by Guest Contributor | Oct 16, 2017 | Opinion
In September 2016, Mexico City’s Chief of Government, Miguel Mancera, called for the development of a city constitution to grant formal recognition of the rights of all residents. An initial draft of the constitution included an article stating that each Mexico City resident is “entitled to a standard of living that is adequate for him or herself and their family, as well as to the continuous improvement of their living conditions,” a provision inspired by the basic income movement in Mexico (see the previous report in Basic Income News).
However, the proposal for an income guarantee was eventually dropped in the face of opposition from right and center parties. Instead, an article specifying the right to a “vital minimum” is the closest approach to a basic income to appear in the constitution ultimately ratified in February of this year.
In this Basic Income News special feature, Pablo Yanes of BIEN-Mexico describes the process by which a minimum income guarantee came to be replaced in the constitution by the idea of a “vital minimum”, and discusses how this might nonetheless be perceived as a victory for basic income supporters.
THE STRAIGHT LINE AND THE CURVED LINE:
BASIC INCOME, VITAL MINIMUM AND THE CONSTITUTION OF MEXICO CITY [1]
Pablo Yanes, BIEN-Mexico [2]
In Mexico, the discourse around basic income achieved never before seen dimensions and intensity this year due to the debates held by the Constitutional Assembly that deliberated and approved Mexico City’s Constitution.
As we will see later on, in the original proposal, the Chief of Government proposed the recognition of basic income as a right for all persons, from birth.
Finally however, after many negotiations, the universal right to a vital minimum was agreed upon as a compromise with regards to recognizing basic income. This was not the original proposal, but the phrasing contains the original intent and is close to its philosophical content. There is no doubt that this is a great step ahead in the never-straight path of politics.
Because of this, it is important to highlight that the basic income debate in Mexico now has a new status: it’s a political discussion with legislative implications. It’s a part of the discourse around different alternatives for the country’s development, which will only grow with the coming election cycle that will culminate in July of next year. In Mexico, within a very short timespan, basic income went from an idea confined to small academic and political circles, to one of the most important debates held in the Constitutional Assembly of one of the most relevant cities on the American continent.
A non-minimalist vital minimum
Thoughts on basic income, citizen income or a right to a vital minimum have been present at the heart of the Supreme Court of the Nation, which, in 2007, published a judicial thesis whose reading could help illuminate much of the ongoing debate. Due to its relevance I quote it extensively:
“The Constitutional right to a vital minimum is fully in force from the systemic interpretation of the fundamental rights enshrined in the General Constitution […]. A principle of underpinning for a Democratic State of Law is one that requires individuals to have, as a starting point, conditions such that they are allowed to lead a fully autonomous life plan, such that those who are governed can fully participate in democratic life. In this way, the enjoyment of a vital minimum is a principle of underpinning without which the central coordinates of our Constitutional order lack meaning, insofar as the intersection between the Powers of State and the trappings of rights and fundamental freedoms consist of the determination for dignified and autonomous subsistence, protected by the Constitution. This parameter constitutes the content of the right to a vital minimum, which coincides with the competencies, basic conditions and social benefits needed so that a person can lead a life free from the fears and burdens of misery, such that the aim of the right to a vital minimum encompasses all of the positive or negative measures that are indispensable in order to stop a person from being unconstitutionally reduced in his or her intrinsic value as a human being, because of a lack of material conditions needed for dignified existence. Thus this right seeks to guarantee that the person – the center of judicial ordering – does not become an instrument for other ends, objectives, purposes, goods or interests, no matter how important or valuable these are”. [3]
Even if a vital minimum and basic income are not the same thing, it can be deduced that a guaranteed basic income is a fundamental tool for enjoying a vital minimum alongside universal access to other rights and decommodified services such as health care, education and diverse social protection mechanisms. Basic income fits perfectly into a definition of a vital minimum that calls for a guaranteed basic income and access to different public services and goods to achieve maximum possible well-being.
Daring, voting and negotiating
Because of this, the inclusion of basic income as a right in the Mexico City Constitution Project is hugely important, as it attunes the proposal to the fundamental contents of the Human Rights reform in Mexico in 2011 and with the emerging international debates in anticipation of the challenges of the 21st century.
In it’s original proposal, the draft of the Constitution of Mexico City read as follows:
“Every person has a right to a standard of living that is adequate for them and their family, as well as a continued improvement of existence conditions. The right to a basic income is guaranteed, with priority for people in situations of poverty and those that cannot fulfill their material needs by their own means, as well as priority attention groups. In order to access basic income, this will defer to the common dispositions in this article.”
This wording generated intense debate, one of the most intense ones in the Constitutional Assembly, due to the opposition of certain political forces to the recognition of the right to basic income derived from the condition of being a person or from citizenship. The arguments for financial unsustainability and for the undesirability of the program due to possible political manipulation (thinking of it as a program and not a right) as well as the possible counter-incentives to work and personal effort were repeated. Nothing new.
