What should the level of basic income be in 24 European & OECD countries?

What should the level of basic income be in 24 European & OECD countries?

The level of Basic Income (BI) is a matter of heated debate in discussions of BI for national implementation, investigating the level at which BI would be ‘high enough’. There is also growing dispute regarding ‘partial’ vs. ’full’ BI. This was the central topic of investigation at this year’s BI conference in Maastricht in January. The following calculations, using a common formula and comparing BI levels for 24 European/OECD countries, aim to assist in the resolution of this debate.

We don’t want to make the system worse than it is. It’s logical, then, that the minimal level of BI should reach, at least, the level of current Social Assistance (SA): we could call this ‘partial’ BI. All BI proposals included in this analysis satisfy this condition.

It follows that implementation of a BI close to the level offered by the current social security system (e.g., the SA level) implies budget neutrality in countries with a more universal system.[1] This follows the argument “If we can afford our current welfare system, we can afford basic income” that Max Ghenis has well elaborated. These proposals might be socially more acceptable, given that the change would be ‘minimal’.

So, if the level of SA in a country indicates 1) the socially acceptable level of social aid and 2) the first estimation of the social welfare budget, BI at the same level would likely be the most financially and socially affordable solution, offering the shortest implementation time frame. Proposals for Slovenia[2], Hungary[3] and Finland[4] belong to this category.

On the other hand, the level of BI should be high enough to ensure a material existence and participation in society. We assume this when we argue that BI should be at least at the level of the current Poverty Threshold (PT): we could call this ’full’ BI. BI at such a level would probably fulfill the role of an emancipatory welfare system.[5] Proposals for Switzerland[6] and the Netherlands[7] fit into this second category.

The question is, how costly are lowered aspirations regarding a ‘partial’ BI level (e.g., in Slovenia, Finland and Hungary) in service of affordability and/or social acceptance in the foreseeable future? Will we achieve anything? As the microsimulation in Slovenia demonstrated, however, even a partial BI proposal (budget neutral, well below PT and above SA) proved to be: 1) better for the majority, 2) the same or better for the more vulnerable and 3) better for the lowest deciles. The Hungarian BI proposal seems to draw similar conclusions.

To serve discussion regarding the level of BI in different countries, a common formula (similar to that used for the Slovenian proposal) was used to calculate the levels of BI proposed in various countries. 

Formula: BI = an average of three components:

  1. Social Assistance for a single person with no children: Indicates the currently acceptable minimal level of social aid (and the ‘budget’ of the current social security system).
  2. 1/2 of the Poverty Threshold at the point of 60% of the median income: Takes into account income distribution and the risk of poverty.
  3. 1/3 of average net wages: Takes into account the ‘value of work.’

A table with Basic Income calculations for 24 European and OECD countries allows us to draw comparisons across and within countries regarding: the social protection system (e.g., SA), the average wage (AW), the poverty threshold (PT), BI calculations using the same formula (both in national currencies and euro) and different BI proposals. It’s very important to note, however, that in countries where the level of SA is already higher than the BI calculation, the existing SA should be taken as a starting point. BI proposals for Finland and the Netherlands belong to this group.

Such BI calculations (that are above SA & ‘budget neutral’ & below PT) could serve BI discourse as the first benchmark:

  1.  at which we could expect results that would be: a) better for the majority, b) the same or better for the more vulnerable and c) better for the lowest deciles;
  2.  of the BI level calculation for countries that, as yet, have made no BI calculations;
  3. to evaluate competing national proposals;
  4. to evaluate proposals across countries;
  5. to evaluate existing social security systems, investigating by how much they diverge from this preferable solution;
  6. of common European social welfare solutions made by the people (of 99%) for the people and not from the EU elites.

oecd graph

Valerija Korošec: PhD in Postmodern Sociology, MSc in European Social Policy Analysis.  Author of (eng) UBI Proposal in Slovenia (2012) sl. Predlog UTD v Sloveniji: Zakaj in kako?(2010). Co-editor UBI in Slovenia (2011). Member of Sekcija za promocijo UTD. Member of UBIE. Slovenian representative in BIEN. Fields of expertise: poverty, inequality,  sastifaction with life, social policy anlaysis, gender equality, ‘beyond GDP’, paradigm shift, postmodernism, UTD, basic income. Slovenian. Born 1966 and raised in Maribor. Lives in Ljubljana. Employed at the Institue of Macroeconomic Analysis and Development (Government Office of Republic Slovenia). Views under my name are my own. @valerijaSlo

 

Footnotes:

[1] All included countries have a universal SA system, except: 1) Finland, Germany, Belgium, Estonia and Denmark, which have different levels of assistance based on employment status according to OECD statistic – in these cases it was the data for the ‘Employed’ SA level that were included; and 2) the United Kingdom, Greece and Italy, which have no scheme comparable to SA.

