by Basic Income Earth Network | Apr 21, 2020
What is a Basic Income?
A Basic Income is a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement.
Sometimes called Universal Basic Income, a Citizen’s Income, or a Citizen’s Basic Income, it is not the same as a Minimum Income Guarantee; A Basic Income does not reduce as one earns more. For more information: About Basic Income
Why do we need it?
Because someone’s Basic Income would never be taken away, it would
- provide a secure financial platform to build on
- enable the employment market to become more flexible at the same time as enhancing income security
- give to everyone more choices over the number of hours for which they were employed
- enable carers to balance their caring and other responsibilities
- make it easier to start new businesses or to go self-employed, and
- encourage personal freedom, creativity, and voluntary activity
Because everyone would get a Basic Income, it would
- create social cohesion, and
- carry no stigma
Because the Basic Income would never be withdrawn, it would
- reduce the poverty trap for low income families, enabling them to lift themselves out of poverty by seeking new skills, better jobs, or additional hours of employment
- reduce the unemployment trap, so getting a job would always mean additional disposable income
Because Basic Income would be simple and efficient, it would
- be easy to understand
- be cheap to administer and easy to automate
- not be prone to errors or fraud
Many current benefits system are no longer fit for purpose. They assume that everyone has a stable single employment, that household structures don’t change, and that individuals’ circumstances change very rarely. Our lives are no longer like that: and as technology and the employment market continue to change, our benefits systems will become even less appropriate.
In a context of rapid change, the only useful system is a simple one. A Basic Income is as simple as it gets.
For a list of 101 reasons for a Basic Income, see Malcolm Torry’s book, 101 Reasons for a Citizen’s Income.
Why pay money to the rich when they don’t need it?
It is efficient to pay the same level of income to everybody of the same age and then tax it back from those who don’t need it. The alternative is to means-test incomes so that only those who are poor receive them: but that results in complexity, stigma, errors, fraud, and intrusive bureaucratic interference in people’s lives.
Would Basic Income be financially feasible?
Tests for a Citizen’s Basic Income scheme’s financial feasibility might be listed as follows:
- Revenue neutrality ( – that is, it would be funded by making changes to the current tax and benefits system), or sustainable additional funding should be shown to be feasible
- Poverty and inequality need to fall
- Low income households should suffer no significant losses at the point of implementation, and no household should suffer unmanageable losses
- Income Tax rates should rise by a clearly manageable amount
- A significant number of households should be released from means-tested benefits
Would people still work?
If by ‘work’ we mean ‘paid employment’, then the answer is yes. In the short to medium term, we are unlikely to see a Basic Income that would be sufficient to live on, so everyone would need additional sources of income. And because Basic Incomes would not be withdrawn as earnings rose, any family taken off means-tested benefits by their Basic Incomes would experience a reduction in withdrawal rates, and would experience more incentive to seek employment, or to start their own business, than they do now.
If by ‘work’ we mean purposeful activity of any kind, then the answer is again yes. By providing a secure layer of income, a Basic Income would enable people to readjust their employment hours in order to undertake additional caring and community work.
Why pay money to people who do nothing?
In many countries we are already paying means-tested benefits to people who do nothing, and the complexity and sanctions associated with those payments demotivate people and can tip their families into poverty. A Basic Income would take a lot of people off means-tested benefits, and so would encourage economic activity. Pilot projects in India and Namibia showed that in countries with less developed economies, and without comprehensive benefit systems, even quite small Basic Incomes increase economic activity among households with the lowest disposable incomes.
Would immigration go up?
As with other benefits, a government would be likely to require a period of legal residence before someone could receive a Basic Income. Because Basic Income would provide everyone with a secure layer of income, and therefore a greater employment incentive than means-tested benefits, anyone coming into the country would be even more likely to contribute to the economy than they are now.
Would wages fall?
Means-tested benefits function as dynamic subsidies – that is, they rise if wages fall, which can encourage wage-cutting. A Basic Income would not rise if wages fell, so employers would experience more resistance if they attempted to cut wages.
Some wages might rise. Because everyone would have a secure financial platform on which to build an income strategy, some workers would be more able to leave undesirable jobs in order to start their own businesses, or to learn new skills and seek new jobs; and workers would be able to spend longer looking for a job that they might want, rather than just any job. Either currently undesirable jobs would have to improve, or wages would have to rise in order to attract workers.
Some wages might fall. Because everyone would have a secure income layer, some people might decide to take a desirable job even if it didn’t pay very much. Wage levels for desirable jobs might therefore fall.
Would a Basic Income threaten the welfare state?
If a revenue neutral Citizen’s Basic Income scheme were to be implemented, then no cuts to public services would be required. The amounts of means-tested benefits received by households would fall, but only because those households were already receiving Basic Incomes. Benefits specifically designed to cover the additional costs of disability, and benefits to cover the differing housing costs in different areas, would continue.
