Thinking about Basic Income on International Women’s Day

Thinking about Basic Income on International Women’s Day

By Liane Gale and Ann Withorn
for the Basic Income Woman Action Group (BIWAG)

Since 1909, International Women’s Day has been a day for recognizing women’s economic, political and social achievements.  Yet over the past century, March 8 Women’s Day celebrations have revealed tensions between feminists, socialists and anarchists about the meaning of women’s roles in society. Feminists saw full equality through equal participation in the polity as the major way women would gain power. Socialists argued that full inclusion of women as workers within a self-aware proletariat was the way for women to achieve solidarity, and therefore power.  Anarchists envisioned women’s liberation as based on learning new ways of living and loving, so that a new way organizing society would become possible.

Today, we view the Basic Income Guarantee (BIG) as a means to transcend such historic differences. BIG offers a way for women to achieve basic economic security outside of the labor market.  It firmly denies that only certain activities done outside the home and community should be rewarded, much less be the chief source of one’s respect and social value in society.  With a meaningful basic income as a secure base for living, women everywhere should be more able to live a life without fear, and of their own design.

If basic income could fundamentally change the lives and fates of women and girls, and with it the fate of humanity, then why is this not widely discussed in the community? One case in point is the appeal by Martha Beéry to the national media agency in Switzerland to invoke bias towards male views in a panel on basic income on national television in 2012 that only included men. The decision was in her favor, but the inclusion of women’s points of view in regards to basic income has been slow both in mainstream and social media. Despite this, recently we have seen a welcome surge of contributions about the economic and social realities of women, that often offer basic income as a solution to some of the disadvantages women face.

These analyses include calls to elevate the value of care work and other contributions to society (such as community work), which are underpaid or not paid at all, and as a result do not elicit much respect by a society which largely equates money-making abilities with importance and status. Organizations, such as the Care Revolution Netzwerk, that is active in German-speaking countries, Mothers at Home Matter from the UK, and initiators and supporters of the “Leap Manifesto: A Call For a Canada Based on Caring for the Earth and One Another” are all grassroots efforts to change the current narrative. With the Basic Income Woman Action Group (BIWAG), we strive to contribute to this international effort. To that end, we are facilitating national and international conference calls with interested members and maintain a BIWAG Facebook Group.

The program of the 15th Annual North American Basic Income Congress in Winnipeg, Canada (May 12-15) is especially attentive to women’s concerns and to enhancing women’s roles in the movement. More than half of the planning committee members are women. Dr. Felicia Kornbluh, professor of Gender Studies, writer, welfare rights advocate and member of the Vermont Commission on Women, will give a keynote on “Two, Three, Many Precariats: Basic Income and the Fight for Gender, Class and Disability Justice”. Two other keynotes will also be given by women. At least sixteen panel presentations and speakers will be directly addressing links between basic income and women. In addition, three BIWAG sponsored roundtables will allow serious time for discussion of “Women’s Roles within the Basic Income Movement”, “Basic Income and the Care-Centered Economy”,  and “Basic Income’s Role in Ending Violence Against Women.”  A panel on the Color of Poverty and speakers from the Aboriginal Council of Winnipeg will also bring much immediacy to the event.

The 2016 theme of International Women’s Day includes the goals of ending all forms of discrimination and violence against all women and girls everywhere, and we believe that a basic income would be a firm step into the direction of a more humane world for all.

To learn more about BIWAG or to get involved, please join our Facebook group or contact us at withorn.ann@gmail.com or liane.gale@gmail.com.

 

Recent contributions on women and basic income, and closely related issues and causes:

Nicole M. Aschoff, “Feminism Against Capitalism,” Jacobin, February 29, 2016.

Allissa Battistoni, “Why Women’s Work is Key to a Just and Sustainable Future,” Feministing, August 6, 2015.

Alyssa Battistoni, “Why Establishing a Guaranteed Income for All Can Help Prevent Environmental Catastrophe,”, Alternet (reprinted from Jacobin), February 19, 2014.

Madeleine Bunting, “Who Will Care  for Us in the Future? Watch Out for the Rise of the Robots,” The Guardian, March 6, 2016.

Petra Buskins, “‘Flexibility’ Won’t Stop Women Retiring In Poverty,” New Matilda, October 30, 2015.

