by Guest Contributor | Dec 27, 2017 | Opinion
We know that basic income has risen dramatically in the public consciousness and also up the political agenda in the last two to three years. How has this been achieved? The academic literature offers theoretical explanations but no empirical evidence from any of the existing pilot projects. Therefore, I carried out research in four of the locations undertaking pilot studies, Finland, Scotland, the Netherlands and Ontario, to understand how basic income was legitimised as a policy, what problems they hope to address, and how the interpretation and implementation of basic income varies between them.
Through interviews with policymakers, experts and advocates involved in these pilots and in the promotion of basic income in these countries, I discovered a great deal of similarity in the factors which have allowed basic income onto policy agendas. Some have occurred by accident, some through long-term advocacy and political lobbying, and some through economic change. Importantly, these factors occurred at similar points in time, enabling them to interact and strengthen each other.
In all four of the pilot locations interviewees described how long-term support and advocacy for basic income has allowed public and political opinion about the idea to develop over time. Alongside this, long-standing problems such as unemployment and poverty have proved extremely difficult to address, and dissatisfaction with existing policies has grown. Interviewees explained how anxieties about the changing nature of work and the inability of social security systems to properly adapt to this new world have led increasing numbers of people to look to basic income as a radical alternative. Existing systems are seen as delivering poor outcomes, stigmatising those in poverty and being overly complex and bureaucratic. The assessment of basic income as a holistic and intersectional policy, capable of delivering multiple outcomes, was cited by several interviewees as reinforcing the desire to implement a pilot. Each pilot study aims for a range of positive impacts, both economic and social, pragmatic and ethical.
Interviewees in all four of the pilot locations reported high levels of public debate and engagement with the idea of basic income, and this appears to have been crucial in legitimising it as an idea . Public interest reached a critical mass, which, coupled with other factors, prompted political action. These pilot studies have not been developed solely by civil servants in a bureaucratic bubble but have been strongly influenced by campaigners, basic income advocates and experts from think tanks and academia. Evidence from the interviews shows that formal and informal coalitions and collaborations between these different groups has helped to shore up support and consolidate basic income as a legitimate policy.
Interviews in all of the pilot areas noted a context of growing interest in evidence-based social policy, and each pilot is framed as an experiment, not necessarily the precursor to a full roll-out of basic income. In Finland for example, both advocates and opponents of basic income supported setting up the pilot in order to evaluate if basic income can live up to its promises. The emphasis on experimentation was an important factor in enabling the Finnish pilot to take place but also meant that it does not necessarily signal deep political or social change.
It should be noted at this point that none of the pilot studies that are running (Finland, Netherlands, Ontario) are experimenting with a ‘full’ basic income: a universal, non means-tested payment with no obligations or conditions attached, paid regardless of other income.
Each study retains some element of conditionality, targeting or an earnings cap, above which the basic income payment is reduced. A clean break with existing policies and paradigms of social security has not been achieved or indeed attempted for the most part. Interviewees discussed political, bureaucratic, and experimental pressures that led to compromises in the scope and ambition of their pilots. These compromises appear to have been critical in allowing the pilots to take place, as they resulted in proposals that were deemed to be politically and experimentally acceptable. At a detailed level, each of the pilots look very different in how they were designed, whom they target, and how they operate; local influences proved powerful in translating the core concepts of basic income into operational models.
These compromises could be considered as a de-radicalisation of basic income, and have resulted in a curious situation in which pilots are not testing a ‘full’ basic income but have retained the basic income ‘brand’. This appears to be a presentational issue; many interviewees described a desire amongst politicians to demonstrate innovation, leadership and radical thinking, and basic income was seen as a way to do this. Retaining the basic income ‘brand’ even though the experiments deviate in important ways from the core ethical and economic values of basic income confers a positive light on those involved and attracts international attention.
When look at their specifics, each pilot in the study is different, influenced by myriad local factors. However, each pilot demonstrates striking similarities in the clustering of a number of factors that have allowed basic income onto the political agenda. Broad agreement on the importance of tackling poverty and unemployment, and the steady rise in public interest in basic income coupled with a desire for evidence-based policy and the hope that basic income could tackle multiple problems. As a small-scale, qualitative study, these findings cannot be considered a ‘how-to’ guide for other places hoping to develop their own pilot project but may prove useful in understanding how a radical idea such as basic income can find a place in mainstream policy.
