In a sign of the major progress Universal Basic Income (UBI) has made in Asia, the United Nations Development Program in Beijing hosted a roundtable discussion on basic income last week. Professors from China’s most influential universities spoke at the roundtable about the potential for a basic income pilot program in China.
Patrick Haverman is the UNDP Deputy Country Director for China. Haverman said he wants to work with academia and government to determine if basic income experiments in different areas of China are feasible.
“With the Sustainable Development Goals firmly focused on the need to ‘leave no one behind’, careful consideration of a wide variety of responses will be essential,” Haverman said during his opening remarks. ”It is very important that we can foster collaborative discussions around potential options to address poverty and inequality into the future, and the role of UBI should not be overlooked.”
The roundtable also discussed the benefits and likely challenges of implementing a Universal Basic Income in China. A large topic was how UBI could improve on the dibao system, which is China’s means-tested unconditional cash transfer program. Dibao currently has issues with targeting the subsidies toward people in poverty, which many participants at the roundtable noted UBI’s universality could potentially alleviate.
Shi Li, a professor at Beijing Normal University, said Chinese people in poverty receive the dibao because of poor targeting. In his research, Li and other researchers found that nearly 88 percent of poor residents in China do not receive dibao stipends. Remarkably, administrative costs of means-testing were three times more than the actual transferred amount.
The large size and economic disparities across the mainland mean it may be difficult to implement a national UBI that is not adjusted based on residence, others noted.
The event was co-hosted by the International Labour Organization, which presented on the potential disruption of automation on employment during the roundtable. Haverman said an advantage in China is that smartphone penetration is high and many businesses now accept digital payments. This means it may be most efficient to send basic incomes to digital wallets.
“Almost everyone has a phone, so if we find a pilot zone I think we should take a look at it,” Haverman said.
Furui Cheng an associate professor at China University of Political Science and Law’s Business School, said the China Basic Income/Social Dividend Research Network is working with UNDP to plan the next steps for a pilot program in China.
Cheng said they are looking to work with local governments and raise money from technology companies.
“Basic income is the probable alternative for the future global social security system, which is facing unprecedent challenges now,” Cheng said.
“We shall learn the experiences of global existing basic income experiments as much as possible, and we welcome any suggestions from any supporters,” she said.
Zhiyuan Cui, a professor at Tsinghua University, has written how China could emulate the Alaska Permanent Fund to implement UBI. Cui explained that Jay Hammond, the Alaskan governor who created the Permanent Fund, said he often felt “closer to Beijing than Washington DC.”
Yang Tuan of the Chinese Academy of Social Sciences said the size of China means it would be a good place “to come up with many types of experiments” for basic income.Tuan, who supported the implementation of dibao when she was working for China’s social security system, said the economic dynamics of China have changed since dibao started.
“(In the past) I have been against western mechanisms of social security,” she said. “But today I think the context of China is different.”
According to Haverman, the UNDP is planning to release up to three more working papers, addressing topics such as financing UBI in China, as well as its effect on work hours.
UBI Taiwan held a press conference to describe their proposal to give every Taiwanese citizen a basic income each month. Skeptics and supporters were given details of how Taiwan could feasibly implement such a policy.
Taiwan’s extremely low tax rates coupled with a highly developed economy make Taiwan a feasible candidate to establish an Unconditional Basic Income (UBI), the group said.
UBI Taiwan was established in 2016 to bring attention to this policy in Taiwan, where it has not yet been a major topic of national discussion.
On the heels of the press conference, UBI Taiwan has scheduled meetings with political party representatives in Taiwan.
The national proposal briefing cover
UBI Taiwan’s basic income proposal does not include a means-test or work requirement, which means, essentially, every Taiwanese citizen would receive a stipend. Under this proposal, adults would receive 10,000 NTD per month ($330 USD) and children 5,000 NTD per month ($165 USD).
The group argued such a policy could help to alleviate income inequality, which has been growing steadily in Taiwan. It may also address some of the financial anxieties related to having children, which has created a demographic crisis on the island.