Liane Gale and Ann Withorn, “Basic Income Women Action Group”, Google Hangout, hosted by Marlen Vargas Del Razo, Living Income Guaranteed, Streamed Live, August 23, 2013.

Claire Cain Miller, “How Society Pays When Women’s Work is Unpaid,” New York Times, February 22, 2016.

Helen Ninnies, “As Rental Prices Rise, Women Stay in Bad Relationships to Survive,” Broadly, February 20, 2016.

Vanessa Olorenshaw, “Mothers at Home Matter and the Politics of Mothering – When Maternal Care is Taboo and Politicians Have No Clue,” Huffington Post U.K., March 17, 2015.

Meera Lee Patel: “Idea: All Work Deserves Pay,” Fast Company, January 20, 2016.

Ina Praetorius: “The Care-Centered Economy: Rediscovering What Has Been Taken for Granted,” e-book published by Heinrich Böll Stiftung, April 7, 2015.

Judith Shulevitz: “It’s Payback Time for Women,” New York Times, January 8, 2016.

Yanis Varoufakis urges Swiss to vote ‘yes’ for the UBI referendum

スクリーンショット 2016-04-26 17.29.34Yanis Varoufakis, the former Greece prime minister, recommends Swiss people to vote ‘yes’ for UBI at the national referendum scheduled on 5th June.

 

Varoufakis, who’ve recently made his support for UBI clear in the interview published for the Economist, calls ‘yes vote’ for the UBI referendum in the recent two interviews.

In the video interview with the Gottlieb Duttweiler Institute, the Greek economist argues that the future picture of technological progress would be either the Star Treck version that the progress can make us equal and free or the Matrix version that the progress enslaves us.

In another interview with Swiss newspaper “Tagesanzeiger“, the translation of which is available here, he says:

Because Switzerland is doing so well, it is ideal for experiments with the basic income. But don’t forget, in spite of the wealth, the quality of life is decreasing. What good is a well-paid job if you are scared to lose it? This constant fear paralyzes people and makes them ill. Switzerland should see the basic income as an investment in the future.

Varoufakis will be one of speakers for the UBI event on 4th May in Zurich, Switzerland.

 

Can the ECB create money for a universal basic income?

Can the ECB create money for a universal basic income?

Funding basic income through taxation is costly. At the same time, low consumer demand is a major worry. The European Central Bank could kill two birds with one stone by giving money directly to citizens.

Guest post by Teemu Muhonen, originally posted on taloussanomat.fi
Translation by Petri Flander

Finnish social welfare agency KELA’s basic income experiment has got plenty of attention in Finland and elsewhere. This is not surprising: in recent years various proposals for a basic income have been submitted by a growing number of scientists, politicians and non-governmental organizations in several countries.

According to a study by the Municipal Development Foundation, 51 percent of the Finnish population supports basic income. Last year, even greater support was found on surveys in France and the Spanish region of Catalonia.

The popularity of unconditional basic income can be explained by the fact that it can be argued from various standpoints: the left is attracted to the idea of eliminating poverty and making citizens freer; the right wants to simply welfare benefits, and encourage people to get out of benefits and take up whatever work is available.

There are problems with basic income models that still need attention. The most common of which was brought up last week In an interview on the Finnish public broadcaster Yle, history professor Juha Siltala brought up one of the most common objections: “We should really consider a basic income that you can really live on. But who pays it then?”

When KELA hinted that they might pay up to 800 euros per month, unconditional and tax-free, to participants in their basic income pilot, Canadian professor James Milligan dismissed the idea as “typical fiscal nonsense.” According to Milligan, if the amount was given to the whole population, it would require doubling the Finnish tax rate.

But what if a universal basic income is funded by other means, in addition to taxation?

The ECB to the rescue

In recent years, the European Central Bank (ECB) has tried to support the eurozone’s lagging inflation through “quantitative easing” (QE), a measure used by other central banks as well. The ECB has been buying securities from institutional investors such as banks, using large amounts of fresh money.

So far, national economies have not responded as hoped: despite the increase in the value of securities, consumer prices have stagnated.

Last year the leader of the British Labour Party Jeremy Corbyn promoted the idea of “People’s QE” in which the Bank of England would channel money directly to citizens, not banks.