It’s noteworthy that, in the original wording, this article not only recognized basic income as a right for all people, as well as including the principle of an adequate standard of living and the constant improvement of living conditions, but also included an operational element that watered down the strength of the recognition of the right by mentioning priorities (non-exclusivity) in its implementation regarding impoverished people and those lacking their own means.
These limitations notwithstanding, the recognition of basic income as a right was submitted to a vote by the Assembly and obtained 57% of the vote, a clear majority, but not the 66% majority required by the Assembly rules. This led to a round of negotiations just as or even more intense than the original debates.
Several alternatives were proposed by the different committees in the search for new wording. Fox example: “Art. 14: Every person has a right to a basic income.” and “Art. 22: Basic income will serve as a mechanism that will, progressively, guarantee access to a minimum basis of well-being, beginning with people in situations of poverty and vulnerability.”
This was not accepted because it mentioned income. Another proposal was made.
“3. Every person shall have the right to a minimum subsistence income that will cover the various dimensions of socio-economic well-being and contribute to a free and dignified existence. The authorities will progressively ensure its fulfillment.”
However, this was not accepted because it mentioned a minimum income for every person (universal).
A variant of this last proposal was created after some more negotiations:
“Every person, from birth, will enjoy the right to a subsistence minimum that covers the various dimensions of well-being and covers their basic human need. The authorities will progressively guarantee its fulfillment.”
This also was not accepted because of the mention of the various dimensions of well-being, in particular as a right for every person since birth.
Finally, after several long days and before the risk of not reaching a two thirds majority, the following wording was agreed upon:
“Article 9. Dignified Life
- Every person is entitled to a vital minimum to ensure a dignified life by the terms of this Constitution.
(Article 17) The mechanisms to make the right to a vital minimum, giving priority to people in a situation of poverty, which will be established according to the criteria of progressiveness, with the indicators determined by the appropriate federal Constitutional organism and the measurable goals established by the corresponding local organism.”
The debate on basic income in Mexico City’s Constitution coincides with both the Senate of the Republic and Congress having proposals for a Constitutional reform recognizing basic income as a right on a national level, introduced by Senator Luis Sánchez and Congresswomen Araceli Damián and Xóchitl Hernández.
That another state in the Republic, Jalisco, also introduced the concept of vital minimum as a guiding axis of its planning is also relevant, even if its relationship to basic income as a right is less clear than in the case of Mexico City. In any case, it is relevant and even older than the Mexico City case.
The Constitution for the State of Jalisco reads:
“Article 4. The human rights recognized for the people within the territory of the State of Jalisco are those in the Political Constitution of the United Mexican States as well as those enshrined in the Universal Declaration of Human Rights, emitted by the General Assembly of the United Nations, in the American Convention on Human Rights, […] and in the treaties, conventions and international accord that the Federal Government has signed or that is otherwise a part of, attendant to the principle of a vital minimum as an axis for democratic planning via which the State must create the conditions so that every person can fulfill his or her life plan.”
Two steps forward, but one step back?
The discussion around basic income in the Mexico City Constitution was resolved, likely provisionally, by recognizing the right to a vital minimum.
This contains several positives which cannot be underestimated:
- The vital minimum was recognized as a right and basic income was left as an underlying part of this.
- This recognition was based on the Supreme Court’s definition, which is not a minimalist one. On the contrary, it’s a bet on satisfying the material conditions that make a person’s independence and autonomy possible.
- It was established as a universal right (all people). Even if priorities are mentioned, it was never proposed as a mechanism only for poor people, or that it would be means-tested.
- It was framed within the guarantee of a dignified life and not a program for combating poverty, even if it is a powerful tool for the eradication of income poverty.
These are all highly meaningful advancements beyond a doubt. On the other hand, some limitations or risks remain, such as:
- The original proposal mentioned basic income as a right; this was not included in the final wording.
- Basic Income can be argued for within the vital minimum, but it can also become diluted within it.
- Normative definitions were mixed with operational criteria, which leads to lingering ambiguity regarding the vital minimum as a universal emancipation tool or as a measure for groups in a situation of poverty or social disadvantage.
- Potential legal competency or conceptualization conflicts are introduced by mentioning the utilization of criteria from the appropriate federal organism (CONEVAL) and the local organism (The Planning Institute and Autonomous Evaluation Council for the City) for determining measurable goals and indicators.
I would like to stress that it is feasible for this to be a preliminary wording, as the City’s Congress will begin working next year and will not be bound by the compositional rules or the interplay of forces present in the Constitutional Assembly. Consequently, new debates and modifications that are closer to the original project cannot be ruled out.
A balance of the content of the articles addressing the vital minimum in the Mexico City Constitution published on February 5th 2017 allows us to state that there is significant progress that will have to be landed later in the definition of the secondary legislation and the formulation of policies, without ruling out new debates and reforms for the Constitutional text itself.
