Book Review: Basic Income as a ‘realistic revolution of the welfare state’

Book Review: Basic Income as a ‘realistic revolution of the welfare state’

by | Aug 21, 2017 | Opinion

Why do so many leading economists pronounce themselves in favor of a Basic Income? Because of its positive economic effects on the distribution side, for example. Basic Income stabilizes the overall domestic consumption and provides a kind of regulation for the ratio between expenditures and savings. Furthermore, the Basic Income helps up to a certain degree to equalize the “unnecessary” distortions arising from the free play of market forces within the context of automation, digitalization, delocalization and further developments in society. And finally, Basic Income constitutes a lean and just system to provide every single individual with the minimal share of the wealth of nations that he/she is entitled to.

The economist and former head of the Hamburg World Economic Institute Thomas Straubhaar does not put the emphasis on the macroeconomic aspects. In 2006, he was one of the originators of the liberal Basic Income proposal “Solidary Citizens’ income” promoted by Dieter Althaus, member of the center-right party CDU and Thuringia’s prime minister at the time. Straubhaar’s new publication “Radikal gerecht” (radically just) shows some interesting development, while maintaining the core of the arguments in favor of a Basic Income from a liberal perspective.

The principles remain the same: Basic Income is paid unconditionally, to each individual, in addition to existing income and an amount that allows for a dignified living of each person. According to Straubhaar, Basic Income is a liberal concept because it promotes free choice of the individual (including the poor) and abolishes social bureaucracy. And it is a just cause because people with a high income pay more net taxes than those with a low income. While the citizen’s income of 2006 was calculated at €600 per adult per month (Bürgergeld), Straubhaar now speaks of €1,000 per person. He does not insist on this sum, saying that a) the basic needs of the individuals have to be re-evaluated periodically by the responsible office, for instance the federal statistical office, and b) in addition the amount is and will be a function of the political debate. A higher Basic Income requires higher taxes, which is the expression of the political will respectively of the political majorities. “It is obvious that the amount of the Basic Income and the tax rate are the levers of the policy makers and of the population to steer this new social system”, he writes on page 17.

Straubhaar presents the Basic Income as a kind of radical reform of the tax system. He calls it a negative income tax, however. A core element of this tax reform would be a flat rate tax on all kinds of income, not only wages, but also capital revenues and revenues from automats and robots. Here, Straubhaar reacts in a raw form to the fact that in the future, products from fully automated factories are going to have a price as well. Hence these have to be taxed like any other income. This is a major difference to most other models (and specifically the solidary citizen’s income of 2006) which deal mostly or exclusively with revenue taxes, and it is very welcome to see such an adaptation from the liberal side and in a systemic (even if at this moment still rather crude) form.

Concerning the financing, Straubhaar argues that the €960 billion cost of a Basic Income of €1,000 per person per month (80 million x €12’000) is somewhat higher than the actual expenses for the social state in Germany of €880 billion. The actual gross value-added amounts to €2.73 trillion (2015), which means that a flat rate of tax of 40% on this (at the moment it is transformed into income) would provide €1.1 trillion. The rest of the state’s expense would be covered by indirect taxes. At the same time, the contributions for the classical social insurance that actually are deducted from the gross salaries would largely be abolished.

Straubhaar admits this calculation to be very rough and not able to reflect all the possible and dynamic effects of the introduction of a Basic Income scheme, and insists on the flexible elements such an introduction will imply (estimation of cost of living, political process etc.). As with other authors, financing is not the core of this motivation. He sees the Basic Income as the best and most viable solution to adapt the classical system of social insurance of the 19th century to the 21th century. It creates a sort of a “blind” social policy, contrary to the targeted schemes whose advantage all too often is only to maintain a class of social bureaucrats who decide on sums and subjects. Furthermore, it is a core contribution to big issues of our times, namely an ageing population, digitalization/automation, individualization, and so on. Economically, it is not only viable, but it makes sense within the context of globalization and full automation. And he insists on paid labor continuing to be the main source of income but in new, more flexible and open forms, as activities and careers keep changing, as we witness already today. In this context, the existing organizations like trade unions or entrepreneurs’ federations will maintain their significance. The work motivation, which some economists see threatened by a Basic Income, will not decrease, but on the contrary increase thanks to the increased degree of freedom.

Straubhaar’s book is an important step for the liberal promotors of the Basic Income scheme in Germany. He aligns in practice with the other wings (Netzwerk Grundeinkommen, Goetz Werner) by speaking now of a sum of €1,000 per person per month (without being categoric about it). He urges it as a core element for the rebuilding of the social state, an adaptation to the 21th century and a blind social policy with arguments that are widely acknowledged by intelligent people. However, it is not certain that his fellow liberal economist colleagues in Germany are willing to follow his arguments. Many of them are still anchored in the concept of a 19th century social state. On the promotor’s side, some might be tempted to criticize Straubhaar’s concept of a negative income tax. Furthermore, several questions about the additional tasks of the social state remain.

There is one point that cannot be conceived in the way Straubhaar does. On page 98, he writes that every German citizen is part of the Basic Income scheme from birth until death, and those living abroad would have a right to their full claim, independent of their new country of residence. This is a flashback to the 19th century concepts of citizenship and nationality. Today, we speak of resident population and debate the introduction of a Basic Income in the whole world. Thus, if a German citizen would live in France, he would get the French Basic Income without the German Basic Income. But this is a tiny remark and does not impair the substantial progress of “Radikal gerecht”.

Finally, although Straubhaar labels Basic Income as radically just, he does not close the loop from a moral perspective to a legal standpoint, by omitting the step from basic income to basic right. As Thomas Paine wrote in 1796, the whole earth was originally in the possession of the whole human race. Now, on the base of an immensely increased wealth of nations and individuals, Basic Income represents the entitlement of every individual to a minimal (or basic) share of this wealth.

 

More information at:

(in German)

Thomas Straubhaar, Radikal gerecht [Radically just], Edition Körber-Stiftung, 2017

Written by: Albert Jörimann

Albert Jörimann, was president of BIEN-Switzerland from 2008 until 2013. His main research subject is financing questions of basic income.

