by Daniele Fabbri | Nov 23, 2018 | Research
Photo Credit: CC(Cindy Woods)
The last world development report from the World Bank is out. It investigates the changing nature of work and suggests what governments could and should do to address the phenomenon. Among the proposals there is the enhancement of social protection, to a degree disjoining it from formal wage employment, considering Universal Basic Income (UBI) as one of the options.
Digital transformation allows firm to grow rapidly, escaping the traditional patterns of production, and the rise of digital platforms make people more susceptible to the effects of technological change. The landscape of work is evolving and the skills required by employers around the world are changing: skills such as complex problem solving, adaptability and teamwork as central requisites. This in turn modifies how and at which terms people work, and short-term work is on the rise, bringing challenges to the existing welfare state, the report says. The World Development Report goes on suggesting three solutions governments should put into practice: investing in human capital, through the guidance provided by the Human Capital Project; enhancing social protection; and increasing revenue mobilization as a mean of financing the two aforementioned solutions.
The changing nature of work
Fears of technological based unemployment have their roots in history, spanning from the introduction of knitting machines in England in the XVI° century, to the Luddites distruction of textile machinery in the 19th century, but the overall effect of industrialization was to stimulate economic growth and to raise the living standards. This fear is also contemporary, supported by the trend of declining industrial employment in high-income economies in the last two decades. The Republic of Korea, Singapore, Spain, and the UK are among the countries in which it dropped by more than 10 percentage points but, on the other hand, millions of industrial jobs have been created in developing countries since the late 1980s.
Technology is disrupting, unevenly, the demand for skills, and its potential for the amelioration of living standards manifests heterogeneously: workers in elected sectors gains from technological progress, whilst others see themselves left facing displacement. The wealth created by the platform economy is huge, but its placed in the hands of a few, and A.I. raises concerns about the advent of a jobless economy following the rapid growth in the number of robots operating worldwide: if they are 1.2 millions in 2018, they will be 2.6 millions in 2019, an increase of 1.4 milion units in just one year. It should be noticed how, in the countries with higher robot density – Germany, Korea, Singapore – employment rates remain high, but in Germany the effect was a reduction in the hiring of new, young entrants; young workers, and economies anticipating larger numbers of entrants, may be more affected than others.
The extent to which robots replace workers remains unclear, with automation of routine work estimated to have also created 23 million jobs across Europe starting in 1999, and evidence suggesting that its overall effect is that of raising demand for labor, specifically in the technology sector, by providing the tools necessary for online work, or for taking part in the gig economy. It’s sure that jobs based upon repetition, which are “codifiable”, are those more endangered by automation, but estimates of the number of jobs at risk varies widely, for the US from 7% to 47%, the latter figure the result of automation probabilities developed by machine learning experts at the University of Oxford, a speculation which cannot account properly for the rates of technology absorption, which have been observed to vary greatly depending on the kind of technology, both internationally and intranationally.
The effect of automation on skills demand and on the production process is somehow more discernable. On the skills side, the demand for cognitive abilities which allow workers to be more adaptable, as critical thinking and socio-behavioural skills, is increasing; on the side of the production process there is the rise of global value chains, the changing nature of the boundaries of firms, and the fluid geography of jobs. The process has favored the more educated, and human capital seems the more effective protection against automation driven unemployment: “A big question is whether workers displaced by automation will have the required skills for new jobs created by innovation”. Innovation has the greatest impact on low and middle-skilled workers, either because they are more suceptible to automation, or because no complementarities with technology (human-machine cooperation) manifest.
The paper identifies how technology has disrupted the demand for skills: firstly, the demand for non-routine skills (i.e. cognitive and socio-behavioural) is increasing both in advanced and emerging economies; secondly, the demand for job specific-skills is declining; thirdly, payoffs to combination of different type of skills, allowing for greater adaptability and easier transfer among different jobs, appear to be increasing. The risk is growing inequality, as the report states:
“In advanced economies, employment has been growing fastest in high-skill cognitive occupations and low-skill occupations that require dexterity. By contrast, employment has shifted away from middle-skill occupations such as machine operators. This is one of the factors that may translate into rising inequality in advanced economies. Both middle- and low-skill workers could see falling wages ⎯ the former because of automation; the latter because of increased competition.”
Technology changes the way in which people works and the term under which they work. The gig-economy and jobs based on on-demand services, arising in an environment created by the advance of technology, don’t rely on long-term contracts but rather on extreme flexibility. There is a minimum productivity level at which firm find it optimal to employ workers formally before resorting to globalization, this means that informality is prefereable for everyone exept for the most productive workers.
If globalization and automation were to act simultaneusly, increasing the productivity of workers, the number of informal workers may decline, but if more requirements –minimum wage, required benefits – are imposed on firms, the positive “formal employment effect” may be reversed, and informality actually rise. The management of risk through employers doesn’t fit well with the new nature of jobs, and the use of payroll taxes to finance pensions and social insurance may no longer be sustainable, even for advanced economies, as the percentage of the workforce taking part into the formal economy decreases. Indeed, the changing nature of work stimulates informality, as taxation, ragulation, and social protection schemes don’t provide businesses with incentives to grow, particularly in developing economies. The issue is present in both emerging and advanced economies, and convergence is occurring among them, with increased informality in the advanced ones, leaving workers without access to benefits or protections and making the case for direct intervention of the government through benefit provision. “If automation pushes up the cost of distorting labor markets, and development improves the efficacy of the public sector, government should move away from regulation-based redistribution to direct social welfare support.”
Lifelong Learning
“Skill acquisition is a continuum, not a finite, unchangeable path”.
