by Josh Martin | Sep 4, 2015 | News
Santens article eloquently discusses a recent report by David Autor of MIT on the history and future of work, highlighting realities that may not be common knowledge. For instance, low-income jobs have consistently grown throughout the past forty years, but there has been an erosion of middle-class, manufacturing jobs and a slowing of high-skilled, high-paying jobs. When academics claim technology creates jobs as much as it eliminates them, they often ignore the fact that these jobs often are low-quality work that leaves people worse off. Further, Santens cites the Oxford study that found that 47% of jobs are at high risk of automation in the next two decades. Those low-income jobs may shrivel up as well. Considering all of this information, Santens implores policy-makers to consider a basic income as a means to combat the future of technological unemployment.
Scott Santens, “Everything You Think You Know About The History and Future of Jobs Is Likely Wrong” 19 August 2015.
by Vito Laterza | Aug 22, 2015 | News
The new bailout agreement between Greece and international creditors includes plans for a national roll-out of a Guaranteed Minimum Income (GMI).[i] The GMI is not an unconditional basic income for all citizens, but would be the first universal means-tested grant that covers all Greeks below a certain level of income and asset ownership, regardless of employment status, job contract type, professional category, gender or age.
Alexis Tsipras
In the latest round of bailout negotiations, Greek Prime Minister Tsipras reportedly opposed the introduction of the GMI. The final memorandum approved by the Greek parliament last week, however, provides for a national roll-out of the GMI by end of 2016. The government needs to find 0.5% of GDP to finance the national GMI scheme. A draft report from the World Bank published in January this year, provides a core scenario where 1.2 million people would be covered by the GMI – this is constructed on the basic qualifying criteria and payment amounts of a GMI pilot started last year. The measure would cost €980 million or 0.54% of GDP.[ii]
The general wording of the bailout agreement remains vague and the GMI has not yet been approved by parliament. The specifics of implementation will only be known in the next months.
Recent political events are another source of uncertainty. Tsipras resigned on Thursday and called for snap elections, following a rebellion by those opposed to the bailout within the ranks of his party, Syriza. The elections are expected to be held at the end of September. The rebels have formed a new left group which will run under the banner of Popular Unity.
This casts some doubts over the stability of the next government, and might have implications for the bailout implementation. Sources close to the majority line in Syriza stress that, despite the harsh bailout measures, any future government led by Tsipras would be committed to a social agenda that prioritises those who are in most need.
The history of the GMI in Greece
Attempts to introduce a GMI as a basic social safety net for the most vulnerable sectors of society have been made before. In 2000, the centre-left government led by Pasok assessed and then rejected a proposal in favour of this option. Syriza also tabled a legislative proposal to institute a GMI in 2005, without success. In recent times, the GMI has rarely appeared in policy debates, encountering resistance from many quarters. Trade unions and left-wing critics see the GMI as a threat to well established social protection mechanisms for unionised workers, pensioners and their families. From the right, a pro-poor agenda struggled to gain any prominence until the recent economic crisis brought about by the austerity measures of previous bailouts.[iii]
Economist Manos Matsaganis in Greece
The previous coalition government, led by the centre-right party New Democracy in alliance with centre-left Pasok, feebly endorsed a GMI and launched a pilot in November 2014, engineered by the World Bank. The pilot was to be implemented in 13 municipalities across Greece. It’s too early to make final conclusions about it – the new bailout agreement includes provisions for an evaluation of the pilot to be carried out. In a recent academic paper, Matteo Jessoula, Manos Matsaganis and Marcello Natili suggest that there were problems, with little support from central government to the chosen municipalities, and limited capacity from local governments to deliver, resulting in haphazard implementation.[iv] The GMI amount was set at €200 per month for a single person. In a couple, the other spouse was entitled to an additional €100. The monthly sum was increased by €100 for each additional adult dependent and €50 for each minor child. The cash payments would cover the difference between the guaranteed amount and the household’s assessed resources. A couple with two children would fetch up to €400 per month. The GMI also had non-monetary components, including heating allowance, food stamps, and subsidised employment and training programmes.[v]
By the time the GMI pilot was launched, it was strongly opposed by Syriza. Many saw it as a measure instigated by the creditors to justify major cuts in other welfare measures and substantial reductions in wages, while introducing an income floor well below decent living standards. Observers note that the GMI debate rarely hit the spotlight, on either side of the political spectrum, and has been mostly confined to technical discussions among policy experts.
Towards a basic income?
Is the GMI then irrelevant to basic income discussions? Economist Manos Matsaganis, basic income advocate and a pioneer of Greek GMI policy proposals, is not optimistic: “Nobody is really discussing this at the moment, either within Syriza or outside. In any case, calling for the introduction of a basic income in Greece under current conditions would not be right. You cannot have a basic income before having a GMI, especially when fiscal constraints are so severe”. Social policy expert Varvara Lalioti is more positive: “There are a number of obstacles to the implementation of GMI, not least the current government’s political scepticism and problems with delivery. A national roll-out of the GMI would be a step in the right direction”.