Additionally, it must be remembered that Mexico City has been an entity that is advanced in the recognition of new rights (with strong repercussions at a national level) and that these rights have also gone through intermediate stages.
Here are some examples:
Today, the legal termination of a pregnancy is a reality in Mexico City. However, in order to reach this state, an intermediate step had to be taken in 2000 with a partial reform of the penal code, which was limited to increasing valid reasons for terminating a pregnancy.
Today, the right to equal same sex marriage is fully recognized in Mexico City, including the capacity to adopt, but the intermediate step of civil partnerships (Sociedades de Convivencia) first had to be established in a legal reform in 2006.
And today, the Mexico City Constitution recognizes a vital minimum as a right for all people. It’s convenient to ask ourselves if the recognition of this right is an intermediate step towards the fully recognition of basic income as a universal right in Mexico City.
Even beyond this, the inclusion of basic income as a right proposal in the Constitutional project for Mexico City and the recognition of the right to a vital minimum constitute a relevant step ahead in the discussions regarding social policy, human rights and the social state in the 21st century.
It is a debate that has reached the legislative sphere and is here to stay, both in Mexico and many other parts of the world. What could have seemed a wild idea a few years ago is now treated respectfully and considered a rational, reasoned proposal that has to be debated and talked about.
This is a welcome debate and one that we must congratulate ourselves on. It’s a debate that is just beginning and that will intensify in the foreseeable future with the same speed with which changes and challenges replace each other in this vertiginous time of doubt and hope.
[1] This article is based on a presentation written for the 17 BIEN Congress.
[2] Research Coordinator for the subregional ECLAC headquarters in Mexico. The opinions expressed within may not be those of the United Nations System.
[3] SCJN. Tipo de Tesis: Aislada. Fuente: Semanario Judicial de la Federación y su Gaceta. Tomo XXV, Mayo de 2007. Tesis: 1a. XCVII/2007.Página: 793
Kate McFarland also contributed to this report.
Heidi Karow, copy-editor.
by Guest Contributor | Oct 12, 2017 | Opinion
Why it’s useful to see Basic Income through the lens of Population Health Intervention Research
Thanks in part to the health sciences, there is widespread public acceptance that being poor is bad for your health. It doesn’t take much for us to make the connections. We might expect that less to eat and poor housing conditions interfere with our ability to maintain healthy bodies and immune systems. Less money could mean no access to things like computers so that people can visit sites like Thenutritioninsider.com
to get advice on how to eat healthy and look after their bodies. It may also mean less access to the health services that could treat or prevent illness and disease.
We need to make treatments more accessible which is why using coupons from somewhere like Save On Cannabis for CBD products might enable the vast health inequality to become smaller in the future. Moreover, fewer resources might mean fewer opportunities and fewer job options. Poverty also compounds political and social injustice, with marginalized people such as women, Indigenous people and racialized groups profoundly affected by poverty. These groups often constitute much of the poor. Lastly, evidence suggest we suffer the psychological consequences of living in material deprivation, both in absolute terms and relative to others. Therefore it is a necessity for marketing cbd brands to change the narrative around cbd products so that there’s a change in the structure and more people get accessible medical care.
The immense research on poverty, income inequality, and the social determinants of health culminated in public sympathy for the plight of the poor. Yet for all the studies that have been done on poverty, perhaps it is time to develop research and public support for a solution – such as Basic Income. There are practical challenges to getting basic income into common public health parlance. The health of everyone is highly important, no matter the level of wealth, every person should have access to healthcare, for example, men may need sexual health medications (), which means that they must be able to have that access when required by their doctor.
The answer may lie in the understanding of Basic Income as an ideological proposal that can affect our health. The discourse around basic income as a deeply ethical idea is necessary, but perhaps insufficient. I believe we should consider reframing the concept concretely as a population health intervention.
Why call basic income a “population health intervention”?
A concept advanced by Canadian researchers Potvin and Hawe (2012) as being policies or programs that shift the distribution of health risk by addressing the underlying social, economic and environmental conditions, population health intervention research is a unique approach to figuring out how we are affected by policies that have a wholesale effect on people. Eminent basic income economist Dr. Evelyn Forget took this approach in her paper “New questions, new data, old interventions: The health effects of a guaranteed annual income” (Forget 2013). She used old administrative data from the well-known “Mincome” experiment in Manitoba, and looked at health records from the same time-period. She saw a reduction in hospital burden relative to a similar town’s health care use that did not get the income grant.
Calling basic income an intervention means that we can treat it as a ‘natural experiment‘.
We can study the impact of a policy on our health and well-being without necessarily running a Randomized Controlled Trial (where you randomly assign some people to a treatment, policy, or program, and not others).
Many have proposed that we need to conduct this sort of formal scientific experiment first. Some have questioned how useful such limited studies would be. A Randomized Controlled Trial might tell us whether basic income works in a certain social, economic, and political setting, but tells us little about whether the policy would work in other settings, or why the policy had a particular effect.