The advance of automation increases the demand for high-order cognitive skills, while simultaneously decreasing the demand for repetitive, job-specific skills. At the same time, the retooling of existing jobs make adaptability a fundamental requisite: the idea of a career for life seems no longer plausible, and shifts between jobs will be the norm. Thus, the profile of the ideal employee changes, as a single job may require the combination of skills from multiple disciplines: jacks of all trades will surclass the masters of one. How well countries respond to the changing demand for skills depends on how fast the supply of skills can shift, but the education system is traditionally adverse to change, and adjustment occurs predominantly out of compulsory education. Tertiary education, given its flexibility, allows for enrollment whilst participating in the workforce, and so will be the main provider of the cognitive skill-set required. Government should take action in enhancing instruction during youth, the period in which the learning capabilities are higher, and simultaneously helping to shape a better framework for adult learning as a complement to schooling, in order to “inoculate against job uncertainty.”
A new social contract
Old and new pressures calls for a renovation of the social contract, which the report defines as “a policy package that aims to contribute to a fairer society.” The changing nature of work is costly for workers and adjustments are needed: a global new deal is necessary. This new deal should be different from the one adopted in the US after the Great Depression, as the Depression was a transitory shock, whilst the advance and automation and informality are here to stay. Any social contract should be tailored to the specific country context, but some core elements remain: following the indications of Amartya Sen in “Development as Freedom”, the instruments for equality of opportunity are political freedoms, freedom of opportunity, and economic protection from abject poverty.
“The labor market is increasingly valuing advanced cognitive and socio-behavioral skills that complement technology and make workers more adaptable. This means that inequality will increase unless everyone has a fair shot at acquiring these skills.”
Strengthening social protection
Social protection should be enhanced through the improvement of its three main components: a guaranteed social minimum, social insurance and market regulation.
A guaranteed social minimum, with social assistance at its core, should be based on the concept of progressive universalism, with programs providing financial support to the largest possible share of the population, in order to account for the risks in the labour market. Social assistance needs to be reformed, as the Bismarckian model is no longer satisfying, and should be coupled with subsidized social sinsurance, not strictly based on participation in formal wage employment, financed through mandatory earning based contributions limited, at least initially, to the formal market. In order to provide equal opportunities, a social contract should also include means to provide education and upskilling, necessary for navigating the job market, starting from early childhood development, as knowledge is cumulative and pays more the earlier it starts.
“As social contracts are reimagined, subsidizing a basic level of social insurance — especially for the poor — could be considered. Such a reform could also equalize the costs borne by different factors of production, such as capital and labor, as the financing of the system is at least partly shifted away from labor taxes toward general taxation.”
Universal Basic Income
Universal Basic Income is being hotly debated as a mean to expand the guaranteed social minimum, the report says. It wouldn’t be a substitute for health, education, or other social services, but a supplement to existing social programs, and could end up replacing some programs with income support functions, increasing efficiency by reducing programs fragmentation. It’s monetary nature is an advantage: analysis of cash transfer programs showed advances in school enrollment rates, test scores, and cognitive development, food security and use of health care facilities, especially when combined with forms of intervention. The available evidence seems to disprove one of the main concerns related to UBI, that of work disincentives, as the Alaska dividend program shows no impact on employment (if not for the increase in part-time employment), and a study on the Iranian basic income program found that it did no harm to employment. The regular provision of welfare benefits granted by UBI would contrast with the arbitrarity of means-tested anti-poverty measures, which facing the dynamism of poverty ends up generating winners and losers.
The costs of UBI would depend on the level at which it is set, and its effects would depend on how it is financed. Simulations setting UBI at the level of existing cash transfer programs show that it would have significant fiscal impact, costing an additional 13.8 percent of GDP in Finland, 10.1 percent in France, 8.9 percent in the United Kingdom, and 3.3 percent in Italy. The taxation of UBI alongside regular income and the elimination of tax allowances were then used as sources of revenues for covering the additional costs: “in Finland and Italy, these measures were more than adequate to cover the additional costs of a UBI. In France, those revenues almost offset the cost of such a program. In the United Kingdom, taxing cash benefits and eliminating tax allowances were not enough to cover the UBI.” Simulations for developing countries found significant distributional effects: in Nepal most people would gain, in Indonesia 40% of the poor would be worse off and in South Africa most of the elderly and the poor would be worse off. This is due the structure and performance of the existing schemes, UBI being set at their level. A debate remains around whether some of the “cousins” of UBI, as a Job Guarantee or a Participation Income, conditional to the fulfillment of public jobs, or to volunteering, could be more beneficial, the report states.
Financing social inclusion
A basic social minimum package which uses UBI, set at the average poverty level, and aimed at adults would cost 9.6% GDP in low-income countries, 5.1% in medium-income countries and 3.5% in upper middle income countries. If the UBI was to be for everyone, the figures would be in the double digits in the poorest countries, 9% of GDP for middle income countries and 5.2% in upper-middle income countries. And the invesment for UBI should be coupled with investments in the creation of human capital, the report mantains. A significant mobilization of capital becomes necessary. Taxation patterns diverge from low income countries to high income ones; if the former rely mostly on indirect taxation –consumption and trade taxes – the latter rely on direct taxation. The paper analyzes sources of potential revenues to finance the global new deal, as excises taxes on tobacco and alcool, that even if considered regressive, have usually a long term positive impact on health. Value added tax could have a significant role in developing economies, whilst they are already diffused among advanced ones. A carbon tax may have strong impact, with a study finding that for the top 20 carbon emitting countries, optimal taxation could rise almost 2% of GDP, and be paired with the elimination of energy subsidies, which globally amouts to $333 billion. Personal and corporate income taxation may be aided by technology in avoiding tax avoidance.
“The virtual nature of digital businesses makes it even easier to locate activities in low-tax jurisdictions. The provision of goods and services from abroad without a physical presence in countries where consumers are located escapes the traditional corporate tax.”
