by Sandro Gobetti | Mar 17, 2018 | News
Basic income, the whole world talks about it. Experiences, proposals and experiments this is the title of a new book by Sandro Gobetti and Luca Santini, with a preface by Andrea Fumagalli, published by GoWare Edizioni (March 2018).
Description
At the dawn of a new great transformation with the advent of the technological revolution, robotics and artificial intelligence, and in the age of major crises (economic, financial, political and ecologic), comes the echo of a proposal that opens unpublished scenarios: a basic income for all. In the era of the capitalism as a unique economic model, the idea of a guaranteed income rises up as one of the main human rights.
From experiences of minimum income inEuropean countries to the experimentation of an unconditional basic income around the planet, the right to a guaranteed income becomes key to fully enter, with confidence, in the third millennium. A book of agile and quick reading, written by two major Italian experts, helps to understand where we are and what we can expect.
Summary
Preface by Andrea Fumagalli
Introduction
Guaranteed minimum income and basic income
universal
Protection against social risks and minimum income: from welfare state to guarantee income
Unemployment insurance and minimum income in Europe
Systems and models of protection in European countries
What this means in practice: some examples
The universal and unconditional basic income
People talk about it everywhere. The state of the art of experimentation in the world
Africa at the forefront
What happens in Latin America
Back in the “first world”: North America
Asia, a crossroads of experimentation
The old continent that wants to reinvent itself
The debate and the proposals in Italy
Without income, without a network
A categorial and fragmented welfare
Moving situation
Essential principles for a possible proposal
Relations with unemployment benefits
Beneficiaries’ platform
The question of accessibility
Basic Income amount
Connection with the service system
Individuality
Basic Income duration
The principle of congruence
To find out more: bibliographic references for topics
European models of guaranteed minimum income
Social and labor transformations and basic income
The fourth industrial revolution, artificial intelligence, robotics and basic income
Authors
Sandro Gobetti, independent researcher and author of articles with a particular enphasis on guaranteed income. He collaborated on the 4/2009 law definition about minimum guaranteed income in the Lazio Region, and the national proposal law for guaranteed income. He is a founding member and coordinator of the Basic Income Network-Italy.
Luca Santini, lawyer, expert on migration law and social security law and has signed several articles. Has collaborated on the proposed law for guaranteed minimum income in Italy. He is the president and founder of the Basic Income Network-Italy.
This article has been reviewed by André Coelho
by Patrick Hoare | Mar 5, 2018 | News, Research
Credit to: Flickr
In a new paper, published by the Institute of Labour Economics (IZA) in December 2017, James Browne of the Organisation for Economic Co-operation and Development (OECD) and Herwig Immervoll, of both the IZA and the OECD, have discussed what the social and economic consequences might be when replacing some existing social benefits with a comprehensive basic income. The study contributes to the expanding literature (building on the work of Atkinson 1995) that uses the microsimulation technique, a method that builds a computer program based on economic inputs (such as costs, income, expenditure and savings) in order to see what the effect of one variable output (such as poverty or inequality) would be if an input was changed. It was most recently developed by EUROMOD (the only multi-country EU-wide tax-benefit model currently available), and was used in Malcolm Torry’s paper, published in May 2017 by the Institute for Social and Economic Research, which analyzed similar scenarios and outcomes to Browne and Immervoll’s. This article will compare the two papers in an attempt to better understand the growing work in this area.
The Browne-Immervoll paper focused on four countries across Europe that have different population and labour-market structures, as well as very different tax and transfer policies: Finland, France, Italy and the United Kingdom. It looked at a situation where a universal basic income (UBI) would directly replace other working-age cash-payment benefits, including unemployment benefits, social assistance and other generalised minimum-income schemes, in-work benefits, early retirement pensions (i.e. pensions paid to those below retirement age whatever their official label), student maintenance grants and family benefits. In order to ensure that hardship was not ‘built into’ the policy changes, disability allowances and housing benefits would be retained, as well as the funding of other public services, such as the provision of healthcare and education. In line with BIEN’s definition of the UBI, payments would be, in all other ways, universal, paid to the individual, provided at regular intervals in cash, and be unconditional. The funding for the reform would have to take place under budget-neutrality, which would be achieved by taxing the basic income provided and by removing any tax-free allowance from the fiscal model. The marginal rates of tax, thereafter, would remain in accordance to the rates in place prior.