We ought to be careful not to set ourselves up to fail with studies too narrowly drawn in scope. Mixed or unexpected results from such studies also risks misinterpretation, and can be used to prevent basic income from entering policy.
Although the Ontario Pilot Program represents a step in the right direction, nothing stops us from advocating for the full national implementation of basic income. A host of different research and study designs would be embedded into the impact evaluation of this federal policy, on par with health care or public education. Framing a given policy as a population health intervention acknowledges the fact that many there are health-promoting aspects to programs outside of health care sector (Hawe and Potvin 2009).
Basic income is such a policy. Programs to alleviate poverty lie outside the doctor’s office, but nevertheless have a profound impact on health.
Population Health Intervention Research compels us to think bigger than ourselves.
Traditional medicine treats the individual person. If we are looking at the effect of social programs and policies, this unit of analysis is often too small to see measurable differences in any single person. Moreover, if we restrict a given treatment or social program to the poorest people – such as welfare, we may see limited overall benefits to the population as a whole.
Epidemiologist Geoffrey Rose recognized this problem (Rose 1985). Imagine that people lie on a continuum of ‘risk’ for certain diseases and health outcomes. For example, this could be said of high blood pressure as a risk factor for heart attack. Higher blood pressure puts you at higher risk of heart attack.
For our purposes, let’s say this distribution represents the relationship between poverty and getting sick. Higher poverty puts you at higher risk of ‘sickness’. We might expect that most people lie somewhere in the middle of the distribution, while those at very high or very low poverty sit somewhere at the tails.
Rose noted that traditional medicine’s approach was to target high risk people at the far right. However, these people are a smaller proportion, and paying attention only to them might not give us the biggest bang for our buck. Instead, he posited that interventions that reach entire groups of people would ‘shift’ the distribution itself. At the end of the day, he estimated that these far-reaching treatments would have a bigger impact overall (Rose 1985).
Basic income fits that profile – a social policy that brings everyone up, effectively ‘shifting’ the distribution. In order to examine policies that lend a helping hand to everyone, we need a scientific lens that is broad enough to capture the whole picture. Reframing basic income as a population shifter might fill that void.
Lastly, population health interventions allow us to redirect our thinking from the problem to the solution.
We keep studying poverty, not the fixes for poverty. A population health intervention approach calls for the health sciences to consider the potential gains to be made by studying the impact of income interventions on population health. We should be turning our attention from studying how poverty effects our health, to studying how fixing poverty effects our health.
You might be quick to point out that we have not eradicated poverty yet. So, how do we study this state of affairs, when it doesn’t yet exist?
In some ways, we can. We have the pilot run in Dauphin, Manitoba that in many ways, was ahead of its time. Dr. Forget was the first to recognize the strength of “intervention-alizing” the Canadian basic income experiment. We can also examine policies that get close to basic income, such as the Bolsa Família program of Brazil – a conditional cash transfer available to families with children. In Canada, the non-conditional income grant for senior citizens called the Old Age Supplement has been analyzed as an analog to basic income (McIntyre, Kwok et al. 2016) and indeed, those researchers found that participants eligible for OAS reported better self-reported physical, mental, and function health. Importantly, they also found those on OAS (which is non-conditional) where better off than those on conditional income programs. These are innovative approaches to the question of basic income’s potential impact, using information we already have. And, it might move us from studies of poverty, toward studies of basic income.
As it stands, promoting basic income as a population health intervention for the sake of our health is underutilized, yet it seems like a sensible way to communicate the idea. Poverty is intricately tied to the material conditions of our lives and societal position in the world, predicated on sex, race, and class. How a policy like basic income works among these conditions deserves no less than comprehensive and holistic look at how our health is profoundly impacted. Research that is based on an understanding of population health intervention attempts to do just this – and capture the value and differential effect of these interventions, the processes by which they bring about change and the contexts within which they work best (Hawe and Potvin 2009).
The Dauphin Experiment and the impending Ontario Pilot have and will continue to shape our thinking moving forward. They are also a testament to the desire of Canadians for a better, kinder, healthier society for all. However, we have not yet fully transformed the public’s conception of poverty alleviation as a necessary policy, worthy of widespread implementation as are universal health care, public education, or social assistance.
Implementing a basic income as an essential social program and for our health is possible, and fully within our experience of policy-making at both the provincial and national levels. The time has come to make this a reality.
Sarah M Mah is a PhD student in the department of Geography at McGill University. She is also a member of the Asian Women for Equality Society, an organization dedicated to the campaign for a Guaranteed Livable Income.
The opinions expressed above are not necessarily those of BIEN or BI News.
References
Forget, E. L. (2013). “New questions, new data, old interventions: the health effects of a guaranteed annual income.” Prev Med 57(6): 925-928.
Hawe, P. and L. Potvin (2009). “What is population health intervention research?” Can J Public Health 100(1): Suppl I8-14.