The proposal received wide support, and many people believe the ECB should follow suit. Even former IMF chief economist Olivier Blanchard praised the idea.

The expression that Corbyn used is misleading, however, because in his proposal the money is not channeled directly to the public, but to government, which then uses it to stimulate the economy through infrastructure projects and other measures.

Another model was suggested by a group of 19 economists, who signed a letter published in the Financial Times (FT) in March last year. They proposed that the money should be given directly to citizens of the eurozone countries. The idea was to use ECB money to give 175 euros per month to each citizen for 19 months.

Economist Milton Friedman once called this kind of payments “helicopter money”: it is as if the money is just thrown at people from the sky, with no strings attached. Effectively, what the FT letter proposed was a eurozone-wide unconditional basic income paid by the ECB.

One problem with helicopter money is inflation

If the ECB funds infrastructure investment and fiscal policy, it strengthens the position of states substantially. The impact of a pan-European basic income would be the opposite. It would transfer a substantial part of social security funding from states to the ECB. In addition, allocation of money would be determined by citizens, not governments.

The FT letter did not call for a permanent and comprehensive basic income. After all, 175 euros per month is a significant sum in the poorest countries of Europe, but not much at all in countries like Finland.

There are other problems. If the ECB pays a higher basic income, rising demand could lead to massive inflation, unless production of goods increased at the same pace as demand. ECB’s quantitative easing has inflated equity prices for a long time, but sharp increases in the prices of real goods are generally considered more harmful to the economy.

In addition, direct monetary payments to states and citizens would be incompatible with the EU treaties and further limit ECB’s independence.

Despite these problems, a pan-European basic income would have a distinct advantage when compared to a national basic income. A national basic income in countries that attract most migrants would make them an even more popular destination. A pan-European payment would equalize the differences between countries.

Two birds with one stone?

One model discussed by basic income activists would entail that the ECB pays the same amount to all European citizens. The countries with higher living expenses would top up their citizens’ basic income from their national treasury, or from the common EU budget.

Such an arrangement may sound utopian, as it would require a major revision of existing national social security frameworks, and probably a reform of the entire financial system.

But the reality is that the challenges faced by the current welfare arrangements and the economic system are reaching a crisis point. Many jobs have been shredded, and, as technology advances, returns from labor and tax revenues no longer increase as labor productivity rises.

Still, we need money to sustain consumer demand and fund social security. A pan-European basic income financed by the ECB could solve both problems. There is no doubt that we will see more of such discussions in the public sphere in the near future.

===

Photo Credit CC European Central Bank

Interview with Zoltan Istvan, US presidential candidate in support of basic income

Interview with Zoltan Istvan, US presidential candidate in support of basic income

Founded in 2014 by futurist and philosopher Zoltan Istvan, the Transhumanist Party is an American non-profit political organization, which advocates the use of non-discriminatory implementations of science and technology to solve a majority of the world’s problems. Despite being in its early stages, the Transhumanist party has been incredibly inspirational for millions of people who are seeking modern, progressive solutions to the challenges we face as a species.

The current leader of the Transhumanist Party, Zoltan Istvan, is running for US president in 2016. At the heart of Zoltan’s platform is a focus on the use of science and technology in the pursuit of immortality. He also promotes free education for all, an end to US military actions abroad, and the implementation of a Universal Basic Income (UBI).

Zoltan’s campaign platform can found here.

Zoltan was kind enough to answer a few questions for Basic Income News, specifically regarding his support for a UBI.

Dawn Howard: You have made UBI part of your 2016 presidential election platform. Can you tell us who you are thinking about appointing as your chief economics advisor? Does he or she have experience designing or implementing UBI pilots?

Zoltan Istvan: A UBI Plan is a huge part of my campaign. As someone who contemplates technology all day long, I am sure that robots are going to take many if not nearly all jobs in the next 10 to 35 years. So we need a way to transition society to being able to happily live in an age where there are no jobs. UBI is the perfect vehicle.

While I have advisors helping me sort out the basics of implementing a basic income, I can’t reveal who might fill the role of implementing that program. But we would draw on experts that have already had some experience in their own nations of doing so.