Digitizing property registration systems will improve the collection of property taxes, and withholding taxes on payments of services will become more important in economies with strong digital presence and a prevalence of intangibles. Social protection should be enhanced keeping in mind financial costraints, and expanded as more resources are mobilized through improved taxation.
More information at:
World Bank. 2019. World Development Report 2019: The Changing Nature of Work. Washington, DC: World Bank.
Human Capital Project: https://www.worldbank.org/en/publication/human-capital
This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by the World Bank
by Guest Contributor | Oct 31, 2018 | Opinion
The Past – from Ancestral Economy to Capitalism
Tribal groups, in which all men and women on Earth have lived since humanity emerged, have functioned through cooperation and solidarity among their members in tasks such as obtaining and distributing food, building shelters, and family dwellings or taking care of community assets; tasks that today we would call ‘economic’. In fact, over hundreds of thousands of years of human presence on Earth the whole economy was cooperative and supportive. And at the time it was sustainable. About 6,000 years ago things began to change when the first sophisticated civilizations arose and put into practice a variety of new forms of economic organization; from the range of traditional systems based on agriculture or trade to, subsequently, feudalism, mercantilism and everything else after that. Today, however, all the economic diversity that existed over those 6,000 years is virtually nullified, and an (almost) unique model has once again consolidated. It is called capitalism, and it has been going on for about 200 years.
Ancestral economies were based on solidarity and cooperation among people, on a harmony between them and nature and on an orientation towards the mere satisfaction of their needs. Capitalism is characterized by competition among peers, by the predation of the Earth and by an orientation of its agents aiming at unlimited material accumulation. Both modes are hegemonic, each in its own time, but that is about as much as these modes have in common.
Can, like its ancestral homologous form, the present ‘state of the art’ in economic organization – capitalism – last for hundreds of thousands of years? It does not seem possible, given the condition in which it left the planet and humans, after only 200 years. Earth’s soils, rivers, oceans, and atmosphere are now filled with the poisons left over from our economic activity; the climate is changing, the elements unsettled and life as we know it may be doomed, if we do not make deep and rapid changes. As for us humans, materialistic as we have become, we too often forget who we really are and can do: our nature as creators; our ability to generate art, mathematics or philosophy; our potential for freedom, for choosing paths, for changing ourselves and the world as we decide, and the lack of any natural bound between us and what we can achieve or be. By forgetting so much, we reduce ourselves to economic roles, going now so far as to even discuss whether artificial intelligence and robots will make us pointless and expendable one day. The culprit is our current economic culture and system.
However, despite its pitfalls, an important merit can be attributed to capitalism: with the demand for accumulation and profit, it has given us machinery, techniques, and knowledge that can now allow us to access the resources necessary for the material comfort of all. This is only a possibility though since these machines, techniques, and knowledge only provide the capacity, not the guarantee of its use.
Our collective future is unforeseeable. It will be the result of an infinity of both conscious choices and involuntary actions, taken by billions of individuals and groups, in a chaotic general movement that no one can control or anticipate. And yet, it can be felt that capitalism would make no sense in human history unless it was fated to eventually free us from the shackles of material scarcity. Hence, the great economic question of our time must be: how to accomplish the potential that capitalism offers us? The simple ‘progress’, as currently evolving, does not seem to be the way. Reality shows us, everywhere, that the mere growth of the present economy, without any change or innovation in its logic and processes, will never free us. Neither will the strengthening of the so-called welfare state, in its traditional, bureaucratic, expensive and life-controlling form. It can do no more than mitigate poverty, but at a high cost in dignity to its beneficiaries, and a cost in humanity to all the others. The more unnecessary this becomes the more intolerable it gets.
Each one of us, rich or poor, directly or indirectly is suffering from the lack of a process which guarantees the essentials for all. Clearly, this is no longer a problem of production capacity, but one of economic organization. The satisfaction of the basic needs of all people is not inherent to capitalism, nor has it ever been added to it. However, without such process, we will not rid ourselves from the specter of material poverty, and therefore from this never-enough culture in which we find ourselves in. Mainly reduced to producers and consumers, we are exhausting the energy that could alternatively be spent in higher occupations which our potential allows and claims for us.
And yet, we can immediately introduce such process of guaranteeing the essentials for all: let us recover from our ancestral economic way its core element of solidarity among people.
A Future – the UBI-AA
Solidarity among people is the essential idea behind the alternative resource distribution model here described: the Unconditional Basic Income of All for All, or ‘UBI-AA’.
UBI-AA is a revenue redistribution process, generically designed to operate monthly, providing automatic and unconditional transfers among citizens, from those who have higher incomes to those with lower or no income at all. Built, supported and leveraged by them alone, the process will invite participants to take responsibility and engage in their communities, which will reinforce these.
It works in two stages:
1) As it is acquired, each member of the community discounts to a common fund – a ‘UBI Fund’ – a proportion of their income, at a single and universal rate;
2) At the end of each month, the Fund’s accumulated total is equally and unconditionally distributed among all members of the same community.
This simple process, which demands the same effort from all participants while offering them the same benefit, treats everyone equally. It turns those who, at each moment in time, have above-average incomes into net payers to the UBI Fund, and those who have below-average incomes into net receivers. Thus, the process operates a joint distribution among participants of part of their individual incomes. In addition to reducing inequalities, this solidarity among peers creates an unconditional guarantee of income for all, that is, an Unconditional Basic Income.
It follows from the UBI-AA process that the loss of available income by some will be the gain of others. Importantly, for the scheme to be accepted by the former and really useful to the latter, the losses involved should be moderate and the gains significant. This should not, however, lead to a devaluation in the possibilities of the mutability of all individual positions. As time goes by and while exercising the options which the process itself opens to participants, individual situations of income ‘winners’ or ‘losers’ should always be seen as circumstantial.
