by Michael Lytton | Jul 12, 2016 | News
Abhijit V. Banerjee. Credit to: Financial Times
On June 18, The Indian Express—an English-language daily newspaper, published an article about the Swiss vote on UBI. The piece titled “The best way to welfare,” was written by Abhijit V. Banerjee, a professor of economics at the Massachusetts Institute of Technology. (His book—co-authored by Esther Duflo—Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, won the 2011 Financial Times and Goldman Sachs Business Book of the Year Award)
Banerjee says that although the Swiss voted against a universal basic income, polls conducted after the referendum suggest that the debate is not over. He gives two reasons, the first being the widespread concern, especially in the West, about the future of work. An increasing topic of concern is that absent a radical reassessment of the fundamentals of how our economy works, there could be an enormous population of permanently unemployed whose jobs have become superfluous by automated and intelligent machines.
Banerjee then says the UBI debate is still alive because our current welfare systems are fragmented, bureaucratic and overly complicated. He reminds readers that reshaping its social security system is the primary purpose of Finland’s basic income experiment, scheduled to take place in 2017–2018, an experiment he says that is ‘clearly relevant’ for India.
For more information on the Finland experiment, read the Basic Income News reports listed below.
Banerjee cites Renana Jhabvala, an Indian social worker who gained prominence through her work on behalf of women in the informal economy, and, with Guy Standing among others, co-edited Basic Income: A Transformative Policy for India (published by Bloomsbury in 2014). The book reports on the results of three basic income schemes piloted in India between 2010 and 2013, in which 6,000 individuals received completely unconditional monthly cash payments. The book was reported in a Basic Income News item, December 8, 2014.
A summary of results of the project was released on the Basic Income Earth Network (BIEN) website. On the United Nations Research Institute for Social Development (UNRISD) website, Guy Standing reports on the main outcomes of the social experiment. The UNRISD also hosted a seminar on May 13th 2016, titled “Informality and Income Insecurity: Is Basic Income a Universal Solution?”. Seven speakers are also featured in videos as part of this event.
Jhabvala estimates that there are more than 350 separate welfare programs in the India. “Why not,” says Banerjee, “have one universal basic subsidy that covers everything (perhaps except health and education) and let people decide how they will spend it, rather than trying to target subsidies based on our imperfect knowledge of what people need and deserve?”
Credit to: Give Directly
The immediate benefits are reduced poverty and less red tape, enabling the bureaucracy to be deployed elsewhere. And potentially the poor might use their financial security to plan their lives more effectively and invest in their families and businesses.
Finally, Banerjee mentions another pilot project, announced in April 2016 by the NGO GiveDirectly, that will test a universal basic income in Kenya. The plan is to provide at least 6,000 Kenyans with a basic income for 10 to 15 years. The parameters of the study are that it generates unbiased and transparent estimates of impact, that it is a long-term commitment, and that it is operationalized within well-defined communities. Banerjee is among a group of academic researchers who will test the impacts of the experiment.
More information at:
Stanislas Jourdan, “FINLAND: Government Forms Research Team to Design Basic Income Pilots,” October 15th 2015.
Vito Laterza, “FINLAND: Basic income experiment – what we know”, December 9th 2015.
Tyler Prochazka, “Dylan Matthews, ‘Finland’s hugely exciting experiment in basic income, explained”, December 13th 2015.
Kate McFarland, “FINLAND: KELA has sent preliminary report to Prime Minister”, April 5th 2016
Give Directly website
Wikipedia, “Renana Jhabvala“, 16th May 2016
Wikipedia, “Abhijit Banerjee“, 20th May 2016
Wikipedia, “Poor Economics“, 26th March 2016
by Kate McFarland | Jun 11, 2016 | News
Andy Stern, the former president of the SEIU (Service Employees International Union), has written a new book on basic income: Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream. This upcoming book was previously announced on Basic Income News, and it remains true that the book will published on June 14, 2016. We now get to say, however, the book will be released next week.
In his new book, Stern investigates the current and projected state of the labor economy — focusing especially closely on the effects of new technologies — and argues that we need to adopt a universal basic income to prepare to massive disruptions in the job market of the not so distant future. Along the way, he talks to “economists, futurists, labor leaders, CEOs, investment bankers, entrepreneurs, and political leaders” about their predictions for economic change in upcoming decades.
Trade unionist Andrew Brady recently conducted a short interview with Andy Stern about the book, which can be viewed here. Stern notes that “we’re about to face a time of major economic disruption” — “a tsunami of change” — when merely tinkering with current policies and programs, such as adopting stricter labor laws, “will not be sufficient to solve workers’ problems.” Thus, “we need to guarantee that there’s a floor” for workers, even though there might be work on top of it.