 

Works cited:

Das Solidarische Bürgergeld. Analyse einer Reformidee.» Konrad Adenauer Stiftung, Edited by Michael Burchard, Lucius & Lucius, Stuttgart 2007.

The OECD and the problems of basic income

The OECD and the problems of basic income

by | Aug 18, 2017 | Opinion

According to the OECD, basic income (BI) is not an effective tool for reducing poverty. However, the outcome would depend on the model chosen for implementing a BI system, as well as the changes made in other parts of social protection.

 

The Organisation for Economic Co-operation and Development (OECD) published in May a Policy Brief paper studying the feasibility of a basic income model in four OECD countries, one of which was Finland.

On June 16, Kela organized a seminar in which Herwig Immervoll, a senior economist at the OECD, discussed the findings of his study and analysed the strengths and weaknesses of a BI scheme. After the seminar, the national broadcasting company YLE reported: “Universal basic income might increase poverty and inequality”.

Apart from Finland, the OECD study includes France, Italy and the United Kingdom. The analysis was done with the help of the EUROMOD microsimulation model. In each country, the starting point for the analysis was to take all existing spending on social cash-transfers together and see what level of BI they would amount to. Eventually, the level of BI was set near the existing levels of guaranteed minimum-income benefits for single individuals in each country, adjusted so that it would not increase the public expenditures.

In Finland, this resulted a BI of 527 euros for the working age adults and 316 euros for children and youth under 18 years of age. Those entitled to old-age pensions within the current main statutory retirement age (in Finland over 65-year-olds) were excluded from the BI model.

In the BI model used in the OECD analysis, all existing working-age benefits (including social insurance benefits) apart from cash transfers for housing and disability would be abolished. Also, the zero-rate tax bands of income-tax schedules and equivalent tax-free allowances would be abolished, and all income-tax thresholds would be shifted downwards by a corresponding amount. BI would be made taxable under personal income taxation alongside other taxable incomes.

The OECD model would create many gainers and losers

The most important outcome of the OECD study is that the simulated BI model would strongly impact the income distribution in all studied countries. However, the effects vary greatly among the countries.

In all income groups, the BI model would create many gainers and losers. It would change the net income of most people in one way or another. It would lift some groups out of poverty and thrust others below the poverty line.

The simulated BI model would increase the income level of those small income groups who are currently not receiving any social benefits, or whose benefit level is very low. In turn, those receiving earnings-related benefits or several means-tested benefits would see a decline in their standard of living.

In Finland, those below 65-years-old receiving old-age pensions and single parents with low incomes would be among the losers of the model. The middle-income earners instead would generally benefit from the model.

The conclusion of the OECD is that particularly in countries with a comprehensive social protection BI is not an efficient tool for reducing poverty, since it does not target the benefits effectively. According to the OECD, a budget-neutral BI would not be distributionally neutral. High enough to be socially and politically meaningful and fiscally realistic, a BI would still require tax rises as well as reductions in existing benefits.

A very low basic income, instead, would have little other significance but increase poverty.

The outcomes of BI depend on reforms in taxation and social protection

How the findings of the OECD study are to be interpreted in the Finnish context?

Perhaps the most important issue that the research sheds light on is the fact that there are many institutional challenges in implementing a BI system, and those challenges differ among countries due to their different systems of social security and taxation.

As the OECD report (p. 5) notes, BI as an idea is simple, but the existing social protection systems are not. Therefore, there are grounds to argue that the same model of BI does not fit everywhere. If a reform such as BI were to be carried out, it needs to be adjusted to the existing institutions of social protection and taxation in each country separately. The parameters of the model should be adjusted so that it will not produce excessive changes in people’s incomes.

The greatest problems of the OECD’s microsimulation are that the income taxation is not changed to correspond with the BI model, and that the existing systems are demolished by the same means everywhere without examining the structures of social protection in each country separately. Due to this, BI seems to have unpredictable effects to income distribution.

The income distribution produced by a BI model can be influenced by adjusting the parameters of taxation and social security. In his presentation at the Kela seminar, Herwig Immervoll mentioned that tax reforms should be discussed in parallel with BI. Indirect taxes, such as environmental or value added taxes, have often been proposed as a complementary source for financing a BI scheme, combined with income taxation.

However, the OECD report does not mention these alternatives, and the premise seems to be that taxation in any form should not be increased.

In Finland, as well as in many other countries, some organisations and individuals have launched models of BI adjusted to the local context. Their objective has often (yet not always) been to not radically alter the income distribution or cause reductions in people’s after-tax incomes, especially in the lowest income groups. Microsimulation has been employed at least in the models of partial BI by the Green Party and the Left Alliance, and in the preliminary study

online pharmacy buy tadapox no prescription with best prices today in the USA

 for the national BI trial conducted by Kela.

In these models, BI is linked with a reform in income taxation that is designed so that radical changes in after-tax incomes will not occur in any income group. The aim is also to make the models budget neutral, that is, to cover the costs of BI by reforms in taxation and replacing the existing benefit systems. In these models, the old system will be abolished only in those parts where the level of benefits is lower than the BI.

One of the problems with the BI trial currently underway is that due to time constraints, the taxation reform proposed by the research team that designed the experiment was not included.

Will Finland implement a BI?

Though there exist BI models in Finland that would technically allow implementation of a BI system without radical changes in income distribution or public financing, the road of BI will probably be rocky even here.

The preparations of the BI experiment scheme revealed many institutional challenges in implementation of a BI model. The greatest obstacles for a BI are, however, ideological.

In Finland, BI has gained interest especially as a possibility to improve the incentives for paid work. The possibility to combine wages with social benefits more smoothly than today is an issue that no party opposes. Yet, many still find it morally wrong to give people money with no obligations. The opponents of BI fear that the “free money” would reduce people’s willingness to work and give a moral legitimacy to not apply for jobs.

If the only, or at least the most important function of BI is to improve work incentives, the great promises of BI may not be fulfilled after all. The preliminary studies for the BI trial revealed that BI models do not always unambiguously remove incentive traps, if parts of the old social security stay intact.

However, it seems likely that in Finland, as well as in other industrialised countries, the social security will be reformed in a direction that may contain some elements of BI, but not necessarily a ‘pure’ BI model.

