by Andre Coelho | Dec 5, 2019 | News
The Centre for Welfare Reform, a citizen think tank formed in 2009 and based in Sheffield, has published a statment in support of basic income. It can be read in this kind of manifesto:
Over the past few decades there have been successful pilots of UBI in many other countries and there’s growing grassroots support for testing the idea and for exploring many of the practical questions that need to be resolved to make UBI work for everyone. In our view, now is the time to pilot UBI in the United Kingdom.
Signing this community support for basic income and its experimentation on British soil are, among others, longtime basic income advocates and researchers, such as Jamie Cooke, Jurgen De Wispelaere, Malcolm Henry, Becca Kirkpatrick, Barb Jacobson and Guy Standing.
by Andre Coelho | Jan 17, 2019 | News
Philip Alston. Picture credit to: BBC News
Philip Alston, UN Special Rapporteur on extreme poverty and human rights, was in the UK last November 2018, presenting his findings on this press conference. It seems that the UK, the 5th world economy in terms of GDP, drags on the 55th position as far as inequality is concerned, in a list of 160 countries (Gini coefficient measurements from the year 2000 onward, mostly). He refers that, although many think tanks, civic organizations and even parliamentary groups speak of poverty as a crucial challenge in the UK, government ministers consider that “things are going well”, in an obvious attitude of denial.
Alton’s visit to the UK has spurred the House of Commons Work and Pensions Committee to conduct an inquiry on UK’s welfare system, along with rising evidence of debt, hunger and homelessness across the country. In fact, a recent (June 2018), deep study on British welfare had already demonstrated that the attribution of conditional benefits has more drawbacks than positive outcomes, which turns the present system counterproductive. So, it seems that poverty, social stigma and arbitrary sanctions are not only the product of some filmmaker’s imagination (e.g.: I, Daniel Blake), but real, verifiable facts.
Among the cited evidence can be found the contribution of the Citizen’s Income Trust (CIT). Given the grim scenario of UK’s poorest or most financially insecure social layers – wages below the poverty line, high unemployment, high insecurity within the job market, increasing conditional welfare – the CIT, headed by Malcolm Torry, recommends that UK’s welfare system should be covered with a new level of unconditional income security. Therefore, it has recommended to the House of Commons Work and Pensions Committee the adoption of basic income, in the following terms:
Research at the Institute for Social and Economic Research at the University of Essex has shown that such a new layer of unconditional incomes would be entirely feasible. By reducing to zero the Income Tax Personal Allowance and the National Insurance Contributions Primary Earnings Threshold, levelling out National Insurance Contributions across the earnings range, and raising Income Tax rates by just three percentage points, it would be possible to pay an unconditional income of £63 per week to every working age adult, with different amounts for different age groups. No additional public expenditure would be required; poverty and inequality would be substantially reduced; almost no losses would be imposed on low income households at the point of implementation, and only manageable losses on any household; a significant number of households would be taken off means-tested benefits; and a much larger number would be brought within striking distance of coming off them. For every household that came off means-tested benefits, employment incentives would rise substantially. Most importantly: every household in the country would experience a substantial increase in its financial security.
It is worth noting that the House of Commons Work and Pensions Committee had already run a formal Oral Evidence Hearing about basic income, on January 12th 2017. At this session were presenting evidence and informed opinions for basic income Louise Haagh (University of York and Basic Income Earth Network), Annie Miller (Citizen’s Income Trust) and Becca Kirkpatrick (UNISON West Midlands Community Branch). On the official summary of that formal hearing, the Committee judged the possibility of introducing a basic income type of policy in the UK as risking “being a distraction from workable welfare reform”, urging “the incoming government not to spend any energy on it”.
Overall, social degradation is happening in the UK, no matter how much governmental officials try to deny it. And that is in the midst of great transformations in the British welfare system, which may raise concerns about what “workable welfare reforms” the House of Commons Work and Pensions Committee had in mind in early 2017. Accepting evidence from the CIT, naturally supporting a thought-through basic income scheme for the UK, it remains unclear whether the appeal for the government to avoid basic income is to be given any credence.