[2] https://basicincome.org/bien/pdf/munich2012/Korosec.pdf

[3] https://let.azurewebsites.net/upload/tanulmany.pdf (English version unavailable).

[4] https://basicincome.org/news/2015/12/finland-basic-income-experiment-what-we-know/

[5] https://basicincome-europe.org/ubie/charter-ubie/

[6] https://www.reuters.com/article/us-swiss-pay-idUSBRE9930O620131004

[7] Alexander de Roo, by mail.

 

Basic Income as Proposal, as Project, and as Idea

Basic Income as Proposal, as Project, and as Idea

I have been part of Basic Income Earth Network’s and US Basic Income Guarantee Network’s social media team for a while and I want to clarify something for as many readers as possible. There are three ways of looking at the basic income movement: Basic Income can be endorsed as a (1) proposal or (2) a project or (3) an idea. A lot of communication causes people to evaluate each other more harshly than they need to because they mistake where the speaker or writer is coming from.

I will say what I mean and show how this distinction helps me.

(1) Basic Income as Proposal: When I describe basic income as a proposal, I am referring to any bill or law that implements an unconditional grant. Here we are looking at the policy. Here are some US-based examples:

Alaska invests a small amount of the land rent it charges and puts out the dividend to every citizen. They give about $2,000 to every individual and $8,000 for a family of four.
The Healthy Climate and Family Security Act would put a cap on carbon, charge fees, and distribute the revenue to everyone. This would amount to about $1,000 per person and $4,000 for a family of four. (Ref. www.climateandprosperity.org)

The Fair Tax act gets rid of the income tax and replaces it with a national sales tax. They acknowledge that this move would hurt low-income people so they include a dividend for all. They list around $7,200. (https://fairtax.org/)

An interesting common feature of these three examples is that basic income was an afterthought for many supporters. These proposals are not parts of projects that seek to abolish poverty or secure independence for all.

The Alaskan Governor at the time the dividend was implemented, Jay Hammond, was following the basic income movement and he sought a more substantial amount. Alaska, however, has never had a basic income movement. There has never been an attempt to push the grant all the way to a poverty-ending amount. That said, at $2,000 a year for all family members, the Alaskan Permanent Fund raises the incomes of low-income families more than most other proposals out there. The dividends were largely an accidental product of the State’s Constitution, which gave un-owned land to the State. If power-brokers in Alaska had known that this land included some of the most lucrative oil reserves in the world, this would not have happened. Hammond’s commitment combined with these fortunate circumstances produced the Alaska Permanent Fund.alaska perm

Supporters of the Healthy Climate and Family Security Act are mainly trying to develop an answer to the threat of climate change. They understand that a cap on carbon would raise prices on fuel and other things that many low and moderate income people need. Some supporters are enthused about the dividend to be sure, but it is very seldom sold as a stepping stone for a dividend high enough to foster independence. Again, with that said, there are very few proposals that would result in an increase in average income of $1,000 in low-income communities.

carbon

Fair Tax supporters are primarily focused on getting rid of the income tax. The dividend is seldom emphasized in their literature. When it comes to the impact on poverty, the math is more complex for this proposal, because the new sales tax would be high. Proponents do cite economists who stress that the Fair Tax would have a progressive impact.

fairtax

When Basic Income Earth Network or US Basic Income Guarantee Network links to an article describing a project like this, we get a lot of comments that evaluate them as if they were the entire basic income project. The proposal is treated like a project. We are informed that you cannot live on $2,000 a year. We know that. Many respondents “project” projects onto proposals. They don’t evaluate the proposal but an imagined series of other proposals that would stem from an imputed project. When Silicon Valley investors start a basic income pilot, we are told that they want to cut this and that. But they have not said so, and we will not know their project until they start making concrete demands.

