In February 2019, then-Stockton Mayor Michael D. Tubbs launched the Stockton Economic Empowerment Demonstration (‘SEED’), a 24-month guaranteed income initiative, the first mayor-led initiative of the sort in the US. Two years later, the preliminary results from the first twelve months of the experiment (through to February 2020, before the pandemic) have been released and the key findings are positive with the guaranteed income reducing income volatility, enabling access to full-time work, improving mental health and allowing better control over one’s time and decisions.
Program design
Under the SEED program, 125 Stockton residents were randomly selected to receive $500 per month for two years with no conditions attached to the handout and limited eligibility criteria namely: being at least 18 years old, being a Stockton resident and living in a neighbourhood at or below the median income ($46,003 in Stockton). A control group of 200 individuals meeting those same criteria was also established for research purposes.
The experiment is funded with private donations including a $1 million grant from the Economic Security Project, an initiative that aims at “making the economy work again for all Americans” with a specific focus on guaranteed income and anti-monopoly action.
The program is being evaluated by two researchers, Dr. Stacia Martin-West of the University of Tennessee, and Dr. Amy Castro Baker of the University of Pennsylvania under a ‘mixed-methods approach’ consisting in both a quantitative and qualitative analysis of data collected before and during the experiment. The data was collected through both surveys and in-person or group interviews (participation in the experiment was not conditional on participating in these interviews).
The experiment was designed in close cooperation with public authorities and community members to tailor it to local specificities (disbursement timing and mechanism for instance) and to build trust between recipients, control group members and SEED staff. This work was necessary to address initial concerns around the unconditional and guaranteed nature of the income (considered ‘too good to be true’) and the risk of loss of eligibility for other benefits (covered through specific work by the Economic Security Project).
Key findings
The preliminary results show that recipients made rational decisions about the income they were receiving, mostly spending it on ‘necessities’ (food, utilities, auto care). The researchers also found positive spillover effects with recipients being able to assist people in their extended networks more. Recipients also faced less income volatility and, noticeably, reported being more able to face unexpected expenses with cash or a cash-equivalent than before.
The guaranteed income gave recipients more time to engage in meaningful activities (socialising, spending time with children). This, according to the researchers, highlights how “financial scarcity generates time scarcity”. Participants also reported improvements in mental health when members of the control group did not experience the same improvements. Participants also reported improvements in mental health compared to the baseline measures when members of the control group did not experience the same improvements.
Finally, the program also resulted in an increase in full-time employment. 28% of recipients had a full-time job at the beginning of the project. After a year that proportion had risen to 40% (in the control group the proportion only moved from 32% to 37%). Some individuals indicated that the guaranteed income allowed them time to train or complete a degree or simply gave them more confidence to apply for certain positions.
Reactions
Reactions to the release of the study have been positive with the findings seen as further evidence that these programs do not remove incentives to work and that, as the researchers put it, “poverty results from a lack of cash, not of character” making cash transfers an effective way of addressing poverty (the researchers as well as Mayor Tubbs are quick to point out however that these cash transfers cannot be the only solution to the issues faced by residents of a city such as Stockton).
On the other hand some have pointed out that SEED remains a small-scale and relatively short experiment and have cautioned about drawing conclusions too rapidly from the study. Another limitation of the study is that tracking of expenses from the guaranteed income relied on recipients collaborating with the researchers (the income was transferred to a prepaid debit card to be used directly and through which researchers had access to spending records, or to be withdrawn as cash or to another account. In those cases, about 40% of the recipients, researchers had to conduct specific surveys). Finally, some critics have used the fact that the experiment was being privately funded to argue that basic income was too expensive for public authorities.
Regardless, these results are sure to add to the growing debate about basic income in the US. Other experiments are ongoing, and in June 2020, Michael Tubbs and the Economic Security Project founded Mayors for a Guaranteed Income, a network of around 40 mayors across the US working on implementing guaranteed-income experiments in their cities.
Editor’s note: The use of the term ‘basic income’ for the sheme in Janggo Island does not correspond to BIEN’s definition of basic income, since it is paid not to all residents but to only participants in communal fish farming activities for 20 years, and paid not to individual but to household.
