Universal Basic Income (UBI) is making significant progress in Brazil, according to the following letter former Senator Eduardo Suplicy sent to leaders of BIEN. (See also: Maricá one step from Universal Basic Income):
my dear friends of BIEN:
Let me inform you what I consider another positive step in favor of the Citizen’s Basic Income, Universal and Unconditional. Yesterday we had municipal elections in all Brazilian cities. As a candidate for being reelected citycouncilman I got 167.552 votes, the most voted candidate for a citycouncilman in the city of São Paulo or in any other city of Brazil.
It is also a very good news for the objectives of BIEN that the Mayor of Maricá, Fabiano Horta of the PT (Worker’s Party), who has started the institution of a Basic Income, has been reelected with 88% of the votes. Since December 2019, ¼ of the population of 162 thousand people, 42.500 inhabitants started to receive a Basic Income of 300 mumbucas per month, a social money (each mumbuca is equal to one real – each dollar is equal to R$ 5.42). By December 2020, ½ of the population will be receiving it and by 2024 the whole population of Maricá will be receiving the Citizen’s Basic Income.
I have already informed you that last July 21st, 220 federal deputies and senators formed the Parliamentary Front in Defense of the Basic Income. The President João Henrique Campos invited me to be the President of Honor due to the fact that I am the author of the Law 10.835/2004 that institutes, step by step, starting with those most in need, the Citizen’s Basic Income.
Therefore, Brazil is moving, step by step, towards UBI.
On September 19, 2020, people marched for UBI all over the world even in New Orleans where a steady rain came down all day. This blog post has videos and pictures from the march. It was an honor for me to be asked to speak to this group of people who came out on the rain and stayed out for several hours even as the rain kept coming. It was great to think that we were one small part of a march that took place all over teh world–on all six of the inhabited continents. Next year: UBI march Antarctica! Meet me there.
Below is the a copyedited version of the speech I delivered at the Basic Income March, New York, October 26, 2019 in the Bronx, New York, October 26, 2019. Pierre Madden ranscribed and copyedited it, in Montreal, Quebec, September 2020. Then I copyedited it again, at St. Elizabeth’s, Napoleon Avenue, New Orleans, September 11-13, 2020
I march for UBI because it’s wrong to come between anybody and the resources they need to survive and that is exactly what we do in just about every country in the world today. Poverty doesn’t just happen. People don’t get themselves into poverty. Poverty is a lack of access to resources. The world is full of resources. The only reason you can lack access to the resources you need to survive is because somebody else controls them whether it’s an owner, whether it’s a politburo or whether it’s a bureaucracy. It doesn’t matter who controls them. If it’s not you and they say you can’t use them unless you do what we say, you are not free.
Freedom is independence. Freedom is the power to say no to anybody who wants to give you orders. But we’ve set up the world so it seems so natural that some people should just own the earth. And the rest of us, the 90%, the 99%, we all have to go to them to get our job or we have no resources to keep us alive. And we call that “work.” We act like there’s no other kind. As if the only thing work could possibly mean is going and taking orders from somebody who has more privileges than you do. Working for yourself has become impossible. It’s been impossible since we kicked the peasants off the land and enclosed the commons. Working for yourself has been impossible since we killed the buffalo. Working for yourself has been impossible since we abducted the slaves. And the freed slaves knew this at the end of the Civil War. That’s why they asked for 40 acres and a mule. Unfortunately, their masters knew it too: that’s why they didn’t get it.
There’s nothing wrong with a job. Jobs don’t make you unfree. What makes you unfree is when instead of saying I want you to work for me so I am going to pay you enough that you’ll want to work for me, they say I’m going to take everything starve you into submission. A small group of owners took all the resources. They didn’t invent these resources. These resources were here before all of us. And this group of people, this tiny little privileged group of people are going to take all the resources and they are not going to share with anybody until the people who have nothing provide services for the people who already own everything. That’s why when you control resources, you don’t get just the resources; you get to control other people.
The obligation should go in the other direction. Instead of the poor being obliged to work for the rich, the rich should be obliged to work for the poor. The only thing you could possibly do to justify owning resources, to own more resources than other people do, to have more access to resources, to have more control over resources, to use and use up more resources than other people do, is to provide some sort of service for them.