Lots of media presume that a basic income replaces all other social provisions, which is a view that I have only rarely encountered in my time with engaged members of USBIG and BIEN. We hear a lot of false news that Holland or Finland is replacing everything with BI. Projects are being foisted onto proposals and policies.

Keep in mind that a basic income may well be implemented as an afterthought or as a part of a project that most anti-poverty activists oppose. Charles Murray’s proposal would consist of $10,000 per person and a $3,000 health care voucher. This would replace everything that currently promotes social protection. When he emphasizes the amount of money this would save, that includes bureaucratic expenses, but that also entails a huge withdrawal of other expenses, such as social provisions that many anti-poverty activities would rather keep .

While we should not endorse a bill that implemented Murray’s proposal, we can acknowledge the grant is a good idea if it is not accompanied with harmful cuts. If such a basic income were to be implemented (and Paul Ryan has expressed an interest in consolidating anti-poverty provisions), those who support BI as part of an anti-poverty project will have to fight to keep the grant and raise it. We have to talk about basic income now so that anti-poverty activists do not oppose it.

(2) Basic Income as Project: Once a basic income is part of a project, we have to look at what the whole project seeks to do. Many of the supporters of basic income pilots in Finland also support austerity as the right response to the European financial crisis. Almost everyone involved with Basic Income Earth Network and its affiliates are opposed to austerity. They see basic income as a way to combat poverty directly, with less bureaucracy and more security for most citizens. Many supporters of basic income in Finland are working to make sure the pilots are an opportunity to push basic income as emancipatory .

How it is funded, what is cut, what is not cut—all of these factors turn a policy item (an unconditional cash grant) into a project. We have to learn how to assess whole projects.

Left-wing organizations should make a basic income part of their left-wing project. Left-wingers that denounce basic income as “neo-liberal” are refusing to de-link the policy from a rival project. They should write out what sorts of basic income they would support and condemn the powers-that-be for not securing economic independence for all.

Free-market enthusiasts (I am not calling them “right-wing”) should make a basic income part of their free-market project. Those that denounce a basic income as “socialist” or “communist” are refusing to de-link the policy from a rival project. They need basic income if they care about extending the benefits of markets to everyone.

In the US, there are no left-wing or free-market organizations (or magazines or parties) that have stated clearly whether or not basic income is part of their project. My hypothetical left-wingers and free-marketers are based on reading a few thousand Facebook comments and individual columnists.

De-linking the proposal from the project can be difficult. Would an otherwise free-market-oriented economist with a basic income in the mix still be “left-wing”? Is basic income such a good policy that we should support someone who supports a rival project? Some people are suspect of an Alaska-style dividend just because they know the state usually votes Republican.

These are the sort of choices we will face. If a supporter of a rival project embraces basic income, one has to decide whether or not to jump ship. Some basic income supporters will want to work within other projects. Some will work within the Greens or within Socialist or Labor or Environmental organizations. Others might name a particular bill and lobby for it.

Basic Income Action in the US has stated that they seek any unconditional grant that leaves the least-well-off and the majority with more income than before. They have lobbied for the Healthy Climate and Family Security Act and hope to get a bill sponsored that has a full-fledged basic income in mind. BIA argues that this project improves any other project. Whether they are the left or the right, whether they have a good tax plan or a bad one in mind, they would be that much better with a basic income in the mix. See them at www.basicincomeaction.org.

india(3) Basic Income as Idea: There is another way to think about basic income. This is an idea that gets in your head. Once you realize that it is mostly a question of political will, you start to think about how different the world would be if everyone had a share. You start to wonder how different schools would be. How different political life would be. How different the art world and the sport world would be.

When I first heard about basic income, I was excited because I saw it getting to people who need it. I had seen the manipulation of money and power deny the invisible and the powerless the resources they need. Too many times I saw “jobs programs” pretend to hire “everyone who sought work.” Sports arenas and lectures were sold as anti-poverty programs. A basic income gets around all that. Now, I think more about how much more powerful low-income communities will be. And I see better the work they are already doing.

 

Sarath Davala, Renana Jhabvala, Soumya Kapoor Mehta, and Guy Standing organized a pilot program in India and wrote a book that testifies to its emancipatory effects. A video they made provides a nice synopsis. One sees here an image of strong people made more powerful.