A forum took place on the meaning and issues of the basic rural income social experiment, which Gyeonggi Province plans to conduct in the second half of this year. Entitled, “The Meaning and Issues of the Community-centered Basic Income Social Experiment,” the first Rural Basic Income Policy Forum was held on the 29th of January and introduced cases and discussed India’s basic income experiment, distribution of shared assets in Boryeong, Chungcheongnam-do, and Jeju Island. The Hankyoreh Economic and Social Research Institute with the Gyeonggi-do Agricultural and Fisheries Promotion Agency, the Basic Income Korea Network, Lab 2050, the Korea University Institute of Government Studies, and the Korea Regional Development Foundation all participated in organizing the January event. Some of the presenters and debaters participated online.
Lessons from the Indian basic income experiment
Sarath Davala, the keynote speaker, is the architect of India’s basic income social experiment and chairman of the Basic Income District Network, which leads the discussion on basic income worldwide. He laid out the implications of basic income experiments conducted in India and Namibia.
Namibia and India conducted basic income experiments—in 2008 and 2011, respectively—during which Namibia paid USD 12 and India USD 4 per month to 2,000 people for a span of 12 months. “Contrary to many people’s expectations, people who received basic income did not become lazy. Start-ups and economic activity increased, new transportation facilities were opened, school attendance rates rose, household debt decreased, and other good things occurred. In Namibia, the consumption of alcohol remained unchanged,” Dr. Davala explained.
Dr. Davala also introduced changes in policies following basic income social experiments. “After the social experiment, the local government in India began providing cash allowances to all farmers proportional to their farmland area in 2018, and through this policy, the party won three-quarters of the local council. […] However, the program excluded sharecroppers and non-farmers and allowances were paid only to owners of land in rural areas, and basic income discussions focused mainly on ‘the excluded.’ […] The implications of the Indian outcomes on other basic income experiments is that one needs to follow the principle of individuality and avoid excluding anyone in the region.”
Dr. Davala emphasized the role of social experimentation in promoting social dialogue beyond the collection of evidence. “In the past, we did not conduct small-scale social experiments in advance before abolishing slavery or winning women’s suffrage. These policies were based on values, philosophy, and human rights. Obviously, the policy effect rationale is important, but the policy is not implemented only with evidence. In India, political movements took place after social experiments, and there was a close review and public discussion of what was better,” he said. Another aspect of the social experiment he emphasizes is that it triggered dialogue between the public and the media, experts, and political parties to discuss desirable alternatives. “In Korea, there have been experiments with things such as youth dividends in Seongnam City, a basic income for young people in Gyeonggi Province, and national disaster support funds amid the Corona crisis, which has attracted the attention of politicians and the public.”
Sea cucumber seeds become basic income for islanders
The forum also presented a case where a local community shares the profits generated from a shared asset. Kang Je-yoon, head of the Island Research Institute, explained how Janggo Island allocates the profits from collected seafood to the islanders. Janggo is a small island with 81 households and 200 residents and began allocating profits from sea cucumber farming grounds in 1993. In 2019, 11 million won (around USD 10,000) was paid annually to each household in basic income. Kang said, “Unlike other fisheries, sea cucumbers grow on their own when the residents sow seeds. There is nothing residents have to do with them until they are ready for harvesting. Residents of Janggo Island receive a basic income from sea cucumber farming, which requires minimal labor, and the same amount is allocated as labor income from collecting clams ten times over two months. “Since the village community provides a basic income and labor income together worth 20 million won per year (USD 19,000), Janggo Island residents earn equal and stable income, unlike residents of other islands, where large income gaps exist between those in the aquaculture industry and those who are not.
However, Janggo Island also went through a slow and painful process before residents received a consistent dividend. Initially, the fishing village fraternity rented out fishing grounds around Janggo Island to fish farmers, who paid rent to the village society. Director Kang said, “It is illegal to rent out fishing grounds, which no one owns, and beside that, the rent was 500,000 won a year, which was an absurdly low price for 1983. In 1983, the village’s newly appointed head persuaded residents to reclaim the fishing grounds, after which they managed the profits from the fishing grounds (now village property) for ten years, and gave out loans. After much controversy, the dividend first began in 1993, and residents’ complaints about fishing grounds profits subsided, and the community’s common interest in the fishing grounds increased the quality of management.” A fair distribution system supported the management of shared assets.