More information at:
Hannah Trippier, “United Kingdom: Study suggests that welfare conditionality does more harm than good”, Basic Income News, July 31st 2018
Genevieve Shanahan, “UK: Parliament releases summary of Oral Evidence Hearing on UBI”, Basic Income News, May 9th 2017
André Coelho, “VIDEO: UK’s Work and Pensions Committee oral evidence on basic income (summary of content)”, Basic Income News, February 18th 2017
Michael Buchanan, “Poverty causing ‘misery’ in the UK, and ministers are in denial, says UN official”, BBC News, November 16th 2018
by Hannah Trippier | Sep 13, 2018 | News, Research
The International Monetary Fund (IMF) has published a report suggesting that basic income would be better than their welfare system at supporting low income households in India. Similar evidence has been found for both Indonesia and Peru, where basic income was found to be beneficial compared to current welfare systems.
The report uses 2011-12 National Sample Survey data to analyse the Public Distribution System (PDS) in India, where subsidies for food (wheat, rice, sugar) and energy (kerosene) are provided at different levels according to a person’s position in relation to the poverty line. This welfare system was found to be both inefficient, with leakage in the procurement-transportation-distribution chain, and inequitable, in that around 20% of low income households do not receive any subsidy
The analysis compared PDS to a model of basic income. Their analysis found that a basic income outperforms PDS in terms of coverage, as basic income is universal. However, the analysis showed that the introduction of basic income would mean reduced targeting and generosity for lower income groups. At the lower end of the income scale, some households will gain in terms of relative benefits, whereas some will lose out. In the bottom decile the analysis found a greater share of losing households (58% losers compared to 42% gainers).
The authors noted that basic income would bring about a benefit in eliminating current operational inefficiencies in the PDS. They suggested that savings from this could be used to fund a more generous basic income that could mitigate the losses in lower income deciles. They ran another analysis with a higher basic income and found a greater share of gainers than losers in the bottom decile (60% gainers compared to 40% losers), suggesting a higher basic income would be more beneficial for this group. Alternatively, the authors also discuss the possibility of introducing additional programmes for households in this group, to supplement basic income and ensure they do not lose out.
More information at:
David Coady, Delphine Prady, “Universal Basic Income in Developing Countries: Options, and Illustration for India”, IMF Working Papers, July 31st2018
Rema Hanna, Benjamin A. Olken, “Universal Basic Incomes vs. Targeted Transfers: Anti-Poverty Programs in Developing Countries”, National Bureau of Economic Research Working Paper Nº24939, August 2018
“Debate over universal basic income steps up as IMF weighs impacts”, Development Pathways, August 14th2018
“Growing debate around universality” sees diverging estimates of basic income”, Development Pathways, September 3rd2018
by Hannah Trippier | Jul 31, 2018 | News, Research
The Welfare Conditionality (WelCond) project recently released a report on how people receiving benefits in the UK experience welfare conditionality within a social security system. Welfare conditionality is where a person’s eligibility for benefits is dependent on meeting certain requirements, for example attending regular interviews, which will be taken away if a person does not meet the latter.
The study used longitudinal qualitative methodology to investigate the experience of people receiving welfare in the UK and the changes in their behaviour over time. Over five years, from 2013-2018, the study conducted 1082 qualitative longitudinal interviews with 481 people receiving welfare (including jobseekers, single parents, migrants, homeless people, and offenders who have left the judicial system), 52 semi-structured interviews with policy stakeholders and 27 focus groups with frontline welfare practitioners.
Longitudinal qualitative methodology enables researchers to gain an insight into people’s experience of and perspectives on welfare conditionality over a period of time. However, qualitative research does not enable the assessment of the effectiveness of welfare conditionality intervention on relevant outcomes (such as the motivation to work). Accordingly, the results of the study cannot be taken to show the effectiveness of welfare conditionality as an intervention but can be used to gain a greater understanding of the potential benefits and harms of this practice.
The results of the study indicated that benefit sanctions do little to enhance people’s motivation to prepare for, seek, or enter paid work. On the contrary, in some cases the imposition of benefits sanctions led to feelings of reduced motivation and disengagement with the social security system. Welfare conditionality was viewed to be largely ineffective in facilitating people’s entry into paid labour market or in sustaining employment. Participants often reported a lack of change or sustained change in employment status, where they shifted between short-term, insecure, and low paid jobs, and periods of receiving benefits.
Additionally, welfare conditionality and benefit sanctions were reported to be connected to adverse outcomes such as poverty, increased reliance on charitable providers and informal support networks, increased debt and loss of tenancy, etc. People dealing with high debts may have to go for a rental property after losing their home and take the assistance of a letting agents to find a property at a reasonable rate. Welfare conditionality can also be associated with negative health outcomes, including fear, anxiety, psychological distress, and exacerbating existing health conditions, particularly in people with mental health issues.