If the political thinking emphasizing the labour supply and austerity in public economy prevail, the prospects for more generous BI models seem to be low. In the framework of current economic policies, the implementation of a BI would most probably mean at least demolishing large parts or other forms of social security.

BI as a social dividend?

The OECD report (p. 8) ends up recommending some kind of ’partial’ alternative of a BI model. One option mentioned is a possibility to introduce BI as a separate system from the existing social protection, whose function would be to share the benefits of globalisation and technological progress more equally.

This idea of ‘social dividend’ has often appeared in BI discussions. The state of Alaska is already giving an annual share of the permanent fund based on oil revenues to each citizen as a social dividend. There is similar thinking linked also to the idea of “helicopter money”, originally introduced by Milton Friedman, a cash transfer paid by the central bank to people’s accounts to stimulate consumer demand in economic downturns.

Considering BI as a social dividend would locate it in a new frame, where its function would not be to fix the problems of social security systems, but to distribute purchasing power also to those who lose their jobs or end up in low paid precarious jobs in the labour market turmoil caused by digitalization.

If BI were paid on top of other social benefits, its level could even be lower, or for instance connected to macro economy indicators. In that case, it could also be used to stimulate economies in downturns.

 

Johanna Perkiö
M.Soc.Sc., Doctoral Candidate
University of Tampere
email: johanna.perkio(at)uta.fi

 

Original article:

Johanna Perkiö, “The OECD and the problems of basic income“, Kela, June 30, 2017.

How Many Couch Potatoes Can You Live With?

How Many Couch Potatoes Can You Live With?

by | Aug 16, 2017 | Opinion

I hardly ever respond to anything in writing if I am not remembering it at least a year or so later. The piece I am remembering is an episode of the podcast Freakonomics

online pharmacy champix with best prices today in the USA

called “Is The World Ready for A Guaranteed Basic Income?” I recommend it as an introduction.

I am going to give you a quote and then I want you to keep reading.

Sam Altman runs Y Combinator, a technology venture capitalist firm that has had some great successes and is now interested in funding social science research that will include basic income. Here is the quote, which came up during his interview in this podcast episode:

Maybe 90 percent of people will go smoke pot and play video games. But if 10 percent of the people go create new products and services and new wealth, that’s still a huge net win.

We are back to the couch potato. This character appears in a lot of objections to basic income. Altman concedes that there will be couch potatoes. He just thinks that is a good price to pay to get more entrepreneurs, even only a few of them. I appealed earlier for the reader to keep going because most people in my orbit would not like this quote. (If it sounds good to you, then I guess I should still urge you to keep reading.) I will explain why some will push back and why I ultimately do not.

We are starting to see increased support for as well as new sorts of negative reactions to the idea. Not very long ago, basic income advocates were often introducing the idea to specific audiences. This meant one could get away with starting where you thought the listener would react best. If you were talking to someone on the left, you might call it a “strike fund for all”. If someone is more liberal, you would emphasize that a basic income reaches people that welfare is supposed to help. With libertarian types, you start with the efficiency and non-bureaucratic character of a basic income. I have been very impressed by recent writing that emphasizes basic income’s ability to remedy asset inequality for people of color and women.

Now, I am very pleased to see more people who have already heard about basic income from someone. Sometimes they caught the wrong person for them. As we explain basic income, we will need to separate the policy (giving everyone an unconditional cash grant) from the project (which can range from left to right).

A quote like Altman’s can swing a listener in different directions. I know this from my social media work. I imagine people running different movies in their head. Some hear “new products and services and new wealth” and visualize start-ups and think it all sounds great. Others try to imagine a world working well with 90 percent of people not doing anything anyone else wants them to do and they just can’t see that working out well. Others hear this and worry that basic income is part of a larger scheme to organize our lives around Silicon Valley capitalists. To them, Altman seems to overly glorify the tech entrepreneur. Other writers are more desperate in labeling basic income a “neo-liberal plot”, which would make you laugh if you went to one of our Congresses. We would not want to merely swap one set of capitalists for another.

I have not met Sam Altman. His other statements show that he also finds basic income interesting because it directly answers a moral mandate to make sure people are clothed, fed, and sheltered. I highly recommend the rest of the podcast. My objective here is to explain why I think we ought to look at this quote charitably. I will show in what way I think his quote is true. I also want to propose an alteration that makes it much more palatable for those I see reacting negatively.

No One is Saying Ninety Percent of Society Will Hit the Couch

Altman is not talking about a whole society in which only 10 percent work. He is saying that even if we lose some work-time to lame leisure (pot and video games), we will make it back even if only 10 percent start up new enterprises. Nor is he saying that he knows that we will get one successful start-up for every nine lives lost to the coach. He is only saying that losing nine to the couch would be an acceptable price to pay if we gain a start-up, which would offer something someone wants and would also be offering jobs. This is very plausible.

Most people with a basic income will live a lot like they do now. They will have a more stable income. They will worry less about many of their friends and family. They will have a plan if they need to train for a job or pay bills between jobs. This cuts into the number of people who would choose the couch. Work can be a place where we get recognized for our talents and for our cooperativeness. And jobs pay money. In fact, you can still count on a basic income if you take on a job. And you can count on it if you change your mind.

The problem now is that employees have very few options when workplaces go sour. Basic income creates one option (work for no one) and enables people to survive while they search for and train for other options. This will increase pressure on workplaces to improve.

I used to be suspicious of most rhetoric surrounding markets. I think that was because so much of it ended up with a conclusion like “Therefore, government should do less/nothing.” I have come to value markets more and more. Now, I want them for everyone. A basic income secures the capability to participate in markets for everyone. There are many sections of the United States that get very little government or market attention. That would be less likely with a basic income in effect. You will also see more start-ups under a UBI because failing doesn’t risk losing everything. Most entrepreneurs now come from the upper one percent of our society. Whole communities aren’t going to see much startup soon if we wait for the elite to try to make money there.

Add Caregivers and Organizers To The Mix

online pharmacy cialis-soft no prescription with best prices today in the USA

Someone organizing a non-profit, a political organization, or even an informal social scheme fits under Sam Altman’s phrase of “new products and services and new wealth.” He is not confining his hopes to technological startups.