Kim Ja-kyung, an academic research professor at Jeju National University, who presented on the possibility of basic income through shared assets on Jeju Island, said, “Jeju Island has a tradition of distributing profits through communal operation of pastureland and fisheries. For example, one village harvests seaweed fusiforme and agar together and distributes them among the participants while allowing individuals to keep the collected seaweed for themselves. One hundred and one fishing village fraternities had their own unique customs and order.”
Recently, wind and wind power generation has been drawing greater attention as a new shared asset on Jeju. Professor Kim gave a wind farm in Haengwon-ri, Gujwa-eup, eastern Jeju Island as an example. “Six villages in Haengwon-ri receive part of their wind power generation profits and set aside the funds. […] There is always a possibility of conflict and disagreement in the village, which prevents certain people from arbitrarily exercising their decision-making authority.” There is still work left to be done to develop a system to distribute the new shared asset profits fairly.
Consideration of the impact of distribution system on residents
Lee Chang-han, director of the Korea Regional Development Foundation, which designed the basic income social experiment in rural areas in Gyeonggi Province, said the experiment’s primary purpose is to closely examine the impact of basic income on the local community. “Because of the name “basic rural income,” many people are confused whether it only benefits farmers. However, farmers in rural areas in Gyeonggi-do Province make up only about 16% of the total population. It is crucial how farmers and non-farmers interact in the same living space in these rural areas. Like Janggo Island, we will observe the impact of the distribution system on resident communities.”
Park Kyung-chul, a researcher at Chungnam Research Institute, said, “Since 2019, various local governments have introduced farmers’ allowances, and there has been a discussion on farmers’ basic income. […] However, since non-farmers are also, directly and indirectly, involved in agricultural activities in rural areas, and together they form local communities, expanding the scope of payments to all rural residents is the concept behind basic income.”
Lee Ji-eun, CEO of the Basic Income New Research Network, said, “The basic income social experiment in rural areas can be reevaluated in terms of climate justice.” She added, “We hope this experiment will lead to discussions on rediscovering ‘the commons’ (shared assets), discovering small sustainable economic models and revitalizing ecological feminism, reflecting the peculiarity of rural areas.”
Lee Won-jae, CEO of Lab2050, who headed the debate, said, “I think the basic income social experiment in Gyeonggi Province has a unique status, as does the basic income experiment in Finland…where the prime minister in power conducted a policy experiment. In Korea, the experiment is taking place when basic income is becoming a central political topic.” This means that it is an environment in which the country’s overall policy will follow the results of the social experiment.
For more information, check out Gyeonggi Rural Basic Income Social Experiment’s blog page: https://gg-rbip.medium.com/
Written by Yoon Hyeong-joong, visiting fellow at the Hankyoreh Economy and Society Research Institute, philyoon23@gmail.com Translated by Eunjae Shin, researcher at the Hankyoreh Economy and Society Research Institute, eunjae.shin@hani.co.kr Reviewed by Toru Yamamori, Academic Research Editor of BIEN
Photo: Credit: Janggo Island, South Korea, is experimenting on sharing dividends from sea cucumber farming grounds with its residents. Provided by Kang Je-yoon.
The Institute for Policy Research (IPR) at the University of Bath is seeking a post-doctoral research associate for a new programme of microsimulation research on Universal Basic Income (UBI).
The IPR is collaborating on research into UBI with the newly formed Freiburg Institute for Basic Income Studies by convening a Microsimulation Research Group, consisting of academics and civil society partners with interest and expertise in microsimulation studies of basic income schemes.
The Research Associate will conduct microsimulation research for the group and organise its collaborative activities, under the direction of Prof Nick Pearce, Director of the IPR. Expertise and experience in using microsimulation models such as EUROMOD is essential. The post is offered for two years in the first instance, with the possibility of extension in due course.