To achieve its intended effects, the implementation of the UBI-AA should be accompanied by the release of its participants from the burden of personal income tax. Such tax relief will compensate them for the contributory effort required by the UBI-AA process. However, for those above a certain level of income, such compensation may turn out to be merely partial.
Once the personal income tax is abolished, the moderation of losses for citizens with above-average incomes and, simultaneously, the material significance of gains to those with under-average incomes, will be possible if the rate of contributions to the UBI Fund is set at an optimal level, balancing the two outcomes.
A more complete description of the UBI-AA process, as well as a simulation of the financial effects it would have produced, both in individual citizen spheres and in the State budget, hypothesizing it in force in Portugal in 2012, can be reached here.
UBI-AA differs from most current traditional redistributive processes because it is unconditional. It also differs from most unconditional alternative processes since it is a construct of common citizens, instead of a government, a central bank or any other ‘power’ policy. We see it as a humane alternative to organizing the economy on its distributive side. Operating through the income distribution process described above, it will favor the rehabilitation of values such as solidarity and voluntary cooperation among people, and the creation of an unconditional guarantee of income for all will be a corollary.
We cherish the hope that this may contribute to the flourishing of a new and less materialistic culture. Who knows, if making everybody’s access to essential material resources as simple as breathing, will not end up instilling in people the same attitude towards those resources – money and the things it buys – as the one we have towards the air we breathe: no matter how valuable it may be to us, we do not quarrel with each other for it; we only use it in the quantities we need; accumulating it does not even occur to us. Such a cultural shift would certainly be a great human civilizational progress and a much-needed step towards a reconciliation between us and our environment.
Miguel Horta
André Coelho
by Kate McFarland | Aug 23, 2018 | News
Photo: Newberry Building in downtown Stockton, CC BY-NC-SA 2.0 Onasill ~ Bill Badzo
A new discussion paper, released on Monday, August 20 by Mayor Michael Tubbs and the Stockton Economic Empowerment Demonstration (SEED) team, reveals details of the design of the basic income pilot planned for launch next year.
Stockton Mayor Michael Tubbs
Following in the heels of Silicon Valley’s Y Combinator, the mid-California City of Stockton announced in October 2017 that the municipality was readying a privately financed basic income pilot.
The project arose out of collaboration between Mayor Michael Tubbs and the Economic Security Project (ESP), an initiative founded in California in the previous year to support work related to basic income and cash transfers in the US.
Called the Stockton Economic Empowerment Demonstration or “SEED”, the program will provide approximately 100 Stockton residents with unconditional cash payments of $500 per month for 18 months.
ESP supplied a $1 million foundational grant to launch SEED, which would be followed by major contributions from such donors as the Future Justice Fund, the Goldhirsh Foundation, tech entrepreneur Serkan Piantino, and Facebook co-founder Andrew McCollum.
To prepare a study of the effects of the cash payments, the project has recently enlisted the assistance of two scholars: Dr. Stacia West of the College of Social Work at University of Tennessee, who gained press in the basic income community last year for her study of Dolly Parton’s My People Fund (which provided no-strings-attached cash support to wildfire survivors), and Dr. Amy Castro Baker of Social Policy and Practice at the University of Pennsylvania.
A new discussion paper from SEED, published on August 20, 2018, lays out newly disclosed details about the process of selecting and enrolling participants. The design is one that has been informed by feedback received from Stockton residents, consulting researchers, and others since the project was unveiled.
Seeding SEED (Participant Selection)
As described in the discussion paper, participants in SEED’s basic income trial will be chosen from the population of legal adults (at least 18 years of age) who reside in any Stockton neighborhood in which the median household income is no more than $46,033, the median household income of the city as a whole. The latter provision is intended to allow the project “to be inclusive of residents across the city while ensuring that resources reach those who are in need”.
Although eligible participants must reside in a neighborhood in which the median income is at or below the city’s median, there are no limits on the individual or household income of participants. An adult resident earning above $46,033 is still be eligible to participate in SEED.
Invitations to participate in the basic income demonstration will be sent to 1000 households randomly selected from neighborhoods meeting the income condition. Approximately 100 recipients will then be chosen at random from those who reply to the invitation and give consent to participate. Those who are not selected will be eligible to join the control group. Members of the control group will share the same type of information with the researchers (e.g. information about their financial security, health, and well-being), and they receive compensation in cash for their participation in supplying data, but they will not receive the $500 monthly income.
The invitations are to be mailed by January 2019, with first payments anticipated in February.
Project Assessment
Lead researchers West and Castro Baker will publish a pre-analysis plan in October, which will present the study’s methodology in depth.
But SEED’s latest discussion paper does provide a few new details: the project will examine outcomes including “financial security, civic engagement, and health and wellness” through a combination of surveys, interviews, and focus groups, and the research team will compare outcomes among the cash recipients to those of a control group (which, as mentioned above, will be composed of others from the population of eligible participants).
Although SEED is now to include a controlled experiment, the project still calls itself a “demonstration” instead of an “experiment”, and this not due (merely) to the attractiveness of “SEED” as an acronym rather than “SEEE”; the generation of stories and anecdotes remains a core purpose of SEED.
As also described in the recent discussion paper, Mayor Tubbs and his team aspire to produce stories about how a modest guaranteed income impacts individual lives, as well as how a social experiment impacts a city.
The demonstration will track the individual experiences of a small group of participants who volunteer to speak publicly about the effects of the program on their lives. Artists will also assist in delivering the narrative. For example, the paper indicates that a public event featuring poetry and spoken word performances is to be held at the conclusion of the project.
In addition to telling the stories of individual recipients, the SEED team intends to set the project “in a larger framework for a broader vision for a new social contract”, presenting it “as part of the larger story of Stockton, a trailblazing city on the rise”.
Motivation
The Stockton project is motivated by the belief that an unconditional basic income is “one of the most effective tools” to reduce poverty and mitigate economic insecurity. SEED states, “We are motivated to test a guaranteed income in Stockton because we believe it is to combat poverty. Unconditional cash can supplement and enhance the current social safety net.”
