This article was a response to another article, posted by well-known leftist politician Francisco Louçã, on the 22nd of February 2017. That article was critical of basic income, to which Roberto Merrill and Sara Bizarro now counter-argument.
They start by clarifying some aspects about the basic income experiment in Finland, in which no subject is expected to lose earnings, only to turn 560 € of those earnings unconditional. As for financing basic income in Portugal, Merrill and Bizarro suggest that distributing 450 €/month to every Portuguese citizen would cost 16.2 billion €/year if, after clawing back from taxes it benefitted 30% of the Portuguese population. Benefitting only 5% of the population would only cost an extra 2.7 billion €/year. They also refer other possible tax sources, like automation, financial operations and property.
Rebating Louçã’s conceptual objection that it is unfair to give a basic income to everyone and then, through taxes, clawing it back from the relatively richer, Bizarro and Merrill cite the example of seat belts in vehicles. This example is used to show that it does not make sense to target specific groups to get a basic income, when all need basic security – even if some already have it at the time being. That would be tantamount to just installing seat belts only in those vehicles that would have an accident.
More information at:
Roberto Merrill and Sara Bizarro, “Quem dá e torna a tirar, ao inferno vai parar? Um rendimento básico para todos [Who gives and takes away goes to hell? A basic income for everyone]”, Público (online), April 4th 2017
Kathleen Wynne, Premier of Ontario, announced some long-awaited details of the Canadian province’s pilot study of guaranteed minimum income on Monday, April 24, 2017, including the locations, time-frame, and general design of the study.
The Government of Ontario is preparing a three-year test of a guaranteed minimum income in three regions: the city of Hamilton (southeastern Ontario, population around 537,000), Thunder Bay (northwestern Ontario, population around 108,000), and Lindsay (southeastern Ontario, population around 20,000).
Kathleen Wynne, CC BY-NC-ND 2.0 Premier of Ontario Photography
A press release issued on April 24 indicates that 4,000 individuals between ages 18 and 64 will be selected to participate in the study. According to Wynne, participation will be voluntary, but few other details concerning the selection of participants are currently available. Contrary to some initial speculations, it appears that the study will not include a saturation site.
Participants in the study will be assigned either to a control or treatment group. Those in the treatment group will be eligible for the following benefits, to be paid in cash:
- Up to $16,989 per year for a single person (with the amount reduced by 50% of the amount of any income earned on top of the benefit).
- Up to $24,027 per year for a couple (with the amount reduced by 50% of the amount of any income earned on top of the benefit).
- Up to an additional $6,000 per year for a person with a disability.
Although commonly called a “basic income pilot” — including by the Government of Ontario — the scheme to be tested bears several notable differences from a “basic income” as defined by BIEN. First, the amount of the transfer is not independent of household composition: couples will receive a smaller total amount than would two single individuals. Additionally, the amount of the transfer is not constant irrespective of means, but instead decreases with earned income. However, the scheme is importantly similar to a basic income in that receipt of the benefit is not conditional on any type of participation or work requirement (e.g. recipients do not need to demonstrate that they are working or looking for work) and in that no restrictions are placed on how recipients may spend the money received.
More details concerning the precise design of the study will follow, with the Ontario government stating that the province is partnering with Hamilton, Thunder Bay, and Lindsay to ensure that the pilot “is fair, effective, and scientifically valid.” The press release adds: “A third-party research consortium that will evaluate the study will be announced shortly. The province will form an advisory group with research and evaluation experts to ensure that the pilot is conducted with the utmost integrity, rigour and ethical standards.”
The pilot will begin in Hamilton and Thunder Bay later in the spring, and in Lindsay in the autumn.
Ontario’s plans for a pilot study of guaranteed income have been a topic of discussion in the basic income community since February 2016, when the province announced plans to fund a “Basic Income pilot” in its budget. Project advisor Hugh Segal, a former Canadian Senator, released the paper “Finding a Better Way: A Basic Income Pilot Project for Ontario” to serve as the focus of discussions on the design of the pilot in November 2016. Segal’s paper clarified that the study would most likely take the form of a negative income tax rather than a “demogrant” (commonly called a “basic income”) in which all subjects would receive a cash grant of uniform amount. Following the release of the extensive discussion paper, the provincial government held a series of public consultations, the results of which were published in March 2017.