According to the white paper briefing, UBI would lower the rate of low-income families in Taiwan by 66 percent – from 25 percent currently to 8.5 percent after basic income.
The proposed amount is two-thirds of Taipei’s poverty line, which is the highest in Taiwan.
The press conference was held on October 20 at National Taiwan University’s conference venue. They outlined several methods to realize such a policy in Taiwan, focusing on either immediate or gradual implementation.
An immediate implementation would have a “gross cost” of 15 percent of Taiwan’s GDP, the group said. Ray Song, the research director for this national proposal, said the “gross cost” is misleading because it does not account for how much individuals would pay back their basic income in taxes.
Oscar Han, UBI Taiwan’s lead welfare researcher, discusses the benefits of UBI. The press conference had immense interest and was unable to provide tickets to the large number of Taiwanese who applied to attend.
The “net cost,” which calculates how much the government is actually sending out as a basic income and not receiving back in taxes, is 3.2 percent of Taiwan’s GDP, according to the research team’s calculation.
The group argued one step Taiwan should immediately take to pay for UBI is implementing a carbon tax.
A carbon tax in Taiwan would follow South Korea, which has recently implemented a carbon trading scheme, and Japan, which heavily taxes fossil fuels and is beginning a “climate change mitigation tax.”
Taiwan currently has no carbon tax, but rathersubsidizesfossil fuels by 20 billion NTD a year.
A tax on carbon of around 900 NTD per ton that increases 60 NTD per year would generate 1.7 trillion NTD in revenue over ten years, according to the proposal’s white paper.
During the question and answer session, Tyler Prochazka, UBI Taiwan’s co-founder and fellowship director, said adding a UBI on top of Taiwan’s existing social welfare system would put Taiwan closer to average welfare spending in developed countries.
The UBI Taiwan research team leadership answers questions during the press conference. Left to right: Jiakuan Su, Tyler Prochazka, Ping Xu, Ray Song, Oscar Han
“It is noteworthy that 70 percent of Taiwanese would benefit from this policy,” said Oscar Han, UBI Taiwan’s lead researcher for social welfare.
Wealthier families would still receive the basic income, but they would likely pay more in taxes than they receive from UBI, Prochazka noted.
There are several overlapping the social welfare policies in Taiwan that could be substituted by basic income, according to Song.
During the question and answer session, one audience member was concerned that eliminating other social welfare could leave some people worse off.
Prochazka explained that UBI Taiwan is not advocating eliminating any particular social welfare program, but that some would naturally fade away because a basic income would raise many individuals above the qualifying standard to receive the aid.
Considering the political difficulties with immediate implementation of UBI, the other option outlined was to model Alaska’s Permanent Fund, which has been providing a partial basic income to Alaskan residents for decades based on oil revenues and other investments, and gradually phase-in a basic income starting with young Taiwanese.
The Taiwan Permanent Fund (TPF) would collect revenue from taxes, such as a pollution tax, and invest the revenue back into the economy in order to pay out the dividends as a basic income.
The TPF proposed by UBI Taiwan would require an increase in taxes of 5.2 percent of GDP, but it would require several years to phase-in as the fund grows from its investments.
There were audience members who said they thought the phase-in for the Taiwan Permanent Fund would take too long. Song said that their calculations for the phase-in were based on conservative adjustments to taxes.
“This is the most conservative version (of our Permanent Fund plan),” Song said. “If the public is willing to increase taxes more quickly, this would allow us to achieve faster implementation of a full UBI.”
One audience member was skeptical that a basic income would improve labor relations, and she thought business owners would lower their wages in response.
Jiakuan Su, the lead taxation researcher, said that a basic income could give an employee more influence over their employers.
”We have the evidence to show that even when you just give a basic livelihood, you can give an emancipatory potential for us to choose what our passions are, rather than to be forced by economic factors to go do things that we hate,” Prochazka said.
The proposal has been under preparation since this summer when UBI Taiwan began its fellowship research program with students selected from across Taiwan. During their research, the team collaborated with economists who study basic income from various countries, as well as Taiwanese professors to guide their work.