That’s why we need to tax the owners of property. All property is made out of resources. Every single piece of property, even on the internet. You need a place to stand when you make the internet. You need energy to make that internet work. All property is made out of resources.
They’ll tell you they’ve paid for those resources. No, they paid the last guy who owned them. They didn’t pay all of us who don’t own any resources. If you want to take a part of the earth that was here before you, you’ve got to pay back, provide a service for those who own nothing. That’s why you have to pay a tax on resources and the distribution of the revenue from that tax has to be unconditional.
But they’ll say, that’s something for nothing. No, that’s exactly backwards. The system we have now is something for nothing, where people who own the Earth don’t pay anything to those of us who therefore must do without. That’s something for nothing.
We pretend we’re free because we have a choice of which one of these property owners we can work for. A choice of masters is not freedom. Freedom is independence. Freedom is the power to say no to anyone who would want to be your master. When you establish that, everybody gets some of the value of the resources of this earth, enough to live in dignity, enough to survive, enough that you don’t have to work unless somebody makes it worth your while. Oh, but they will say: All those lazy workers won’t work if you do that.
Notice how it’s always lazy workers and never cheap employers. No, that’s never said. So what we’re really doing when we say this, is we’re taking sides in a dispute. When somebody offers a job and somebody else doesn’t want it, that’s a dispute about wages and working conditions. Everyone has their price, right? So, if there’s a good price, people will take it: Good wages, good working conditions. Someone will take that job. But if we say whatever the wage is, if you don’t take that job you’re a lazy worker. Never a cheap employer. It’s like we’re looking at a dispute and pretending it’s not even a dispute. We’re pretending that only this side counts. We’re taking sides in a dispute, and we’re siding with the most privileged person. We’re morally judging the weakest, the least powerful person, the most vulnerable person, and leaving the privileged people beyond reproach, as if they’re not even a party to a dispute.
That’s the way the system works today.
And that’s based on a ridiculous assumption that the privileged people of the world, whether they’re in government or whether they’re private resource owners, they get to judge everybody else. They get to judge the weak and the vulnerable. They say: you deserve to live; you don’t. You go be homeless, you go eat out of dumpsters or do whatever else you have to do to keep yourself alive. That is the ridiculous assumption that there is anyone who doesn’t deserve the basic resources that they need to survive. And they decide who’s deserving on the self-serving assumption that privileged people have the right to judge whether unprivileged people deserve to survive. Those assumptions are self-serving to begin with. And look how self-servingly they use that power! In practice, the number one thing that we ask of the poor is, “if you’re truly needy, are you willing to work for the rich?”
Are you willing to work for people who own property? That’s what you’ve got to do to prove that you’re worthy. That’s so self-serving on the part of the privileged. And for almost all of us, it’s self-defeating, because most of us don’t have enough property to work for ourselves. The vast majority of us have to work for someone who owns enough property to hire us. By creating the situation where the more privileged to get to block the less privileged from the resources they need to survive, we’ve created a situation where just about everybody has to work either directly or indirectly for the wealthiest of us.
And that creates this terrible work incentive problem. When they talk about incentives, they only talk about the incentives for those lazy workers to work. What about the incentive for those cheap employers to pay good wages? That incentive problem doesn’t just affect the people at the low end. 41 years ago, real per capita income was half of what it is now. That means we could all be working half as much and consuming the same or we could be working the same and consuming twice as much as we did 41 years ago. But most people are working just as much as their parents were 41 years ago and consuming little if any more than their parents did 41 years ago. We’ve had all this economic growth all this automation in the past 41 years and the benefits have all gone to the top 1%. Basic Income is not just for those other people at the low end, it’s for everybody who has no other choice but to work for a living.
We have owed each other a Basic Income since we enclosed the common lands, since we abducted the slaves, since we killed the buffalo not because some long-dead person stole something from some other long-dead person but because they created a system that privileges some, impoverishes others, and corrupts us all. We all owe each other a Basic Income now. That’s why I’m marching today and thank you for joining me. –Karl Widerquist, the Bronx, New York, October 26, 2019, final edits St. Elizabeth’s, Napoleon Avenue, New Orleans, September 13, 2020
All the images and videos above are by Ching Juhl of Juhl Media.