Anna Dent is a consultant working in employment and skills policy and implementation for the public and non-profit sectors. She has particular interests in low-income workers, the changing nature of work, and welfare benefits. She holds an (Master of Science) in Public Policy from the University of Bristol, and is a fellow of the RSA (Royal Society for the Encouragement of Arts, Manufacturing and Commerce).
by Hilde Latour | Dec 23, 2017 | News
On October 30th 2017, the Canadian Association of Social Workers (CASW) released a position paper recommending a Universal Basic Income Guarantee (UBIG) of $20,000 for all individuals, regardless of income. CASW’s UBIG fulfils the definition of a Basic Income. CASW argues that a UBIG is superior to a Negative Income Tax, which is being tested in other experiments (1).
CASW argues that a universal demogrant model, or UBIG, is “a cost-effective and socially responsible mechanism through which Canada can ensure dignity for all”.
CASW states there have been many federal promises to end poverty in Canada over the past 30 years, in many different forms, including Canada’s support for the United Nations’ Sustainable Development Goals which specifies the need to “end poverty in all its forms everywhere”. Yet in 2016, 4 million Canadians (12.9%) were living in poverty and child poverty rates even increased between 1989 and 2013.
According to CASW, conditional and heavily monitored programs are insufficient and expensive. The combined income support-related expenditures of all federal, provincial, and municipal levels of the Canadian government cost just over $185 billion. Furthermore, their implementation causes a great deal of stress given their unreliable nature, with individuals reporting stress brought on by stigma, marginalization and feelings of disempowerment and hopelessness.
CASW claims that “current social assistance systems in Canada are inadequate and contribute to a cycle of poverty”.
Poverty is a well-known social determinant of physical and mental health. CASW illustrates this with several UBI-related examples from Canada:
- a difference of more than 20 years in life-expectancy between the high-income and low-income population in Hamilton, Ontario;
- a reduction of 8.5% on hospitalization during the Mincome basic income pilot project in Dauphin, Manitoba (2);
- people between 55 and 64 years of age are 50% more likely to experience food insecurity compared to seniors 65 years or older who receive the Old Age Security pension.
From CASW’s perspective, the strengthening of Old Age Security (OAS) and the introduction of the Canada Child Benefit were solid steps towards realizing a UBIG in Canada. Programs like the OAS, which are universal in nature and have few eligibility criteria, are quite inexpensive to operate. In 2013, the total cost of operating the OAS program was 0.3% of the total annual program cost. In contrast, the total administrative cost of Employment Insurance, a program with a high degree of gate-keeping and extensive eligibility criteria, was 8.1% of the total annual program cost.
According to CASW, this cost-saving potential is a fundamental strength of the UBIG which would operate under significantly fewer operational and administrative costs than, for example, a negative income tax model.
CASW further argues that the so-called “benefit trap”, that makes the adoption of part-time work unattractive and is often used to argue against a basic income guarantee, in fact only exists within the negative income tax model. Therefore, the true benefits of a basic income guarantee cannot be realized within the negative income tax model which has formed the basis of all of the pilot projects run so far in Canada.
In addition, a universal demogrant model involves significant benefits to the middle classes giving it a wider support base compared to a program that only targets low-income households. It will therefore have more likelihood of success.
CASW recommends a UBIG of $20,000 per year with the possibility of additional fully-remunerated casual, part-time, or full-time employment. Individuals with disabilities would receive an extra $6,000 tax free per year. The UBIG should replace only traditional welfare or social assistance programs – not all existing social programming. One’s net income will then be taxed according to progressive tax brackets. This model encourages participation in the labour market.
Notes
(1) – A Negative Income Tax does not pay an unconditional income to every individual. Instead, it tops up earnings below a threshold, and charges tax on earnings above the threshold. The administration of a Negative Income Tax poses more challenges than the administration of a Basic Income.
(2) – This is a significant amount considering the Canadian Institute for Health Information in 2014 put the total health expenditure in Canada as upwards of $200 billion.