Inspired by Dr. Martin Luther King Jr.’s endorsement of a guaranteed annual income, Mayor Tubbs developed an interest in basic income as part of a broader program to help his city recover from economic devastation. Hit badly by the economic collapse of 2008, Stockton was declared “America’s most miserable city” by Forbes in 2011 and filed for bankruptcy in 2012, becoming the largest US city to have done so at the time (although soon surpassed by Detroit).
Tubbs was elected to Stockton’s City Council in 2012, at the age of only 22, and in 2016 defeated incumbent Anthony Silva to be elected as mayor of the city of 300,000 — the youngest mayor in the city’s history and the first African American.
Since assuming office, Tubbs has pursued a range of initiatives to combat the effects of economic devastation. He led Stockton in creating a Housing Mitigation Fund to reduce financial risk for landlords who rent homes to the homeless, for example, and he secured a philanthropic grant to launch another privately funded initiative, Stockton Scholars, which provides scholarships to help Stockton high school students attend college or university. Mayor Tubbs also spearheaded a partnership with the city and Advance Peace, a controversial program that aims to reduce gun violence by providing cash assistance and other personal support to those most likely to commit violent crimes. In addition to heading SEED, he is currently constructing a re-skilling program to help close the skills gap between employers and Stockton job-seekers.
It is against this background that SEED declares it is “taking place within a larger collective impact model to build a world-class cradle-to-career pipeline of education, public safety, and opportunity”.
A “Basic Income” Trial?
Past articles in Basic Income News have stressed that many existing so-called “basic income” experiments are constrained in ways that call into question their resemblance to a universal and unconditional basic income. In many cases, for example, participants have been selected only from pools of individuals with low incomes (Ontario, Y Combinator), who are unemployed (Finland), or who are currently receiving other welfare or social assistance benefits (The Netherlands, Barcelona). In some cases, moreover, the cash payments are reduced with earned income (e.g. Ontario, The Netherlands).
The design of the Stockton pilot is notable in that there is no requirement that individual participants be low-income, unemployed, or receiving government assistance. As mentioned above, participants must reside in neighborhood with an average income at or below the city median; however, participants themselves needn’t have an income below this level (e.g., in principle, invitations to participate could be sent to affluent investors who has purchased homes in low-income Stockton neighborhoods with the hope of later turning a profit).
Additionally, the $500 payments will not be clawed back with additional earned income. That said, however, other benefits might. SEED is currently working with government benefits agencies to determine how the unconditional cash grants will impact recipients’ eligibility for means-tested benefits. Under current US policy, such a $500 per month of “reasonably anticipated income” would generally need to be reported as household income. However, Tubbs hopes to secure waivers for participants to prevent or mitigate potential loss of benefits during the trial. SEED states that it will provide potential recipients with detailed information about the effect of participation on public benefits, as well as providing opportunities to consult with benefits eligibility counselors prior to consenting to join the project.
More Information
Official Paper: “Our Vision for SEED: A Discussion Paper” (August 20, 2018).
Official Website: www.stocktondemonstration.org.
by Guest Contributor | Aug 17, 2018 | Opinion
Written by: Alfredo Roccia
We talk so much about freedom.
-Ingmar Bergman, The passion of Anna
As argued by Karl Marx, “it is not the consciousness of men that determines their existence, but, on the contrary, their social existence determines their consciousness.”[1] Despite acknowledging the importance of external factors on men’s freedom, Jean-Paul Sartre did not share the Marxian thesis, however, asserting that “we have the war we deserve,” namely man, “being condemned to be free,” is only “responsible for himself,” regardless of their surrounding environment.[2] Therefore, according to the French philosopher, human beings have the decisive possibility to give meaning to their existence in absolute freedom, without any influence from pre-established principles.
However, what do we do when the future we want is precluded by precarious economic conditions or a staleness social system? What if we had to settle for what Martin Heidegger called “inauthentic” existence rather than pouring all our abilities out?
It is on the fine line between what Marx and Sartre exposed, that we could position the Universal Basic Income (UBI) and its significative impact on humanity’s freedom in a future scenario.
Although the reasons-be them of political, economic and social nature-which UBI advocates opt for, we could essentially group them in three sets of problems: (1) the current levels of unemployment, (2) the work threatened by the new advent of machines, (3) the current social care system as not sufficient for twenty-first century needs.[3]
However, the aspect of UBI which has won me over, besides the financial security that would result, is the freedom of choice that UBI could generate or at least reinforce in modern society. Also, those who Need Money Desperately might find this a huge relief. It can also pave way for their financial planning because now they have a recurring income to depend on.
A freedom that would allow everyone to express and legitimize his or her own talent through any job or activity without any kind of diktat from the market or society.[4] I personally consider this aspect deeply interesting since today, more than ever, human beings seem to have lost the ability to say “no,” being slaves of constant financial insecurity, trapped in not always satisfying careers, stressful working hours and short leisure time.[5]
Indeed, how do we define leisure time? Would it be perhaps a vacation every month, running away from the working stress, an apparent getaway from an unsatisfying life? Or maybe focusing on our own passions and talent just during weekends, because of the scarce free time we have, stolen from a job we do not love-therefore constantly working, ignoring the need for a vacation?[6] I believe it is clear how greater financial security would consequently enable a greater possibility of choice, less influenced by external factors, allowing our creativity to run riot, giving us greater flexibility within our lives.[7]
Staying in the creative sphere, it is clear how UBI could have a significant weight within the work of artists. Namely, it could help those who choose to devote themselves to art, despite sometimes agreeing to accept jobs not totally in line with their ambitions or realizing works whose typically commercial nature is imposed by the market and the need of paying the rent by the end of the month, rather than their artistic will.