At the beginning of the press conference, UBI Taiwan played a video featuring their supporters from around the world. Among those who showed their support included Andy Stern, Barack Obama’s former economic adviser, Peter Knight, a former World Bank economist, and Enno Schmidt, the leader of the Switzerland basic income referendum.
“A country that is brave enough to face the issues and challenges of our time and to rethink its values, I think that country deserves the leading role in this innovative issue of a Universal Basic Income,” Schmidt said in his video address to the conference.
One of the fiercest criticisms of UBI is that it will increase laziness. Schmidt thinks the opposite is true.
“We are lazy today, just living in the given economic structures. UBI is a measure against this wasting of time, destruction of social relationships and environment,” Schmidt said. “It’s a measure that brings life and work closer together and will lead you to do more, work better, because it can be your work.”
Stern has been an influential advocate of basic income in the United States. He was previously the President of the Service Employees International Union, and has written a book on UBI called “Raising the Floor.” Stern has been providing advice to UBI Taiwan since this summer.
“It’s an amazing effort and it’s just beginning, but it has the potential to change the future of work and more importantly the economic security of everyone on Taiwan,” Stern said in his video for the conference.
Guy Standing, a professor at the University of London and a co-founder of Basic Income Earth Network, advised the UBI Taiwan research team over the summer as they were preparing the proposal.
Standing’s message to Taiwan is that UBI is feasible.
“It’s feasible. It’s affordable. We’ve done pilots in India where we gave very modest amounts for thousands of people and we’ve seen that it improves nutrition, health, reduces mental stress,” Standing said in his video address for UBI Taiwan.
Ping Xu, UBI Taiwan’s co-founder and coordinator, will travel to California this week to attend a cash-transfer conference and discuss her group’s research. She said she is proud of the work they accomplished on the national proposal.
“In this group of young researchers, you can see hope for the future of Taiwan,” Xu said.
Sarath Davala, the lead researcher for the Indian basic income experiment, has worked closely with UBI Taiwan over the past year. Davala said he is hopeful that the proposal will spark a conversation about basic income in Taiwan.
“The proposal is done after rigorous analysis of the existing welfare system. It can become a model for the countries in the region,” Davala said.
The conference took place on a rainy day, but the venue was nearly full of audience members, including some political party representatives and government officials.
“Even in the pouring rain, having so many people show up to the press conference was really encouraging to us,“ said Jaiyou Wei, a research associate for UBI Taiwan. ”But this press conference is only the beginning of our plans to spread UBI in Taiwan.”
The People’s Republic of China has created the largest unconditional cash transfer program in the world. It is called dibao, meaning Minimum Livelihood Guarantee. A recently published book is taking a fresh look at how effective dibao is at improving the livelihoods of impoverished Chinese people.
Dr. Qin Gao is on the faculty of the Columbia University School of Social Work, where she researches poverty, income inequality, and social welfare programs in China.
Gao has done extensive work researching dibao, and has released the book “Welfare, Work, and Poverty: Social Assistance in China,” which evaluates how well dibao has achieved its goals of lowering the amount and intensity of poverty in China.
The UBI Podcast recently interviewed Gao on her new book about the dibao program and asked her to give her thoughts on universalizing dibao.
Dibao is important to understand for basic income researchers because it demonstrates on a large-scale how basic income operates when it is not universal (since it includes a means test).
The dibao program allows each locality to set its own dibao standard (essentially the poverty line). Anyone below that standard is technically eligible for dibao assistance. The assistance in theory gives an individual enough money to reach the dibao standard. Eligibility for dibao is based on individual income, so one individual in a household could qualify, while another may not, Gao said.
For example, a dibao standard in Beijing, China is 900 RMB per person per month. If an individual made 700 RMB per month, dibao would provide 200 RMB in assistance to reach the dibao line of 900.
While some may worry that officials will cut off dibao assistance once an individual goes over the line, Gao said the reality is more complicated.
“In reality, many local officials are very considerate of the fluctuation in people’s incomes and other family situations. For example, education needs, health care needs. So many localities actually have initiatives to not discontinue people’s dibao benefits right away if they have income that’s higher than the local dibao line,” she said.
