by BIEN | Sep 6, 2015 | News
The Finnish Government is interested in the basic income. Prime Minister Juha Sipila has expressed support for the idea, saying, “For me, a basic income means simplifying the social security system.” 4 out of 5 Finns currently support the basic income, but some policy experts have expressed hesitation to endorse the policy. Ohto Kanninen, from Tank Research Centre, said, “What would be the impact of a basic income to employment in Finland – positive or negative? We can’t really foresee how people would behave with a basic income.” Consequently, a pilot is being considered. The project would pay 8,000 people from low income groups four different monthly amounts, possibly ranging from €400 to €700. The Finnish constitution requires every citizen must be equal, which could prevent the project, but this requirement could be waived to gain information for the good of society
For more information on the Finnish basic income project, see:
“Finland considers basic income to reform welfare system” Maija Unkuri, BBC News. August 20, 2015.
by Josh Martin | Sep 5, 2015 | News
The movement for a basic income guarantee in Canada gained further support as 178 Canadian physicians have signed a letter delivered to Ontario’s Minister of Health that states their support for a basic income. Current health issues in Canada clearly show links between income level and health outcomes, and these physicians believe that a basic income could reduce toxic stress and lead to improved health outcomes. This support continues the Canadian movement for a basic income that has made the news in Prince Edward Island as well as in Edmonton and Calgary.
To read the letter and to learn more about the health reasons for a basic income, click on the following link:
“A basic income guarantee may be the best medicine”, Upstream, 17 August 2015.
by Will Wachtmeister | Aug 25, 2015 | News
From: https://en.wikipedia.org/wiki/People’s_Party_for_Freedom_and_Democracy#/media/File:VVD.svg
A local branch of the powerful Dutch liberal party VVD has issued a strongly worded rejection of the proposed basic income pilot project for the city of Utrecht.
The VVD’s Utrecht spokesperson on work and incomes Judith Tielen writes that she is responding to questions from the public about the city’s “ridiculous experiments” and gives seven reasons why her party opposes the basic income pilot: poor experiment design; costs; the moral need for benefit recipients to reciprocate; the reasonable nature of current conditionality; the risk of increased “hammock-based” welfare scrounging; the primacy of national over local legislation as well as a general claim that basic income doesn’t solve anything but actually creates more problems.
The intervention by the VVD, whose leader is Dutch prime minister Mark Rutte, illustrates the lines of attack that basic income opponents will take when the Utrecht initiative is debated by local politicians in September [2015] and more generally, as basic income continues moving up the national political agenda.
Language DUTCH:
Judith Tielen “7 redenen waarom de VVD het ‘experiment basisinkomen’ in Utrecht afkeurt”, VVD Utrecht website, 11 August 2015
by Vito Laterza | Aug 22, 2015 | News
The new bailout agreement between Greece and international creditors includes plans for a national roll-out of a Guaranteed Minimum Income (GMI).[i] The GMI is not an unconditional basic income for all citizens, but would be the first universal means-tested grant that covers all Greeks below a certain level of income and asset ownership, regardless of employment status, job contract type, professional category, gender or age.
Alexis Tsipras
In the latest round of bailout negotiations, Greek Prime Minister Tsipras reportedly opposed the introduction of the GMI. The final memorandum approved by the Greek parliament last week, however, provides for a national roll-out of the GMI by end of 2016. The government needs to find 0.5% of GDP to finance the national GMI scheme. A draft report from the World Bank published in January this year, provides a core scenario where 1.2 million people would be covered by the GMI – this is constructed on the basic qualifying criteria and payment amounts of a GMI pilot started last year. The measure would cost €980 million or 0.54% of GDP.[ii]
The general wording of the bailout agreement remains vague and the GMI has not yet been approved by parliament. The specifics of implementation will only be known in the next months.
Recent political events are another source of uncertainty. Tsipras resigned on Thursday and called for snap elections, following a rebellion by those opposed to the bailout within the ranks of his party, Syriza. The elections are expected to be held at the end of September. The rebels have formed a new left group which will run under the banner of Popular Unity.
This casts some doubts over the stability of the next government, and might have implications for the bailout implementation. Sources close to the majority line in Syriza stress that, despite the harsh bailout measures, any future government led by Tsipras would be committed to a social agenda that prioritises those who are in most need.
