The Alaska Permanent Fund was started in 1982 to make sure Alaskans directly benefit from its resources in the wake of its oil boom in the 1970s. Part of the proceeds from investments of the principle, which is held in trust for the state and invested by an independent board, is shared yearly with all Alaskan citizens as the Permanent Fund Dividend (PFD). This is as close to a basic income by BIEN’s definition as has been achieved world-wide. It is paid equally to each individual regardless of age or financial status, without means tests or other conditions and regularly every year, although the amount differs depending on how the APF’s investments do over a five year period. It has inspired campaigns in many other countries, including Mongolia, South Africa and Goa, to share the profits from resource use as a basic income or dividend to all citizens. The PDF is under particular threat at the moment as a result of recent deficits in the State’s budget, which some legislators want to plug by taking the dividend payments away entirely.
BIEN News interviewed a board member from the Permanent Fund Defenders about the situation. Joe Geldhoff, a lawyer in Juneau, the capital of Alaska, said that “while it is in our constitution that Alaskan citizens should benefit from the state’s resources, the dividend itself is only in legislation.” The PFD allocation for Alaskan citizens needs to be approved by the state legislature every year. For the first thirty years it was paid equally from a fixed 25% share of the fund’s average profits over five years. In the past six years state politicians have whittled down the amount of dividend paid, “despite big promises at election time, which are often unrealistic.” There are worries that there might be no dividend paid out this year, despite the Fund making a profit of some $18.6 million, and large Federal subsidies to the state, especially since the Covid crisis. The PFD competes with state services and projects for priority, since the state government levies neither income nor sales taxes to cover its own spending, which also comes from Permanent Fund proceeds. “This should be a lesson for people advocating basic income schemes all over the world,” Mr Geldhoff said.
The Defenders want the eariler formula from Permanent Fund investments restored to the dividend, and enshrined in the State constitution to protect it from other budget demands and political maneuvering. Mr Geldhoff said that the current special session will be deciding this year’s dividend allocation, and may not pay it at all. The legislature may also consider a constitutional amendment to protect it and restore the original formula which, if approved, would then go out to be voted on by all state citizens. He expressed the worry, however, that there “aren’t enough adults” amongst state politicians, and that they could be too divided to see the latter option through.
“Young people have become very cynical about the political process,” Mr Geldhoff said, so the Defenders are working to educate all Alaskans about the role the dividend has played in “lifting people out of poverty, supporting private enterprise and combatting income inequality” and how they can get involved with saving it. He said that while those with higher salaries in the state’s large public sector have tended to save their dividend to send their children to university, the dividend has enabled people in rural areas with little cash to maintain and buy equipment for subsistence farming, hunting and fishing. Women in particular have used their dividend to get away from relationships which have gone bad, and to train for better jobs. “It’s really about whether you trust citizens to spend the money well or the politicians who tend to give contracts to their cronies,” he said. “This is our common wealth from which we all should have a direct share.”
A recording of our interview with Joe Geldhoff will be available soon. In the meantime people can support the all-volunteer Permanent Fund Defenders in getting their message out to Alaskans on their GoFundMe page. More information about their campaign and the history of the PFD can be found on their website, and the latest news can be followed on their Facebook page.
Workers aren’t working for the wages we’re offering as much as they used to. Five million fewer Americans are working now than were working in June of 2019. That’s 3.33% of the U.S. labor force—a shortage! Think about what that means: 3.33% fewer pool boys at the spa, 3.33% fewer caddies at the country club, 3.33% fewer ball girls at the tennis club. Just the other day, I had to wait more than 30 minutes for my lobster bisque. Today, I called my service, and they couldn’t schedule anyone to clean my house until the middle of next week! If this keeps up, who’s going to iron my shirts? It’s a crisis.
All this is happening even though most businesses are still offering a very generous $7.25 per hour and, in some cases, even more. At that rate, a single parent only needs to work one-and-a-half jobs to get herself and her child out poverty. Then she’ll only need two more jobs to pay for the childcare she needs for the time she spends at her first job.
Despite this wonderful generosity, some workers have the audacity to suggest employers could end the labor shortage by paying higher wages. Some even suggest improved working conditions. That’s class warfare! We don’t need that radicalism here.
I suggest a simple solution—a small extension of our well established way of doing things—and it will literally eliminate the labor shortage in 5 minutes.