McIntyre, L., C. Kwok, J. C. Emery and D. J. Dutton (2016). “Impact of a guaranteed annual income program on Canadian seniors’ physical, mental and functional health.” Can J Public Health 107(2): e176-182.
Rose, G. (1985). “Sick individuals and sick populations.” Int J Epidemiol 14(1): 32-38.
by Guest Contributor | Sep 12, 2017 | Opinion
In 1970, conservative Republican US President Richard Nixon introduced a health bill into the American Congress. It passed but was defeated in the Senate. He did not realize it was a health bill, nor did many of his fellow politicians. It was called the Family Assistance Plan, a guaranteed income for families with children, not adequate to bring the income up to the poverty line, but substantially more than was previously on offer.
It required the breadwinner to accept work if available. Thus it was targeted, conditional, and inadequate by itself to eliminate poverty, but it was a huge change in thinking from a conservative leader in the United States. It came with this impressive rhetoric
“Initially this new system will cost more than welfare, but unlike welfare this is designed to correct the condition it deals with and thus lessen the long range burden and cost.”
The health-income gradient and the failure of ‘welfare’
We know that health and poverty are inextricably linked, that health outcomes follow the income gradient, and that the basis for this association in wealthy countries with good health systems is not simply access to care, but poverty and its own associations. Thus the Nixon proposal was a health bill.
The famous Whitehall study of British public servants who all had similar access to the National Health Service demonstrated a clear association of income with health outcomes. Those most in control of their own lives lived longer and suffered less.
Because of concern about wasting taxes on welfare and about the so called ‘welfare trap’, we have developed a highly targeted welfare system in Australia, with a strong emphasis on mutual responsibility. Our efforts to identify any welfare ‘fraud’, accidental or intentional, have become increasingly intense.
We continue to force people to chase jobs which do not exist or which they could not do. We hound them with letters generated by computers and then make it difficult for them to question any charges against them. We demean them. We dis-empower them even further than their poverty, unemployment, mental illness, or physical illness already does.
A BIG idea
An alternative is needed. The concept of a Basic Income Guarantee (BIG) is not new. Thomas More wrote about it 400 years ago in his book Utopia. Variations of it have been advocated for centuries. Bismark’s social insurance in Germany has some elements of the concept. Nobel Laureate economist and free marketeer Milton Friedman advocated it in the form of a negative income tax (NIT).
Dr. Tim Woodruff
Four trials in the 1960-70s in the United States used Friedman’s model (p 107-109). If an individual’s tax return indicated a low or no income, a tax rebate was paid as a monthly deposit to a bank. The size of the rebate declined slowly as income was earned, ensuring earned income led to an increase in total income. The largest of these four trials involved 4,800 families, and the amount given varied from 50 to 100 percent of the poverty level. There were no work requirements.
The alternative model to NIT is a cash payment. This was trialed in Canada in 1974, where 60 percent of the Low Income Cutoff (poverty level) was paid. For every dollar earned the payment was reduced by fifty cents. Analysis of results showed that even though only one third of the population ever qualified over the 4 years of the trial, high school completion results increased and hospital admissions decreased during the trial compared to the control group.
An even more simple model is one in which the cash payment goes to every individual adult and is not means tested. This eliminates any negative perception of being needy, because everyone receives it. For those who do not need it, the money can easily be recouped by changes in taxation.
Counting costs, reaping benefits
The Basic Income Earth Network established in 1986, defines a basic income guarantee (BIG) as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement”. This does not specify the level of the cash payment but the simplest and likely the most effective method would be to make the level at or slightly above the poverty line.
Concerns about the basic income guarantee relate both to the benefits and the costs. The Canadian trial mentioned above, demonstrated both health and education benefits. Analysis of the effect of increased household income in the Cherokee Indian community as a result of distribution of profits of a Cherokee owned casino showed less criminality and improved education down the track. None of this is surprising.
But does this mean people will not work as hard? The US trials referred to previously showed a decrease in hours worked particularly among women and young adults. Is that bad? It is not clear from the data what they did instead of working so much. Were women spending more time looking after their families? Were young adults looking more carefully at work options and training?
Men reduced their work hours by about six percent but it did not appear that they were permanently unemployed. Rather, it appears they were spending more time between jobs. The sky did not fall in. Most people who can earn a little more than a poverty level income will do just that.
Is it affordable?
A basic tax free income guarantee of $22,000 (the poverty line at 50% of the median income for a single person) for every adult Australian (18 million people) would cost $400 billion a year. But the idea is not to increase the net income of millionaires by $22,000. It keeps administration simple to give the basic income to everyone and recoup in taxes from the wealthy. So the real cost is much less.
Only about six million Australians currently receive income support. Another one million or so have some funding from the Federal Government. Being generous, for eight million to receive the BIG would cost $176 billion, almost completely offset by replacing the welfare budget of $150 billion. That could be abolished.