I see the same impact in low-income parts of the US. Basic income gets around the pretending so many people do when they approach poverty. I wrote a piece on how a basic income could work in the Saint Louis/Ferguson area that has this sort of emancipation in mind. One of my main goals was to get readers to just see what a difference more income would make. We should spare them the hectoring about each and every choice they make and issue a share.

The Swiss Basic Income Movement mostly sought to push basic income as an idea in Switzerland but also all over the world. History’s largest poster posed the question: What Would You Do If Your Income Were Taken Care Of? They posed it in English and reassembled the poster in Berlin . A picture of the poster was shown in Times Square. They are posing a question to the world.

takencareof poster

takencare of nyc

The movement has pushed people to think about what makes a life and a society good. Long before basic income becomes a policy, it does great work as an idea.

Another example is the Canadian Association of Sexual Assault Centres. Their shelters talk with residents about basic income. They have a copy of the Pictou Statement they wrote in which they proclaim their support for basic income.

The statement calls on some of the most vulnerable people in the world to think about how different things would be if everyone had a share:

“We refuse to accept market measures of wealth. They make invisible the important caring work of women in every society. They ignore the well-being of people and the planet, deny the value of women’s work, and define the collective wealth of our social programs and public institutions as “costs” which cannot be borne. They undermine social connections and capacities (social currency).”

Publicly endorsing basic income offers a chance for different relationships between people. When a shelter tells someone fleeing assault that they want a different allocation of resources, this breaks the long chain of bureaucrats, landlords, advisors, and hustlers. When I tell someone that I think they deserve a share, I have a chance to show that I recognize them as valuable. That is a powerful idea.

I have also found that people who are not sure they believe basic income is feasible politically end up pointing to other social provisions that they consider more efficient or politically feasible. They start to talk about education and health and public employment. This is a far better conversation than one that argues between some provisions and no provisions, which is the one we are hearing far too often. That is a powerful idea.

A lot of people have seen police violence, corruption, and the privileged position of the wealthy, and they just can’t imagine a government that macro-manages and micro-manages a just economy. However, they have seen Social Security issue a check to everyone and they have seen the IRS tax forms issue an exemption. They know that this proposal is simple enough for even a bureaucratic government to implement. That makes this a powerful idea.

Lots of people are saying that they think basic income is great, and then they get challenged to produce a proposal or to spell out their project. I want to see more basic income policy proposals out there. I want to see more people make basic income part of their projects. But we also need to see people saying “The world be better if we did this.” We need to get as many people as we can to say “That’s a powerful idea.”

 

BIEN Needs to Have Yearly Congresses

BIEN Needs to Have Yearly Congresses

Karl Widerquist, co-chair
Louise Haagh, co-chair

We, the two co-chairs of the Basic Income Earth Network (BIEN), have made the following proposal to BIEN’s 2016 General Assembly: “Starting as soon as possible, BIEN will have yearly Congresses whenever affiliate networks are available to host them.”[*] BIEN has held Congresses once every two years since its inception in 1986. The Congress in Seoul will be BIEN’s sixteenth. In this op-ed we explain why a move to annual Congresses are so important to BIEN at this time, and we address some concerns people might have with annual Congresses.

The main reason that BIEN needs yearly Congresses is that the Basic Income movement has grown enormous. In 1986, when BIEN began, it is hard to say there was a movement. There was a small tight-knit group of researchers; most of them came to every conference. Although some activists were interested in Basic Income, public opinion was not at point to make a real activist movement viable in many countries. Today Basic Income has millions of supporters around the world with many more joining every day. The topic has entered mainstream political debate in dozens of countries, many of which had no previous history of high-level discussion of basic income.

BIEN has to keep pace with the growth of the movement. Its role is to get people involved, to exchange ideas, to give people a chance to build on each other’s ideas. It’s missing too many opportunities to do that with such infrequent Congresses.