Currently, Ontario is the only region in Canada that plans to conduct a pilot of a guaranteed minimum income, although the governments of other provinces, such as Quebec and Prince Edward Island, have also expressed considerable interest.
Watch Wynne’s announcement of Ontario’s experiment:
See also the News Release from the Government of Ontario: “Giving More People an Opportunity to Get Ahead and Stay Ahead: Ontario Basic Income Pilot to Launch in Thunder Bay, Hamilton and Lindsay” (April 24, 2017).
Reviewed by Genevieve Shanahan
Cover photo:Legislative Building for the Provincial Government of Ontario, CC BY-NC 2.0 Alan English CPA
Luke Martinelli is a research associate for the universal basic income project of the Institute for Policy Research (IPR) at the University of Bath. In March 2017, Martinelli published the working paper “The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK”, which uses simulation techniques to examine the effects of four revenue-neutral basic income schemes for the UK on poverty and inequality.
Accompanying the release of this 46-page working paper, Martinelli also published a shorter blog post, focusing on some of the methodological issues underlying his decision to conduct simulation studies.
As Martinelli describes in the post, empirical evidence concerning the effects of basic income can be sorted into two main types: ex-post (“after the fact”) and ex-ante (“before the event”).
Ex-post evidence includes the results of pilot studies and experiments specifically designed to test some of the effects of introducing a basic income, as well as observational studies of related policies such as Alaska’s Permanent Fund Dividend. Martinelli points out that experimental studies are limited in their ability to forecast the effects of a basic income. For example, trials are limited in duration (whereas a basic income would be lifelong) and are influenced heavily by the specific contexts in which they are implemented, constraining the applicability of their results to other contexts. Moreover, the policies analyzed in both experimental and observational studies often diverge from full-blown basic income schemes in key respects.
Ex-ante evidence, in contrast, is exemplified by microsimulation–the technique used in Martinelli’s working paper–which uses computing methods to simulate any of a number of tax and benefit reforms. While microsimulation predict the fiscal and distributional consequences of a broad array of possible policies, it has other limitations; for instance, it does not shed light on the behavior effects of basic income (or other policies) or take account of such effects in prediction. Thus, Martinelli believes that ex-ante evidence must complement, rather than replace, ex-post evidence.
Martinelli’s forthcoming paper “Exploring the Distributional and Work Incentive Effects of Plausible UBI Schemes” will further examine the “distribution of winners and losers” under UBI, again using microsimulation techniques.
Read the full post:
Luke Martinelli, “Addressing the evidence deficit: how experimentation and microsimulation can inform the basic income debate,” IPR blog, March 13, 2017.
Reviewed by Cameron McLeod
Photo CC BY 2.0 Michael Greenberg
BIEN co-founder and honorary co-president Guy Standing (also Professorial Research Associate at SOAS) has written a new introduction to basic income, Basic Income: And How We Can Make It Happen. The book has been published by Pelican Books, a well-known publisher of nonfiction works intended to be accessible to a broad audience in both content and cost.
As the publisher describes the book: “Guy Standing has been at the forefront of thought about Basic Income for the past thirty years, and in this book he covers in authoritative detail its effects on the economy, poverty, work and labour; dissects and disproves the standard arguments against Basic Income; explains what we can learn from pilots across the world and illustrates exactly why a Basic Income has now become such an urgent necessity.”
Commenting on Standing’s latest book, journalist Paul Mason states, “Guy Standing has pioneered our understanding of [basic income] — not just of the concept but of the challenges it is designed to meet: rapid automation and the emergence of a precarious workforce for whom wages derived from work will never be enough. As we move into an age where work and leisure become blurred, and work dissociated from incomes, Standing’s analysis is vital.”