DH: Several countries including Canada, India and most recently Finland have already tested or are in the process of testing basic income for a small portion of their population. How do you feel about this type of research, and do you think it could work in the US?  

ZI: One of the best things to happen to the world in the last few years is having smaller populated nations test out a UBI. It gives the larger nations the evidence they need to confidently implement their own plans one day, and it offers a road map to follow.

DH: Many in the UBI community speak of a “transition” in terms of the timeline between passing legislation and full implementation. In as little or as much detail as you wish, can you tell us what you think this transition would look like? 

ZI: I think the transition would probably take five to six years to fulfill from the point legislation passed to everyone having a basic income. While I support a quick transition, we also must be careful not to disturb our national economy too much as this historic process takes place. It would be better to do it slowly, but correctly, rather than force it and lead to a recession, or worse. Capitalism is changing due to technology, and may not even survive 30 years into the future. We must be able to change with it and help the needs of every single citizen out there. But we must also not be hasty.

For more information about Zoltan’s presidential campaign, visit his web site here.


Photo: Zoltan Istvan, leader of the Transhumanist Party and US presidential candidate. Credit: Business Insider.

 

Scott Santens’ basic income log: the importance of security

Scott Santens’ basic income log: the importance of security

If you’re new to my writing, you may not yet know that I have a crowdfunded basic income through Patreon. Beginning my campaign for $1,000 per month in late 2014, I reached that goal at the end of 2015, and so this year, at the beginning of every month, I will start the month with $1,000 per month, guaranteed, through the patronage of around 150 supporters on Patreon who incredibly make it possible.

So, what’s it like to have a basic income? How are things different? What is there to learn? I intend to publish an ongoing series of these observations, made through the eyes of a life being lived with basic income. This is the first entry in my “Basic Income Observations Log,” and it’s about the first thing I learned so far, which was last year, when I was actually only a few months into my campaign: security.

Security is one of those words that we all know, but I think few of us fully understand, because I for one didn’t understand it the way I do now until I actually experienced it in a new way. Here’s the thing. We all have a minimum basic income guarantee right now. It is a guarantee of $0. No one is guaranteed anything more than nothing. So we all know what insecurity feels like. We can get a job and reduce that feeling of insecurity, but even when we get a job, that feeling of insecurity is still there. At any moment, we could get fired. At any moment, our employer could go out of business, or downsize, or outsource. Any number of things could happen that could result in our incomes falling back down to a minimum of $0. That possibility is omnipresent.

Oh sure, we’ve developed some things we like to call “safety nets” here in the US, where if you have a job and something happens, maybe you’ll get disability money if you’re able to fill out the forms and pass the tests, of which many who are disabled don’t, so don’t count on that. Maybe you can get unemployment money, if you fill out the right forms and pass the tests, of which many who are unemployed don’t. And if you do get it, that is temporary, so don’t count on that for too long. Maybe you can get Temporary Assistance for Needy Families (welfare), or Supplementary Nutrition Assistance (food stamps), if you fill out the right forms and pass the tests, of which many who are in need don’t. And if you do get it, these both too are temporary and also insufficient, so don’t count on them for too long either, or at all for that matter given how small they are, and who’s making the decisions.

So yeah, basically, don’t count on our safety nets for a feeling of security, because that’s not what they are there for. There is one program intended for actual security, and it’s called Social Security. The way it’s calculated is a little messed up, where what you get for the rest of your life all depends not only on how much you earned up till qualifying, but on how long you can wait to start receiving it. But once you’re on it, it is a source of income you can count on as an American, until the day you die. And unlike the way other programs work, you are allowed to earn anything you want on top of it, without losing your monthly Social Security checks. Essentially, we already have basic income in the US, it’s just means-tested based on age, and the amount varies based on lifetime earnings. But for a significant number of Americans, seniors, they actually do know what it’s like to be able to count on a monthly minimum income guarantee that is greater than $0. In fact, for many it is close to $1,000 per month.

So what have I learned so far as a non-senior with basic income security?