Some localities may allow a family to stay on dibao for three months after extra income is earned to make sure they have job security and they “do not fall back into poverty right away.”
Once a family receives the cash, it is unconditional, meaning there are no (direct) behavioral conditions to continue receiving the money.
Gao said the evidence that dibao creates a poverty trap, where families remain under the poverty line intentionally to receive assistance, is not strong.
Some localities have families update their income and wealth information every three to six months. Certain villages will even publish the names of recipients to allow for public feedback on whether a family should qualify for dibao. Based on the feedback, localities will randomly select people to verify their income information.
“So it’s a very systematic and stringent process,” Gao said.
For some villages, allowing others to comment on a family’s poverty situation may further stigmatize the dibao and other forms of welfare.
“Because the dibao is an unconditional cash transfer, so by design the policy requires applicants to tell the truth and other community members and neighbors to share the responsibility of monitoring. That is part of the design of this program,” Gao said.
While on paper, the dibao is technically an “unconditional cash transfer,” the way dibao measures wealth creates its own form of conditions.
Depending on the locality, dibao recipients may face a myriad of asset tests that prevent them from owning pets, a larger than average home, a car, or luxury items. Expensive private schools and schools abroad are off-limits. In the past, even a cellphone was a disqualifier.
“I think now, many localities are more lenient on that, especially on the cell phone. But there are certain luxury goods (so-called), that you’re not supposed to have. That also features into the feedback from the neighbors and community members. They would get critical and jealous if you have certain luxury goods that they don’t have but you are getting dibao,” Gao said.
In Gao’s book, she also analyzes the subjective well-being and social participation of dibao recipients. She found dibao recipients “tend to be more isolated, and less active in their social participation” than similar peers.
Dibao recipients may feel stigmatized from participating in these activities, such as going to the movies, since it is not a “culturally acceptable use of the dibao income,” she said.
After China’s transition from a planned economy to a market-based economy, society’s expectations about how families earn their own living changed. Now it is expected that people “earn a living through their own work.” Although, Gao said China is currently going through a debate about who “deserves” welfare.
“Previously people had guaranteed jobs, but many people during the economic transformation were laid off so able-bodied adults couldn’t support themselves through jobs anymore. And that group is making up about half of the dibao population,” Gao said.
One area of concern for policymakers is ensuring the dibao is reaching the “proper recipients;” that is people in poverty. There are reports of targeting errors in administering dibao “because of misreporting or difficulty to capture the real income or assets situation in rural areas.”
“The targeting error is real and local officials are very aware of it, but that will stay with the program because of the variations of family conditions and income,” Gao said.
The dibao standard is often used as a criteria for other welfare as well. This means that qualifying for dibao also gives a family access to a host of other assistance (including education, housing, and medical assistance). However, this could create a “welfare cliff” issue, where if a family exceeds the standard they may lose a lot more assistance than they gain as income.
“I think this is one of the policy design features of dibao that needs to be revised right now,” Gao said of dibao acting as a “gatekeeper” for other social assistance.
Overall, dibao has only reduced the rate of poverty to a “modest degree.” It is more effective at reducing the depth and severity of poverty, Gao said.
When asked about the potential to universalize dibao and remove the means-test, effectively creating a Universal Basic Income for China, Gao said this idea has been “very much on my mind recently.”
“I think the best possibility probably would be for certain more developed localities to experiment with such a program and see how it works,” she said.
As for creating a UBI program in China in the near-term, Gao said this would be challenging for many reasons.
“To make the dibao or a similar cash transfer universal all around China, I don’t think it’s very likely in the short-term, both in terms of fiscal challenges and also political and cultural challenges,” Gao said.
The greatest challenge of this generation is managing both environmental sustainability and a growing human population. Climate change and income inequality are making this an increasingly difficult prospect.
The Sufficiency4Sustainability Network (S4SN) is working on analyzing the intersection of these issues and the solutions that can address them.