Would a Basic Income cause inflation?
Inflation occurs when the amount of money available to spend is greater than the value of the economy’s productive capacity. In that situation, if the amount of money keeps growing, then each unit of money can buy progressively less, so money loses its value, sometimes rapidly. A Basic Income scheme paid for purely by making changes to the current tax and benefits system would not add to the money supply, so inflation would not occur. If the amount of money available to spend was below the productive capacity of the economy, then a government could create money until the gap was filled, and that new money could be used to pay a Basic Income: but if inflation started to occur, then money creation would have to stop, and new taxes would have to be used to pay for the Basic Income.
Has a Basic Income ever been tried?
Short pilot projects have taken place in Namibia and India, and something like a Basic Income has been implemented by accident in Iran. Experiments with the similar but different Minimum Income Guarantee and Negative Income Tax in the United States and Canada during the 1970s showed useful social outcomes and very little withdrawal from employment. The similarities between the economic effects of a Minimum Income Guarantee and Basic Income would suggest that the results of the Minimum Income Guarantee experiments would be replicated if a Basic Income were to be implemented; and the differences between them mean that the effects are likely to larger for Basic Income than for the 1970s experiments. Basic Income pilot projects and similar experiments continue in the United States, Uganda, Kenya, Spain, and the Netherlands, and experiments are planned for Scotland.
Further reading
More detailed responses to questions can be found in chapter 10 of Malcolm Torry, Why we need a Citizen’s Basic Income: The desirability, feasibility and implementation of an unconditional income, Policy Press, 2018.
Recently published introductions to the subject are as follows:
Louise Haagh, The Case for Universal Basic Income, Polity, 2019
Annie Miller, A Basic Income Handbook, Luath Press, 2017
Guy Standing, Basic Income: And how we can make it happen, Penguin, 2017
Malcolm Torry, Why we need a Citizen’s Basic Income: The desirability, feasibility and implementation of an unconditional income, Policy Press, 2018
For a detailed treatment of feasibility, see Malcolm Torry, The Feasibility of Citizen’s Income, Palgrave Macmillan, 2016
For chapters on many aspects of the Basic Income debate by world experts, see The Palgrave International Handbook of Basic Income, Palgrave, 2019
by Basic Income Earth Network | Apr 21, 2020
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by Giulia Traversi | Apr 20, 2020 | News
Canada is taking measures to face the Covid-19 pandemic. The situation requires, together with radical and fast actions in medical terms, radical and fast actions in economic and social terms.
The introduction of a Basic Income has been a topic for years in Canada and with the current crisis, it is showing even more possible benefits. While one can always approach a private money lender for emergencies, having a basic income can better sort the situation.
On the 18 March the Prime Minister, Justin Trudeau, announced the federal response to the crisis: a $82 billion relief plan which allocates $27 billion in direct support and $55 billion to help businesses liquidity through tax deferrals. So far, the Opposition parties have been supportive, especially the New Democratic Party which is pushing the Government for more generous and comprehensive measures.
The Canada’s Covid-19 Economic Response Plan includes a temporary boost to Canada’s Child Benefit payments, a new emergency Care Benefit to provide income support to workers, the Canada emergency response Benefit (CERB) and other targeted measures. The CERB is a monthly payment of 2000$ a month for a period of 4 months that will go to any worker who earned at least 5000$ in the past 12 months and has suddenly lost their job as a result of the pandemic. The Government has estimated that more than 2 million Canadians will receive a temporary Basic Income through the CERB. Understandably, Basic Income advocates have stressed the desirability of a more universal approach, as opposed to the long list of targeted measures such as those above, which can represent a cost in terms of classifying the beneficiaries due to long and sometimes bureaucratic processes. They have pressed for keeping a Basic Income model which can last after the pandemic is over, because Covid-19 will probably not be the last major setback to the Canadian economy. The next time it could be the shock from climate crisis or technological unemployment.
The CERB is not the first measure something like a Basic Income that Canada has experienced. An experiment called a Basic Income pilot was introduced in April 2017 by Kathleen Wynne’s liberal Government. The program consisted in monthly payments for 4000 randomly chosen individuals living under the poverty line, without work conditions, in three communities in Ontario. The program, originally stated to be for 3 years, ended prematurely, but showed interesting effects: the majority of the people who had low wage jobs before the trial remained in the workforce. Many went back to school, and mental health improved. The payments were like a Basic income in that they were not work-tested, but because they were income-tested and based on the structure of the household, the experiment was not a Basic Income pilot experiment.
The Basic Income Canada Network has proposed some options for Canada: among them there is cash transfer based on household income for 18-64 year olds people, of $22.000 per year ($31.113 for a couple) that decrease gradually as other income increases. This would be similar to the Ontario experiment, and so not strictly a Basic Income, but the report does model a fully individual, universal basic income option.