Removing the tax free threshold of $18,200 for the 12 million earning more than that would generate $41 billion. But anyone on a low income would still have a total income of more than $22,000.
Tweaking the tax rates on higher incomes would effectively remove the BIG from higher income earners. Provision for children would add to the cost. Reducing BIG for dual income households to a level which would reflect economies of scale, in the same way as pensions do currently, would reduce the cost.
Most Australians would not lose a cent. All Australians would be guaranteed a basic income, whether sacked, disabled, unable to find work, or simply unemployable. The NDIS and Medicare would continue unchanged. This is all possible. Even the Productivity Commission thinks it’s worth investigating (p69):
“While Australia’s tax and transfer system will continue to play a role in redistributing income, in the longer term, governments may need to evaluate the merits of more radical policies, including policies such as a universal basic income.”
A bold move for health
If Australia introduced BIG we would have a system that almost eliminates poverty, thus appealing to those deeply concerned about the plight of the disadvantaged. We would also have a system which gives such people the genuine capacity to make their own decisions about what they do with their lives, which should appeal to those committed to individual responsibility.
Implementing this idea would do away with the current cruel, dis-empowering, wasteful welfare system. It would improve health outcomes. It could improve productivity. It would improve the life prospects of the 13% of Australians who currently live in poverty, the 17.4 percent of kids who are being raised in poverty, and the 40 percent of children in single parent families who live in poverty.
This is a health issue. Medical groups of all types should think about how we might use our knowledge and concern about health to bring this issue to the minds and actions of our politicians.
About the author:
Dr. Tim Woodruff is president of the Doctors Reform Society, an organisation of doctors and medical students promoting measures to improve health for all, in a socially just and equitable way. On twitter @drsreform
Edited by Tyler Prochazka
by Guest Contributor | Aug 30, 2017 | Opinion
The relationship between health and social context includes a range of factors influencing overall well-being. Social status, class, lifestyle, education, and environment primarily shape these factors. Age, gender, race, and ethnicity are structural variables of equal importance to health outcomes. Health is being facilitated or inhibited by the socioeconomic, cultural, and political backgrounds, in which one is born and raised. The people that view these data points and makes correlations between socioeconomic status and backgrounds to health issues have an interesting career because they constantly have to adapt to the understanding of new societal groups and focus on why a certain group would make a certain decision, for example.
In the last few decades, we have seen growing income inequality between the poor and rich. Since the 1980’s, the United States of America has seen a shift in wealth from the middle class towards the wealthiest people and transnational companies. The top one-tenth of 1 percent owns as much as the bottom 90 percent. Firebaugh and Beck argued economic growth would automatically benefit the masses, which in hindsight seems questionable.
As health outcomes and life expectations closely liaise to within-country income inequality, policies should aim at finding appropriate actions to address this phenomenon. Meaning, getting basic family urgent care, in terms of medical needs cannot be compromised. Currently, in some countries, those who earn more are able to find medical treatments to treat their injuries or illnesses, whilst those who don’t have as much money are having to cope with their illness or find other treatments. For example, those who suffer from digestive problems would have to pay a significant amount to get their illness looked at, so people on lower incomes will find supplements to help them instead. The bio complete 3 supplement can deliver prominent improvements for people’s digestive systems, so people are able to treat these problems. However, not all problems can be treated with supplements. This is why changes have to be made.
Wilkinson and Pickett found health issues to be strongly correlated to income inequality within a country. To support this finding, they used two different measurement tools. The first index, applied to Western countries, was a ratio of the 20 percent top incomes in relation to the 20 percent of the bottom earners. For different states within the USA they used a second index, the Gini-index, which adopts a different methodology. Where ‘Gini = 0′ represents perfect equality (same income for everyone) and ‘Gini = 1′ is total inequality (if all income goes to one person). The outcome of these results showed that the widening income gap led to an increase of different health issues related to mental disorders, life expectancy, infant mortality, obesity and teenage births. Societal problems that correlated to income inequality included: lower levels of trust, less educational performance, more homicides, higher imprisonment rates and a lack of social mobility. Some authors found Wilkinson and Pickett’s dismissal of poverty in relation to health outcomes incorrect as they did not measure it. On the other hand, research by Beckfield and Bambra confirmed the correlation between life expectancy and health stating that the lagging welfare state in the USA led to an average loss of 3.77 quality life years in comparison to other OECD countries. The USA has an income gap of 8:1 (the average biggest earners have 8 times the wage of those at the other end of the spectrum) leading to a life expectancy of 78.7 years, which is in contrast with Japan reaching an average of 83.0 years with an income gap of 4:1. The same age dependent relation has been found in Scandinavian countries having similar income gaps as Japan.
Goda and Torres Garcia looked at the rise of global inequality and confirmed previous results by stating that within-country inequality is responsible for 70 percent of the global inequality, suggesting 30% is due to in-between country inequality.