Robert Putnam’s book Bowling Alone, written in 2000, lays out the loss of social networks and the harm that has caused most Americans. These can be voluntary associations, political clubs, fraternal organizations, or sports leagues. Participation has declined as work-hours per household has increased. This means that many will look for alternative ways to interact with like minded Americans, especially when it comes to sporting events.

There is a strong link between organizational affiliation and many different metrics for happiness or meaningfulness. We also see more affiliation in communities that have more political power and that generate more market activity. (There is likely a causal loop there. Lack of power and lack of market options may often precede losses in organizational depth. And a lack of organizational depth may well often precede losses in money and power.) Social-capital comes hand in hand with capital-capital.

Michael Lewis and Eri Noguchi apply Putnam’s work, and combine it with survey data, to give us strong reasons to think that we would see improvements in civic networks as well. Declines in civic participations can be shown to coincide with an increase in work hours. People who value civic participation will have an option to do so.

If you want to know how a basic income will benefit society, let’s make it clear that we are including “organizers” within our understanding of “entrepreneur”. Our culture is one that has to be reminded of this. Once we expand our understanding, we can look around and see how many people are trying to participate in institutions that organize in pursuit of truth, justice, and beauty.

Examples will help here: church committees, symphony boards, rotary clubs, sports leagues, poetry circles, craft guilds, environmental organizations, identity-based youth groups, identity-based cultural organizations, music bands, theater companies, unions, political organizations, lobbying organizations, etc. This list could go on a very long time.

At this point, I want to share a little bit of what I learned as a community organizer in Arkansas for ACORN. Organizing is difficult. There are many ways in which it is not like entrepreneurship at all. You aren’t selling anything. All organizations have trouble finding this skill set. It is also difficult to get the resources together for full-time organizing. We would often hire someone who loved the mission of the organization but had to leave for pretty small increases in money. It might also prevent the loss of organizers to the for-profit sector.

Please note: I have noticed that a large section of the US internet is trying to malign the very term “community organizer” but my argument includes organization of groups I disagree with.

The ratio of organizers to members goes beyond the one to nine ratio that Altman imagines. About six of us at Arkansas ACORN served around 5,000 households if you are only counting dues payers. The community that responded to our work was larger than that. There were meetings every month. People debated goals and tactics. Political leaders were interviewed or protested. Organizations that despised us did the same things, though often with more funding from fewer people.

Every time I hear the term “couch potato” brought up as some sort of nightmare case for basic income, I remember that I sat on thousands of couches, urging people to get active, to get involved with their community’s decisions. I know that with a basic income, we would have had more organizers and more active members. Rival organizations would have had the same benefit. We will live in a more democratic place.

I am still involved in political work, even though I am not employed to do it. I also have been published as a poet and as a photographer, though not paid. You will find a lot of people working on magazines, readings, and websites in which the true, the good, and the beautiful are debated. A lot of people can see how to raise some money doing cultural, social, or political work but they can’t get to a decent level. A basic income would generate audiences for artists, philosophers, preachers-good and bad. A thriving art world is full of disputed art. A thriving philosophical culture will have disputed philosophical projects. We will live in a more interesting place.

Norman Rockwell “Freedom of Speech”

Finally, we should look at the decision to care for a family like we would a “start-up”. The “caregiver” has started a “career” that works for many people like a vocation. For each caregiver, there is at least one other person, usually more, benefiting in a meaningful way. Economists often do not count care for children and elders unless someone is formally paid to do it. A basic income would enable people to say no to employment if someone they love needs them. We will live in a more caring place.

In fact, Robert Putnam shows us in his research, as do Michael Lewis and Eri Noguchi in theirs, that the “stay-at-home” mom was often a civic association organizer as well.

More markets, more culture, more democracy, more care. This looks to be well worth investing 3% of our GDP and letting a few people stay home.

When I read the comments and notes that come with all basic income articles, I can see that some people would worry about people not working because of basic income. Basic Income enables people not to work. Kate McFarland points out that a basic income enables people to say no to all social useful activity. But we are far away from that. Some people will live incorrectly. Many people live incorrectly now. Basic income is a good bet for increasing socially useful work.

  • More entrepreneurs means more people are offered employment.
  • More organizers mean more people are being invited to venues where what is true, what is good, and what is beautiful are debated and plans are made.
  • More caregivers mean more people are taken care of.

Therefore, most likely, for every couch potato, we will have better reasons than ever to get off the couch.

About the author:

Jason Burke Murphy teaches philosophy and ethics at Elms College in Western Massachusetts. He serves on the board of US Basic Income Guarantee Network and recently presented at their North American Congress. He helps with social media for US Basic Income Guarantee Network. He has written before for Basic Income News. His most read piece so far is “Basic Income as Proposal, as Project, and as Idea

online pharmacy buy champix without prescription with best prices today in the USA

.”

SPAIN: New book published: “Renta Básica contra la incertidumbre”

SPAIN: New book published: “Renta Básica contra la incertidumbre”

by | Jul 28, 2017 | Opinion

The Spanish publisher RBA has just released a new book by Daniel Raventós, Renta básica contra la incertidumbre (Basic Income against Uncertainty), in its “los retos de la economía” (Economic Challenges) collection. The book updates the most important developments in basic income and discusses recent writings. The collection, in which the book is included, is not academic, but one which presents the basic elements of today’s concerns (inequality, the welfare state, and so on) to non-specialist readers, in such a way as to serve as a basis for further study.

Raventós’ book not only discusses the theoretical issues of basic income, but also gives an account of the social and political situation which has led to this proposal becoming widely known and regularly debated in social movements, the media, political parties and trade unions. Just a few years ago, this was unimaginable. Some people were complacently asserting that basic income could never be openly recommended because it would “shock” or “repel” the population, or at least a good part of it. It would have to be introduced, if at all, through the back door.

Well, we have lived to see the day! Here we offer an extract from the introduction of Renta básica contra la incertidumbre, which will soon appear in an Italian edition. The book has six chapters in which Raventós discusses the normative aspects from the standpoint of political philosophy (with particular reference to property and freedom); how basic income has been received in social movements like feminism and environmentalism, as well as in trade unions; how to finance it; experiments with basic income in various parts of the world; the role of basic income in an increasingly unequal world, in which mechanisation is advancing at a dizzying pace; and the paradox of support from both the right and left.