Pierre Madden, transcribed this text, did some of the copyedting.
Originally published by Open Democracy. 14 August 2020, under the title, “Basic income could virtually eliminate poverty in the United Kingdom at a cost of £67 billion per year”
Universal Basic Income (UBI) – a policy that would provide a regular, cash income to every citizen without means test or work requirement – is surprisingly inexpensive. The United Kingdom could introduce a full UBI (one large enough to live on) for just £67 billion per year or 3.4% of Gross Domestic Product (GDP), according to a study Georg Arendt and I recently completed.
Attention to UBI in the United Kingdom has increased substantially as the Scottish Parliament discusses experimenting with it and as policymakers discuss it as a temporary measure to boost the economy during the Covid-19 outbreak. While a pilot project can examine some of the effects of UBI, this kind of study is necessary to determine how much it is likely to cost.
The cost of UBI is often exaggerated because many authors focus on its ‘gross cost’: the size of the UBI times the population. The gross cost of UBI is not a cost in any meaningful sense, because it ignores the great extent to which the new taxes people pay to support UBI are cancelled out by new money they receive in UBI. The real cost of UBI is the ‘net cost’ – the amount people receive or pay after subtracting the amount they pay themselves. The net cost of a full UBI for the UK is only about one-third its gross cost.
Our study is based on data from the 2014/15 UK Family Resource Survey. It uses microsimulation analysis from the European Union’s EUROMOD Tax-Benefit Model to subtract out the amount people pay themselves and determine the cost of a roughly poverty-level UBI of £7,706 per adult and £3,853 per child.
Key findings of the study include:
The cost of a full UBI for the United Kingdom is £67 billion per year or about 3.4% of GDP.
This figure is the net cost – the real cost – of a UBI scheme of £7,706 for adults and £3,853 for children. This assumes a 50% income tax rate for net beneficiaries integrated into the UK tax-and-benefit system in a way that ensures the majority of UK citizens benefit from the transition and no one in the bottom 20% of the distribution of income is financially harmed by the loss of programmes replaced by the UBI. Although net beneficiaries’ tax rate increases, they receive more in UBI than they pay in additional taxes.
This UBI scheme adds only 39% to the cost of the UK’s existing benefits system (not including the spending on the National Health Service), and an 8.7% increase in the UK’s total government spending (£67/£771 billion).
This UBI scheme is a net financial benefit to most households in the lower 70% of the UK income distribution, making it an effective wage subsidy (or tax cut) for millions of workers and their families.
The average benefit over the existing system for each net-beneficiary family is £4,056.
Under this scheme, the percent of UK families with incomes below the current official poverty line would drop from 16% to 4% and poverty among children and the elderly would all but disappear.
The net cost of this UBI scheme – the gross cost minus the amount people pay to themselves (£155 billion), and ignoring the costs and benefits of integrating the UBI into the existing tax and benefit system – is about one-third (35.4%) of its often-mentioned but not very meaningful gross cost (£438 billion).
Also subtracting the cost of existing programmes that can be replaced by UBI without financially harming anyone in the bottom 20% of the income distribution makes the net cost only about 15% of the programme’s gross cost.
This UBI system eliminates absolute poverty (e.g. as it is measured in the United States) from the UK.
According to a 2015 piece in the Guardian, the UK currently spends over £93 billion per year on corporate subsidies and tax breaks. If so, the UK could entirely fund a UBI by eliminating corporate subsidies and tax loopholes. No increase in individual taxes would be necessary, and the government would still have £26 billion available for corporate subsidies.
Countries with similar per capita income and similar tax-and-benefit systems should expect the cost of UBI to be a similar percentage of their GDP.
Those remaining in poverty under the scheme would be much closer to the poverty line than they are now and would have enough to get by in combination with other government payments and services. Therefore, we conclude that a UBI of this size would eliminate absolute poverty in the United Kingdom, a powerful result for less money than Parliament currently spends on corporate subsidies and tax breaks.