Taking national and local figures into account for the UK, the Office for National Statistics observed a life expectancy for new-born baby boys to be 83.3 years in the Kensington and Chelsea area. Meanwhile, the life expectancy for the same cohort in Blackpool is merely 74.7 years. Nationwide, the female life expectancy is 86.6 years in Purbeck and the lowest in Glasgow City with an expectancy of 78.5 years. The authors conclude that inequality has increased over the last two decades despite improvements in these local areas.
Medical technology has improved greatly over the past two decades, with many illnesses that were fatal twenty years ago proving simple to treat now. Simple technological breakthroughs such as RFID labeling and instant messaging have meant that medical practices can be streamlined, saving time and money which can then be invested back into treating patients. With all these improvements in technology, why is there still little improvement in life expectancy in some areas? The answer lies again with income inequality, with areas that suffer from low income also suffering from lower government funding. This directly impacts the access local hospitals have to new technology, meaning they have fewer new technologies to utilise for their patients.
We may assume a strong relation between income inequality and health outcomes on a global scale as Dorling in recent research concludes there are overarching arguments. Dorling (2007) confirmed a strong relation between income inequality and negative health outcomes on a global scale after an observational study performed in 126 countries.
The academic world has provided alternatives to deal with the widening gap between poor and rich. Reformed minimum wages, living wages, basic income or a global ‘fair tax’ and redistribution are only a few austerity counter-proposals to ensure overall well-being by reaching or transcending the poverty line. Minimum wages have proven insufficient and a basic income is still globally debated. An international fair tax may even prove more challenging as this requires global political support.
Minimum wages and living wages have the same aim; raising income for the least fortunate to reduce the impact of a growing income gap. A minimum wage is defined as a minimum market valued income, imposed by law and paid by employers. A living wage is a locally liaised and negotiated pay rate that a fulltime employee needs for a household of four to reach the poverty line. For the latter, societal context is important, as living in a metropolitan area is more expensive than living in the countryside. The Basic Income Earth Network defines basic income as “a periodic cash payment unconditionally delivered to all on an individual basis, without means, test or work requirement”.
A locally implemented living wage project in the UK, facilitated by the General and Municipal Boilermakers Union in 400 councils, has proven to be successful in reducing (health) inequalities as well as being beneficial for government tax income. Awareness within the community influenced policy in a way that living wages became accepted as a benchmark for society. In this regard, a living wage clearly will contribute to individual well-being and social cohesion – both factors improve health within communities.
Proposals for a Universal Basic Income (UBI) are slowly reaching the minds of global policymakers, but this process will take more time in achieving broader support. In developing a short-term response tackling inequality, a living wage appears to be a possible solution for developed countries yet remains a huge challenge for developing countries.
Emerging new technologies will demand economical strategies that are able to cope with less job certainty and keeping up with growing demands in healthcare.
A redistribution of capital, as proposed by Thomas Piketty in his book ‘Capital in the Twenty-First Century’, in combination with a UBI may prove to be the best strategy in the long-run to counter income-related health inequalities on a global scale. We must urge politicians to finally face transnational companies and the top one percent in order to obtain a globally acceptable taxation rate.
About the author:
Sam Brokken hails from Belgium and lives near the city of Leuven. He studied physiotherapy, sports physical therapy and manual therapy practicing these areas for years in private practices within local communities. He lectures in musculoskeletal disorders in relation to manual handling and ergonomics for healthcare service providers.
He is currently engaged in postgraduate work at the Robert Gordon University (Aberdeen – Scotland) within the MSc Public Health and Health Promotion course.
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by Guest Contributor | Aug 21, 2017 | Opinion
Why do so many leading economists pronounce themselves in favor of a Basic Income? Because of its positive economic effects on the distribution side, for example. Basic Income stabilizes the overall domestic consumption and provides a kind of regulation for the ratio between expenditures and savings. Furthermore, the Basic Income helps up to a certain degree to equalize the “unnecessary” distortions arising from the free play of market forces within the context of automation, digitalization, delocalization and further developments in society. And finally, Basic Income constitutes a lean and just system to provide every single individual with the minimal share of the wealth of nations that he/she is entitled to.
The economist and former head of the Hamburg World Economic Institute Thomas Straubhaar does not put the emphasis on the macroeconomic aspects. In 2006, he was one of the originators of the liberal Basic Income proposal “Solidary Citizens’ income” promoted by Dieter Althaus, member of the center-right party CDU and Thuringia’s prime minister at the time. Straubhaar’s new publication “Radikal gerecht” (radically just) shows some interesting development, while maintaining the core of the arguments in favor of a Basic Income from a liberal perspective.