Observation One

As a 38-year-old American who is experiencing a minimum income guarantee of $1,000 per month decades before I’m “supposed to”, I can tell you that income security is a big deal. It’s a bigger deal than I think anyone without it fully realizes. And the thing is, it doesn’t even need to be above the poverty level to feel. It just needs to be greater than $0, and basically enough to afford not to starve. I felt more secure earning only $250 per month, because that amount is enough to afford groceries, or pay half my rent. Believe me, it’s a load off your mind to know there is a smaller gap you need to cover through paid labor to meet your most basic needs. Starting every month with a minimum of $250 is definitely better than starting every month with $0. It is not nothing. It is a small amount, and not what I’d call a basic income, but it provides a feeling of increased security, and that feeling is not small at all.

Since having achieved my $1,000 per month new minimum income floor, I have to say, there is definitely a difference between $1,000 and $500 and $250, but learning that something as seemingly insufficient as $250 still made a difference in my feeling greater security, I consider a notable lesson I’ve learned thus far. And I think it’s something people discount when they worry that $1,000 per month may be too low of an amount, or that anything lower than that amount would be pointless.

Observation Two

There’s another lesson I’ve learned as well in regards to security, that was an entirely unexpected lesson in how what I have is both like and unlike basic income.

What I have is like a basic income, in that I can count on it at the beginning of every month regardless of paid work, and its size is sufficient to lift me above the federal poverty line, but it is unlike a basic income in that it relies on about 150 people as I write this, whereas a basic income would be a legal right backed by the full faith and credit of the United States. Say what you want about that, but it doesn’t change that such backing is considered the most secure in the world. So unlike a government-backed basic income, it is possible for me to lose my crowdfunded basic income, if everyone stops being a patron. However, that same reason is why I feel more security than anyone with a normal paycheck, and I consider this a very interesting observation.

For anyone with a normal job, they can be fired by one person. As a result, their income can fall from $1,000/mo to $0/mo. For me, I would have to be “fired” by 150 people to fall from $1,000/mo to $0/mo. If “fired” by one person, I can fall from $1,000/mo to $990/mo. It is this decentralization of income that creates for me a greater sense of security that is far greater than a standard full-time job situation, but still less than the security a US government provided basic income would provide.

It is this observation that prompted me to create a new milestone on Patreon, where my new goal is not to gain a larger income, (anything over $1,000 will still be pledged to others making the same pledge) but to instead create a more widely distributed income floor. If I were to reach the point of being supported by 1,000 patrons, then I think that would provide a sense of security much closer to that of a true basic income. For if I have 1,000 people all pledging $1/mo, then the loss of 1 person is $1, not like now, where the loss of one person could immediately drop me back down to $900/mo. I now think creating a greater sense of security is key to better duplicating the effects of a basic income, so that’s my new goal on Patreon – greater security.

Observation Three

One other observation I’ve made in regards to security is the effect it has on family. When you are part of a household, increased security of one spills over onto other members of the household. Because I have a basic income, my girlfriend even feels greater security. She has a great job, and she loves it, but again, a job can always be lost, so she worries about what can happen if that were to happen. That’s natural. We all worry about what can happen, however unlikely. But now because I have a basic income, even though she doesn’t, the worst case scenario isn’t as scary. It’s a notable reduction of stress. And therefore, the security of a basic income has household-spanning effects. I would argue there’s even evidence for this, thanks to $4,000 per year casino dividends in North Carolina that resulted in incredible outcomes for the kids.

They know, based on the interviews with parents, that the relationship between spouses tended to improve as a result. They also know that the relationship between the parents and their children tended to improve. And they know that parents tended to drink less alcohol. “There is a lot of literature that shows in order to change outcomes among children you are best off treating the parents first,” said Simeonova. “And these are really clear changes in the parents.” There’s also the question of stress, which the extra money helps relieve—even if only a little. While the added income wasn’t enough to allow parents to quit their jobs, it’s a base level that helped with rent and food and other basic expenses. That, Akee said, is powerful enough itself. “We know that the thing poor couples fight about the most is money,” he said. “Off the bat, this means a more harmonious family environment.”

Definitely read the full article in the Washington Post, but the takeaway is that the stress in households, that exists largely due to a lack of income security, has profoundly negative effects, and when that stress is reduced through greater income security, it has profoundly positive effects, especially on young children.

Basically, a feeling of security is hugely important, and most of us are so used to not having any, that we entirely underestimate the transformative effects that basic income will have on any society that adopts it as policy.