In April 2019 Gyeonggi Province in Korea, the area around Seoul, implemented a Youth Basic Income that pays to every 24 year old who is a permanent resident 250,000 won (US $220; £158; €184) every quarter for four quarters. The grants are given in a local currency.
Based on surveys before and after the implementation of the Youth Basic Income, results published at the end of 2019 showed improvements in life satisfaction, in perception of Basic Income, and in work motivation.
Editor’s note: The use of the term ‘basic income’ or ‘universal income’ here does not correspond to BIEN’s definition of basic income, since the payments each month will fluctuate with income. ‘Socle citoyen’ corresponds more closely to a Negative Income Tax, adjusted on a monthly basis.
On November 26 2020, the National Assembly voted on the resolution tabled by the group Agir Ensemble launching a public debate on the creation of a universal income called “Socle citoyen.” Why do you welcome this vote?
Marc de Basquiat: This vote is historic for three reasons. First of all, it was very broad, bringing together the votes of deputies belonging to five political groups close to the centre of the political spectrum: LREM, Agir Ensemble, MoDem, Libertés et Territoires, Socialists and related parties. Credit for this result goes to Valérie Petit, a northern representative, who launched and led an informal working group on the Socle citoyen project based on the platform we published in the Observateur on May 4 with the support of 80 co-signatories, including 50 parliamentarians. In-depth work was carried out, with a series of remote (because of Covid) meetings. The 48 deputies who tabled the resolution voted on November 26th really know the stakes and the key principles of the technical solution that we propose to study.
The second reason to applaud is the strong support of the La République En Marche deputies. Seventy of them voted in favour of the Agir Ensemble group’s resolution. At a time when many people have doubts about representative democracy, we can salute here the joint search for consensual solutions for our country by representatives from diverse groups, including the governing party. Let us recall that at its creation in 1988 the Revenu Minimum d’Insertion in 1988 received the deputies almost unanimous support. Yes, a reform as ambitious as the one proposed by this resolution aims to achieve consensus from all parties of the National Assembly. This is the process that Brigitte Bourguignon, Minister Delegate for Autonomy, supported with her speech.
The third reason to celebrate this advance is the fiscal nature of the Socle citoyen proposal that it is to be studied. Let us quote from the enacted text:
“The Socle citoyen is unprecedented in that it combines tax reform and improvements in social benefits. First of all, we propose to establish the universality of income tax: every French person, from the first euro of income, is taxed proportionally. This very fact constitutes being a part of and being responsible to the national community. It links one to the collective destiny and at the same time ensures assistance and solidarity.
With the mechanism of the Socle citoyen, the universal income becomes an individual tax credit, negative or positive. Thanks to tax withholding at the source, calculation and payment are now possible in almost real time. This is one of the great social benefits of this major tax reform: it makes it possible to calculate and automatically pay out the Socle citoyen, based on the universal tax, at the same time the reform achieves universality.
The fact that universal income is approached from a tax perspective revolutionizes the question of its economic feasibility. It is not a question of creating an nth social benefit that is painfully financed, but, first of all, of ensuring that all citizens are involved, in their own way, in the financing of public services. The same “right for all” is possible because, beforehand, we ensure the same “fiscal duty for all.”
Is this a sign that something is changing, at the parliamentary level and elsewhere, with regard to universal basic income?
Despite the trauma of the 2017 presidential campaign and the failure of Benoît Hamon’s project for a Universal Existence Income, many—of all political stripes, I can attest to that—grasped the importance of a transfer mechanism that would automatically guarantee a minimum of resources to everyone, regardless of the vagaries of life. But until recently, we hesitated to talk about it for fear of being suspected of providing a caution for the Hamonist party, Generation-S.
I believe that with the Covid-19 crisis, we all understand that the issues we are facing go far beyond political posturing and partisan arrangements. I am happy that the only Hamonist deputy in the Assembly, Régis Juanico, has lent his voice to the resolution drafted by Liberal deputy Valérie Petit. It is by working together that our elected officials will be able to re-inspire politics!
