of 15% in the American Gini index.

UBI would fill the holes in the existing safety net, a “welfare mess” that leaves many people behind, and which design is far too complex, inhumane and not efficient, as Santens explores in depth in his article.

“Is it progressive to not support the greatest reduction of poverty and inequality — and greatest increase in freedom and dignity — ever proposed in American history, because you insist upon preserving paternalistically neoliberal conditionality?”

More information at:

Santens, Scott, “There is No Policy Proposal More Progressive than Andrew Yang’s Freedom Dividend”, Medium, July 22th, 2019.

The Future of Work as seen by the OECD

The Future of Work as seen by the OECD

Credit Picture CC(OECD/Marco Illuminati)

The OECD published “The Future of Work Employment Outlook 2019”. 

Change is underway, driven by digitalisation, globalization, and demographic changes, and will impact each and every way in which our society operates. While on the one hand these mega-trends can amplify our capacity to better our lives, on the other they also pose challenges, which need to be dealt with.

With estimates suggesting that 14% of jobs are at risk of disappearing completely in the next decades and 32% changing radically, middle skilled jobs are particularly exposed to the transformation, with the risk of a hollowing out of the middle class: automation works “from the middle out”. The transition will bring to the emergence of many lower quality jobs on one side, and to other with a high degree of knowledge intensity. The risk is that earning inequalities between low and high skilled workers will increase.

“Shaping a future of work that is more inclusive and rewarding calls for a Transition Agenda for a Future that Works for All- a whole-of-government approach that targets interventions on those who needs it most”

Traditional means of income support will need to be revised, as they leave out a great number of precarious workers, which will make up for a greater share of the labour force. In the context of a flexible job market, which will see an increase in the number of entries and exits, and the need for continuous modernization of skills and work practices, the design of new systems of workers protection will become pivotal to  the functioning of societies. 

Workers outside of the traditional form of contract are the one in the direst situation, as access to social protection is difficult for workers in non-standard employment; those who are falsely self-employed, finding themselves under the yoke of employers who don’t want to be held accountable for them. With little control over their wage and their working hours, they are the ones requiring more protection.

With non-traditional workers 50% less likely to be unionized, the emergence of monopsony in the labour market cannot be discarded, and with the instrument of collective bargaining lacking, changes to address the problem by providing the employees with more leverage are required.

Whilst the outlook discards universal basic income (UBI) as being too costly, this says nothing about its actual capacity to work as a solution. It is true that the main obstacle to the introduction of a UBI is to find its source of financing, but the measure’s design would help solving many of the problem arising in the labour market, as recent publications by the World Bank and the International Labour Organization pointed out.

Article reviewed by Dawn Howard.

More information at:

OECD, The Future of Work

Joseph Stiglitz on UBI and the future of work

Joseph Stiglitz on UBI and the future of work

Credit picture: CC(Andrew Newton)

Nobel Laureate economist Joseph Stiglitz speaks about inequality, automation, and Universal Basic Income (UBI) in a conversation at the New York Stock Exchange.

The economist says that, as many people fear, it is entirely plausible that the problem of inequality will get worse if countermeasures are not undertaken. Although he recognizes that a single program such as UBI may offer some advantages, he is not a big fan of the idea. Instead, he thinks that the main responsibility a society has is to provide everybody with a job (a Job Guarantee).

Stiglitz states that if jobs with decent salaries were available, the need for UBI wouldn’t exist, even though some social programs to protect the needy would be needed. But in his opinion many people find dignity in their job, and so the focus of the attention should be to make the labour market work properly.

A goal that could become more and more difficult to attain as technology advances, with machines threatening an ever-increasing number of professions. As automation proceeds, the risk is that inequalities will increase, as a result of growing unemployment and AI undermining the very basis of the market.

Artificial Intelligence (AI), Stiglitz states, makes it possible to alter the functioning of the market economy, making everybody pay a different price, appropriating consumer surplus and adding it to the profit of the wealthiest, thus further polarizing the distribution of wealth.

The solution should be, in the economist view, twofold: on the one hand, the economy has lost its balance because workers lost their bargaining power, and thus it should be reestablished. On the other hand, the core of innovation is government funded research and government funded education, but too little of the proceeds go to the public, and a better system of sharing the benefits need to be designed.

While Stiglitz states he is not a big supporter of UBI, what he proposes in order to reduce inequality is what UBI itself is designed to do: provide workers with bargaining power and redistribute the wealth of society in a more equal manner.

More information at:

Andrew Davis, “Joseph Stiglitz weighs in on Universal Basic Income and the future of work“, CNBC, May 5th 2019