The second most important reason to begin having yearly Congresses is that BIEN has grown. BIEN was constituted as the Basic Income European Network, and its geographic reach was limited almost entirely to Western Europe until BIEN expanded to become the Basic income Earth Network in 2004. Even then, for several more years, most of its membership and most of the people attending its Congresses were European. But with BIEN’s expanded reach, it had to have Congresses in other parts of the world. BIEN has had successful Congresses in Africa, South America, and North America, and we expect it will have a successful Congress in Asia this July, but the expansion of geographical reach of BIEN’s Congresses has meant fewer Congresses in any region. Only the world’s most privileged people can travel halfway around the globe to attend a conference. We need to have more conferences in more regions so that more people have the opportunity to attend a one now and then.

We see very little downside to this proposal. Most organizations that have conferences have them yearly. The amount of basic income literature and activism going on today ensures that there is no risk that we will run out of new ideas to discuss at the congresses.

The most likely concern that might make people hesitate to endorse annual Congresses is the fear that they might be too much work and that BIEN might outstrip its resources. Obviously, two conferences are twice the work of one conference, but two conferences are not necessarily more work for any one person. Each BIEN Congress is run by one of BIEN’s affiliate networks. They take on the responsibility of raising funds, finding facilities, inviting participants, creating schedule, and virtually everything else involved with running a conference. The BIEN Executive Committee’s role is limited to overseeing this effort to ensure consistency.

When BIEN began in 1986, it had no affiliates, and there was only one national basic income network—the Citizens Income Trust[†] in the United Kingdom—in existence in the world. Today BIEN has about two dozen affiliates on all six habitable continents. Most of them either have hosted a BIEN Congress or would like to if they got the chance. Many more networks, many of them potential affiliates, are springing up around the world. In its affiliates and members, BIEN has far more resources than ever before. Many networks would like to get more involved in the movement by bringing the BIEN Congress to their country or region.

In 2014, three excellent proposals were put forward to host the 2016 Conference—one each from Finland, the Netherlands, and (South) Korea. According to BIEN’s rules at the time, the General Assembly could only pick one. That meant that we had to turn down two others. It was little consolation to those groups to say, “although you can’t host a BIEN Congress in two years, if you reapply, maybe one of you can host it in four years and the other can host it in six years.” That is an extremely long time to wait. We had to turn away groups that were willing and able to put on great conferences.

As the co-chairs of BIEN, we have been in touch with several groups that are interested in hosting the next BIEN Congress, and some of them are interested in doing it as early as 2017. We are, therefore, confident that we can move to yearly conferences right away. If in any year we do not have an affiliate network capable of hosting a conference, we have written the proposal in a way that allows us to skip a year.

Therefore, we see very good reason to support—and very little reason to oppose—a move to annual BIEN Congresses. We ask all of BIEN’s members to join us in supporting this motion.

— notes —

[*] The full wording is, “Starting as soon as possible, BIEN will have yearly Congresses whenever affiliate networks are available to host them. If BIEN cannot find affiliate networks to organize Congresses yearly, they will continue with Congresses once every two years.”

[†] Then called the Basic Income Research Group.

https://basicincome.org/wp-content/uploads/2015/02/bien-congress-seoul.jpg

BIEN Congress

After Switzerland – Learning Political Lessons is Key!

After Switzerland – Learning Political Lessons is Key!

Yesterday, the Swiss voted on the proposal to provide a basic income sufficient to allow the people to live in a dignified manner and participate in public life. The proposal was voted down with 23.1% of the voters in favour and 76.9% against. With a participation rate of 46.3% that boils down to little over 10% of the Swiss population supporting basic income. No doubt the Swiss campaigners as well as those watching the referendum closely will be conducting a post-mortem of what happened and how to interpret these results.

I for one believe this is a result that the Swiss campaign should be proud of. A 23% yes vote in a popular vote against the background of pretty much unanimous establishment resistance is a major achievement. Yesterday’s vote breaks firm ground for a basic income debate in years to come. The Swiss debate is not over, not by a long shot! Perhaps even more importantly, as many commentators have rightly pointed out, the Swiss campaign – one of the most creative and professional I have seen in a long time – managed to create wave after wave in the media. With policy attention following media attention, it is fair to say without the Swiss we wouldn’t be where we are now in Finland, Netherlands, Canada or France. So for that, Switzerland we thank you!

But appreciating what Switzerland has achieved shouldn’t prevent us from asking important (and perhaps some hard) questions about what happened or didn’t happen in the Swiss campaign. What political strategy lessons can we learn from Switzerland? And how can we use those lessons in countries as diverse as Finland, Canada or Portugal? We can all learn from the Swiss experience, and conversely this is the time for the Swiss campaign to educate us on the upsides and downsides of their strategies.