Stern further elaborates on these issues in an article for Daily Caller, in which he remarks on the outcome of Switzerland’s June 5th vote on basic income.
Today’s economic pain though may only be a warm-up to more anguish if we fail to act boldly, and expediently. There is now quite reputable research on the potential disruption of software and AI; an Oxford University study predicting the loss of 47 percent of all U.S. jobs by 2033; Boston Consulting Group estimating up to 25 percent by 2025; McKinsey Global 45 percent elimination of all present tasks, with artificial intelligence reducing 13 percent more, could be harbingers of a future of increased economic peril.
Indeed, as he describes in a post on The World Bank’s Jobs and Development blog published last April, these changes in the economy played a large role in Stern’s decision to leave his prestigious post in organized labor. (He is now a Senior Fellow at Columbia University.)
I didn’t resign from SEIU because I was bored. Rather, after nearly fifteen years at the helm of SEIU, I had lost my ability to predict labor’s future. I could do that in the 1990s and early 2000s. But, by 2010, the economy was changing and fragmenting at such warp speed that I couldn’t see where it — or labor — was headed. At the end of that year I embarked on what became a four-year journey to discover the future of jobs, work, and the American Dream.
Already, the new landscape of work is populated by free agents and temporary workers who have more freedom and flexibility in their work life, but no job security and significantly less leverage with the people and companies who hire them. My focus turned to larger questions: If there are significantly fewer jobs and less work available in the future, how will people make a living, spend their time, and find purpose in their lives? Also, how can we keep the income gap from growing so wide that it erupts into social discord and upheaval?
I believe there is a solution – the universal basic income or UBI.
This blog post, “Moving towards a universal basic income,” is an extract from Raising the Floor, and it’s well worth reading in its entirety as you wait for the book to arrive.
The philosopher and political economist Philippe Van Parijs — well known in these parts as a cofounder of BIEN — calls Raising the Floor “a stunning combination of lucid analysis, up-to-date information, and lively dialogues that culminates in a bold proposal for universal basic income.”
The book has also received praise from the likes of former US Labor Secretary Robert Reich, author Barbara Ehrenreich, CEO Tim O’Reilly, and Planned Parenthood president Cecile Richards.
Andy Stern with Lee Kravitz (2016) Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream, PublicAffairs.
Picture of Andy Stern from Ralph Alswang via flickr
by Jessica "Trinley" Rafka | Jun 9, 2016 | News
Original article published in SPREEZEITUNG, January 11th, 2016, written by Ursula Pidun. Translation by Jessica Rafka.
Discussions about an unconditional basic income have been around for a while. But this topic is not picking up steam. What are the reasons for this, and why are unions and political parties still very much against a basic income? We will be discussing these questions, and the many different social, economic, and political advantages of having a UBI (Unconditional Basic Income) with Reimund Acker, who has worked as a council member of the non-party affiliated, 2004 founded, Netzwerk Grundeinkommen (Basic Income Network) in Germany.
The network contributes to the introduction of basic income to Germany and other countries. This organization counts more then 4,000 individual members, and over a hundred member organizations—including the BDKJ (Federation of Catholic Youth), the KAB (Catholic Worker Movement), and the AWO-Jugend (The Workers’ Welfare-Youth), each with more than 100,000 members—it is the largest basic income organization in the world. The Network is the German affiliate of the Basic Income Earth Network (BIEN), and a member of the Unconditional Basic Income Europe (UBIE) network. Together with the Austrian and Swiss Basic Income Networks, they’ve held three conventions, and organized the biannual BIEN-Congress 2012 in Munich, which was attended by 450 scientists, activists, and politicians from all over the world.
Mr. Acker, you are an elected councilor of Netzwerk Grundeinkommen. When did you get involved with this topic and to what extent?
Reimund Acker, Netzwerk Grundeinkommen
Since 2008, I’ve been active as an honorary volunteer of the network council, that acts as an executive committee of the network. Back then only a few experts knew what to make of the concept of “basic income”. Meanwhile, it is so well-known that the media uses it without explanation. The high profile that basic income has gained in Germany is thanks to important players like Götz Werner, Susanne Wiest and Michael Bohmeyer, but particularly the work of the Network that will be 12 years old this fall.
Political parties still hesitate to embrace a basic income, despite the growing approval among renowned experts. What are the causes and what is the current status within the parties?
Basic income had a bad start in leftist circles, because it was initially suspected to be a neoliberal concept. Meanwhile, however, word got around that this assumption would only be true for a partial basic income – a UBI, that’s too low to live on.