The history of the GMI in Greece
Attempts to introduce a GMI as a basic social safety net for the most vulnerable sectors of society have been made before. In 2000, the centre-left government led by Pasok assessed and then rejected a proposal in favour of this option. Syriza also tabled a legislative proposal to institute a GMI in 2005, without success. In recent times, the GMI has rarely appeared in policy debates, encountering resistance from many quarters. Trade unions and left-wing critics see the GMI as a threat to well established social protection mechanisms for unionised workers, pensioners and their families. From the right, a pro-poor agenda struggled to gain any prominence until the recent economic crisis brought about by the austerity measures of previous bailouts.[iii]
Economist Manos Matsaganis in Greece
The previous coalition government, led by the centre-right party New Democracy in alliance with centre-left Pasok, feebly endorsed a GMI and launched a pilot in November 2014, engineered by the World Bank. The pilot was to be implemented in 13 municipalities across Greece. It’s too early to make final conclusions about it – the new bailout agreement includes provisions for an evaluation of the pilot to be carried out. In a recent academic paper, Matteo Jessoula, Manos Matsaganis and Marcello Natili suggest that there were problems, with little support from central government to the chosen municipalities, and limited capacity from local governments to deliver, resulting in haphazard implementation.[iv] The GMI amount was set at €200 per month for a single person. In a couple, the other spouse was entitled to an additional €100. The monthly sum was increased by €100 for each additional adult dependent and €50 for each minor child. The cash payments would cover the difference between the guaranteed amount and the household’s assessed resources. A couple with two children would fetch up to €400 per month. The GMI also had non-monetary components, including heating allowance, food stamps, and subsidised employment and training programmes.[v]
By the time the GMI pilot was launched, it was strongly opposed by Syriza. Many saw it as a measure instigated by the creditors to justify major cuts in other welfare measures and substantial reductions in wages, while introducing an income floor well below decent living standards. Observers note that the GMI debate rarely hit the spotlight, on either side of the political spectrum, and has been mostly confined to technical discussions among policy experts.
Towards a basic income?
Is the GMI then irrelevant to basic income discussions? Economist Manos Matsaganis, basic income advocate and a pioneer of Greek GMI policy proposals, is not optimistic: “Nobody is really discussing this at the moment, either within Syriza or outside. In any case, calling for the introduction of a basic income in Greece under current conditions would not be right. You cannot have a basic income before having a GMI, especially when fiscal constraints are so severe”. Social policy expert Varvara Lalioti is more positive: “There are a number of obstacles to the implementation of GMI, not least the current government’s political scepticism and problems with delivery. A national roll-out of the GMI would be a step in the right direction”.
Syriza demonstration
The controversies around the GMI are symptomatic of the kind of resistance that might be encountered against basic income as well. The key issue seems to be the implementation of a universal mechanism that would substitute to some degree the redistribution of public funds through specific interest groups – for instance workers protected by unions or retired people receiving contributory pensions.
Critics point out that the GMI might constitute a race to the bottom pushed by creditors in order to reduce labour costs and state liabilities. GMI supporters like Varvara Lalioti note that, while government scepticism might be justified, “the GMI would protect those who have no social safety net and no organisations to speak on their behalf. They are among those who have borne the worst effects of the crisis”.
The controversies will no doubt continue in the next months. Basic income activists note that what the GMI might do is put in place the bureaucratic infrastructure needed to deliver a basic income set well above poverty levels. Reflecting the experience of other southern European countries, the Greek welfare state evolved piece-meal and reflects a complex constellation of interest groups. The introduction of a measure that covers people with little or no income from formal labour markets, and who have never worked under job contracts offering significant welfare benefits, is a significant change. It is likely to have important implications for the future of basic income discussions in Greece.
The article benefited from the expert advice of Dr Varvara Lalioti, Professor Manos Matsaganis and Professor Neni Panourgia. Errors are the sole responsibility of the author.
[i] The Memorandum of Understanding underpinning the bailout agreement.
[ii] World Bank. 2015. Ex ante poverty and fiscal evaluation of a guaranteed minimum income programme in Greece. Washington, D.C.: World Bank Group.
[iii] A detailed account of the different positions and criticisms in the Greek GMI debate is offered by Varvara Lalioti’s academic article “The curious case of the Guaranteed Minimum Income (GMI): highlighting Greek ‘exceptionalism’ in a southern European context”, forthcoming in the Journal of European Social Policy. An earlier version is available online here.
[iv] Matteo Jessoula, Manos Matsaganis and Marcello Natili. 2015. “Strengthening minimum protection in southern and eastern Europe? Pressures from within and from beyond”. 22nd International Conference of Europeanists, Paris, 8 July. Abstract available.
[v] Hellenic Parliament – Parliamentary Budget Office. 2014. Minimum Income Schemes in European Union and Greece: a Comparative Analysis.
by Guest Contributor | Aug 10, 2015 | Opinion
Busiso Moyo
[The Southern African Development Community (SADC) member states are characterized by high levels of poverty and some of the highest levels of inequality globally, albeit endowed with high levels of mineral resources. – ed.]