Privatize the atmosphere. The problem with the air we breathe is that nobody owns it! People take it for granted that they can inhale air any time they feel like it as if they have some natural right to breathe. That’s communism! And that never works. Poor people won’t appreciate the air they breathe until they pay for access to it from a corporation, until they know the police will arrest them if they steal the air from its natural owner—the American corporate sector.
This simple solution is in accord with the American way of doing things. We don’t usually give anything to poor people unless they work for it or prove they can’t work. Why are they getting such a valuable thing as breathing rights for free? Because they need it? People need food, shelter, and clothing; we don’t give them access to the resources they need to produce these things for themselves. Only naked savages do that. In civilized countries like ours, people don’t get access to the resources they “need” until they go to a boss and say I will work for you all day to get the money to buy the stuff I need to live.
Bitch Bastardly
This free atmosphere policy is unnatural and unamerican.
Imagine what a privatized atmosphere will do for the labor shortage? Once workers who are “looking for a better job offer” lose the right to inhale and exhale without the permission of the owner of the atmosphere, they’ll learn the truth of my motto, no job is a bad job, right quick. Like a good member of the lower class, they’ll do what they’re told and they do it in five minutes. If they don’t do it, they pass out and die. But that’s their choice. That’s what freedom in the free market is all about. People who don’t own resources, choose to work for people who do, or they choose not to use resources. If that means homelessness, hunger, or malnutrition, that’s their choice. This simple solution simply adds another choice: suffocation.
Imagine all the jobs a privately owned atmosphere will create in the banking sector as workers who can’t find a job before they pass out seek loans to buy breathing rights? Years of interest payments and collections will follow, generating banking sector profits that will trickle down to everyone.
The atmosphere’s new corporate owner will really clean up our environment. They’ll use their Supreme-Court-given free-speech rights to make all the campaign contributions it takes to get Congress to pay them money to remove pollutants from the atmosphere they own. And think of all the jobs that will create!
They’ll file suit in federal court to get the police to stop polluters. Right now, the government allows polluters to dump dirty chemicals into the air whenever they want. If the atmosphere was owned—as nature intended—by a wealthy campaign contributor, the government would stop polluters. No one has the right to dump pollution into the atmosphere you breathe unless they pay for that right from a private, for-profit corporation.
When corporations own resources, the consumer is sovereign, so you’ll be free to choose exactly how much pollution would get into your lungs. If the people want cleaner air, all they need to do is use their combined bidding power to make it more profitable to sell them clean air than to sell polluters the right to dirty up the air. If you think global warming is real, you can offer money to the corporation to get them to stop that too. It’ll be an old-fashioned bidding war, you versus the polluters, and may the deeper pocket win—it’s the American way.
And the best thing is that, whoever wins, the atmosphere-owning corporation will make lots of money, and that’s good for everybody, because what will they do with that money? They’ll spend some of it and that will create jobs. They’ll invest the rest and that will create even more jobs!
And what will people do with all the money they make in those jobs? They’ll buy the right to breathe, of course. But when they get home and take a deep breath, they’ll know they earned it, because they bought it from whatever corporation owns the right to tell them it’s OK to breathe. That’s the freedom of the free market. -Bitch Bastardly, June-July 2021
For information about the Indepentarian blog, contact Karl@widerquist.com For information about Bitch Bastardly, just make it up.
Mark Drakeford, Wales’ new First Minister, announced soon after the Senedd elections in May that the government will launch a basic income trial in the country. As Basic Income News mentioned over a month ago, the support for trialing basic income in the country has greatly increased and Drakeford has confirmed that a pilot will be launched soon.
Jane Hutt, recently appointed as Minister for Social Justice, will be in charge of the supervision of the project. There is still no definitive information regarding the funding and date of implementation of the pilot, but the government’s commitment is firm. “A basic income pilot is one of the specific responsibilities of our new social justice minister. It will have to be carefully designed, it will draw on the experience of attempted pilots in Scotland, but I have a very long standing interest in basic income”, Drakeford said. “We’ll do it on a cross-party basis. There are 25 members of the Senedd in different parties who have expressed an interest in it,” he added.
The Future Generations Commissioner for Wales, Sophie Howes, said that the launching of the pilot shows an “incredibly significant commitment by the First Minister to tackling Wales’ poverty and health inequalities,” and that this trial shows that small countries can lead big policy changes.