“Basic income will be paid out to people simply because they exist as citizens or accredited residents, independently of gender, ethnic group, income, sexual orientation, religious affiliation or lack thereof. Hence, like universal democratic suffrage, basic income is a proposal with the formal characteristics of laicism, unconditionality and universality.

Basic income has to confront considerable intellectual, social, philosophical, economic and political resistance, often in the form of questions. Is basic income a just proposal? Do people who disdain a salaried job have the right to an unconditional cash transfer? Will it abolish poverty? Aren’t the usual welfare state conditional cash transfers a better way to combat poverty? Will people get or stay in jobs if they have a basic income? Wouldn’t it be better to aim for full employment? Would workers have better bargaining power if they received a basic income? How would basic income affect migratory flows of impoverished people from poor countries to rich countries? Would everyone, both rich and poor, gain with a basic income? Would or wouldn’t women benefit from a basic income? Given the threat of robotisation in many areas of work, does basic income have something to offer?

Since inequality between a tiny minority of extremely rich people and the rest of the population is constantly increasing—as Joseph Stiglitz, Nobel-Prize-winning economist and others have pointed out and studied—would basic income be a good idea? If basic income has supporters on both the right and left, are they advocating the same thing?

Then there is the most frequently repeated objection, also in the form of a question. Can basic income be financed? In fact, it would be more precise to say that it was “most frequently repeated until recently”. Although there are not many studies which demonstrate in detail and with technical competence how basic income can be financed, those that have been published are compelling. Whatever they might have in common, each region and each country is different in economic terms, but financing a basic income would have to take the form of changes in budgetary priorities and reforming tax systems. For example, there are proposals advocating the introduction of special mechanisms for taxing financial transactions.

These reforms would bring about a substantial reduction in inequality of income distribution and allow for simpler, more coherent tax and welfare benefits systems. Basic income is not a panacea or a quick-fix for all the world’s social and economic problems but, in view of many who study and espouse it, this measure would mean that people would be better equipped to participate in productive activities, social inclusion would improve, communities would be stronger, political and social participation would be revitalised, and there would be a significant reduction of poverty and all the problems that go with it.

Basic income is not a political economy, per se, but would be part of one, as well as a general project aiming to guarantee and underpin the material existence of the whole population. It might also be seen as a kind of indemnity for past and present wrongs since it requires more privileged citizens to contribute towards achieving the right of existence for everyone. And herein lies one of the main political obstacles for basic income.

This is also the point which makes it possible to explain the apparent paradox of left and right support for basic income. The book notes that the difference depends on financing. The left focuses on additional taxes on the rich, while the right wants to trim down existing welfare to pay for basic income.

“In other words, the left-wing position does not entail any cuts to existing social services or social rights, in education, health, support for dependents, housing, etc., all of which are essential in any welfare state worthy of the name.”

Upcoming cryptocurrency integrates basic income

Upcoming cryptocurrency integrates basic income

by | Jul 24, 2017 | Opinion

Written by: Mark McCarron, Pheonix Digital Currency

Phoenix Digital Currency is a new, open, peer-to-peer, cryptocurrency, which will be entering full release in the next few months. Similar to Bitcoin, in that anyone can set up a client/server, we’re quite different from other cryptocurrencies at the same time. Our currency is pegged to the dollar, has a fixed valuation, is anonymous and comes with advanced anti-theft features.

It has also been designed with the needs of enterprises and retailers in mind, both to provide consistent pricing and easy integration into existing environments. We don’t, however, see this as the be-all and end-all of how currencies can function. When Bitcoin first emerged, it showed the world that currencies could evolve.  This is how we see Phoenix Digital Currency and we have planned for this from the outset.

When looking at the issue of Universal Basic Income, we were quick to understand that governments cannot afford this. Where does the money come from? Taxes on the rich, more public debt or simply loans? None of these seems very likely, but the AI revolution is almost here and we need options before people are unemployed in large numbers.

One idea that Phoenix Digital Currency has been exploring is a single underlying currency option. Whilst on the surface you would have your nation’s respective currency, behind the scenes, it would be part of a single, broader currency. A universal currency is one that is not traded as a commodity, it is merely branded differently within each nation. This means that currency cannot devalue, as devaluation must occur with respect to something.

Why is this important? Well, let’s say I wanted to print off $50 million for everyone on the planet and offer them $500,000 per year. With currency as a commodity we can’t do that, as no one would view our currency as having worth. But with a single underlying currency, there is no one to convince.

Inflation and demand are the next big issues. Normally this idea would fall flat here, but with AI almost upon us, the cost of labour to business will remain fairly flat rather than increasing to ridiculous levels as businesses try to tempt employees back to work. A fast food burger won’t suddenly cost $1 million because staff are looking for $100,000 per hour.

This means that we can achieve the goals of a Unified Basic Income in a manner which doesn’t burden the taxpayer. In fact, it is even possible to end taxation altogether as a principle of economics.

This has been a short introduction to an idea, known as ‘Formal Proposal Number One’. Please join us at phoenixdigitalcurrency.com to share your ideas.

All features articles are opinion pieces, and express opinions not endorsed by Basic Income Earth Network or Basic Income News.

Poverty-traps and pay-gaps: why (single) mothers need basic income

Poverty-traps and pay-gaps: why (single) mothers need basic income

by | Jul 21, 2017 | Opinion

Written by: Dr Petra Bueskens

Harper discovered she wasn’t alone when she packed up her house, stopped paying rent and took her four-year-old son, Finn, on a six month “holiday” up north to warmer climes.

“I found in every camp site, especially the show grounds as they’re the cheapest ones that still have facilities, there were a couple of other single mums and their kids. I was also travelling with a friend and her son, so there were often five or six of us and a bunch of kids at each campsite. Up north there’s even more. Over time we became familiar with each other.”

Harper gave up her home because she couldn’t afford the rent and have any quality of life. Paid work put her in a double bind: if she worked, she lost most of her Centrelink payments; if she didn’t work there wasn’t quite enough to make ends meet. So, she worked and stayed poor. These are the poverty-traps that keep many single mothers working-poor and unable to dig out.