Torry’s paper, dealing specifically with the UK economy, also deemed it permissible to remove tax-free allowances and to tax all earned income in order to contribute toward the funding of the reform whilst maintaining budget-neutrality. Being guided by Hirsch’s recommendations (2015) based on political feasibility, however, Torry allowed for increased Income Tax rates of up to 3 percentage points across the board to help with this funding. Additionally, and significantly, his model maintained – where necessary – the means-tested benefits entirely removed in the Browne-Immervoll version, such that if the introduction of the UBI (which he, alongside others, label a ‘Citizen’s Basic Income’) wouldn’t be sufficient in improving the economic situation of an individual, then the means-tested benefits in place prior to the reform would be available as a form of supplementary benefit.
Given the conservative (or non-existent) fiscal expansion allowed across the modelling, which in both cases is argued as being necessary for realistic simulation, the rate of the net BI payments to be provided was significantly below the poverty line in all cases. In the Browne-Immervoll model, the UBI, for adults, would be at just 21% of poverty line level (defined as 50% of median household income) in Italy (€158), at 32% in the UK (£230), at 49% in Finland (€527), and at 50% in France (€456). The tapering of income at this level (or lower for 16 to 18 year olds) had the inevitable result of an increased rate of poverty in each scenario. This effect was especially pronounced in the UK, rising from 10% to 15%, due to the fact that the UK’s pre-UBI system relied heavily on means-testing and would have, in situations of such low income levels, provided additional benefits no longer available in the new model. Though Torry’s calculated UBI for the UK was only marginally higher for both adults (£264 per month) and young adults (£216 per month), the poverty rate under the conditions of his scheme followed the opposite trend and dropped substantially, falling from 14.84% to 11.8%. This difference – the effect of which is relatively even greater given the fact that Torry, in line with De Agostini, 2017, defined the poverty line as 60% of median household income – can largely be explained by the fact that Torry retained the very same means-tested benefits that Browne and Immervoll removed.
The analysis of potential gains and losses to income groups also reflected the difference in the methodologies used by the papers. The unwillingness in the Browne-Immervoll simulation to increase any current marginal rates of tax in order to collect revenue led to the expected result that those on lower incomes, overall, experienced larger relative losses. The very poorest – with little or no income – experienced gains, due to the universal and unconditional features of the new scheme, but the regressive nature of the flat uniform payments was not sufficiently offset by any progressive mechanisms, and thus the model delivered an overall regressive outcome. In contrast, Torry’s desire to avoid regressivity, and his willingness, therefore, to raise all the marginal tax rates, resulted in the top two highest earning deciles experiencing loses in disposable income of up to 5%, the third highest maintaining their level of disposable income, and the fourth decile down experiencing gains.
In order to understand the effect on work incentives of introducing a UBI, both papers focused on whether the reform would increase the effective tax rates on additional income, thus disincentivizing earning extra at the margins. Though this metric fell, on average, in both simulations – thus showing that there would be an increased (or, at least, not decreased) incentive to work – in the Browne-Immervoll model this was the consequence of removing the benefits associated with low-employment or unemployment, whereas in the Torry model this trend occurred in spite of keeping such benefits in place. As such, Torry’s simulation saw people getting wealthier – thus potentially moving up tax-brackets – but still managed to create a system where the financial rewards to work remained, or were even increased.
In conclusion, Browne and Immervoll determined that introducing a UBI in place of most other means-tested benefits would be costly and lead to negative social outcomes. Torry concluded, by contrast, that a UBI of similar level could be financially and politically feasible and would lead to many positive social outcomes. Given, however, that universal and uniform payments in an unequal society will, by definition, always increase regressivity if not offset by sufficiently progressive funding, the data gathered and logical conclusions derived are completely consistent with the papers’ respective methodologies. This comparative analysis shows that by adjusting a model’s predicated constraints, one can collect quantitative evidence to support different desired conclusions. On this basis, a UBI’s potential introduction does not seem to be determined by its feasibility (implementation, political likelihood, or positive economic outcome) but rather, by whether there can be consensus on what its purpose should be. That is, is UBI a mechanism for equalising wealth or a mechanism to simply provide everyone with something, no matter how small or large that payment may be?