I was recently asked four questions about Alaska’s Permanent Fund Dividend, and I think the answers provide a pretty good overview of what people who are interested in UBI need to know about the fund.
1. When was the Alaska policy passed?
The enabling legislation was introduced gradually from 1976 to the early 80s and was altered before it could be it could be introduced because of a court challenge. So, it’s best to focus on when the first dividend was distributed. That was 1982.
2. How many benefits does it provide people?
See this table. Note that it is for every man, woman, and child, so each family receives several times this amount. It usually varies between $1,000 and $2,000 per year. It would be much larger if it hadn’t been for the Governor’s and the legislature’s cuts a few years ago.
3. What was the history behind the policy?
Oil money really began to flow in 1976, just as Governor Jay Hammond took office. He used the power of his office from 1976 to 1982 to make deals with the legislature to create first the fund and then the dividend. The fund idea was popular, but the dividend wasn’t until it was introduced. Hammond had a few allies in the legislature, but it was very much his single-minded pursuit of the dividend that made it happen. He did it because he knew oil revenue would be temporary and he wanted to make sure every Alaskan benefited from it. Mexico, for example, has exported a lot of oil, but it’s hard to say whether the poorest people have benefit from it. All Alaskans–including homeless people–have benefited from Alaska’s oil exports, via the fund.
But the fund and therefore the dividend are about 1/8 to 1/4 the size Hammond wanted. So, the dividend could be 8 times what it has been in the table, and it could be even larger without the recent cuts. Imagine that—$4,000 to perhaps $12,000 year for every man, woman, and child.
Almost as soon as it was introduced it became the most popular government policy in Alaska, and was considered untouchable until about 4 years ago when Alaska’s oil revenue began to collapse, and politicians who had failed to plan for that day began raiding the fund to avoid reintroducing the state income tax or raising other taxes. Had they kept the income tax, and saved all or most of their oil money–as Hammond wanted–the state wouldn’t face a fiscal crisis as oil revenue declines, and they’d feel less temped to drill in the Arctic Wildlife Refuge.
4. Has it proved to be effective?
Yes, if an impoverished family of four receives $8,000, that’s not enough to live on for a year, but it’s enough to make an enormous difference. In the first 20 or 30 year of the program, Alaska was one of the most economically equal states and the growing PDF was probably one of the reasons. It’s helped Alaska maintain a much lower poverty rate and poverty gap than it would otherwise have. -Karl Widerquist, on my front porch in New Orleans, Louisianan, 20 August 20, 2020
For more information about the fund see these two articles:
Karl Widerquist, 2012. “Alaska’s Permanent Fund Dividend: Basic Income in Practice,” Democratic Imperatives: Innovations in Rights, Participation, and Economic Citizenship. Report of the Task Force on Democracy, Economic Security, and Social Justice in a Volatile Word, American Political Science Association (ed.). Washington, DC: The American Political Science Association (April), p. 64
This Review was originally published in the Review of Political Economy, December 6, 2009. It’s reproduced here as originally published.
In Our Hands: A Plan to Replace the Welfare State, by Charles Murray, Washington, DC, AEI Press, 2006, 230 pp., $20.00 hardcover ISBN 0-8447-4223-6
Charles Murray is not known as a friend of the poor. His 1984 book, Losing Ground argued that the government should ‘zero-out’ all programs designed to help the poor. His 1994 book, The Bell Curve (co-authored with Richard Herrnstein) used questionable methodology purporting to show that people are poor because they are less intelligent than average and that blacks are disproportionately poor because they are genetically less intelligent than whites. If racism is the belief that your race is mentally or physically superior to others, The Bell Curve is a racist book. Yet, his new book, In Our Hands: A Plan to Replace the Welfare State, Murray puts forth a plan to provide more healthcare, more retirement security and more actual income to the poor with no supervision or conditions attached.