When she stopped paying rent, her landlord was very understanding, Harper said. But at the end of the day, he had a business to run and Harper understood that. He issued her with a notice to pay rent or quit (learn more about that here) and she made the decision to pack up and leave.

In Australia now, there is a clandestine group of mobile single parents, mostly mothers, who have found they cannot, on Centrelink benefits and low-paid casual work, meet the cost of living. They have chosen instead to travel and live with their children in camping grounds and caravan parks around Australia, particularly in Northern NSW and Queensland, where living outdoors is relatively easy. For as little as $10 a night at national parks and showgrounds and up to $25 at caravan parks that have showers, washing machines and other facilities, they live on the move. Harper and Finn travelled between both-a few days roughing it in national parks followed by a return to “civilisation”, taking showers, washing clothes and sharing dinners with friends at caravan parks. Here Finn could play with other children, some of whom were becoming familiar as they met in parks across Victoria and NSW. The vibe at the caravan parks sounds convivial-better than yelling at your kids to get ready for childcare and school, so you can go to a low-paying job and never see them-but also a little Orwellian: this is not a holiday; it’s homelessness with benefits. For some, getting a caravan and living in a caravan park might be a worthy alternative until they can find something else. However, these women are a little worried about whether they would be able to get a caravan of their own. While there are a wealth of tips available for buying a caravan, you can see this buying guide for an example. It is different when you don’t have an income.

Harper announced her “holiday” to friends and family on social media. Here they could follow her adventure in photos and status updates. “I had to call it that; I couldn’t admit to myself it was anything else”. The 6-month, 12-month or indefinite camping “holiday” is a functional, adaptable and resourceful response to the poverty traps single mothers so often find themselves in, and since the “welfare reforms” of the Howard years and Gillard’s removal of the sole parent pension for those with children over eight (ironically on the historic day of her misogyny speech), it is no surprise that this practice is growing. The truth is, some single parents can no longer work within the system; it is simply too hard. So, like other vulnerable mobile populations, they’re outside of it.

Harper told me there is a Facebook group dedicated to this practice but asked I didn’t share the name as it’s currently illegal to have no fixed address-or in other words, be homeless-and in receipt of Centrelink benefits, arguably when you need it most! People who have given up their home for long term camping and travel, often mixed with sleeping in their cars, provide the addresses of family and friends to meet eligibility criteria; in reality, paying rent has become too expensive.

With the turn to surveillance of welfare recipients-take the 2015 case of Tania Sharp whose Facebook status update of her pregnancy was used against her in court as evidence of welfare fraud-we move to a new kind of welfare state: the surveillance state. This is a net, but, far from a safety net catching people who fall, the analogy is closer to a fishing trawl where the recipients-disproportionately poor women and children-are being hunted and caught. The infamous robo-debt scheme also disproportionately catches single mothers in its “net”. There’s no safety in this net; rather there’s punishment, gender specific punishment, for not being “safely” ensconced in patriarchal marriages or well-paid jobs. Most so-called “welfare cheats” are single mothers.

Universal Basic Income (UBI) is a radically different concept-nobody has to apply, prove their worth, pretend they have or do not have a home, justify their sex-life or living arrangements, or fill out 20 page complicated and often contradictory forms. There are no deserving and undeserving poor, no recipients cast as “cheats”. The underlying philosophy is completely different: everyone has a right to a share in the collective wealth; they don’t need to bear a stigma or struggle for recognition, and unpaid care work is socially valued.

With the massive rise in the cost of living, particularly the cost of housing over the last decade, but also energy and telecommunication bills, many can no longer afford to meet their monthly payments or, like Harper, if they can, there is absolutely nothing left over and the stress involved in achieving this end makes daily life a struggle. Harper found she was cutting corners everywhere: meals were less nutritious, she didn’t have time to cultivate social relationships, and her mothering was compromised. When she gave up her house (a share house), sold almost all of her belongings and hit the road, she felt a freedom and control over her life she hadn’t had since Finn was born. Travelling for six months lifted the burden she felt around managing dual roles and her payments were not automatically chewed up on rent and bills. Harper had time with her son-literally all day long-which she cherished and claims healed their relationship.

“It felt like Finn was always between me and what I needed to do [go to work]. I had to rush and he wanted time; I had to put him in childcare and he wanted to be with me; he was always clingy and demanding and had begun acting out; I found him difficult to be around. I could never afford holidays so we never got a break from this stress and pressure. This is why I called it a holiday because it was a break from this cycle of exhaustion and poverty and stress.”

Travelling meant Harper was able to reconnect with her son. He also had playmates in the caravan park with their communal yet contained play areas. Harper had friends to share dinners with. There is now a small but growing population of homeless single parents who live this way; they’re home-schooling their kids or still have pre-schoolers. They’re on the move-but not in any socially sanctioned way. They’re not travelling like young people, or middle-income families or retired baby-boomers. Not quite refugees, but certainly rendered so vulnerable that they are unable to take root and live in society, or at least not permanently. They are on its “flexible” fringes recast as mobile passengers; not quite in and not quite out. While I laud the innovative adaptation to circumstances, which not only gets out of the iron triangle (working to pay the rent and paying the rent to work; paying for the car to drive to work to pay for the car) but solves a number of other problems of modern living: highly regulated schedules, less and less time for children and relationships, leisure based on meaningless consumption. Nonetheless, there is still a remainder: “chosen” homelessness is not an answer, at least not at the structural level, to the problem of (single) mothers’ poverty. It is an idiosyncratic not an institutional solution.