In the 80s the Green Party still had the basic income issue in their repertoire. I, for one, learned about it there. It got lost temporarily on their way to power. The Social Democrats are afraid that their golden calf “work”, would be damaged by basic income. As if the value of work would increase by being forced on people! Veteran Greens and Social Democrats often show a certain loyalty to their Hartz Laws: “But we meant well!”
For the Conservatives, the basic income seems to have fallen victim to a skiing accident. It happened earlier to Dieter Althaus, former Prime Minister of Thuringia, who designed his own basic income model which he had examined by the Konrad Adenauer Foundation to tender it to his party for inclusion in the program. Althaus disappeared from the political stage back then and with him his project.
To date, the most tragic blow to basic income happened within the party that carries “Freedom” in its name. Since freedom is still the primary focus of basic income and not free money from the government, which we already have. The former liberals, who today are mere neo-liberals, wanted to jump on the UBI band-wagon with their “citizen’s income”, but it was just a “Hartz-V”. Even the great liberal Ralf Dahrendorf, couldn’t change anything when he wrote in their register on the occasion of an anniversary celebration of the Friedrich Naumann Foundation, convening all the party members including the complete FDP (Free Democratic Party) leadership that a basic income—and not their silly citizens income—belongs on every liberal’s agenda. All applauded well-behaved.
With so much discussion in virtually all relevant parties you would think there would slowly be more of a movement?
Meanwhile, there are at least strong minorities for the basic income in the Leftist Party and the Green Party. The Pirates, as the only not so small party, have it on their program. All three parties respectively promised in their last election programs the establishment of a committee of enquiry for a basic income. Sadly, the Green Party has meanwhile backed out. The public reluctance of politicians when it comes to basic income does not necessarily reflect the true majorities among them, as long as the endorsement of a basic income could harm their career.
The nature of UBI is to separate income from work. In other words, basic income could significantly strengthen the position of workers. Isn’t it long overdue in the 21st Century?
Yes, whereby the separation of work and income is limited at the poverty line. Thus, there remains an incentive for gainful employment, even more so than under Hartz IV. The prospect to turn down a job offer because of a basic income, should lead to more power for workers, reinforced by unionization. A very important effect that I see, that basic income could have, is the weakening potential to ransom job security. Today, someone just needs to yell “jobs” and all our good intentions are forgotten. To the extent that existential fears would decrease with the basic income, workers, politicians and ultimately the whole of society would be less vulnerable to extortion.
Parts of the economy fear a striking competitive disadvantage. Is this concern justified in your view?
No, on the contrary I believe that the introduction of basic income would increase competition between countries. However, the effect also depends on the method of financing the UBI. If people were better able to follow their career interests and abilities with a basic income, not every third worker would be dissatisfied as is the case today. An employee occupying a job that he hates keeps the other person, who would love that job from having it. What a waste of talent and life!
Wouldn’t it be much more efficient, if people worked a job they liked, instead of working precariously to survive economically in the first place?
Of course, it would be more efficient if people would work because they want to instead of having to: Better quality, less waste, more commitment to improve working conditions and operational processes, fewer sick-days. A motivated workforce is priceless. It’s conceivable that many workers would be happy with less pay, as long as at the end of the day it’s supplemented with a basic income. On the other hand, some UBI models want to prevent further wage cuts in Germany by maintaining at a legal minimum wage in spite of a basic income.
What other economic benefits might result from a reasonably well-invested UBI?
At any rate, a basic income would lead to savings in pension and unemployment insurance, since only the difference between the present level and the basic income must be insured. So, whoever would want a retirement income of 500 Euros above the basic income would only have to pay premiums for an income of 500 Euros, since he receives the basic income without making contributions. But there are other economic benefits of having a UBI that would also produce competitive advantages. It would allow for more innovations and business start-ups, since basic income constitutes non-refundable venture-capital. Many business ideas, research and development projects or art projects fail already in the planning phase because they don’t pay the rent upfront. By contrast, whoever gets a basic income, knows his rent and cost of living are safe, and he can develop, test and implement his ideas in peace.
We keep rationalizing, but remain stuck on the same to old structures, like the 8-hour workday, just like it was 100 years ago. How important is a UBI in regards to an earned income in our modern times?
Entrepreneurs may see the advantages of basic income, in that they’d no longer have the unbeloved role as employers who are expected to create and preserve jobs, but could focus on their main objective: To produce goods and services as efficiently as possible, i.e., with a minimum of resources. And human life is a precious resource. Götz Werner doesn’t tire of saying that no one starts a business to create jobs. The basic income could, therefore, also lead to social policy again, made by those who we elect for it, and entrepreneurs won’t have to apologize, if they cut jobs.