For those familiar with universal basic income, Murray’s proposal sounds very familiar. Murray calls it ‘the Plan,’ saying, ‘I have not been able to contrive a better name,’ but it is essentially a version of the program known as ‘basic income,’ which has been widely discussed by political philosophers in the last twenty years. Basic income is a regular government-ensured grant provided to every citizen on an individual basis without a means test or work requirement. People with middle or higher incomes pay more in taxes than they receive in the grant, but everyone receives the grant in cash every month. A great deal of literature has appeared on basic income in the last twenty-five years. Basic income is similar to, but not quite the same as, the negative income tax, which was widely discussed in the United States in the 1960s and ‘70s. The major difference between the two is that the negative income tax is given only to net recipients and phased out for people who earn above a certain amount, so that no one both receives a grant and pays income taxes. Both programs are ‘guaranteed incomes’ in the sense that they are designed to ensure that everyone has a small but reliable income, and both programs eliminate ‘the poverty trap’ in which some people find that they can attain a higher income by not working than by working.
Murray cites some of the literature on the negative income tax, but he appears completely unaware of the basic income literature, giving the impression that he reinvented the idea independently. When he discusses people who might drop out of the labor market, his example of what they might do is surf. This example is well-known in the basic income literature from an exchange between John Rawls and Philippe Van Parijs, neither of whom is cited by Murray. Is it a coincidence or is he merely neglecting to connect himself with that movement?
The Plan is most similar to a little-known basic income proposal by Leonard Greene, and elaborated by Irwin Garfinkel, although this connection is probably coincidental. Both Murray and Greene propose canceling everything the US government is currently doing to support individual incomes and use all of that money to finance a basic income for every citizen. The Plan is not quite a universal basic income. Only people age 21 and over are eligible, but it is a basic income in the sense that it has no means test and it is given to everyone who reaches the age of eligibility regardless of income.
Murray promoted the book and the Plan with several lectures in 2006. When questioned whether a guaranteed income is an affront to the work ethic, he responded, ‘You’re a conservative. I’m a libertarian.’ But make no mistake, Murray is profoundly conservative. His books have blamed the welfare state for everything that a conservative might find wrong with modern society, from welfare dependency though unwed motherhood to a decline in ‘man’s’ ability to craft a meaningful life. Many of the benefits he expects from the Plan align with conservative goals. He believes it will lead more people to attend church, more people to support private charities, and more of the poor to adopt the superior values of middle- and upper-class people.
Many people were shocked that a man who wrote a book arguing to zero-out the welfare state would put forward a plan for a basic income and universal health care. But it should not be completely surprising. Murray was sympathetic to the negative income tax in his contribution to Lessons from the Income Maintenance Experiments; and in What it Means to Be a Libertarian, he wrote that some form of income guarantee was the next best thing to the complete elimination of redistribution.
There is in fact a long history of free-market conservatives who have seen an income guarantee as a streamlined, conservative alternative to the complex, conditional welfare system. F. A. Hayek and Milton Friedman promoted the negative income tax on those grounds, and it seems to have been part of the motivation behind Richard Nixon’s watered-down negative income tax proposal in 1970. Most recently, Governor Sarah Palin pushed through a bill for a one-time increase in Alaska’s regular basic income (the Alaska Permanent Fund) from $2000 to $3200 per person per year. The free market appeal of an income guarantee is twofold. From the point of view of taxpayers, conditional welfare programs waste a large percentage of their budgets in overhead cost that could be saved under an income guarantee. From the point of view of the recipients, the rules and constant oversight of a conditional welfare system can be humiliating and oppressive.
Murray’s earlier books give the impression he believes that the poor are unproductive, genetically unintelligent people with bad values who have babies just to get welfare checks. One might therefore wonder why he cares about freeing the poor from oppressive government supervision. The answer is that while Murray seems to believe capitalism is a near-perfect meritocracy and that the poor are genetically inferior, he honestly believes that the poor should be free and that humiliating supervision by government bureaucrats cannot make the lives of the poor better. This kind of thinking led Murray to reinvent basic income.