One obvious point of contention – one that affects every jurisdiction campaigning for basic income – is whether to promote the principle of an unconditional and universal basic income granted or instead to focus on a concrete proposal, including a clear indication of how high the basic income will be and how it would be funded. The Swiss referendum asked voters to vote on the principled argument, leaving both amount and funding to be determined by legislation. This may put off some voters who are risk- and, above all, ambiguity-averse (preferring current certainty over future possibility). Partly to counter this, the Swiss campaigned for a basic income pitched at 2,500 Swiss francs (approximately €2250, £1,750 or USD2,555). Many no doubt will argue that this high sum traded-off uncertainty for genuine anxiety amongst many voters, and that a lower level of basic income may have been a more prudent approach. The reality is we don’t really know, and for that reason a genuine post-mortem would be a very useful step going forward.

I’d like to point out another lesson from the Swiss referendum, and perhaps an uncomfortable one for most basic income advocates. In recent months a number of polls have been put forward indicating growing levels of support for basic income. Most recently there was the Dahlia Research poll which suggested on average 64% (of surveyed EU countries) were supportive of a basic income. These results are regarded as indicative or even evidence of robust basic income support. But the Swiss case puts a sobering note here. A poll conducted in April asking 20000 Swiss citizens their voting intentions found 40% intended to vote in favour. The reality turned out quite different, with only 10% of Swiss coming up to vote and then voting yes.

This shouldn’t surprise us because political polling is a notoriously difficult enterprise, and polls around basic income are easily influenced by framing of the questions as well as real-world events. For an example of the latter, the Finnish working group coordinated by Kela found that Finnish support for basic income decreased quite radically once questions about the amount of basic income are paired with corresponding questions about the taxes needed to fund it. This is also why we should really stop being overexcited by polls claiming to offer evidence that only 2% (or 4%, or whatever really) of surveyed individuals would stop working: the so-called social desirability bias means that polls are simply the wrong tool to answer the question of what people would do when they get a basic income.

The bigger question – and lesson to be learned from Switzerland – is whether we have a really good understanding of the level of support for basic income amongst ordinary citizens as well as key policy stakeholders. Basic income support is growing as more people become familiar with the idea, but there is still a lot of work to be done understanding how to translate this support into a robust political constituency. I think our Swiss friends will be able to help us understand the next steps to push basic income onto the policy agenda.


Jurgen De Wispelaere is a Visiting Research Fellow at the University of Tampere (Finland), where he is part of the Kela-led research team preparing a national basic income experiment in Finland.

The worldwide march to basic income: Thank you Switzerland!

The worldwide march to basic income: Thank you Switzerland!

Despite being factually defeated in the ballots, the Swiss initiative for basic income should be regarded as a giant step in the now unstoppable march towards basic income, says BIEN Founder Philippe Van Parijs.

Philippe Van Parijs is Professor at UCLouvain, Hoover Chair of Economic and Social Ethics. Chair of BIEN’s International Board

June 5th, 2016 will be remembered as an important landmark in the worldwide march towards the implementation of unconditional basic income schemes. On that day, all Swiss citizens were asked to express their approval of or opposition to the following proposal:

  1. The Confederation introduces an unconditional basic income.
    2. The basic income must enable the whole population to live a dignified life and to participate in public life.
    3. The law will determine the funding and level of the basic income.

The proposal was rejected, with 76.9% of the voters against, 23.1% in favor. Why was this rejection predictable? And why is it such an important step forward?[1]

From 0 to 23%

To answer these questions, a brief historical overview is in order. In 2008, the German film maker Enno Schmidt and the Swiss entrepreneur Daniel Häni, both based in Basel, produced Grundeinkommen: ein Kulturimpuls, a “film essay” that gave a simple and attractive picture of basic income. The dissemination of this film through the internet helped prepare the ground for a popular initiative in favor of the proposal quoted above, which was launched in April 2012. Another popular initiative, which proposed an unconditional basic income funded specifically by a tax on non-renewable energy, had been launched in May 2010, but it failed to gather the required number of signatures. The initiators of the 2012 initiative first thought of specifying that the basic income should be funded by the Value Added Tax, as was suggested in the film, but they dropped the idea for fear of reducing support for the proposal. They also chose not to stipulate a precise amount of the basic income in the text itself. But their website did mention a monthly amount of 2500 Swiss Francs per adult and 625 Swiss Francs per child as the best interpretation of what was required, in Switzerland, “to live a dignified life and to participate in public life”. If an initiative gathers over 100.000 validated signatures in 18 months, the Federal Council, Switzerland’s national government, has the obligation to organize a country-wide referendum within three years either on the exact text of the initiative or on a counter-proposal to be negotiated with the initiators.