This is one story of poverty and homeless that is emerging on the fringes of our society. I have another …

Naomi rents her beautiful four-bedroom home on Airbnb every weekend for around $800. She has three teenage kids who stay at their friends’ houses or accompany her to her parents’ houses, one and two hours away respectively. On occasion they have driven further afield for a bed. As a wife and mother who took “a long time”1 to complete her studies while caring for her three children, Naomi doesn’t have great employment prospects. Into her mid-40s now and currently going through a divorce, she has very few avenues for earning an income and can no longer rely on her breadwinner spouse. She doesn’t have the track record for professional employment despite now having multiple degrees. She applies for many jobs, has been shortlisted for two and has been given none. The gig economy provides an instant if unstable solution to the immediate problem of income. She doesn’t need an uninterrupted CV, a talent for bullshit and three professional referees to list her home on Airbnb, but neither does Airbnb give her any job security or superannuation. This is why she needs to think about superannuation planning because if she doesn’t think about this now, it may affect her finances in the future. Although she’s a long way off retiring, it still needs to be considered. She’s thinking about Uber too; she has a people mover-good for mums with large families and, as it happens, trips to the airport from her regional home. The gig economy is not and never will be a substitute, but it has certainly stepped in to fill a yawning economic gap. Living in a trendy tourist town and thanks to marriage to a high earning spouse, Naomi owns-at least for now-a beautiful home. She’s no doubt spent money on homely touches like poster artwork to add some personality to the rooms, among other things. She enjoys hosting and also rents rooms during the week. However, after eight hours of laundry, making beds and cleaning to hotel standards, she has to clear out of her own home for the weekend, every weekend. Everyone she and her children stay with has the sense that this is not an independent visit but a need, which puts a strain on relationships.

Naomi’s weekend homelessness is also a novel and adaptive solution to the crisis of income in her system, but it comes at a cost: the children are disrupted in their routines. “The kids and I find it really disruptive, but how else can I make $800 to pay the mortgage and bills? How? The bank would reclaim the house if I didn’t do this”.

Naomi only receives a small Centrelink benefit since her kids are all teenagers and she’s supposed to get a job. The problem is she’s both over and under qualified-she has several degrees, including a postgraduate research degree, but almost no work experience. There isn’t a lot of casual work in regional Victoria and she is still actively mothering; or, as is the case with older kids, ferrying them around. “I still need to pick the kids up from the bus stop, take them to their friends’ places and after school activities, cook them dinner, make sure they’re doing their homework”. For Naomi, being away at a job and adding an hour each way for commuting isn’t an option as a lone primary carer. Then there’s the emotional fall-out of the divorce. The children need her to facilitate and foster their lives. What job realistically accommodates this?

“I don’t have the years of experience and so without Bob paying the mortgage and bills and not being eligible for single parent support, this is how I’m living. Running a BnB suits me and at least I can be there for the kids.”

Naomi would prefer a job but this is her novel solution for now. The gig-economy is stepping in to fill the gap, albeit poorly.

Mothers and basic income

UBI offers an alternative to these poverty traps that are increasingly ensnaring women in the space between low-income waged work, declining welfare and unstable, abusive or non-existent marriages. It makes a new gender contract possible and facilitates women’s economic independence. Women have gained this independence as individuals-the individuals of the liberal social contract-but they have not done so as mothers. As we shall see, on almost every index mothers earn less, have less time to earn more, undertake the great majority of unpaid care work, and suffer the highest pay and promotion gaps and, here’s the rub: most would prefer to care for their children, especially when they’re young. As Catherine Hakim’s large-scale research shows, most mothers prefer to combine paid work with care work, while up to 20% prefer to stay at home full-time (2000). Basic income offers mothers, especially single mothers, a means to achieve economic independence at a modest standard while disentangling this from the interlocking and mutually reinforcing institutions of marriage, employment and welfare. In a modern liberal-democratic society, this is the proper foundation of liberty, of mothers’ liberty.

Women’s unpaid care work used to be “paid for” through the institution of marriage (as it often still is, albeit in modified form). That is, through the distribution of the husband’s wage to the whole family. This was the basis of the family wage that sanctioned men being paid at a higher rate than women. However, with men’s declining employment rates and stagnating wages, rising rates of divorce and more children born out of wedlock, poorer mothers’ access to a share of our collective wealth has declined. Women have always had lower wages and a radically compromised capacity to earn an income if they are the primary carers of their children (as most women are); this is not new. What is new is that under neoliberalism all people are required to maintain a full-time secure attachment to the labour force over a lifetime, regardless of their capacity to do so. Now that marriage is both an optional and a soluble institution, this situation has become acute for separated, divorced or never married mothers and we see it showing up in the feminisation of both poverty and homelessness.

From the opposite perspective, what I find interesting, immersing myself in the focus on automation and precarity in the broad basic income literature, including academic and journalistic articles alike, is the assumption that precarious access to employment is something new. Certainly, on a mass scale it is for most (though not all) men and the spectre of middle class professionals losing their jobs-something already happening in fields like journalism and academia and likely in the health sector next-is a very significant social and economic change; but for all but the most privileged women this economic precarity is the historical and contemporaneous norm. Thus, while a full-time, well-paid job over a lifetime is the route to economic security, notwithstanding the rhetoric of gender equality, very few women have ever had such jobs. So, my argument isn’t just that basic income is the only viable macro-economic answer to increasing economic inequality-specifically, the decline of full-time, secure jobs-but that it is a crucial answer to the as yet unresolved issue of gender justice under capitalism.

While I support a basic income for everyone, I think it is important to identify the specificity of mothers in this debate, given both the tendency to ignore the centrality of gender justice and the extent to which, when gender is centred, motherhood is glossed over. In fact we need to make the socio-economic impact of becoming a mother and of mothering work explicit.

Women who are not mothers, not-yet mothers, or long past actively mothering dependent children are all in quite different socio-economic positions (although of course the structural effects of mothering last a lifetime). It’s not that gender doesn’t matter; it’s just that motherhood matters more.

We can look at this demographically variegated landscape by looking at the gender pay gap and then looking at how motherhood impacts this.

In Australia, women’s full-time wages were 82.8% of men’s, with a wage gap of 17.2%. The gender pay gap has grown over the last decade from 14.9% in 2004, to a record high of 18.8% in February 2015 before falling slightly again in 2016. As a result women are earning less on average compared to men than they were 20 years ago!

However, this figure is calculated without including overtime and bonuses, which substantially increase men’s wages, or part-time, which substantially decreases women’s wages. In other words, “83 cents in the dollar” substantially overstates wage parity. When this difference is factored in, the pay gap widens to just over 30%. And in the “prime childrearing years” between ages 35–44, this gap widens to nearly 40%.

