by Kate McFarland | Mar 15, 2017 | Research
Labor policy researcher Anne Gray has written a new research article, “Behavioural Effects of a Citizen’s Income on wages, job security and labour supply,” for the Citizen’s Income Trust (BIEN’s UK affiliate).
Gray begins her article by noting two predictions about the labor supply effect of basic income that appear in tension with one another: the first is that a basic income would increase the labor supply by removing the poverty trap (unemployed individuals could take jobs without the elimination of their benefits); the second is that a basic income would decrease the labor supply by allowing individuals to quit jobs to (for example) perform unpaid labor, retrain, or take more time to find a suitable job. She examines both of these hypothesizes in some detail, stressing that a basic income could result in employers’ reducing wages if the labor supply increases.
Gray then proceeds to “guestimate” the effect of a basic income on workforce participation for various groups (differing according to employment status, socioeconomic status, and household status, for example). She concludes that labor supply would indeed increase among low-wage workers. Thus, a minimum wage would be necessary to enforce in addition to a basic income, in order to prevent the basic income from becoming an employer’s supplement to low wages.
Reviewed by Dave Clegg
Photo: CC BY 2.0 Stephen Bowler
by Dave Clegg | Mar 12, 2017 | News
The 2017 publication Europe’s New Social Reality: the Case Against Universal Basic Income by Sage and Diamond – which can be downloaded from Policy Network online – cites an earlier 2015 Policy Network report which was most concerned about a “growing social, economic and political divergence” developing between the EU nations. In particular, the 2015 report suggested that slow economic growth and the increasing inequality of wealth were causing significant strain on EU governments and even the fabric of democracy itself. Sadly, their latest 2017 report indicates that little has changed.
The 2017 book focuses on the left, right and especially center posturing of the EU’s various political parties regarding economic inequality, but offers nothing tangible to reduce the tensions and differences between these competing interests. Instead the book seems to want to emphasis political divisions by singling out the ‘center left’ of the EU’s political spectrum as the principle promoter of a Universal Basic Income (UBI).
However, the reality is that a UBI is not the property of any one political group. In fact, the idea of subsidizing the needs of the citizenry appears to have developed during the Renaissance era as a more effective means of dealing with poverty than executing the poor who were often simply attempting to gain enough sustenance to survive. Over the succeeding 600 years the idea has come and gone in various nations and under a variety of political ideologies.
Most recently a BI has been considered by Republicans on ‘the right’ in the U.S., Canada’s Liberals ‘on the left’ and various centralist parties in the EU. The BIEN link History of Basic Income is a valuable read in this regard.
Sage and Diamond’s book provides the reader with all kinds of graphs, explanations and theories to support the long held belief that politicians and bureaucrats know what’s best for the economy and, by inference, what is best for the citizenry as well. If they just ‘tinker a bit with this and adjust that’ everything will be fine. So they scrap ‘old policies’ and implement ‘new policies’ and we all wait to see some change. Of course this is exactly the same sort of tired old pedantic rhetoric that surfaces every time a UBI discussion has appeared on the horizon over the last 600 years.
Yet despite the centuries of debate, the endless fiddling and tinkering with social programs and the never-ending promises that ‘new programs and policies’ are all that is needed, the fundamental problem of economic inequality has not only not been resolved, but it is worse now than it ever was. This, in a time when the world is awash in wealth counted in the trillions. Yet with a mere 7 billion people depending on that wealth, half the world’s human population is now destitute and desperate when just a single century ago there seemed to be abundance everywhere.
Sadly the Sage and Diamond book seems to be just another example of the hubris that ‘those in authority’ know what is best for the rest of us. Many UBI critics are stuck on the idea that a UBI is about ‘welfare and poverty’ or about ‘unemployment’ in a rapidly evolving workplace. But those are only the most obvious victims of economic inequality. The real concern is about the economic survival of whole populations and is immediate. It cannot wait for more paternalistic tinkering and adjusting.