Guaranteeing a minimum amount of income security for every member of a society, through a universal basic income sufficient to meet basic needs, will create the conditions for a society to truly flourish. Of that, I have no doubt. And it will be in large part, due to the mass achievement of one word – security.

 

Towards a Universal Basic Income in France: elements for a debate

Towards a Universal Basic Income in France: elements for a debate

Multiple surveys across many countries show an increasing support for the idea of providing every citizen with a monthly lump-sum allowance to ensure everyone can meet their basic subsistence needs. In France, the IFOP (a leading French national market research institute) has shown that this support goes beyond political orientation divisions. From the question: “Are you in favour of implementing a guaranteed basic income for all citizens which would replace most existing allowances?” came a positive answer, depending on the degree of support for one party or another, from 72% to 79% for left wing sympathizers and from 50% to 54% for right wing sympathizers.

However, what would an unconditional basic income in France look like in concrete terms?

 

The Finland experiment

Since the election in April of the Finnish pro-basic income coalition, the topic has given rise to renewed international interest. All started when the Prime Minister of Finland Juha Sipilä announced the launch of a series of pilots, the most important being a “universal basic income” [1], in order to reform the social security system in response to the evolution of the labour market. This will also allow the evaluation of how to reinforce autonomy and incentives to work, as well as reducing bureaucracy and the complexity inherent in accessing social assistance.

The lead role in this project has been given to professor Olli Kangas (KELA) who has outlined the following schedule[2]: preparation phase from December 5th, 2015 to November 15th, 2016; two-year experimentation starting in 2017; evaluation in 2019.

Olli Kangas explained that the work group will evaluate at least four options:

  1. a “full basic income” (~800 €) replacing almost all basic and insurance-based benefits;
  2. a “partial basic income” (~550 €) replacing all basic benefits but leaving intact almost all insurance-based benefits;
  3. a negative income tax in which benefits would phase out as people earn more money;
  4. miscellaneous other approaches including a universal income and additional components.

Everyone who has recognised the need for major reforms of our social protection mechanisms perceives the announcement of the Finish pilot as an opportunity. However, we need to give time to our Finnish friends for their project to mature.

 

Which options are possible in France?

The Association for the Introduction of an Existence Income (AIRE) has been working on these questions since 1989, gathering studies and proposals from numerous experts, philosophers, economists, sociologists, politicians, etc. The French Movement for a Basic Income (MFRB) created in 2013 involves activists from a wide variety of backgrounds, leading actions through the country and enriching proposals by bringing together citizen experiences from the grass-roots[3].

Despite apparent simplicity, an unconditional basic income would require a series of structural choices. Precise adjustment of the parameters would need to be made in order to ensure it performs optimally in terms of justice and efficiency. Considering the vast number of options, it would be fallacious to believe that there is an ideal solution. Actually several options that must be weighted by parliamentary and experts in order to create a consensus that is adapted to the reality of our country.

Our experience leads us to recommend a universal income that would vary based on the beneficiary’s age. In particular the case for children should be processed separately, which means organizing an in-depth discussion about the French family assistance policy. This means replacing all or part of the actual eight allowances[4] by a lump-sum for each child. A key stake is to eliminate the high variability of the State grants according to the child’s rank within the family, the matrimonial status of the parents or the parent’s income (knowing that a single child of a middle-income level couple currently receives a remarkably low grant). The potential variation of the universal income amount according to child age (3, 14, 18 year old thresholds) must also be further investigated.

Similarly a discussion is needed regarding senior citizens. The question of incentive to work disappears with the elderly, but the dependency issue arises. Do we need to define a higher amount above 65 years old? How should the matrimonial life conditions be integrated? The ASPA[5] level (800 € for a single person, 1242 € for a couple) gives an indication but not a clear answer on the solution to be implemented.

The coordination with housing allowances constitutes a third theme to be carefully analysed. Acknowledging the inflationary effect of housing allowances (APL) on the rental market price, some politicians and economists[6] are investigating the potential effects of merging the APL and the RSA[7]. As the AIRE association is attached to the Tinbergen rule[8], we are highly reluctant to support this proposal, but the underlying issues must nonetheless be addressed. In any case, it is important to revisit conditionality links between several allowances and the housing grant, in particular the existence of a problematic “housing lump-sum” component within the RSA.