More information at:
Colleen Kennelly, “Universal Basic Income Guarantee: The Next ‘BIG’ Thing in Canadian Social Policy”, Canadian Association of Social Workers (CASW), October 2017
Picture: Two sides of the same Loonie … (10/100), Jamie McCaffrey, CC BY-NC 2.0
by Faun Rice | Dec 21, 2017 | Research
“Wise Cities & the Universal Basic Income: Facing the Challenges of Inequality, the 4th Industrial Revolution and the New Socioeconomic Paradigm” by Josep M. Coll, was published by the Barcelona Centre for International Affairs (CIDOB) in November 2017. CIDOB is an independent think tank in Barcelona; its primary focus is the research and analysis of international issues.
The Wise Cities Model
CIDOB has published other works about a concept it calls “Wise Cities,” a term intended to holistically encompass words like “green city” or “smart city” in popular usage. Wise Cities, as defined by CIDOB and others in the Wise Cities think tank network, are characterized by a joint focus on research and people, using new technologies to improve lives, and creating useful and trusting partnerships between citizens, government, academia, and the private sector.
The 2017 report by Coll opens with a discussion of the future of global economies; it highlights mechanization of labour, potential increases in unemployment, and financial inequality. It next points to cities as centres of both population and economic innovation and experimentation. A Wise City, the paper states, will be a hub of innovation that uses economic predistribution—where assets are equally distributed prior to government taxation and redistribution—to maximize quality of life for its citizens.
Predistribution in Europe: Pilot Projects
Universal Basic Income (UBI) is one example of a predistribution policy. After touching on UBI’s history and current popularity, Coll summarizes European projects in Finland, Utrecht, and Barcelona in order to highlight city-based predistribution experiments. Coll adds that while basic income is defined as unconditional cash payments, none of these pilots fit that definition: they all target participants who are currently, or were at some time, unemployed or low-income.
Finland’s project began in January 2017, and reduces the bureaucracy involved in social security services. It delivers an unconditional (in the sense of non-means-tested and non-work-tested after the program begins) income of 560 €/month for 2,000 randomly selected unemployed persons for two years. Eventual analysis will consist of a comparison with a larger control group of 175,000 people, and the pilot is a public initiative.
The city of Utrecht and Utrecht University designed an experiment which would also last two years, and would provide basic income of 980 €/month to participants already receiving social assistance. The evaluation would assess any change in job seeking, social activity, health and wellness, and an estimate of how much such a program would cost to implement in full. The author comments that the program was suspended by the Netherlands Ministry of Social Affairs, and the pilot is currently under negotiation.
Barcelona has begun an experiment with 1,000 adult participants in a particularly poor region of the city, who must have been social services recipients in the past. “B-Mincome” offers a graduated 400-500 €/month income depending on the household. After two years, the pilot will be assessed by examining labour market reintegration, including self-employment and education, as well as food security, health, wellbeing, social networks, and community participation. Because the income is household-based, and not paid equally to each individual, it is not a Basic Income, but the results could still provide useful evidence for the possible effects of a future Basic Income.
The Implications
Coll identifies several key takeaways from a comparison of these projects. None of the experiments assess the potential behavioural change in rich or middle class basic income recipients. In addition, multi-level governance may cause problems for basic income pilots, but these issues may be mitigated as more evidence assessing the effectiveness of UBI builds from city-driven programs. Coll also acknowledges that all of the experiments listed in his paper are from affluent regions.
In conclusion, the author argues that UBI is a necessary step to alleviate economic inequality. While cities are experimenting with the best ways to implement UBI, they are often not real UBI trials (as they are not universal), and they do not always take an individual-based approach; however, they are nevertheless useful components of the Wise City model.
More information at:
Josep M. Coll, “Why Wise Cities? Conceptual Framework,” Colección Monografı́as CIDOB, October 2016
Josep M. Coll, “Wise Cities & the Universal Basic Income: Facing the Challenges of Inequality, the 4th Industrial Revolution and the New Socioeconomic Paradigm,” Notes internacionals CIDOB no. 183, November 2017
by Donald Brown | Dec 20, 2017 | News
GiveDirectly, a nonprofit organization currently most known for unconditional cash transfers in East Africa, has decided to distribute cash among Hurricane Harvey victims, starting with those afflicted in Rose City, Texas with a population of about 500 people considered for the project. However, depending on the occupancy of the affected areas, the estimation is to cover at least 3000 people with cash aid. This aid should help go towards matters similar to Roof repair by 99roofers as well as food and supplies. This kind of help would allow people to regain some sense of normalcy in the midst of this disaster. There would be so many families whose houses have sustained significant water damage and would be in need of Water Damage Restoration Services from expert professionals. Hopefully, the people of Rose City will be able to recover from this disaster and be able to restore their lives back to a sense of normality.