Jonathan Rhys Williams, from UBI Lab Wales, said that “this is a huge moment for the basic income movement in the UK and around the world.”
A new guaranteed income program has just been announced in the US, this time in the country’s second largest city, Los Angeles. In his proposed budget for the fiscal year 2021-2022, L.A. Mayor Eric Garcetti included a $24-million guaranteed basic income project that would see 2,000 families in the city receive an unconditional $1,000 per month for one year. Dubbed “BIG: LEAP” (Basic Income Guaranteed: L.A. Economic Assistance Pilot), the program is one of the biggest of its kind in the US. The announcement was made at the end of April when the city budget proposed for the financial year starting 1 July 2021 was unveiled, the budget is usually approved by the beginning of June.
The details of the plan are being finalised, but the Mayor has confirmed that the payment would be truly unconditional with participants in the program able to use the money however they please. There will be eligibility criteria however such as being at or below the federal poverty line (annual income of $12,880 for a single individual / $17,420 for two persons) and, most likely, supporting a child under the age of 18 and demonstrating financial or medical hardship connected to COVID-19. Immigration status, on the other hand, will not constitute a selection criteria. It also seems that the income will go to households and not individuals.
If approved, BIG: LEAP will be the latest in a series of city-led guaranteed income programs in the country. Jackson, Mississippi in 2018 and Stockton, California in 2019 with the launch of “SEED” (Stockton Economic Empowerment Demonstration) paved the way and over the past two years, cities as diverse as Oakland (CA), Patterson (NJ), Denver (CO), Chicago (IL), Gary (IN) and many more across the country have announced or implemented some form of guaranteed income programs.
And these efforts do not occur only at a city level. In Southern California alone, in addition to BIG: LEAP or the pilot implemented in Compton (Compton Pledge), the L.A. County Board of Supervisors has just passed two separate motions asking relevant staff in the administration to design a guaranteed income program for targeted county residents. These first designs are due within 60 days of the motions, i.e. by the third week of July (motion 1; motion 2). Within the city of Los Angeles there are also specific guaranteed income pilots in the South LA and Downtown districts.
Map: main city-led guaranteed income pilots in the US and network of “Mayors for a Guaranteed Income”
Note: programs vary from one city to the next (eligibility criteria, payment amount, duration). Some of the programs that have been announced are yet to be formally approved and started. The map also does not include other initiatives such as, for instance, the payment under the Alaska Permanent Fund which has sometimes been compared to a basic income. (Map by the author, sources: Mashable.com and Mayors for a Guaranteed Income)
Eligibility criteria vary in each city as do the amount of the cash payment or the duration of the experiment but at any rate, the multiplication of the number of programs in progress is indicative of the growing interest for basic income in the US. The COVID crisis is certainly a factor behind this growing momentum. One of the potential eligibility criteria outlined by Mayor Garcetti in his proposal for the experiment in L.A. directly relates to the pandemic. San Francisco has designed a program targeted at artists hit by the crisis and other cities have referenced the impacts of COVID-19 on the economic situation as one of the factors behind their interest for basic income.
Many of these city-led efforts are being supported by Mayors for a Guaranteed Income (MGI), a nation-wide network of mayors founded by former Stockton Mayor and initiator of the SEED program, Michael D. Tubbs. It is supported by various foundations and non-profit organisations such as the Economic Security Project (involved in the Stockton experiment) or the Jain Family Institute (involved in Compton or in a proposed scheme in Newark, NJ). Indeed, whilst these various programs are first a way to alleviate poverty in specific communities and are only local in nature, they are also seen as experiments that will add to the debate around basic income at the federal level.
A Pew survey conducted in August 2020 concluded that 54% of Americans oppose or strongly oppose a federal universal basic income.* Proponents of these programs are hoping that the experiments they are conducting will add to the growing body of evidence that unconditional cash transfers not only help to alleviate poverty, but also improve physical and mental wellbeing and, importantly, that they do not remove incentives for people to work. More generally they are hoping that they will contribute to changing the narrative around poverty and economic insecurity.
*Online survey of 11,001 US adults conducted between July 27 and August 2, 2020, results vary across age groups, ethnicity, political affiliations, and income groups.