Basic Income: And How We Can Make It Happen will be released on May 4, with a free launch event to be held at the London School of Economics (LSE) on May 8. The event will be chaired by Mike Savage of the LSE’s International Inequalities Institute.
Standing’s last book, The Corruption of Capitalism (July 2016), generated widespread global attention, as did his previous works on the precariat.
Reviewed by Cameron McLeod
Guy Standing photo, credit: Enno Schmidt.
Enno Schmidt. Credit to Professor Cui Zhiyuan.
On April 27th, 2017, Enno Schmidt gave a speech on basic income in Beijing. Schmidt was one of the two initiators of the national referendum on basic income in Switzerland last June. He was invited by Professor Cui Zhiyuan from the School of Public Policy and Management in Tsinghua University. The attendance was modest, composed mainly of researchers and students, including some from Poland and the Philippines.
To start, Schmidt presented some of the awareness-raising events they undertook to introduce the concept of basic income to the Swiss people, such as the ‘Everyone is a King or a Queen’ activity, the world’s biggest poster, bearing the question ‘What would you do if your income were taken care of?’ and the eight million coins dumped in front of the Swiss parliament building.
He then explained the special national referendum system in Switzerland. From collecting signatures to voting, this campaign was not about winners and losers, Schmidt underlined. Rather, democracy is a process of participating, training, learning, debating, and choosing. No matter how people ultimately voted on basic income, he highlighted, they had asked themselves the same question: ‘why’. So even though most voters rejected the basic income proposal, Schmidt argues it is still valuable to have raised the issue and ascertained public opinion.
Finally, Schmidt explained the relationship between basic income and personal life, society, economy, politics, and culture. He also gave an overview of basic income pilots worldwide. In the Q&A session, the audience had an active discussion with the speaker. For example, one question concerned the optimal scale for a basic income. Schmidt claimed that, the smaller the scale, the easier the implementation but the more limited the personal freedom. In fact, he also added, it is difficult to implement a universal basic income in large countries with varied regional development levels, like China.
Article reviewed by André Coelho and Genevieve Shanahan.
Maricá, Rio de Janeiro (Brazil)
Fabiano Horta, the Mayor of Maricá, Brazil, has extended the unconditional income already distributed in Maricá, Brazil, to all its residents. He also aims at raising the distributed value tenfold during 2017.
The unconditional income is paid in Mumbuca, a local social currency. One Mumbuca is valued at one Real. The initial income was 10 Mumbucas per month, roughly equivalent to 3 €/month. It was introduced by Washington Siqueira (known as Washington Quaquá), who was Mayor of Maricá until late 2015. This was reported on at the time. The modest amount was given independently of the recipient’s job status, and initially only distributed to the town’s poorest residents, around 35,000 people. Under Mayor Fabiano Horta the program has already been extended to all residents (around 150,000 in total) in Maricá.
Like Quaquá, Horta is a PT party (left-wing) affiliate and federal deputy. Horta wants to raise the unconditional income, financed by the town’s oil revenues, to 30 €/month during 2017. This unconditional dividend is supplemented with conditional subsidies to poor families, where an extra 85 Reais/month (28 €/month) is available from current welfare programs.
The stipend is being paid electronically in the Mumbuca social currency even though fewer than 10% of all businesses in Maricá accept Mumbuca (businesses have to wait more than a month to get Mumbuca exchanged into Reais by the government). The program has been criticized by opposing politician Fillipe Poubel, who says that people will become dependent on the stipend. Poubel calls for the creation of jobs instead. Horta maintains the unconditional income will stimulate local economy. He also has said that the town will be able to scale up this project “in an exponential way over the next ten years”.
Fabiano Horta. Credit to: G1 Região dos Lagos
More information at:
Louis Genot, “Brazilian town embraces universal income experiment”, Yahoo News, February 14th 2017
Isabelle Gerretsen, “Brazilian city experiments with universal basic income”, International Business Times, February 15th 2017
Karl Widerquist, “Brazil: Municipality to introduce small basic income for local residents”, Basic Income News, December 6th 2015