Syriza demonstration
The controversies around the GMI are symptomatic of the kind of resistance that might be encountered against basic income as well. The key issue seems to be the implementation of a universal mechanism that would substitute to some degree the redistribution of public funds through specific interest groups – for instance workers protected by unions or retired people receiving contributory pensions.
Critics point out that the GMI might constitute a race to the bottom pushed by creditors in order to reduce labour costs and state liabilities. GMI supporters like Varvara Lalioti note that, while government scepticism might be justified, “the GMI would protect those who have no social safety net and no organisations to speak on their behalf. They are among those who have borne the worst effects of the crisis”.
The controversies will no doubt continue in the next months. Basic income activists note that what the GMI might do is put in place the bureaucratic infrastructure needed to deliver a basic income set well above poverty levels. Reflecting the experience of other southern European countries, the Greek welfare state evolved piece-meal and reflects a complex constellation of interest groups. The introduction of a measure that covers people with little or no income from formal labour markets, and who have never worked under job contracts offering significant welfare benefits, is a significant change. It is likely to have important implications for the future of basic income discussions in Greece.
The article benefited from the expert advice of Dr Varvara Lalioti, Professor Manos Matsaganis and Professor Neni Panourgia. Errors are the sole responsibility of the author.
[i] The Memorandum of Understanding underpinning the bailout agreement.
[ii] World Bank. 2015. Ex ante poverty and fiscal evaluation of a guaranteed minimum income programme in Greece. Washington, D.C.: World Bank Group.
[iii] A detailed account of the different positions and criticisms in the Greek GMI debate is offered by Varvara Lalioti’s academic article “The curious case of the Guaranteed Minimum Income (GMI): highlighting Greek ‘exceptionalism’ in a southern European context”, forthcoming in the Journal of European Social Policy. An earlier version is available online here.
[iv] Matteo Jessoula, Manos Matsaganis and Marcello Natili. 2015. “Strengthening minimum protection in southern and eastern Europe? Pressures from within and from beyond”. 22nd International Conference of Europeanists, Paris, 8 July. Abstract available.
[v] Hellenic Parliament – Parliamentary Budget Office. 2014. Minimum Income Schemes in European Union and Greece: a Comparative Analysis.
by Josh Martin | Aug 6, 2015 | Research
Skidelsky, a distinguished academic in history and economics, writes on the Conservative government in the UK and their budget that was released in early July. They plan to cut £12 billion in welfare, with £9 billion of that coming from cuts in tax credits, which are in place to help working families reach some semblance of a living income. While the government plans to raise the minimum wage, Skidelsky worries that such a policy re-emphasizes the importance of income generated by labour in a time when automation looks set to make millions of jobs redundant. Instead, Skidelsky believes a basic income is necessary as labour markets shift.
Robert Skidelsky, “Minimum Wage or Living Income?”, Project Syndicate, 16 July 2015.
by Karl Widerquist | Jul 28, 2015 | News
In an interview with Ezra Klein of Vox published on July 28, U.S. presidential candidate Bernie Sanders was asked pointedly about basic income. His response this time was more specific than his answer when asked about basic income on Reddit a year ago, but it was still rather vague.
Early in the interview, Sanders endorsed a single-payer healthcare system, which is an unconditional and universal program. He went on to say:
It seems to me that when you look at basic necessities of life — education, health care, nutrition — there must be a guarantee that people receive what they need in order to live a dignified life.
Klein responded later with a very specific question about basic income:
Let me end on a question about a policy that is getting, seems to be, some momentum but it’s not often talked about in Washington, which is a universal basic income. You’ve begun to have people go back to both Milton Friedman and Martin Luther King Jr., saying we should really have a fundamentally guaranteed standard of living in this country.
Sanders responded by saying, “I am absolutely sympathetic to that approach.” But of course, “absolutely sympathetic” is not the same as “absolutely in support of.” So, exactly what he means is unclear. The rest of his answer does not specifically address basic income. Here it is in full:
I am absolutely sympathetic to that approach. That’s why I’m fighting for a $15 minimum wage, why I’m fighting to make sure that everybody in this country gets the nutrition they need, why I’m fighting to expand Social Security benefits and not cut them, making sure that every kid in this country regardless of income can go to college. That’s what a civilized nation does.
Here’s the point. This is the wealthiest nation in the history of the world, but nobody in America knows it because their standard of living is going down and almost all of the new wealth is going to the top 1 percent. That is an issue that we have to deal with.