On the 4th of October 2013, the initiators handed in spectacularly 126.406 valid signatures to the federal chancellery. On the 27th of August 2014, after validation of the signatures and examination of the arguments, the Federal Council rejected the initiative without making a counter-proposal. In its view, “an unconditional basic income would have negative consequences on the economy, the social security system and the cohesion of Swiss society. In particular, the funding of such an income would imply a considerable increase of the fiscal burden”. The proposal was subsequently submitted to both Chambers of the Swiss Parliament. On the 29th of May 2015, the Commission of Social Affairs of the National Council (Switzerland’s federal house of representatives) recommended by 19 votes against 1, with 5 abstentions, that the proposal for an unconditional basic income should be rejected. After a thorough discussion at a plenary session on the 23rd of September 2015, the National Council proceeded to a preliminary vote and endorsed this negative recommendation by 146 votes against 14 and 12 abstentions.

On the 18th of December 2015, the Council of States (the Swiss Senate, made up of representatives of the cantons) considered the initiative in turn and rejected it by 40 votes against, 1 in favor and 3 abstentions. On the same day, the proposal was the object of a second and final vote in the National Council: 157 voted against, 19 in favor and 16 abstained. In all cases, all the representatives from the far right, center right and center parties voted against the proposal. All pro votes and abstentions came from the socialist party and the green party, both of which were sharply divided. At the final vote in the National Council, 15 socialists voted in favor, 13 against and 13 abstained, while 4 greens voted in favor, 5 against and 3 abstained. The degree of support thus oscillated between 0% in the Federal Council, 2% in the Council of States and 4, 8 and 10% in the National Council (commission, preliminary and final vote).

For the popular vote on the 5th of June 2016, the national leaderships of nearly all parties, including the socialist party, recommended a “no” vote. The only exceptions were the green party and the (politically insignificant) pirate party, which recommended the “yes”, joined by a number of cantonal sections of the socialist party from all three linguistic areas. Against this background, it was entirely predictable that the no vote would win. The actual results of nearly one vote out of four for “yes” — with peaks at 35% in the canton of Geneva, 36% in the canton of Basel-Stadt, 40% in the city of Bern and 54% in the central districts of Zürich — is far above what the voting record in the Swiss parliament would have led one to expect. We must, moreover, bear in mind that Switzerland is perhaps the country in Europe in which support for an unconditional income should be considered least likely, not only because of the deeper penetration, in Calvin’s homeland, of a Calvinist work ethic, but above all because of the comparatively low levels of unemployment and poverty it currently experiences.

In Switzerland and beyond: broader and more mature

Everyone now realizes, however, that even if the initiative had not managed to gather the votes of more than the 2.5% of the Swiss citizens who had given their signatures at the initial stage, it would have been, thanks to the initiators’ stamina and their impressive communication skills, a stunning success. There is now no population in the world or in history that has given more thought to the advantages and disadvantages of the proposal than the Swiss have done over the last four years. And the effect was by no means confined to Switzerland. Just in the few days preceding the popular vote, the Economist, the Wall Street Journal, the Financial Times, the New York Times, the Guardian, and countless other newspapers around the world felt forced to publish substantive articles in order to explain at length — sometimes quite well, sometimes not so well — what a basic income is and what it is about. There is certainly no week in the history of the world in which the media have allocated so much time and space to a discussion of basic income.