Not being technically an artist, but feeling very tied with disciplines like photography, music, cinema or literature, I quite sympathize with those persons who, not being able of practice their own talent freely, are forced to follow careers alien to their pure artistic ambitions. However, thanks to current web platforms like YouTube, many young artists-among which also poets and philosophers, categories perhaps more penalized today than in the past from the job market-can display their own knowledge and talent through video tutorials, lessons, performances, etc., that are free and available to everyone. But, how can they finance all of this, since the working time required for writing, shooting, editing, and post-producing a very short video requires quite a lot of time? There are ways to make money from YouTube, such as by growing a large following and monetizing your videos. For small channels, it might be worth visiting Venturebeat to learn about buying YouTube subscribers. That could help the channel to grow, eventually leading to the channel making some money. However, there are other ways too. Crowdsourced funding platforms like Kickstarter, Indiegogo, Patreon (just to mention some), can help young creative minds by promotional campaigns for financing a single project (see Kickstarter) or by subscriptions that provide an income on a recurring basis or per work of art, in return of special contents or rewards (see Patreon).[8] Sounds familiar, doesn’t it?
So, it seems a kind of artistic basic income is already here and works quite well: many of these young artists can support their expenses with the help of their own backers, changing also the direction to their own career. It is common to see some of them quitting their job or devoting themselves to that virtual activity indeed.[9]
For instance, a case that personally surprised me and which I consider significative is that of a young YouTuber, Paul Davids, a Dutch musician who has shared video lessons about guitar and music theory since 2009.[10] Later, Paul joined Patreon, proposing special contents for his patrons, in exchange for a subscription. On February 20, 2018, Paul published a video telling his followers that he quit his job as a guitar teacher so he could devote himself to what he truly loves: offering high-quality videos, investing his time to improve his guitar skills and making more music.[11] It is interesting to note how Paul decided to quit that activity on which many musicians are “forced” to make do, namely scholastic or private teaching.[12] A difficult choice, but he thinks it could bring him more freedom to “take on bigger projects requiring more time.”[13]
Another example is the Patrick (H) Willems channel, registered on YouTube since 2011 and dedicated to short movies production and video essays about cinema. On a video published on May 7, 2018, the founder Patrick Willems shared the ambition of financing his works through Patreon community, so as to update his working tools, acquire a proper studio, and become more independent. He stated that he was grateful for getting as far as he could using equipment similar to avid media composer first editing software, audacity, and other free resources.
[14]
Those of Paul and Patrick are only some of the hundreds of cases in which young YouTubers, by the funding of Patreon or similar services, can finally pour their own ambitions out through a greater financial security.[15]
But, how long will all of this last? Can we really think that platforms such as Patreon could support young artists forever, behaving as a proper basic income?
Actually, it is important to stress how crowdsourced funding could not replace any form of UBI because of their fundamental differences. It is true how they allow people to collect money through crowdfunding and perhaps even more than what a person could get with any current experiment involving UBI. However, crowdsourcing is breaking what is probably the first rule of UBI, namely its universality. Platforms such as Patreon are not open to everybody in so far as creators need to offer content in return for being supported by their community. Poor or “uncreative” people are evidently excluded from this policy. Moreover, those platforms are usually made by private companies and run for private purposes: they could stop anytime, evolve in something totally different or even close the business for any reason. This could really affect people from planning their own career grounding on a variable amount of money they can get every month, while UBI would be potentially perpetual as well as more inclusive.
However, despite being its surrogate, crowdsourced funding is the proof that the UBI concept can be extremely useful for young artists, at least at the beginning of their career. Moreover, it could allow them to go beyond the current constraints which those platforms implicate-not always making frequent content can be an attractive thing for videomakers-as well as to exceed the rather narrow frame of YouTube.
Perhaps, we should start with what those platforms are representing at the moment and try to mutate the modern perception we have about work and the current values system which characterize it. A greater freedom for artists could mean a boost of creation of those “things that enable market production but lie outside the monetary system,” in a structure in which UBI would have been seen “as capital, and not just money,” allowing a cultural renaissance and the production of new values for an invigoration of the twenty-first century economy.[16]
About the author:
Alfredo Roccia is an Italian-born architect working in London, UK. He studied architecture at the “Università degli Studi di Napoli Federico II”, where he graduated in 2012. In the past five years, he has worked in Italy, the Netherlands and the United Kingdom, where he currently lives.
[1] Karl Marx, preface to A contribution to the critique of Political Economy, trans. Nahum Isaac Stone (Chicago: Charles H. Kerr & Co., 1904; initially published in German as Zur kritik der Politischen Oekonomie in 1859), 11–12.
[2] Jean-Paul Sartre, Being and Nothingness, trans. Hazel E. Barnes (New York: Philosophical Library, 1956; initially published in French as L’Être et le néant in 1943), 553–5; Jean-Paul Sartre, Existentialism and Humanism, trans. Philip Mairet (1948; repr. London: Methuen, 1960; initially published in French as L’Existentialisme est un humanisme in 1946), 29.
[3] For a deepened analysis about UBI and its more recent applications consult: Philippe Van Parijs and Yannick Vanderborght, Basic Income: A radical proposal for a free society and a sane economy (Cambridge, MA: Harvard University Press, 2017); Guy Standing, Basic Income: And how we can make it happen (London: Pelican, 2017); Amy Downes and Stewart Lansley, eds., It’s Basic Income: The global debate (Bristol: Policy Press, 2018).
Various are the forms that UBI is assuming in current debates and during tests adopted by some countries. However, herein I will refer to its most “pure” version, that is “an unconditional, automatic and non-withdrawable payment to each individual as a right of citizenship.” Malcolm Torry, “History and the contemporary debate in the UK” in Downes and Lansley, Basic Income, 123–4.