The time for Basic Income may have come and Governments around the world are implementing measures to address the financial fallout of the Covid-19 crisis. To many, a Basic Income – regular payments to individuals that are not work-tested or means-tested – may sound radical, but it might be the most rational thing the Government can do for Canadians.
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by Malcolm Torry | Apr 13, 2020 | News, Opinion
On Easter Day, the 12th April 2020, Pope Francis sent a message to ‘our brothers and sisters in social movements and organizations’, during which he said this:
… I know that you have been excluded from the benefits of globalization. You do not enjoy the superficial pleasures that anesthetize so many consciences, yet you always suffer from the harm they produce. The ills that afflict everyone hit you twice as hard. Many of you live from day to day, without any type of legal guarantee to protect you. Street vendors, recyclers, carnies, small farmers, construction workers, dressmakers, the different kinds of caregivers: you who are informal, working on your own or in the grassroots economy, you have no steady income to get you through this hard time … and the lockdowns are becoming unbearable. This may be the time to consider a universal basic wage which would acknowledge and dignify the noble, essential tasks you carry out. It would ensure and concretely achieve the ideal, at once so human and so Christian, of no worker without rights. …
Fraternally, Francis
Vatican City, Easter Sunday, 12 April 2020
A question: Was he referring to a national or global statutory minimum wage, or was he referring to Basic Income? Comment would be welcome.
To read the full text of the Pope’s message, click here.
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by Andre Coelho | Mar 28, 2020 | News
Alexandria Ocasio-Cortez. Picture credit to: Fox 32
As the corona virus crisis unfolds, the political atmosphere heats up in the United States. At the Capitol, a 2 trillion dollar bill is in the making, specifically to deal with the economic downturn caused by the epidemic.
Alexandria Ocasio-Cortez (AOC), the Democrat Representative of the Bronx constituency in New York City, already called for measures like paid leave, debt relief, waiving work requirements, guaranteeing healthcare, universal basic income (UBI) and detention relief. She has recognized that the current bill under discussion is, indeed, partly unconditional (around 500 billion dollars), although she has shown concerns that this money may not reach those more in need of it, but go to large corporations which are seeing their profits plummet at this point.
AOC had already shown simpathy for the basic income policy in the recent past, although in an ambivalent manner. In the face of a “systemic [economic] shock” the corona virus crisis is creating, however, she has again reached for the UBI, at least as an emergency economic measure. That idea, in fact, has motivated more than 500 academics, public figures and (basic income) advocates to call for such a policy, which was manifested in a public letter.
Even on the Republican side of Congress, this kind of approach is getting support. Republican Senator Mitt Romney has said that “urgent action on additional coronavirus response measures [are] aimed at providing economic relief for working Americans and families.” Others, like Congressmen Tim Ryan and Ro Khanna, plus Tulsi Gabbard, have also very recently proposed legislation that will allow the distribution of (unconditional) checks onto people’s hands, resembling the idea Andrew Yang had been proposing for most of his Presidential Campaign. The Congress Financial Services Committee, as a matter of fact, is aiming to release legislation, as part of the 2 trillion dollar bill rollout, that would put an immediate 2000 US$ in the hands of every American, with an additional 1000 US$ for every child. Even when people are able to slowly return back to work, there is always that worry about contracting the virus and people not accepting social distancing regulations. This is where helpful business software from companies like Axxerion come in, they can help manage meetings and workspaces during this time to keep in line with the guidelines, reducing the chance of contact and preventing an outbreak which may cause people to stop working again, affecting their income massively.
Even as the crisis unfolds, critics worry that the basic income policy, even applied over this context, maybe too expensive, while remaining senseless to pay a 1000 $/month for the duration of the contention/recession to billionaires. AOC replies to both those fears shortly and concisely: that (given the situation) it should really be more, and that there is no need to means-test when it can be taxed back (from the relatively more wealthy) in the next fiscal year.
More information at:
CNN Politics “AOC’s message to young people on coronavirus” video
MSNBC, “AOC on coronavirus rescue bill” video
Zachary Keyser, “AOC: We need universal healthcare, basic income to fight coronavirus“, Jerusalem Post, March 20th 2020
Soomi Lee, “Why an emergency Universal Basic Income makes sense during the Covid-19 pandemic“, London School of Economics (US Centre),
Abby Vesoulis, “‘I’ll Be a Very Happy Man.’ Will the Coronavirus Outbreak Turn Andrew Yang’s $1,000 Promise Into Reality?“, TIME, March 17th 2020
“Why more than 500 political figures and academics globally have called for universal basic income in the fight against coronavirus“, Letter published by the Independent, March 18th 2020