Sage and Diamond’s book offers nothing new – with the possible exception of their graphs and charts – while the problems remain largely the same and a major contributor to those problems is still economic inequality. This book is simply representative of the anachronistic anchor that is holding progress back while ignoring the potential offered by a population freed from the specter of destitution and homelessness by the implementation of a UBI. Instead, Sage and Diamond offer yet another paternalistic response. A response that is akin to wearing a different suit of solutions while hanging onto the same faded, tattered and smelly underwear of paternalistic policies.
by Ashley | Mar 11, 2017 | News
Bill Gates. Credit to: The Huffington Post
On a recent Reddit AMA, Bill Gates says countries aren’t rich enough to support a Universal Basic Income (UBI). In the meantime, Gates suggests investing in government programs and increasing the demand of labor.
Bill Gates posted his fifth Reddit AMA on Monday, February 27th, 2017. He responded to questions on a number of topics, ranging from his favorite vacation spot to his viewpoints on whether social media has contributed to divisions in the United States. One Reddit user asked Gates about his thoughts on Universal Basic Income (UBI).
In his response, Gates points to constraints in making this alternative economic system scalable today. He described how countries may not currently have the financial capacity to support a UBI, stating: “Even the US isn’t rich enough to allow people not to work.” Currently, there is a lack of evidence that UBI is linked to decreasing employment or willingness to work. On the contrary, Rutgers Professor James Livingston has shown there is empirical evidence that a subsidy to one’s income has little to no impact on one’s work ethic. Countries around the world are initiating UBI pilots to test feasibility, structure and impacts. In fact, the Finnish UBI pilot is intended to increase employment and reduce poverty.
In the meantime, Gates proposes supporting specific historically marginalized populations, such as seniors and youth with disabilities. He also suggests increasing the amount of “adults helping in education.” One pathway of support he mentions is investment in government programs, like the Earned Income Tax Credit (EITC), that will “help increase the demand for labor.” The Earned Income Tax Credit is a policy initiative that focuses on alleviating poverty for US citizens and has been shown to increase labor-market participation. There are numerous variations of UBI models; some which envision a guaranteed income working in tandem with existing government programs. In contrast to many currently existing government subsidies and programs, UBI assumes a guaranteed income to each individual member regardless of household income.
Gates raises a noteworthy point about the need for an increased demand for labor during a time where there is growing concern about how automation may lead to the loss of jobs. In a recent video interview, he has proposed taxing robots that take humans’ jobs and using that money to finance sectors like education, provide job training, and support government programs. Basic Income News author Tyler Prochazka expands upon Bill Gates’ former comments on taxing robots in his article and how this connects to UBI.
More information at:
Tyler Prochazska, “Bill Gates is Wrong: Don’t Tax Robots”, Basic Income News, February 22th 2017
Mary Hynes, “Jobs are disappearing and to me that’s a good thing: Why We Should Abandon Work”, CBC Radio, March 2nd 2017
John Henley, “Finland Trials Basic Income for Unemployed”, The Guardian, January 3rd 2017
Giacomo Tognini, “Universal Basic Income, 5 Experiments Around The World”, WorldCrunch, February 23rd 2017
On Youtube: “Bill Gates: The Robot That Takes Your Job Should Pay Taxes”, February 16th 2017
On Reddit: “I’m Bill Gates co-chair of the Bill & Melinda Gates Foundation. Ask Me Anything”, February 27th 2017
by Andrew Sisk | Mar 11, 2017 | News
Charlie Wood, writer for the Christian Science Monitor, presents evidence from “cash transfer” programs showing that assigning monetary payments to citizens regardless of employment seems not to encourage retirement, alcohol use, or “laziness”, as some suspect it would.
In fact, results of cash transfer programs conducted by several NGOs show guaranteed cash reduces poverty and increases personal income and savings. Wood’s article, which appears on the CSM website, recognizes the difference between UBI and targeted charity, though the results of a UBI will likely come soon from studies in Finland and other places.
See the full article:
Charlie Wood, “Guaranteed paycheck: Does a ‘basic income’ encourage laziness?” (March 1, 2017)
by Andrew Sisk | Mar 10, 2017 | News
To eliminate poverty and promote economic egalitarianism, which is the right policy, Basic Income Guarantee (BIG) which provides everyone with a minimum level of material security regardless of employment, or Job Guarantee (JG) which provides everyone with a job?
Brad Voracek writes the right approach is not to pit these two ideas against each other. He points out the two policies have much in common, and supporters of BIG and JG are on the same side. The real opposition is the ineffective and disorganized status quo and those who support it.
Brad Vorecek, “The Basic Income and Job Guarantees are Complementary, not Opposing Policies.” (December 7, 2016).