This book—typical of Murray’s research—seems designed to give laypersons the impression of broad knowledge while having little concern with giving that impression to people who know the field. It is a thin volume with lots of numbers and footnotes but without a deep understanding of the research he cites. His discussion of the negative income tax is a case in point. He is aware that Milton Friedman supported the idea and that experiments were conducted on it, but he misstates what a negative income tax is and what the experimental results were. He gives the impression that a negative income tax has a 100% take-back rate, meaning that for each dollar earned privately recipients lose one dollar of their grant. If so, recipients who make money in the private labor market are no better off financially unless they get a job that pays more than the entire grant (pp. 8–9; 74). Almost no one who supports the negative income tax supports this draconian variant. Friedman supported the negative income tax largely because it could be designed to eliminate the work-incentive problems of conditional welfare programs, and none of the experiments tested a 100% take-back rate. Murray also implies that the experiments found evidence that large number of recipients dropped out the labor market. In fact, none of the experiments found evidence that anyone dropped out of the labor market. The relative decline in hours for the experimental group was 2–9% among primary wage earners and up to 20% for mothers of young children, but none of this relative decline represented anyone ‘dropping out’ of the labor market. It was instead attributable to people who happened to become unemployed taking longer to find their next job. Perhaps most importantly, the relative decline of work hours was not always an absolute decline. The largest predictor of whether recipients worked was not whether they were in the experimental or control group but the health of the economy. The people who conducted the experiments concluded that the work disincentive effects were small and did not put the viability of the program at risk.
Murray has not been careful with the facts, but is his plan a good one? Is the Plan a good workable idea that people who actually have sympathy for the poor could support? The answer is mixed. It is small; $10,000 per year minus $3,000 for mandatory private health insurance minus $2,000 for possibly mandatory retirement savings with no additional provision for children’s healthcare. That is, $5,000 per year ($416.67 per month) if retirement savings is mandatory and $7,000 per year ($583.33 per month) if it is not mandatory—for each adult whether she lives alone or with children. A single parent will be able to sue for child support out of the grant to the noncustodial parent, and so might have access to something in the neighborhood of $833.33 per month for herself and her children. But even an adult with no dependents is well below the official poverty line of $9,359 if she tries to live on $5,000 a year. (Following Murray, I’m using 2002 figures.)
Murray’s typically conservative response is that they can double-up with friends and relatives and they can all go out and get jobs at minimum wage. He calculates that when you add $583.33 to the income from a minimum wage job it would get most people—even single mothers with one dependent—out of poverty. He neglects to mention that this strategy involves mortgaging their retirement savings so that they will be more than $4,000 below the poverty line in retirement if they do this every year. He also neglects to mention that he is an opponent of the minimum wage. Since the whole idea of getting rid of the minimum wage is to enable employers to pay their workers less, we can assume that all of his calculations about how well off the recipients will be after they get these jobs are overestimates. He also neglects the very possibility that unemployment might exist, that the market may not be able to absorb the millions of new entrants to the labor market he hopes to see, and that most single mothers cannot work full time or in many cases even part time.
Consider a single mother with three dependent children at ages that make it difficult if not impossible for the parent to work outside the home. Her poverty threshold is $18,307. If she’s on her own and retirement contributions are mandatory, her income ($5000) is less than a third of the poverty threshold. If she can effectively sue the father for his entire grant (an optimistic assumption), she can increase her income to $10,000. If she and the father both mortgage their retirement savings, she can get up to $14,000. That is probably enough to keep her family off the street, but it is still more than $4000 below the meager US poverty line. Murray suggests combining incomes is as a solution. If she cohabitates with another mother in exactly the same situation, their combined income is $28,000—still $1,600 below the poverty threshold for a two parent family with six children of $29,601.
The grant is too small to give a dignified life to the poor without at least the addition of a child grant, but is it better than the current system? I have to admit that on this point, I am inclined to agree with Murray. As horrible as it sounds, in most states, TANF recipients work for less than they would get unconditionally under the Plan. Many people who aren’t eligible for TANF, SSI, or Unemployment Insurance get far less or nothing at all. Even the small grant of $416.67 a month can help many people get by if it is unconditional and tax free. The Plan would save many people from the utter destitution and homelessness that they experience in the United States today. On top of that, a retirement fund of $2000 a year put into a protected savings system would make for a better retirement than many Social Security recipients experience today, and $3,000 per capita could buy basic universal health coverage, solving one of the most important problems in American society today. If the Plan were put in place now, maybe we could eventually get the benefit increased to a decent level. Therefore, despite all of its faults, the Plan would be an improvement for many people living at or near the margins in the United States.