More information at:
James Browne and Herwig Immervoll, ‘Mechanics of Replacing Benefit Systems with a Basic Income: Comparative Results from a Microsimulation Approach’, Institute of Labour Economics IZA, December 2017
A Atkinson, ‘Public Economics in Action: The Basic Income/Flat Tax Proposal’, Oxford: Clarendon Press, 1995
‘Why use EUROMOD?’, Euromod.ac.uk
Donald Hirsch, ‘Could ‘citizen’s income’ work?’, Joseph Rowntree Foundation, 2nd March 2015
Paola De Agostini, ‘EUROMOD Country Report: United Kingdom (UK)’, Euromod, February 2017
by Claire Bott | Mar 4, 2018 | News
India’s Chief Economic Advisor, Arvind Subramanian, recently told reporters that he would “bet” that one or two Indian states would be implementing universal basic income (UBI) by 2020.
The high-level government advisor’s comments occurred within the context of the release of the 2017-2018 Economic Survey of India. The Economic Survey is a regular report which examines the country’s current economic status, and attempts to make some predictions regarding future growth.
The last Economic Survey, for 2016-2017, gave some details regarding the possibility of India adopting a form of UBI. The survey explored the possibility of an income which would be quasi-universal, being distributed to approximately 75% of the population. This does not match BIEN’s own definition of UBI, but was referred to as a UBI within the survey. This was not the only scheme that the government entertained, if you want to know all schemes of indian government in hindi visit:- Sarkari Yojana UP Here is All Information of the government yojana.
While its approach to the subject was broadly positive, the 2016-2017 Economic Survey stopped short of recommending that a UBI be implemented across the country. Subramanian has spoken positively on UBI in the past, saying during an interview in April of last year, “There could be, potentially, several positive impacts – you provide people with a minimum wherewithal with which they can access credit, with which they can invest – and one of the things I think is worth emphasising about UBI is the kind of psychological liberation you can provide for people.” However, in the same interview, he also indicated some issues which could arise, stating, “You can’t pay for it [UBI] unless you get rid of something else.”
A recent report from Carnegie India, India’s Basic Income Bedevilled by Details, by Shaksam Khosla, praised Subramanian for bringing “substantial rigour” to the debate on UBI in India, but also recommended that, prior to any implementation, a large-scale experimental test of the system should be carried out. The Carnegie Endowment for International Peace (CEIP) describes itself as a global network of policy research centres with the aim of advancing peace through analysis and development of new policy ideas, as well as direct engagement with government, business and civil society. Khosla is a Research Analyst with Carnegie India, the CEIP’s sixth international centre to be set up.
Arvind Subramanian took office in October 2014. He previously worked for the International Monetary Fund, and has also been a Senior Fellow at the Centre for Global Development in America.
Edited by: Dawn Howard
by Andre Coelho | Feb 12, 2018 | News, Research
Ville-Veikko Pulkka
Although an experiment on basic income is being performed in Finland at the moment (being expected to end by January 2019), this does not say much about what Finns think about it, or about basic income in general. According to recent research developed by Ville-Veikko Pulkka, a doctoral researcher at the University of Helsinki, not only does survey methodology deeply affect people’s responses, but current beliefs and views of society by Finnish citizens are also such that “there is no need for a paradigm shift”.
Ville-Veikko and his colleague Professor Heikki Hiilamo ran another survey in late 2017, arguing that other surveys on basic income in Finland such as Center party’s think tank e2 in 2015, Finnish Social Insurance Institution (Kela) in 2015, and Finnish Business and Policy Forum EVA in 2017 skewed results due to different ways of defining and framing basic income, with support ranging from 39 up to 79%. These researchers view their survey as “a more realistic view on basic income’s support in Finland”, having it based on the Basic Income Earth Network (BIEN) definition. They also explicitly referred the basic income net level of 560 €/month, which is around as much as many basic social benefits in Finland.
Ville-Veikko and Professor Hiilamo have found that the partial basic income of 560 €/month currently being tested in Finland is actually the most supported one among several basic income options (partial(1) with more or less than 560 €/month, full(1) with 1000 or 1500 €/month), with 51% of respondents saying it is a “good idea” (20% being undecided and 21% firmly considering it a bad idea). Significantly, of the surveyed income schemes, the most supported one was “participation income” (78% of supporters) which is not a basic income by definition.
This survey also showed that the younger the respondents (around 1000 in total), the more support the basic income proposal (the one cited above) receives – 72% under 24 years of age, down to 42% for people over 65. Occupation also seems to have a strong influence, with students showing 69% of support for basic income and entrepreneurs only 38%. For relatively obvious reasons, the unemployed and part-time employed were also more in support of the idea (68 and 61% respectively).