[4] “Somehow release those who are technically and imaginatively proficient from the restraints imposed by the business system and there will be unprecedented productivity and wealth in the economy.” John Kenneth Galbraith, A history of Economics: The past as the present (London: Hamish Hamilton, 1987), 172. In this passage, Galbraith summarizes the thought of the economist and sociologist Thorstein Veblen as he made explicit in his Theory of business enterprise (1904).
[5] Matt Zwolinski, “The libertarian case for universal basic income” in Downes and Lansley, Basic Income, 152. According to Society for Human Resource Management (SHRM), “nearly two-fifths (38%) of U.S. employees reported that they were very satisfied with their current job, whereas a greater proportion (51%) stated they were satisfied but to a lesser degree, indicating that the majority of U.S. employees are to some extent satisfied with their present job role.” SHRM, “2017 Employee Job Satisfaction and Engagement,” accessed May 28, 2018, https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Documents
/2017-Employee-Job-Satisfaction-and-Engagement-Executive-Summary.pdf.
[6] John Maynard Keynes already dealt with problems within a future “age of leisure” in his “Economic possibilities for our grandchildren (1930),” in Essays in persuasion (New York: Harcourt Brace, 1932), 358–73.
[7] “We need to make the case that entitlement to an income and a dignified life should not be dependent on working for an employer, nor conditional on searching for employment. A basic income would free people from this compulsion, granting them much fuller freedom to direct their lives, engage in civic activity, or enjoy leisure time.” Avi Lewis and Katie McKenna, “A down payment on a new cooperative economy” in Downes and Lansley, Basic Income, 72.
[8] cf. GoDaddy Inc., “Top 20 crowdfunding platforms of 2018,” by Erick Deckers, last modified February 27, 2018, https://www.godaddy.com/garage/top-20-crowdfunding-platforms/.
[9] In 1969 Nixon administration already launched the “Family Assistance Program (FAP),” a welfare reform proposal whose unexpected results showed an increase of the time devoted to study or artistic activities by people involved in the experiment. cf. Jacobin, “Nixon’s Basic Income Plan,” by Rutger Bregman, accessed May 28, 2018, https://www.jacobinmag.com/2016/05
/richard-nixon-ubi-basic-income-welfare/.
[10] Paul Davids, YouTube channel, accessed May 28, 2018, https://www.youtube.com/user/Luapper/about.
[11] “Giving guitar lessons, especially private lessons, they are very time-consuming and with YouTube I get so many cool and awesome offer, all of the things I simply can’t do because I don’t have the time.” Paul Davids, “I’m Quitting,” February 20, 2018, YouTube video, 5:29, https://www.youtube.com/watch?v=6nruh9SSXoQ.
[12] “For many musicians…teaching is a way to pay the rent, to pay for food and everything else. When you don’t have many gigs, you want to have a secure income…but nowadays YouTube and everything around…can provide for those things for me.” Davids, “I’m Quitting.”
[13] “I’m very relieved to quit teaching. From now on I can really focus on my channel, work harder for my videos, accept more cool side projects and hopefully play in more bands.” Davids, “I’m Quitting.”
[14] “In the past year the channel finally got to the point where I can afford to do it full-time…just making enough to live off of. So, there isn’t much money left to put into the budgets for the video themselves.” Patrick (H) Willems, “Upgrading Our Videos (Patreon Announcement),” May 7, 2018, YouTube video, 3:48, https://www.youtube.com/watch?v=L6A57-1JteA&t=0s&index=2&list=WL.
[15] “We’ve got…a hundred and sixty-nine thousand subscribers. So, imagine if every one of them pledged $1 a month, it would be crazy!” Willems, “Patreon Announcement.”
Following the live streaming video platform Twitch, other companies such as YouTube and Facebook have recently launched the option of sponsoring videomakers. Artists make more money the more followers they have which is why many of them use one of the 22 Best Sites to Buy Twitch Followers to increase their profits. cf. Business Insider UK, “Twitch raises incentives for creators,” by Kevin Gallagher, accessed May 28, 2018, https://uk.businessinsider.com/twitch-raises-incentives-for-creators-2017-4?r=US&IR=T; CNBC, “Facebook is opening up ways for video creators to make money,” by Michelle Castillo, last modified March 21, 2018, https://www.cnbc.com/2018/03/19/facebook-opening-up-ways-for-video-creators-to-make-money.html; Variety, “YouTube Kills Paid Channels, Expands $4.99 per Month SponsorshiModel,” by Janko Roettgers, accessed May 28, 2018, https://variety.com/2017/digital/news/youtube-kills-paid-channels-1202563599/.
[16] Roope Mokka and Katariina Rantanen, “Universal basic income for the post-industrial age” in Downes and Lansley, Basic Income, 65–6.
by Karl Widerquist | Aug 1, 2018 | Opinion, The Indepentarian
This essay was originally published on Basic Income News in August 2014.
The right-libertarian journal, Cato Unbound, has published a 4-party debate on Basic Income Guarantee (BIG) this month. Matt Zwolinski started it off with a second-best or pragmatic argument for BIG. He doesn’t say outright that BIG is better than many right-libertarians most favored policy of eliminating of all redistribution of property, but he argues that BIG is far superior to the complex and inefficient system that characterizes the current welfare system.
Manzi’s response stems from standard for the property-rights-with-no-exceptions version of libertarianism. In a nutshell, BIG would probably reduce how much propertyless people work for people with property; therefore, necessarily, it is bad. He dismisses Zwolinki’s argument that work disincentives can be a good thing by labeling it “subjective” and “value-laden,” without noting that a subjective and value-laden argument can only be countered by another subjective and value-laden argument, which he does not offer. He just assumes any and all work disincentives are bad. So, he doesn’t actually lay a glove on Zwolinski’s argument.