By Busiso Moyo
Despite being endowed with many natural resources, Sub-Sahara Africa (SSA), wherein 13 of the 14 SADC countries are located, ranks amongst the worst regions globally in terms of poverty and socio-economic inequalities. Evidently, for the region, the capitalist ‘trickle down’ effect of wealth to all citizens in the context of a neoliberal global political economy has proven to be a fallacy. As such, now more than ever, it has become imperative for African governments to prioritize social protection namely through the provision of a Basic Income Grant (BIG) for all residents furnished through universal Social Cash Transfers (SCTs).
A cursory look at SADC countries’ socio-economic circumstances clearly reveals the need for upping efforts towards social protection to ensure that the most vulnerable are safe from destitution. South Africa, the economic mecca of Africa, despite being a middle-income country, is the one of the most unequal countries in the world. People with access to wealth experience the country as a developed modern economy, while the poorest still struggle to access even the most basic services. On the other hand, since the late 90s, Zimbabwe’s economy slowed down and grounded to a halt by 2008 due to socio-political challenges that still bedevil the country to this day. Unemployment is estimated at 80% to date thus leaving the majority of people in abject poverty. Furthermore, 5.3 million people or 50% of the Zambian population falls under the poverty line coupled with the fact that 70% of Mozambicans are classified as ‘poor’. Consequently, poverty and socio-economic inequalities have left the majority of people within the SADC-region food-insecure and with many of the region’s children’s educational aspirations frazzled.
Amidst the above, South Africa has borne the brunt of regional poverty and inequalities as the net receiver of socio-political economic refugees from around Africa especially the SADC region, resulting in refugee management headaches for authorities and ills like recurrent xenophobic attacks on non-South Africans. Therefore, a SADC-wide BIG would not only serve as a buffer against poverty but would be utilized as a stabilizing force to stimulate local and regional growth in-turn curbing one-directional mass movement of people to countries like South Africa.
A universal SADC-wide unconditional social cash transfer to all citizens of no less than US$15 per month, would go a long way in curbing destitution. SCTs, as opposed to in-kind gifts, give beneficiaries the freedom to acquire what they need exactly. This freedom to choose in itself constitutes human security.
The fact that poverty is dire in SSA should not simply be left to the sphere of development practitioners with an interest in poverty-alleviation, but as an obstacle to the enjoyment of many human rights ought to be a concern of all change agents within society. For States and capital-interests within the region in particular, the role of SCTs as the best intervention strategy in the fight against poverty cannot be ignored any longer. Granted, some scholars have alluded to the fact that the notion of social cash transfers brings about dependency amongst beneficiaries and removes the impetus for seeking meaningful employment. So what? People deserve to benefit from the region’s natural resources in a non-prejudicial manner, especially in the pervasive absence of formal jobs. Nonetheless, for the half-convinced, its high-time we acknowledge that the poor are in fact good managers who already know how to do best for their families with the little they have. Many sustain the survivalist economy at the bottom of the pyramid with such wise daily financial decisions. For scholars such as Joseph Hanlon, the questioning of the frugality of the poor is tantamount to blaming the poor for their circumstances. Moreover, such feeble arguments show a lack of appreciation for the political history of SSA and its structural make up. Worse still this mindset portrays a blind endorsement of the neoliberal agenda. Remarkably, a study of European history shows that social protection came first, then economic growth. Indeed saving and/or the entrepreneurship-spirit cannot happen when the majority of people have to endure hunger-pains.
Empirical evidence of successes of SCT schemes globally abound. Brazil’s 2003 initiated Bolsa Familia SCT scheme, supporting about 12 million families, has to date decreased inequality by 17% and the poverty rate has fallen from 42.7% to 28.8%. For the South African experience, social safety nets such as the child grant have already shown that SCT schemes are capable of producing positive outcomes. Gharagozloo-Pakkala observes the following, ‘In South Africa, the child grant reduced the poverty gap by 47%; in Kenya unconditional cash transfers saw a 19% increase in primary school enrolment among ‘hard-to-reach’ children; in rural Ghana, for every one Cedi transferred, 1.50 Cedi of income can be generated in the economy”. Malawi’s Mchinji district’s SCT scheme also testifies to a positive turn of SCTs. SCTs are recorded to have “…influence[d] household productive capacity [and]…ownership of agricultural assets increased 16 per cent…”
Having shown the need for a BIG and it’s transformative power, it is necessary to conclude this piece by observing that in a region blessed with natural resources the issue of a BIG roll out to all – SADC residents, refugees, economic migrants, asylum seekers funded by proceeds from extractive industries and other actors, is not ‘alms’ giving or a charitable gesture, but is an act of economic and social justice, and most importantly an investment in the poor’s human capital!
SADC wide BIG
“Make the Change Happen!” – Support the call for a SADC BIG. Visit www.spii.org.za
Busiso Moyo is an Advocacy and Campaigns Officer with the Studies in Poverty and Inequality Institute (SPII).