The new survey by Ville-Veikko and Professor Hiilamo comes at a time when it becomes clear that the Finnish government’s path is not to break from “the activation policies implemented since the 1990s”. This has been shown through the recent implementation of a tighter work activation model, aimed at the unemployed, which brings more conditionality and sanctions into the system. This is, apparently, contrary to the basic income spirit of unconditionality and, on top of that, the government is already considering tightening up unemployment benefits even further.
From the referred survey and recent Finnish government moves toward activation policies, it seems clear that running an experiment on basic income does not equate to leading the way towards the implementation of this policy. According to Ville-Veikko, basic income in Finland is likely to receive more support if only unemployment and work precarity rises significantly in the near future, which is uncertain even given the latest studies on the subject. It also becomes clear that the public remains polarized regarding social policies for the future: on the one hand there is moderate support for basic income, and on the other hand there is clear support for activation measures such as the “participation income”.
Notes:
1 – here, “partial” refers to receiving the stipend and maintaining eligibility for housing allowance and earnings-related benefits, and “full” refers to losing eligibility to those same benefits.
More information at:
Kate McFarland, “FINLAND: First Results from Pilot Study? Not Exactly”, Basic Income News, May 10th 2017
“New model to activate unemployed comes into effect amid rising criticism”, YLE, 26th December 2017
“Finnish government plan for jobless: Apply for work weekly – or lose benefits”, YLE, 10th January 2018
Micah Kaats, “International: McKinsey report identifies basic income as a potential response to automation”, Basic Income News, 16th January 2018
by Andre Coelho | Jan 24, 2018 | News
The province of Quebec, in Canada, has been fostering conversations around basic income and even, at a certain point in 2016, has appointed a long-time supporter of basic income, François Blais, as Minister of Employment and Social Solidarity. Although the term “guaranteed minimum income” has been used in an indiscriminate fashion ever since 2014, there has never been an actual mandate for Blais to implement basic income in Quebec.
In fact, what is being implemented in Quebec at the moment differs considerably from a basic income, as defined by the Basic Income Earth Network (BIEN). According to Dorothée Boccanfuso, Chair of Quebec’s Expert Committee on Guaranteed Minimum Income, the new plan’s definition is presented as “any system that offers a guarantee of monetary resources for all, with the amount of those resources being related to a minimum threshold”. This expert committee has been tasked to make recommendations to François Blais, on income support, having produced a report. The proposed scheme has, therefore, kept existing social security system’s properties of means-testing and incentives to work, the latter strengthened through “a greater reward be provided for work efforts, through a major increase to the work premium”.
The enhanced economic support scheme is intended to widen its coverage, aiming at defining a “benchmark threshold”, a means-tested minimum guaranteed income to support “persons with no employment restrictions, for persons 65 and over and for people with disabilities”. There has been, clearly, an effort to cover more people with social support, trying to fill in the gaps and effectively reduce poverty levels, but still not embracing unconditionality. As the Expert Committee on Guaranteed Minimum Income puts it:
“The Committee wants a society that is free of poverty, but this wish can only be achieved by helping persons who are able to re-enter the labour market, pursue education and training or, more generally, better integrate into society. In the Committee’s view, poverty is not a status, but rather a situation and those who are in it must be helped to get out. The income support system must guarantee the minimum resources required for vulnerable persons to meet their immediate needs. Above all, it must eliminate barriers preventing these persons from escaping poverty.”
So, the social security program sought is not an unconditional basic income. However, some media sources are portraying it in misleading headlines such as “Quebec to offer basic income for 84000 people unable to work” and “Basic income to be given to 84000 people in Canada”. One the other hand, a few anti-poverty groups have clearly criticised the support scheme, calling out for a true unconditional support system. According to Serge Petitclerc, representing the group Collectif pour un Quebec sans pauvreté, the “guaranteed minimum income (…) should be unconditional and it should apply to the entire population”.
More information at:
Kate McFarland, “Quebec, Canada: Liberal Party’s Ideas Forum to address Minimum Income”, Basic Income News, September 18th 2016
Stanislas Jourdan, “Québec, Canada: Minister of Employment appointed to work on basic income”, Basic Income News, February 4th 2016
Yannick Vanderborght, “Québec, Canada: Minister of Employment for the provincial government reiterates his support for basic income”, Basic Income News, July 17th 2014
Loulla-Mae Eleftheriou-Smith, “Basic income to be given to 84000 people in Canada”, Independent, 11th December 2017
Karina Laframboise, “Quebec to offer basic income for 84000 people unable to work”, CBCNews, 10th December 2017
Malcolm Torry, “What’s a definition? And how should we define Basic Income?”, BIEN Congress in Lisbon, 2017