The last framing issue is to define the scope of beneficiaries for a “universal income”. Despite this designation, it is necessary to limit eligibility to a national community. This needs to be defined in terms of residence and/or nationality, probably through continuity of the rules applying today for the RSA beneficiaries. However, this still creates a variety of fundamental questions, for example the potential right to the universal income for prisoners or asylum seekers (currently receiving the ATA[9]).

 

Three scenarios for a universal basic income for “active age” adults

Similarly to the Finnish approach, we identify three quite different scenarios to defining a universal basic income that would be paid to any adult in France.

  1. Baseline: extend the distribution of the “RSA single person allowance” to the whole country population (excluding the housing lump-sum component), being 470 € by month in 2016, financed by a flat tax system replacing several current basic social and family allowances as well as tax mechanisms.
  2. Maximised: distribute equally to the whole population the entirety of the social protection budget, including pensions and unemployment benefit. This would mean about 800 € by month.
  3. Dynamic: delete all employment incentives to companies and allowing a massive flexibility improvement in terms of minimum salary, in order to finance a basic income ranging between 500 € and 550 € by month. This would also replace a major part of the social and tax mechanisms but leave intact all insurance-based benefits.

The financial feasibility of scenario A is proven and it does not lead to a large upheaval of the redistribution operating in France. It allows a massive simplification of the social and tax systems, facilitating daily life of the population and reducing operational costs. This scenario, like the following ones, eliminates many inconsistences, iniquities and numerous more-or-less known perverse effects. However in term of micro-economic analysis, it does not imply a massive evolution neither by an income effect nor by a substitution effect, unlike the other scenarios.

Scenario B designates the losers: those who contributed all along their life for pensions and unemployment benefits and who would be left without those related benefits. Neither the AIRE nor the MFRB association support this scenario. Such an approach – if it proves to be meaningful – could be considered only through a very long migration phase from one system to another. This would need to be built cautiously, with the implication of the labour unions. Besides, the high level of the benefit leads to a high income effect, many people being possibly satisfied by this amount without seeking for a complementary paid activity. The substitution effect contributes on the same way, due to the high level of contribution necessary to finance it.

Scenario C is probably the most audacious challenge, by lightening massively legal constrains framing the labour market, leaving it up to individual and collective negotiations. Citizens with better secured economic status are then on a better position to decide whether to accept or not professional opportunity offers, or to create their own activity by minimising their personal and family risks. The micro-economic analysis is more ambiguous, the income effect being stronger than in scenario A and on the contrary the substitution effect encouraging the activity thanks to a higher flexibility of the labour market.

Of course, the consensus that will emerge from a parliamentary work gathering representatives of all parties and the support of experts from diverse fields could finally be a combination of those three scenarios with potential integration of others approaches. In any case, no option presented in this note should be excluded without in-depth investigation.

 

Special thanks to Xuan-Mai Kempf for translating the text from French.


ENDNOTES

[1] https://www.kela.fi/web/en/press-releases/-/asset_publisher/LgL2IQBbkg98/content/universal-basic-income-options-to-be-weighed?_101_INSTANCE_LgL2IQBbkg98_redirect=%2Fweb%2Fen%2Fpress-releases

[2] https://www.vox.com/2015/12/8/9872554/finland-basic-income-experiment

[3] Some discussion papers from the field can be tough however well documented. For instance, in order to rebel against the home control by the family assistance administration: https://www.lesenrages.antifa-net.fr/la-caf-contre-les-femmes/

[4] Family allowances, premium for age, family complement for 3 children, basic allowance for child under three, school yearly allowance, RSA increase for each child, income tax reduction according to the number of children, tax reduction for child schooling.

[5] Solidarity allowance for elderly persons.

[6] Cf. the « Unique social allowance » of François Fillon or the IPP report:    https://www.ipp.eu/publication/juin-2015-reformer-les-aides-personnelles-au-logement/

[7] RSA: Revenu de Solidarité Active, is the main French allowance providing a minimum guaranteed revenue.

[8] Based on the name of the first Nobel Prize for Economics winner, Jan Tinbergen, a supporter of an unconditional basic income, who stipulated that for each policy objective, one policy instrument is needed, and one only.

[9] Allocation Temporaire d’Attente.