A more realistic figure is gained by looking at full-time versus part-time earnings as well as average male and female earnings directly. Here we see the pay gap more clearly. For example, in 2016, average weekly earnings were $1,727.40 for male employees and $1,010.20 for female employees (a difference of close to $720 per week). However, most mothers work part-time which exacerbates this pay gap yet again.

If we consider full-time and part-time work, the wage disparity widens further. Compare the $1,727.40 for full-time male employees with $633.60 for part-time female employees; now we have a gap of over $1100 per week! Close to half of all Australian women worked part-time in 2015–16-44% (double the OECD average). However, this figure rises to 62% for mothers with a child under five and almost 84% for those with a child under two. Close to 40% of all mothers work part-time regardless of the age of the child, while only 25% worked full-time.

The remainder, it needs to be remembered, were out of the workforce altogether. As the ABS put it, “Reflecting the age when women are likely to be having children (and taking a major role in child care), women aged 25–44 years are more than two and a half times as likely as men their age to be out of the labour force.”

Age of youngest child is a key predictor of women’s labour force participation although it has almost no bearing on men’s labour force participation and when it does it is in the opposite direction: fathers of younger children typically undertake more paid work. Moreover, a quarter of all female employees work casually and their average weekly earnings were just $471.40. Think about that-a quarter of all working women earn less than $500 a week! These days that barely covers the rent let alone food, bills, and educational and commuting costs.

Occupational segregation and motherhood wage penalties also kick in to this mix. If we look at labour force participation, we see that coupled mothers have higher rates of participation than single mothers given the additional support they receive with childcare and income.

Given the average full-time male wage is significantly higher than the average female wage and, moreover, that women carry the overwhelming share of unpaid care and domestic work and thus typically work parttime in their key childrearing years-and, we should remember, fully a quarter do not work at all!-this is not simply a matter of two incomes being better than one, which is of course true, it is that access to a share of male monopolised wealth-that is, to put it in stark terms, access to a husband-is essential for mothers to avoid poverty.

In broad terms, the closer we are to mothering dependent children, including especially infants and preschoolers, and the further we are from access to a male wage, the poorer we are as women.

Never married single mothers with dependent children are the worst off and it moves progressively from there, with young, educated, urban, never-married, childless women earning very close to, and in certain cases in the US, outstripping average male wages. This contrast gives us a sense of the variegated nature of women’s socio-economic position and again highlights that mothers are a distinct group and, more fundamentally, that the life course transitions of marriage and motherhood continue to negatively affect women’s (independent) socio-economic status.

Often when we’re talking about women’s lower labour force participation and lower earnings, then, we’re actually talking about mothers’ lower labour force participation and lower earnings and, more specifically again, we’re talking about mothers with dependent children; although the lasting effects of care labour means women across the spectrum have reduced earnings, assets and retirement savings if they have mothered.

To highlight this point, Australian sociologist and time use scholar Professor Lyn Craig has shown that many of the socio-economic disadvantages affecting women are, in fact, specific to mothers.

As she says,

“… the marker of the most extreme difference in life opportunities between men and women may not be gender itself, but gender combined with parenthood. That is, childless women may experience less inequity than women who become mothers.”

Another important reason we need to differentiate mothers from women is that over the last 40 years the standard female biography has changed significantly. Whereas once adulthood was by and large synonymous with marriage and motherhood for women, on average women now have a long stretch of adulthood-from the late teens to around age 30-before they have a first child.

For educated and/or unpartnered women, the birth of a first child is often later again into the 30s and sometimes up to 40. Moreover, while only around 10% of women did not become mothers in the mid and later twentieth century, this has now risen to 24%. So, not all women are mothers and many women experience a large chunk of adulthood before they become mothers and after they are actively mothering dependent children.

So there are structural and individual injustices that are specific to mothering dependent children, including an unequal division of domestic labour, unequal access to jobs given the unpaid work load at home, employment built on an implicit breadwinner model that is incompatible with parenting (including school hours, school holidays, sick children and so on), discrimination in the workplace and, in the event of unemployment and/or divorce, an increasingly punitive welfare state and a high risk of poverty. Single mothers and their children make up the bulk of those under the poverty line in the western world. In Australia, of all family groups, single parents constitute the largest single group of those living in poverty (proportionally).

Marriage is no longer the safety net (or gilded cage) it once was with just over 30% of marriages ending in divorce in Australia and predicted to rise to 45% in the coming decades. Additionally, fewer people are entering into marriages and cohabiting relationships have even higher rate of relational breakdown than marriages.

This means a large and growing number of women who are mothering children are caught in this literal economic no-man’s land without adequate access to waged employment, a breadwinner husband, or welfare. I am not suggesting that access to a husband is a right; I am suggesting that the liberal dissolution of the institution of marriage has not been followed with any viable economic alternatives for mothers. Basic income is the obvious choice to stop a large and growing number of women sliding into poverty.

Mothers undertake the bulk of unpaid care work, without which our society would cease to function. To turn this around, we need to ask: is it acceptable that as a society we free-load on this care?

Mothers’ economic autonomy-that is the very foundation of their citizenship and their liberty- is undermined by the extant intersection of the institutions of marriage, employment and welfare. It is on this basis that I am identifying mothers, and more still single mothers, as a specific socio-economic and political group in urgent need of basic income. This is a human rights crisis given that lone parent families are one of the fastest growing family forms in western societies and, moreover, that women head 80-90% of these families.

Unlike the contemporary issues put forward for basic income-namely, mass unemployment from automation and digitisation-the issues facing mothers are not new. Indeed they have been with us since the very inception of capitalism and the waged-labour system. Moreover, they are among the most compelling, given that women and their dependents comprise the majority of the poor. With the liberalisation of markets and marriage, a large and growing body of women and children, such as Harper and Naomi, are being left out of the social contract. Basic income is the critical policy answer to this problem.

Dr Petra Bueskens is an Honorary Fellow in Social and Political Sciences at the
University of Melbourne, a psychotherapist in private practice at PPMD Therapy and
a columnist at news media site New Matilda. She is the author of Mothering and
Psychoanalysis: Clinical, Sociological and Feminist Perspectives

online pharmacy furosemide for sale no prescription

See the original Green Institute PDF here

online pharmacy order zithromax without prescription with best prices today in the USA
online pharmacy buy proscar no prescription

.