As with their other initiatives in Kenya, Uganda, and Rwanda, GiveDirectly is proposing to transfer money to hurricane victims in Texas as an unconditional payment. Unlike the projects in East Africa however, where the transfers were via payments to phones through methods like mobile banking, the transfer for Harvey victims is being delivered via prepaid debit cards containing US$1,500. This initiative also differs from the African experiments in the sense that it is not designed as a basic income pilot: beneficiaries are targeted by applying “a range of criteria to select locations: degree of damage sustained, income levels, access to other aid resources, and size”, as transmitted by Piali Mukhopadhyay from GiveDirectly. Moreover, Hurricane Harvey cash transfer will not be monitored via a control group, so there is no comparison between treated and non-treated groups. Clarifying the “unconditional” reference above, it applies only to the way beneficiaries spend the money, which is completely free from control / conditions.
Disaster victim assistance is changing, from an in-kind-based approach to cash-based programming. Cash transfers were used after the Pakistan floods in 2010, and useful lessons were learnt about cash distribution systems, and in 2016 the method was discussed in a United Nations report. GiveDirectly’s project is therefore part of a trend. Experience so far suggests that providing cash rather than services is an efficient way to provide disaster relief because it supports the local economy at the same time as providing the goods and services that disaster victims know that they need. Homes may take huge hits resulting in different requirements to get them fixed so it is safe for a family to live in again. This will include not only the exterior of the home, wherein you might need an expert gutter cleaning company similar to a Clean Pro Gutter Cleaning Ann Arbor agency, or maybe a water damage restoration company who can look at the problems caused by the excess water in your house! The money given to the needy will come handy when these restorative and repair works will take place, as the latter is imperative to proper living standards for a community. Multiple companies are needed, from roof repairs by a reputable company (you can look on the Florida Southern Roofing info page if you are in this area) to stocking up on provisions after all food is lost. There are many ways in which an injection of cash can help those affected.
Whilst these experiments are not Basic Income pilot projects, the results are useful indicators of how different methods for distributing cash might work, and therefore of what the best methods for distributing Basic Incomes might be in different contexts; and the results might also inform a longer-term debate about how Basic Incomes might be preferable to longer term development aid.
More information at:
Ben Paynter, “This experiment will test if giving cash to victims is the best disaster relief“, Fast Company, November 7th 2017
by Citizens' Income Trust | Dec 18, 2017 | Opinion
This article is based on a research project conducted by a French student, Lucas Delattre, during the summer of 2016, and updated in October 2017
Introduction
A Citizen’s Basic Income is an unconditional, nonwithdrawable income paid to every individual as a right of citizenship.
In 2016, at a discussion on Nick Srnicek and Alex Williams’ book Inventing the Future: Postcapitalism and a world without work (Verso, 2015) at the New Economics Foundation, Ed Miliband was asked what needed to happen to move us towards the implementation of a Citizen’s Basic Income scheme. ‘A pilot project’ was the answer. Others have made the same suggestion.
Existing pilot projects
Many of the projects that have been claimed as Citizen’s Basic Income pilots do not satisfy the criteria of being universal, unconditional and based on the individual. Those that do pay unconditional incomes to individuals cannot be absolutely universal, since they necessarily exclude those outside the sample. This is also an ethical issue that cannot be avoided. And the short duration of most projects enables some short-term effects to be detected, but not long-run or life-time effects. (A project in Kenya is giving 23 US$ per month to 40 villages for 12 years, which is much longer than the two years for which most experiments run.)
Some projects call for volunteers, and so are unlikely to be representative. Mandatory involvement of a representative sample is to be preferred; and even better is a saturation sample, covering a defined geographical area, which can enable effects to be picked up at a local level. Projects that compare the experience of pilot groups that receive an unconditional income to the experience of control groups that do not are preferable to experiments that do not employ control groups.