On the other hand, I am disappointed that no Les Républicains representatives dared to break with a conservative voting directive. The speech of LR deputy Stéphane Viry started well, but its conclusion is saddening:
“The group Les Républicains salutes the willingness of the National Assembly, the most essential forum for public debate, to address this major issue, since it touches on the fight against poverty, for work, and social cohesion. These are all foundations on which to build a social project, national cohesion, dynamism for our country. As part of our efforts, we must constantly, all together, open up new horizons. (…) You are right to put this debate on the table, and our group is very much in favour of a frank reflection on work, on activity for all, on social protection, on the fight against poverty. However, as it stands, as formulated, we will not follow your proposal.”
In 2016, the Senate had carried out a mission of information on basic income, in which all the political movements, from the right to the communists, took part, leading to the formulation of a consensual report that illuminated the way forward. Let us hope that the 11 deputies who voted against the resolution on November 26 will discover, moving forward, that the Socle citoyen has no other ambition than to strengthen cohesion, economic dynamism and fraternity in our country.
What are the liberal arguments to defend the proposal of a universal basic income and what form does it take in this framework?
What seems to me to be common to all liberals—whether one feels on the right or on the left for that matter—is the importance one places on individual choice. A Socle citoyen can be formulated as follows: everyone pools the same share of their income (around 30%) and benefits from the same individual transfer (around 500 euros per month). With this single rule, which is easy to implement using the mechanism of withholding tax, everyone is in the same boat and knows exactly how the income tax they pay or the assistance they receive will evolve according to the events in their lives: change of job or loss of work, marriage or divorce, etc. the impact is always easy to calculate.
Such a proposal is not really a revolution. In fact, for tax households that are subject to the 30% marginal rate, my proposal is just a reformulation of the current tax calculation, with an identical result. For 2020 income, taxpayers in this bracket pay a tax whose monthly calculation is 30% of the taxable income of the previous month, minus €498.52 per tax share (let’s say €500 for a single person and €1,000 for a couple). This would not change much.
The Socle citoyen amounts to applying the tax calculation formula for wealthy taxpayers to everyone! A single person without income who currently lives with an RSA of €497.01 plus a housing allowance would receive €500 and still receive the same housing allowance. No change in his or her case. On the other hand, all other cases of poor and low-income households would be winners, to what extent, depending on what they have today.
You have been defending universal basic income for several years, as president of the Association pour l’Instauration d’un Revenu d’Existence (AIRE) and as a Free Generation expert. Do you think that the coronavirus crisis can bring about a change in opinion?
In March, with the crisis, millions of people discovered unemployment. In restaurants, transport, household services, construction, shops… All these jobs where you work hard, where you get up early. The State has multiplied measures, first by taking over from employers to pay more than half of the wages! We can see that a hazard can bring the bravest of workers to their knees, making them dependent on the community to ensure their subsistence.
This invites everyone to question the solidity of their inclusion in society. Am I in this position only because I deserve it? Do I owe nothing to anyone? How could the country have endured a “laissez-faire” logic, where everyone was left to fend for themselves in order to make a living despite the fear of catching a virus—whose danger was not really understood at the time?
Today, everyone knows they are vulnerable. Everyone has also experienced their own docility! During the first confinement, we were happy to cheer from the windows, it gave us a recreation and a semblance of social interaction. But deep down, we really understood that we are vulnerable and that we have a vital need of others. This is why the ” Socle citoyen ” project speaks to everyone: we contribute as citizens—through taxes—to ensuring a vital base for everyone. In these circumstances, no one is spreading foolish rhetoric about handouts?
Is the Socle citoyen universel an effective response to the economic crisis that is looming with the coronavirus?
No one knows how the crisis will evolve. In the second quarter of 2020, China is the only G20 country whose GDP has grown. Germany posted -12%, France -18%, India -24%. The second wave caused us to fall back, less sharply, but global economic balances will take time to readjust. Public debt is exploding. Even if it is relatively painless in the short term, no one can predict what interest rates will be in 10 years. Our accumulated debts may weigh very heavily, preventing governments from playing their role as buffers against social shocks. At that time, we will be happy to have established a Socle citoyen, the universal distribution of part of the income among all, so that no one will be in total destitution.
We can also venture the hypothesis that our country will regain the growth necessary to adapt and face the planetary challenges. Here again, the egalitarian sharing of a portion of the fruits of growth will be a tremendous driving force for national unity, a multiplier of energies.