Apart from giving a big boost to the spreading of the idea, the Swiss initiative has also greatly contributed to the maturing of the debate about it. For one lesson to be drawn from the experience is that a proposal that stipulates a high amount for a basic income, but no precise way of funding it, can easily gather the required number of signatures for a vote – while still being a long way from convincing a majority among the voters who bother to turn up on voting day (about 46% of the electorate in this case). A shining star that indicates the direction is enough for the former, but visible signposts on the ground marking a safe path in its direction are essential to achieve the latter. Whenever I was invited to join the Swiss debate, I argued that introducing in one go an individual basic income of CHF 2500 (38% of Switzerland’s GDP per capita) would be politically irresponsible. True, no one can prove that such a level of unconditional basic income is not economically sustainable. But nor can anyone prove that it is. Nor will any local experiment performed or planned in Switzerland or elsewhere prove that it is. Moreover, it is not unreasonable to suppose that the economic sustainability of an unconditional basic income at that level will require a number of preconditions currently unmet, including the introduction of new forms of taxation — for example the micro-tax on electronic payments that played an interesting role in the Swiss debate — and effective international cooperation against tax evasion — not exactly Switzerland’s strongest point.

In the immediate future, however, it should now be clear that more modest but significant steps forward can and must be worked out and debated. They must involve an individual unconditional basic income at a lower level (say, 15 or 20% of GDP per capita) that would still need to be topped up by means-tested social assistance benefits or housing grants, certainly for urban single-adult households. It is not because in many cases the unconditional basic income would not suffice, on its own, to “enable the whole population to live a dignified life”, that it would not make a big difference to the security, bargaining power ad freedom of choice of many of the most vulnerable among us. Even in the short run, introducing such an unconditional basic income is definitely sustainable economically. It is up to us to make it politically achievable.

The totally unprecedented Swiss initiative has not only made many people, in Switzerland and far beyond, far more aware of the nature and size of the challenges we face in the twenty first century and of how a basic income might help us address them; by triggering countless objections, some naive and some spot on, it has also helped the advocates of basic income to sharpen their arguments and to better see the need for realistic next steps. For both of these reasons, the Swiss citizens who devoted a tremendous amount of time, energy and imagination to the “yes” campaign deserve the warm gratitude not only of the basic income movement worldwide, but of all those fighting for a free society and a sane economy.


 

[1] Many thanks to Nenad Stojanovic (Zurich and Princeton) for reliable information and insightful comments.

Swiss Basic Income: Crunching the numbers

The preliminary polls are in for all Cantons (states) in Switzerland. As many already know, the referendum did not pass, with only about 23% of voters in favor of it.

From the website for the Swiss Federal Council

Swiss 1Swiss 2

%-Yes Vote for Basic Income ; Average: 23.1 %

These are the provisional results on election day this Sunday. The final results will be in after validation by the Federal Council—a good 2 months after the vote – and the final results may differ slightly from the provisional results.

Swiss 3

Note: population numbers multiplied by 1000

According to statistics reported on PolitNetz.com, a platform that claims to provide politically independent information, all five major Swiss parties recommended a “NO” vote on the referendum.

The Swiss Broadcasting Corporation (SRG) unofficially polled prospective voters in April, and the results looked slightly better than the results today:

Swiss 5

According to the Swiss government portal (www.ch.ch), a “referendum allows the people to alter the text of the constitution” to reflect changes they wish to make to the law. Within an 18 month period, 100,000 signatures must be collected in support of the referendum for it to be considered. The referendum then has to pass with both a popular majority and a majority of the cantons, for it to become the law. But even then, the government reserves the right to alter the text to suit their interpretation of it.

The Universal Basic Income initiative would have amended the Swiss Federal Constitution to read as follows:

 

Art. 110a (new) unconditional basic income:

  1. The Confederation shall ensure the introduction of an unconditional basic income;
  2. The basic income to enable the entire population a dignified existence and participation in public life;
  3. The law regulates in particular the financing and the amount of the basic income.

 

Although, the results are not a total surprise for the Swiss, in whom it is still deeply ingrained that work is tied to income, Swiss media outlets are already speculating as to the reasons  for this massive blow to the referendum. Some are saying that even the Swiss Social Democratic Party, that has been favorable towards the general idea of a basic income, feared that the text was “too vague” and all social benefits would be scrapped at once, leaving the most vulnerable even more so.

Despite the apparent “slap in the face”, many Universal Basic Income supporters see these results as very positive! Co-initiator of the Referendum, Daniel Häni reports that he’s happy with the results, “I would have only expected 15 percent approval. It is amazing and sensational that we are now at more than 20 percent.”