In 2008 and 2009 a privately-financed pilot project was held in the small rural settlement of Otjivero-Omitara in Namibia. 100 Namibian dollars (£7) was paid each month to every member of the population for a period of two years, and significant results were achieved in relation to health, education, crime reduction, economic activity, and poverty reduction. There was no control group with which to compare these results.
Between 2011 and 2013, similar projects in India paid 300 rupees (£3) per month to every member of several pilot villages, and in India the impressive results obtained in the pilot project villages could be compared with those in the control villages.
The Alaskan Permanent Fund (APF) is a sovereign wealth fund based on Alaska’s oil revenues, and invested in the international stock market. It gives an annual dividend payment to every Alaskan citizen, who has been resident for at least a year in Alaska. The APF has usually been able to provide a dividend of between $1,000 and $2,000 each year. Obviously, it is annual and variable, and is not sufficient to take on the role of social security: but it has had beneficial effects on the population of Alaska.
A micro-level pilot project in Germany provides Citizen’s Basic Incomes to selected individuals for one year. In Finland, a random sample of 2,000 people aged 25-58, who were unemployed at the end of 2016, are receiving €560 per month Income for two years in place of existing benefits, and the sample subjects can keep their payments after they have found employment. However, while being based on the individual and unconditional, this does not fulfil the Citizen’s Basic Income criteria of being universal. A similar approach is being considered by some Dutch municipalities. The current experiment in Ontario, Canada, is a Guaranteed Minimum Income project where a means-tested household-based benefit targeted on subjects aged 18-64 is being tested.
The Negative Income Tax experiments in the USA and Canada during the 1970s were based on the household, and so did not fulfil the criteria as a Citizen’s Basic Income pilot projects.
None of this is to suggest that the projects that have been undertaken are not of value. They are. Valuable lessons have been learnt in Namibia, India, Alaska, and the various states in Canada and the USA where Negative Income Tax experiments have taken place; and additional useful lessons will be learnt in Berlin, in the Netherlands, and in Finland. But we still await a genuine Citizen’s Basic Income pilot project. It is arguable that the Indian and Namibian experiments were as near to genuine pilot projects as possible because they were of sufficient duration to enable trends in behavioural change to be evaluated and trajectories predicted.
The UK
Might it be possible to run a Citizen’s Basic Income pilot project in the UK? A genuine Citizen’s Basic Income pilot project? Multiple problems present themselves:
- the project would have to be for a sufficiently long period for a sufficient number of assessments of behavioural change to be made to enable trajectories to be plotted and reliable estimates made of the likely behavioural changes that would accompany a permanent Citizen’s Basic Income scheme;
- any Citizen’s Basic Income viable in the short to medium term in the UK (and in any developed country) would have to be funded wholly or in part by changing income tax and social insurance contribution levels and thresholds. So a genuine pilot project would require government departments to make those adjustments just for the individuals involved in the project, and to recycle the savings into pilot project participants’ Citizen’s Basic Incomes – a somewhat unlikely proposition;
- the project would need to involve a cross-section of the population if it were to stand some chance of modelling a genuine Citizen’s Basic Income; and
- because any revenue neutral or almost revenue neutral scheme would impose losses on some households (- preferably on households in the higher income deciles), some participants in the pilot project would lose disposable income at the point of implementation.
A feasible Citizen’s Basic Income experiment
What would be feasible would be to provide a genuine Citizen’s Basic Income to a small community on top of existing benefits provisions and without altering National Insurance contributions or Income Tax payments. This would avoid government departments having to change current tax and benefits provisions: but it would require additional funding and it would not mirror the tax and benefits changes that would be required to fund a genuine Citizen’s Basic Income. This is why I have called it an ‘experiment’ rather than a ‘pilot project’. Important lessons could be learnt: but nobody would be able to regard the experiment’s results as evidence for how a Citizen’s Basic Income would work in practice.
A further feasible option would be to give a Citizen’s Basic Income to all sixteen to eighteen year olds and not give them an Income Tax Personal Allowance. This approach would create minimal problems for the tax and benefits authorities and for employers, and it would result in almost no losses at the point of implementation. The important question would be whether to promise permanence – in which case it would be a genuine pilot project; or whether to limit the experiment to a stated number of years – in which case it would be an experiment. (Microsimulation research on such a pilot project/experiment can be found in a recent working paper. )