Advocates for basic income have long argued that it is much more than just a poverty relief measure. It is a matter of common justice that would enhance freedom and provide basic security for all. A new survey across six major European countries shows that people understand its potential to improve their lives. Not only do large majorities in France, Germany, Italy, Poland, Portugal and Spain favour basic income pilots and basic income as a permanent policy. The survey also reveals the advantages people believe a basic income would bring for themselves.
The poll, conducted independently by YouGov, found that two-thirds or more of respondents in the six countries were in favour of pilots and a national basic income system. Excluding the few ‘don’t knows’, support ranged from 65% in France to 87% in Portugal. Women were generally more supportive, particularly in Germany, France, Italy and Spain.
Even before the pandemic, European citizens were suffering from insecurity, stress and precarity, linked to rising inequalities. The pandemic has made things worse. In an era of shocks, policies to strengthen individual and societal resilience are vital. Instead, governments have resorted to measures aimed chiefly at propping up businesses, including furlough schemes, that have worsened inequalities and eroded resilience.
Resilience means being able to handle and recover from shocks. It is about feeling in control, able to handle setbacks because we can envisage a better future. But it cannot be provided by today’s labour market, increasingly characterised by flexible labour relations, insecure jobs and fluctuating wages, or by existing welfare systems, or by better public services alone, even though those are needed.
The survey provides cogent support for arguments in favour of basic income. High proportions of respondents said a basic income would reduce anxiety – over half in Poland and Portugal, and more than 40% overall, especially among women and youth. It is now well established that chronic anxiety increases the risk of mental and physical illness. A basic income offers the prospect of reducing ill-health and demands on health services. It might almost pay for itself.
Respondents also believed a basic income would open up opportunities for a better way of living and working. A high proportion of youths and women said it would give them more financial independence – 50% of young Italians and 41% of young Germans, for instance. This would reduce their sense of precarity, the feeling of being a supplicant reliant on others for discretionary help.
One horror of the pandemic has been the surge in domestic violence. Experiments have shown that, once women have basic income security, domestic tensions decline and women are more likely to walk away from abusive relationships.
Many youths said a basic income would enable them to pursue further education or training, including 49% in Portugal, 53% in Spain and 27% in Germany. This reflects the current inability of the precariat to develop their capabilities in the way they choose, because they must take whatever job they can get and put in as many hours of labour as possible. Basic security is conducive to the development of skills and a more educated society.
A basic income would also improve the quality of living. Young people, in particular, said it would enable them to take part in leisure activities that they cannot afford to do now – about a third in Portugal and Spain, for example.
And a basic income would foster work beyond ‘jobs’. Men as well as women, among all age groups, said a basic income would enable them to devote more time to their family. This was the case for one in five in Germany and more than a quarter of both men and women in Poland. The coronavirus pandemic has highlighted the extent to which society suffers from a ‘care deficit’. And pilots have shown that a basic income encourages men to do more care work, helping to weaken the gender dualism that feminists rightly condemn.
Basic income would also foster a more entrepreneurial attitude. A significant proportion of respondents said it would encourage them to launch a small-scale business – 8% in Italy, 10% in France, 13% in Germany and 19% in Portugal. Entrepreneurial enthusiasm was even greater among youths – 14% in Italy, for instance. Many youths also said a basic income would enable them to devote more time to volunteering or social activism, including over a quarter of youths in Germany and 13% in France. Society surely wants more socially engaged and active youth.
One lesson surely learned during the pandemic is that most of us are vulnerable, not just to illness but also to shocks to our finances, relationships and lifestyles. In what was a cross-section of people in six relatively rich countries, only small minorities said a basic income would make little difference to their lives – 11% in Italy and 6% in Portugal, for example. Long-term basic security is still something most of us value.
We should implore European policymakers to launch basic income pilots in communities around Europe. Ideally, some courageous governments would move in the direction of a national system. But failing that, surely it is time for pilots to explore the transformative potential of basic income. According to this survey, over 70% of Europeans want them.
Guy Standing is Professorial Research Associate, SOAS University of London, and honorary co-president of the Basic Income Earth Network.