S4SN is led by Peter Knight, a former lead economist at the World Bank. The network of researchers analyzes different policies and how they may interact with ecological and economic trends. Knight recently joined the UBI Podcast to discuss his work with S4SN.
“We’re exploring how changing values and policies might result in lower resource use by the relatively well-off, while raising the consumption of the poor to a level sufficient to meet their basic human needs on a planet with limited resources and moving toward a population of 11 billion by the end of the century,” Knight said.
The network is interested in researching Universal Basic Income (UBI), and it is included as one of the main research topics of S4SN.
“It seems to me that Universal Basic Income is right on this issue of what are the technological trends that’s going to make this important for not only economic sustainability but social, political, and ecological sustainability,” he said.
UBI is of interest to Knight because he thinks it may be an important solution to address the upcoming dramatic shifts in employment due to technology.
“I think the exponential rates of change involved in Artificial Intelligence and all those technologies that are related to Moore’s Law and their speed and cost of computation, jobs are going to be destroyed faster than they can be replaced, so UBI is a method of separating work and paid remuneration from enough to live on,” Knight said.
While Artificial Intelligence has the potential to help solve many of the problems facing humanity, Knight said, the problems it creates means that it must be coupled with a UBI.
“Exponential technologies including artificial intelligence offer potential substitutes for the limited resources, provide cleaner energy, and reduce the need for physical labor. But they also tend to concentrate income and wealth, so UBI is necessary to provide economic, social, and political sustainability,” Knight said.
For Knight, it is important to consider that the sacrifices made for environmental sustainability should not be made by the poorest among in society.
“You just can’t tell people that are starving, ‘look you’ve got to cut back your consumption. If you want their support for broader changes, you need to both change values and provide enough income to live for people who are increasingly not just manual labor, agricultural labor, industrial, but increasingly the white-collar professions are going to be displaced,” Knight said.
Students from across Taiwan have assembled for the first UBI Taiwan Summer Fellowship. The group is studying and researching Universal Basic Income (UBI) this summer, with the goal of producing a national basic income proposal by September.
The summer fellows met for the first time mid July to be trained in communicating basic income with those that have never been introduced to the idea. The fellows have developed a comprehensive strategy to promote and research UBI in Taiwan.
There are over 30 students from universities across Taiwan participating in either communications or research focused tasks.
“The summer seminar is bringing together both theoretical and practical considerations as a way of creating positive public policy for people,” said Julio Linares, a recent graduate of National Chengchi University (NCCU). Linares, originally from Guatemala, is helping to lead the research team and the seminar.
The fellows are producing a UBI white paper, which is scheduled to be completed by late August, to outline how Taiwan could implement UBI nationally. UBI Taiwan is planning to introduce the policy proposals to Taiwanese policymakers. They are also considering how to create a framework for a basic income pilot program experiment in Taiwan.
Within the fellowship are different teams focused on specific projects, such as social media and news production.
Dongyan Wu, also a NCCU student, is leading the news team for the summer fellowship. Wu said he believes UBI has the potential to transform Taiwan.
“If UBI is successful in Taiwan, everything we do, all our jobs and all the activities, will finally have meaning,” Wu said.
Tyler Prochazka, the fellowship director, started preparing the seminars and recruitment four months ago. Fellows were chosen from nearly 100 applicants based on their skill set and interest in understanding UBI.
Toru Yamamori, Cheng Furui, and Sarath Davala are scheduled to give presentations to the fellows in the coming weeks on various topics related to basic income. Enno Schmidt, the Swiss referendum leader, gave a presentation to the fellows last week.
Ping Xu, the coordinator for UBI Taiwan, said the summer fellowship is part of building up “the kind of future we want to see” in Taiwan.
James Davis, a rising senior from Columbia University in New York, flew to Taiwan for two months to help lead the summer seminar and oversee research for UBI Taiwan. Davis is the director of field research, which is producing the pilot program framework.
“UBI Taiwan’s mission is critical for the future of work in Taiwan. I have really enjoyed getting to know the volunteers, learning about their backgrounds, and sharing their passion for helping others,” Davis said.