The principles remain the same: Basic Income is paid unconditionally, to each individual, in addition to existing income and an amount that allows for a dignified living of each person. According to Straubhaar, Basic Income is a liberal concept because it promotes free choice of the individual (including the poor) and abolishes social bureaucracy. And it is a just cause because people with a high income pay more net taxes than those with a low income. While the citizen’s income of 2006 was calculated at €600 per adult per month (Bürgergeld), Straubhaar now speaks of €1,000 per person. He does not insist on this sum, saying that a) the basic needs of the individuals have to be re-evaluated periodically by the responsible office, for instance the federal statistical office, and b) in addition the amount is and will be a function of the political debate. A higher Basic Income requires higher taxes, which is the expression of the political will respectively of the political majorities. “It is obvious that the amount of the Basic Income and the tax rate are the levers of the policy makers and of the population to steer this new social system”, he writes on page 17.
Straubhaar presents the Basic Income as a kind of radical reform of the tax system. He calls it a negative income tax, however. A core element of this tax reform would be a flat rate tax on all kinds of income, not only wages, but also capital revenues and revenues from automats and robots. Here, Straubhaar reacts in a raw form to the fact that in the future, products from fully automated factories are going to have a price as well. Hence these have to be taxed like any other income. This is a major difference to most other models (and specifically the solidary citizen’s income of 2006) which deal mostly or exclusively with revenue taxes, and it is very welcome to see such an adaptation from the liberal side and in a systemic (even if at this moment still rather crude) form.
Concerning the financing, Straubhaar argues that the €960 billion cost of a Basic Income of €1,000 per person per month (80 million x €12’000) is somewhat higher than the actual expenses for the social state in Germany of €880 billion. The actual gross value-added amounts to €2.73 trillion (2015), which means that a flat rate of tax of 40% on this (at the moment it is transformed into income) would provide €1.1 trillion. The rest of the state’s expense would be covered by indirect taxes. At the same time, the contributions for the classical social insurance that actually are deducted from the gross salaries would largely be abolished.
Straubhaar admits this calculation to be very rough and not able to reflect all the possible and dynamic effects of the introduction of a Basic Income scheme, and insists on the flexible elements such an introduction will imply (estimation of cost of living, political process etc.). As with other authors, financing is not the core of this motivation. He sees the Basic Income as the best and most viable solution to adapt the classical system of social insurance of the 19th century to the 21th century. It creates a sort of a “blind” social policy, contrary to the targeted schemes whose advantage all too often is only to maintain a class of social bureaucrats who decide on sums and subjects. Furthermore, it is a core contribution to big issues of our times, namely an ageing population, digitalization/automation, individualization, and so on. Economically, it is not only viable, but it makes sense within the context of globalization and full automation. And he insists on paid labor continuing to be the main source of income but in new, more flexible and open forms, as activities and careers keep changing, as we witness already today. In this context, the existing organizations like trade unions or entrepreneurs’ federations will maintain their significance. The work motivation, which some economists see threatened by a Basic Income, will not decrease, but on the contrary increase thanks to the increased degree of freedom.
Straubhaar’s book is an important step for the liberal promotors of the Basic Income scheme in Germany. He aligns in practice with the other wings (Netzwerk Grundeinkommen, Goetz Werner) by speaking now of a sum of €1,000 per person per month (without being categoric about it). He urges it as a core element for the rebuilding of the social state, an adaptation to the 21th century and a blind social policy with arguments that are widely acknowledged by intelligent people. However, it is not certain that his fellow liberal economist colleagues in Germany are willing to follow his arguments. Many of them are still anchored in the concept of a 19th century social state. On the promotor’s side, some might be tempted to criticize Straubhaar’s concept of a negative income tax. Furthermore, several questions about the additional tasks of the social state remain.
There is one point that cannot be conceived in the way Straubhaar does. On page 98, he writes that every German citizen is part of the Basic Income scheme from birth until death, and those living abroad would have a right to their full claim, independent of their new country of residence. This is a flashback to the 19th century concepts of citizenship and nationality. Today, we speak of resident population and debate the introduction of a Basic Income in the whole world. Thus, if a German citizen would live in France, he would get the French Basic Income without the German Basic Income. But this is a tiny remark and does not impair the substantial progress of “Radikal gerecht”.
Finally, although Straubhaar labels Basic Income as radically just, he does not close the loop from a moral perspective to a legal standpoint, by omitting the step from basic income to basic right. As Thomas Paine wrote in 1796, the whole earth was originally in the possession of the whole human race. Now, on the base of an immensely increased wealth of nations and individuals, Basic Income represents the entitlement of every individual to a minimal (or basic) share of this wealth.
More information at:
(in German)
Thomas Straubhaar, Radikal gerecht [Radically just], Edition Körber-Stiftung, 2017
Written by: Albert Jörimann
Albert Jörimann, was president of BIEN-Switzerland from 2008 until 2013. His main research subject is financing questions of basic income.
Works cited:
Das Solidarische Bürgergeld. Analyse einer Reformidee.» Konrad Adenauer Stiftung, Edited by Michael Burchard, Lucius & Lucius, Stuttgart 2007.