The study also indicated that the current support provided often did not help people looking for work and that the provision of personalised, holistic support could be more effective in helping people to gain and retain employment. This was noted as a potential facilitator to increase motivation to prepare for, seek and enter work, and to enable people to overcome personal and structural barriers to work.
The authors of the study concluded that the perceived benefits of welfare conditionality to increase motivation to work did not outweigh the potential drawbacks and recommended a trial of conditionality-free benefits for those looking for work and the removal of benefit sanctions for people receiving incapacity benefit for existing health conditions. As an alternative to welfare conditionality, the authors recommended that personalised, holistic employment support should be given to help people enter the job market.
More information at:
Welfare Conditionality, “Final findings report – Welfare Conditionality Report 2013-2018“, Welfare Conditionality, June 2018
by Guest Contributor | Jun 29, 2018 | Opinion
Written by: Leah Hamilton, MSW, PhD
Democrats and Republicans don’t see eye to eye very often, but they can safely agree on one point: welfare doesn’t work. Liberals are concerned that an ever-shrinking social safety net reaches fewer and fewer families in need. Republicans worry that welfare benefits create dependence. They are both right.
The primary cash assistance program in the United States, Temporary Assistance to Needy Families, served 68% of low-income families in 1996. Today, only 23% of poor families receive assistance. This change has been largely brought about by the imposition of five-year lifetime limits (states are allowed to set lower limits) and stricter eligibility criteria. Welfare caseload reductions have been solidly linked to the rise of deep poverty in America, family strain and increased foster care placements. 1.46 million US households (including 2.8 million children) now live on less than $2 per person, per day (the World Bank’s measurement of extreme poverty).
Meanwhile, welfare eligibility rules designed to encourage independence have achieved the opposite effect. For example, though many states impose strict work requirements, states which loosen these rules actually see recipients move to higher wage, higher benefit work, presumably because they have the breathing room to search for a good job rather than take the first one that comes along. Similarly, in states with strict limitations on recipient assets, poor families are less likely to own a car, making it nearly impossible to maintain employment in areas without public transportation. Even worse, some researchers are discovering a “cliff effect” in which welfare recipients immediately lose all benefits (including child care assistance) after a small increase in income. As a result, many parents turn down promotional opportunities because they would be ultimately worse off financially. Any parent would make the same decision if it meant the ability to feed their children and afford quality childcare.
We must redesign this entire system. In the most prosperous nation in the world, it is ludicrous that children are growing up in the kind of deprivation we normally associate with developing countries. Simultaneously, we must ensure that no one is discouraged from growing their income or assets. One potential solution is a universal basic income, which would provide an annual benefit to every citizen. However, this idea comes with a hefty price tag and would either increase our national deficit or increase the marginal tax rate, both of which might be political non-starters. The simpler solution is a Negative Income Tax (NIT) which is potentially cheaper than our current poverty alleviation efforts. An NIT is a refundable tax credit which brings every household to the federal poverty level. The most effective way to do this is to decrease the credit slowly (for example, a $0.50 reduction for each $1.00 increase in earned income) so that there is never a penalty for hard work.
Researchers at the University of Michigan calculated what this might look like in practice. If a family had no income, their tax credit would be 100% of the poverty line ($20,780 for a family of three). If the family’s earned income increased to half the poverty line ($10,390), their tax credit would decrease to $15,585. The credit would phase out completely once the family’s income reached twice the poverty level ($41,560). This plan would cost roughly $219 billion per year and could be almost completely paid for by replacing most or all of our current poverty programs.
With this one simple policy, we can achieve many goals of both the left and right. Poverty would be eliminated overnight. Work disincentives would be removed. American bureaucracy would be significantly reduced. Families would be free to make financial decisions without government intrusion. And in the long run, we would save money. Childhood poverty alone costs the US $1.03 trillion (yes, trillion) per year. In the 21st century, eradicating poverty isn’t complicated. We’re just going about it in the worst possible way.
About the author:
Leah Hamilton, MSW, PhD is an Assistant Professor of Social Work at Appalachian State University. She received a BSW from Metropolitan State University of Denver, an MSW from the University of Denver and a PhD in Public Policy at the University of Arkansas. She served as a Foster Care Case Worker and trainer for five years in Denver, Colorado. Dr. Hamilton’s research interests include poverty, economic justice, and social policy.