In Canada, basic income has become a central issue in the debate on a post-pandemic recovery. Recent steps taken by the governing Liberal Party to endorse the policy has begged the question whether this might represent a serious step towards a permanent national basic income.
In their annual convention in mid-April, Liberal Party grassroots, MPs and delegates voted overwhelmingly in favour of making universal basic income a top policy priority for the party going forward. The policy earned a second place out of 26 policy resolutions to come out of the convention. Although the vote is not binding and does not guarantee that the party will go further with the policy resolution, and further, does not detail what such as Canadian basic income might look like, the move adds to growing momentum surrounding basic income in the national debate.
While the idea has garnered significant national attention previously in Canada, particularly surrounding the recent pilot project in the province of Ontario that was prematurely cancelled, the pandemic has accelerated that debate. At the onset of the country’s first national lock-down in March of last year, there was a significant push for the government to implement an emergency basic income by various advocacy groups such as Basic Income Canada Network, its provincial affiliates as well as by individual long-time basic income proponents. It also garnered significant media attention, with the debate often being centered on the ways in which the current income support system in Canada was inadequate to address the situation.
Many argued that the current employment insurance scheme and the social assistance system were out-dated models not equipped to deal with a changed, and changing, workforce. The New Democratic Party to the left of the Liberal party, which has not traditionally supported basic income but rather a strengthening of the employment insurance system, came out in favor of a universal guaranteed income as a pandemic measure and joined the push for the government to adopt such a policy.
At the time, however, Liberal Prime Minister Justin Trudeau rejected the idea of implementing a universal basic income and opted instead for a more targeted approach. This gave rise to the Canada Emergency Response Benefit (CERB), which was meant for those who did not qualify for existing support programs. The benefit provided individuals who had lost all or part of their income due to the Pandemic with a direct deposit of $2000CAD per month for up to six months. Among the five eligibility criteria for the program, an individual had to have earned minimum $5000CAD in employment income in the previous year, and, as such, it still to some degree tied eligibility to formal employment status.
There was both approval and criticism of the program from all sides of the political spectrum. The Conservative Party argued that the policy was too costly, enabled people to cheat and would prove a disincentive for people to look for and find new work, while the New Democratic Party criticised the policy for being too heavily conditional, not sufficient and not accessible to all who need it.
The program was nonetheless seen by some as a precursor to a potential basic income and as an unintended national experiment with basic income. Amid positive stories published in media on how the CERB had helped people get by, there were further calls to turn the program into a basic income – something that was again, however, rejected by the Prime Minister. Nevertheless, acknowledging that taking away this income support from people in the midst of an ongoing pandemic and new impending lock-downs, the program was replaced by a similar one called the Canada Recovery Benefit, set to end in September 2021.
Now, with the prospect of the pandemic coming to an end, the focus is on basic income as a part of the post-pandemic recovery. Further advocacy groups such as LeadNow and UBI Works have campaigned for the governing party to endorse the policy, and in February a Liberal member of parliament introduced a bill calling for national guaranteed basic income. A vote to determine whether the bill will be brought to committee is expected in coming weeks. If indeed based on the CERB, a hypothetical permanent Canadian basic income would likely not include the pandemic-specific work requirements, but further details as to what such a policy would look like are not provided in the motion.
Additionally, a week before the Liberal convention, the parliamentary budget office issued a report on the cost and the impact on poverty of a national guaranteed basic income, which has significant differences to the “basic income” as defined by BiEN. The report estimates the costs of a model akin to the one that was tested in the pilot project in Ontario to be $87.6 billion in 2022-23. This amount does not take into consideration the potential cost savings of repealing social assistance programs it might replace, as well as the potential savings in terms of health care costs, reduction in crime and less pressure on other social support systems that such a policy might have – something which Evelyn Forget’s groundbreaking work on the Mincome Project in the 1970s in Manitoba shows to be the case. The report concludes that this kind of basic income model could reduce poverty rates by 49% and further estimates that the effect on labour supply is a 1.3 percentage drop in hours worked per week on a national average. Both the cost of a national basic income and the effects on behaviour relating to work have been central concerns in the debate.
There was much anticipation leading up to the convention, and the vote to endorse basic income as a top policy priority signals a shift in the party’s stance on the policy, even though it is not binding. And while basic income was not a part of the Liberal’s federal budget for 2021-22, which was unveiled following the convention, the endorsement comes in an election year, which could make it a key election issue.