The closest he comes to explain the values that led him to the belief that all work disincentives are bad is to say that BIG has always been unpopular in the United States. Yet, to say something is unpopular is not say whether it is a good or bad thing. It doesn’t say whether we should try to change people’s minds about it. At any time in American history up until five or maybe ten years ago, he could have made the same argument against same-sex marriage. Now it’s popular; thanks to people worked hard to change other people’s minds. Is BIG or anything else worthy of a similar effort? Manzi implies that nothing that is currently unpopular is ever worth the effort to change people’s minds.
Manzi mentions my article, “A Failure to Communicate: What (If Anything) Can we Learn From the Negative Income Tax Experiments,” but doesn’t actually engage with its arguments about work disincentives. One argument is that any decline in work effort would—by standard theory—cause an increase in wages partly counteracting the decline in work effort and further increasing the incomes of the working poor—presumably the people a BIG is supposed to help.
Another argument in that article is that the “decline” in work effort was only relative—the experimental group vs. control group. But the experiments also found whether people were in the experimental or control group was not the primary causal factor determining whether they worked or not. The macroeconomic health of the economy was more important in determining how much a person worked than whether or not they received a BIG. Therefore, the experiments indicated that if you have a strong macroeconomy, you can have both BIG andhigh employment. People who received a negative income tax took more time to find the right job, but in all the experiments, if good jobs were available, people took them. If you want propertyless people to work for the owners of property whether or not jobs pay decent wages or provide good working conditions, then the absence of BIG or anything like it is what you should favor. If you want all jobs to be good jobs, BIG is the policy to favor.
Cato Unbound
Another of the main arguments in my article was that, without foundation, many people responded to the evidence of a relative decline in work effort by making a subjective and value-laden assumption that all reductions in work effort are necessarily a bad thing. Manzi makes that very assumption and does not explain—much less defend—the subjecctive foundations underlying his assumption.
It’s what he leaves out, what he doesn’t call attention to, that is the real problem in Manzi’s article. Typical of some brands of right-libertarianism, it’s from a tradition of newspeak. He’s for slavery and he calls it freedom. It’s perhaps unfair to hang all of the rest of what I have to say on Manzi, but it is a common position running throughout a great deal of right-libertarian literature from Nozick and Rothbard and many, many others. Manzi’s essay, by the absence of its foundations, is a good example of how successfully this argument has become taken for granted—not just among right-libertarians but in mainstream political dialogue.
In the rights-based libertarian tradition, a situation in which one group of people has no other option but to work for another group of people is called “freedom” as long as that other group of people are called “property owners” and the working class is propertyless. I call it slavery, but to right-libertarians the opposite is slavery. Any redistribution to relieve people from forced work is supposedly reduces freedom; it’s even “on par with forced labor,” in Nozick’s words. If property owners give jobs or charity to the propertyless, that’s “voluntary” and consistent with freedom, but if the government taxes and redistributes property that’s “force,” “coercion,” and “interference” which supposedly violates negative freedom.
How did these propertyless people get into the position in which they have to work for the propertied? Over a long history, property owners use the force of the legal system to force, coerce, or interfere with other people, establishing “property rights” without the consent of or compensation for the people they thereby force into a state of propertyless. Before property rights, all were free from interference to use the resources of the Earth as they wished; under the type of property rights we have today and under the ideals envisioned by right-libertarians, “property owners” are free to interfere with any use the propertyless might make of the Earth’s resources. When everything is owned by someone else, the propertyless lose so much liberty that they’re unfree to work for themselves. They’re effectively born in debt, owning their labor to the to at least one member of the group that owns property. They face interference with anything in the world they might do for themselves unless and until they accept a subordinate position to a property owner? Doesn’t that make them unfree in the most negative sense of the term?
Right-libertarians usually get around this question by definitional fiat. The interference the rich do to the poor, when they say “We own the Earth and you don’t,” simply doesn’t count. It’s not interference because it doesn’t violate your rights. You have no right to the land; therefore, you have no right to be free from laboring for the people who do, and so we don’t even call it a loss freedom when use the force of the legal system to maintain that situation. The poor are always born in debt, every generation owing their labor to the propertied group, but that doesn’t make them “unfree” because they have no right to be free from being born into debt. I hope this makes my allegation of right-libertarian “newspeak” clear.
Of course, right-libertarians tell us that they defend property rights because they believe in freedom. Now we see that they’re simply defining freedom as the defense of the property rights system they want to see. This is why I think it is fair to use to term tautological libertarianism to describe versions of it that simply define freedom as the freedom do what you have the right to do. They argue we must have libertarian property rights so we can be free, but libertarian freedom turns out to be defined as nothing but the exercise of property rights so defined. Or they argue that we must define property rights this way so that people can be free. And around and around the logical circle we go. Not all libertarians (or even all right-libertarians) take the tautological shortcut, but far too many of them do. A circular argument can appear very powerful if you don’t reveal the whole circle at once. One paper argues this: we must have the definition of property rights because freedom is important. Another paper argues this: we must have this definition of freedom because property rights are important. If you show only one argument at a time, it appears powerful. You put both arguments together, and you have no argument at all. The less of the logic you see, the more powerful the argument appears to be.
You would need a powerful argument to explain why interfering with the propertyless in such a way as to put them effectively in debt to the upper class simply doesn’t count as a violation of freedom. And such an argument could only be subjective and value laden. But if the treatment of property ownership as synonymous with freedom is pervasive enough, you never have to make that argument. You can take it for granted.
Manzi expects his readers to take that kind of argument—or some other subjective and value laden argument—for granted when he assumes that any reduction in the number of hours the propertyless are forced to work for the propertied group is necessarily a bad thing. That’s slavery caused by the application of force, interfering with negative freedom of individuals to do things for themselves. He can call it freedom if he wants, but it’s still slavery.
-Karl Widerquist, Virginia Beach, VA (revised Roanoke, VA), August, 2014