In the wealthiest nation in the history of the world, the top one-tenth of 1 percent should not own almost as much wealth as the bottom 90 percent. Everybody in this country should in fact have at least a minimum and dignified standard of living. All right?
He didn’t specifically mention any unconditional programs and he specifically proposed expanding two conditional programs (Social Security and the Minimum Wage). Therefore, he indicated that basic income is not high on his agenda. He appears to be trying to attract basic income supporters to the idea that the conditional approach can achieve their goal of meeting everyone’s needs, if it is expanded and made more generous. However he might also be implying that he would be interested in basic income if it had sufficient public support to become a political reality. The facts that major-party presidential candidates are being asked about basic income and that some are responding sympathetically is taken by many supporters as an indication of the increase in the political viability of basic income.
The full Vox interview is online:
Ezra Klein, “Bernie Sanders: the Vox Conversation.” Vox, July 28, 2015.
by Stanislas Jourdan | Jun 29, 2015 | Opinion
The new centre-right government coalition in Finland committed to run a basic income pilot project. It is however unlikely that a pure unconditional basic income has any chance to be experimented, says BIEN Finland‘s chairman Otto Lehto in this interview.
The Basic income community worldwide is getting excited about the Finnish government’s commitment to launch a basic income experiment. Are you enthusiastic too?
We have certainly reached a historical point. For the first time, in the general elections of April 2015, the majority of the MP’s in the Finnish Parliament have expressed their support, ranging from mild to strong, for basic income. This data derives from the answers given by candidates during the last election. The majority of the Finnish public has also expressed its support for the idea. This is the result of many years of active public debate and discussion, including our much-publicized but ultimately unsuccessful citizen’s initiative campaign (2013).
Otto Lehto
The new government, led by Prime Minister Juha Sipilä from the Centre Party, has committed itself to setting up a pilot project for basic income. However, premature enthusiasm should be dampened by realism. For one, it is not entirely clear whether people understand the term in the same way. Many MP’s support a BIG that is conditional, means-tested and non-universal.
Secondly, there are elements in the government, including powerful ministers, who oppose UBI and will undoubtedly do their best to abort, or at least water down, the pilot experiment.
So there are reasons to be optimistic but also reasons to worry about the outcome.
How will this pilot project be conducted?
The government hasn’t announced the details yet. The public announcements have been sparse. The government should roll out more details in the coming months. In the past, Prime Minister Sipilä has expressed his support for a regional study conducted under the advice of experts.
Has the Centre Party of Finland been a strong basic income supporter in the past?
The party has traditionally been in support of a basic income or a negative income tax, at least since the 1990’s. However, unlike the Greens and the Left Alliance, who have quite detailed calculations, the Centre Party has never specified what kind of a basic income model it supports. In addition, the party has been quiet on the issue for a long time. The youth wing of the party, however, has been working together with BIEN Finland to advocate for a proper Basic Income.
Support for the basic income renewed itself in the party since september 2014, after the new party leader Prime Minister Sipilä, expressed his support for setting up a pilot project in Finland. At the same time, the influential think tank Sitra funded a report by Tänk (November 2014), which provided a roadmap for setting up a pilot project for BIG.
These developments have led to this point. However, the leaders of the party are still divided on whether this should be a proper BIG or a means-tested, conditional form of BIG.
How about the other parties involved in the current governing coalition ?
The other government coalition parties (the True Finns and the National Coalition Party) are equally divided on the issue, so it is unclear on whether a “pure” Unconditional Basic Income has any chance of even being tried. The current leadership of those parties is unfortunately quite opposed to the idea, or at least suspicious of it, even though there are many supporters in the rank and file members of the two parties.
So, although the Centre Party has managed to include the basic income pilot project into the government’s agenda, it is not very high on the list of priorities for the other coalition parties.
And, to complicate matters, the new government has expressed its intention to increasing the work requirement of social security in order to reduce the costs of the welfare system, while at the same time pushing for a basic income experiment! The same ambivalence is reflected in their statements released to the media. The schizophrenic push and pull between these mutually incompatible goals — piloting an unconditional basic income and simultaneously increasing the conditionality of social security benefits – makes predicting the future difficult.
In this context, how will BIEN Finland stand?
The BIEN Finland network has strong existing connections to many of the opposition parties (including the Green Party and the Left Alliance, which are both strong supporters of basic income). Due to accidents of history, we have weaker connections to the government coalition parties, with the exception of a handful of MP’s, think tanks and the youth wing of the Center Party, so we have had little influence on the planning of the basic income pilot project.
Nonetheless, we will continue to proactively offer our expertise to the government. We will follow the developments as they happen, and inform the European network as soon as we know more about the upcoming pilot program.
Thank you Otto!
Credit picture: CC Aaronigma