Basic income diminishes the importance of gainful employment. I hope we successfully distance ourselves from the perverted notion of work as end in itself and source of income and return to the original meaning of work: The investment of effort to produce something essential or meaningful. Then we’ll be able again to see it as progress, when it succeeds, to produce the same things with less work: Machines are taking our jobs? Finally!
The economy would be forced to make precarious jobs more attractive. A demand that leads to more income equality and thereby more value for society?
Yes, if job seekers no longer have to accept just any job, employers will have to consider how to convince them to work for them; especially, if the proposed activity is unpopular, for example, so-called “dirty work”. So that such work is even done, there are exactly four possibilities: Force, automation, better pay, or do it yourself. When UBI eliminates force, the other three remain. No doubt, I’ll experience my remuneration as equitable, if I’m able to negotiate it freely, without the threats in my ear from an employment agency of who will cut my benefits. This does not mean that the resulting income will be considered fair by society as a whole. What remains will be the scandalous inequality of income and wealth. Even a basic income cannot change that much at first.
Could UBI bridge the gap between the rich and the poor, at least a little?
Basic income isn’t about redistribution in the first place, even though it could end up that way with the right financing. The redistributive effect increases, not only on the revenue (taxes) side, but also on the expenditure (UBI) side. Indirectly, a less intimidated society could enforce more equitable distribution. For this, something would also have to be done in education, though. After all, basic income is not a panacea: It doesn’t solve all problems, but often expedites solutions.
Key is less red tape: Payment of a general UBI could do away with numerous welfare benefits including complex application processes and means-testing. Does the public sector fear job losses?
Sure there are employees in the social sector with concerns, that basic income could make their jobs obsolete. On the other hand, many of our members are engaged in this area, and know of the problems of the current system and therefore understand the necessity of changing the system. Insofar as these jobs have to do with the calculation and payment of benefits, they will not disappear because of a UBI, but rather steamrolled under the gigantic wave of automation coming at us. On the other hand, we will still want to afford debt counselling, youth services, and job placement agencies even after the introduction of basic income. And who ever earns their living conducting research on people who conceal their income to abuse public assistance benefits today, in the future, could be more profitably employed in the chronically understaffed tax fraud evasion department. In any case there will be plenty of time for re-trainings, as no one wants to roll out basic income over night in all its glory, but rather we can count on a lengthy transitional period.
Let’s talk about the unions, that are in the least ruffled by a universal basic income, or as the case may be, speak out vehemently against it. What reasons could they have?
In the unions, it appears that support for a basic income is less at the top—just like in political parties—than at the base. Again, the reason I suspect is fear that basic income could damage the value of work (what ever that means exactly). On the other hand, with regard to basic income there seems to be a shift in thinking in the unions. Meanwhile, Verdi and IG Metall have decided to talk about basic income. UBI-friendly unionists maintain a website for basic income. Overall, however, I can not quite understand unions’ resistance to basic income. Hasn’t anyone there ever considered, what UBI would mean solely for their strike fund?
How great is the probability that, in the near future—say within a few years— Germany will introduce a basic income?
In the last general election, basic income was brought up as a subject matter for the first time, which is illustrated, for example, by the fact of being adopted for the first time as a question of the Wahl-O-Mat of the Federal Agency for Civic Education. At the next election the basic income will be an important issue. Netzwerk Grundeinkommen will see to it, and I hope for considerable tailwind for our work from the referendum on the basic income in June in Switzerland and the debates triggered by it. At the latest, for the federal election, basic income will be a decisive issue, and from then on we can expect a majority in the Bundestag for the basic income at any time.
What criteria must be met to make significant strides in this area?
Above all, I think that we need a serious, nonpartisan, nationwide organization with good media presence that spreads the word about basic income, persistently and with increasing intensity. And I hope we are able to expand the network into such an organization. Today it’s already the world’s largest basic income organization with over 4,000 members.
Furthermore, we must prevent basic income from becoming publicly identified with a particular political party. Because then, it would become a pawn of politicians and that would mean the end of the majority support for this idea. That’s what happened to climate change in the USA, for example, that meanwhile, conservative voters think is a trick construed by Democrats to foist their political goals. Therefore, it’s more favorable if support for a basic income is simultaneously broadcast in as many parties as possible.
Finally, what’s most important for the spreading of the basic income idea is that it does not lead to strong resistance from the industry. Unfortunately, yes, the state of our democratic system today is so lousy that the economy can enforce their will readily against the will of the people. That is why it is so important that business leaders like Götz Werner, or more recently the Telekom CEO argue in favor of basic income. Because then there is hope that a massive rejection of UBI in the economy could at least be weakened. But perhaps there will be a shift in thinking among business leaders, similar to the unions.
