by Faun Rice | Jan 26, 2018 | News
In a July 2017 televised Town Hall with KCET, Economic Security Project co-chairs Chris Hughes and Natalie Foster were asked about the principles of a Universal Basic Income. Public questions from Facebook were delivered by the moderator, the first common concern of which was: should we “give everybody a Basic Income,” even the lazy and wealthy?
Foster took the question and responded with a “yes,” commenting that a universal policy “had more political resiliency” (programs with universal access would attract more support), and that shifting economic situations for the American middle class suggested that support for everyone was logical. She clarified that a Basic Income, whatever the size, is intended to be delivered to everyone with “no strings attached.”
Hughes followed up during a second question on the affordability of Basic Income. He commented that a program could be made more affordable by starting small and scaling up, by, for example, beginning with small monthly payments of $200 to American adults (not quite universal, but not means tested), between the ages of 18 and 64, placing the brunt of the tax burden for this measure on wealthy Americans or in a carbon tax. Hughes also compared Basic Income’s feasibility to existing social security programs.
More recently, Hughes’ new book, Fair Shot: Rethinking Inequality and How We Earn (February 2018), will propose a guaranteed income of $500 per month for working adults whose households earn less than $50,000 annually, with the same provided for students and unpaid caregivers.
Hughes’ book is promoted by but independent of the Economic Security Project, “a network committed to advancing the debate on unconditional cash and basic income in the United States.” Their purview includes, but is not limited to, a Universal Basic Income (UBI), as defined by BIEN: “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.”
Chris Hughes. Credit to: SpeakerHub
The version of guaranteed income that Hughes promotes is very different from that espoused by others at ESP, such as senior fellow Andy Stern, whose 2016 book Raising The Floor makes a case for UBI, because a test based on household income and employment is not the same as giving every individual an unconditional Basic Income. Ongoing coverage of guaranteed income experiments has shown that many governments and organizations follow the same trend as Hughes, pursuing studies that offer cash payments that are means-tested, based on employment status, or revoked when income or employment status exceed minimum limits. Several Dutch experiments encountered obstacles to implementing a UBI pilot not just in public opinion but also in federal compliance issues. UBI proponents may face pressure to give money only to the worthy, and to define that worthiness socioeconomically.
The idea that a guaranteed income is best directed at the poor (and more specifically the working poor) is reiterated in Hughes’ press release email for Fair Shot:
As I write in the book, I’m the first to recognize how lucky I got early in life, but I’ve come to believe this luck doesn’t come from nowhere. We’ve created an economy that creates a small set of fortunate one percenters while making it harder and harder for poor and middle-class people to make ends meet. But we also have a proven tool to beat back against economic injustice—recurring cash payments, directly to the people who need them most. A guaranteed income for working people would provide financial security to all Americans and lift 20 million people out of poverty overnight. It would cost less than half of what we spend on defense a year.
The question raised by the KCET Facebook commentators about ESP’s proposal to give money to “everyone” reflects the same ongoing public concerns that some have about welfare and social programs. It asks for beneficiaries to prove that they are worthy in order to receive public money, and it raises the suspicion that recipients will be lazy or will not attempt to re-enter the workforce. Hughes’ new message in Fair Shot attempts to counteract this by arguing that the beneficiaries are worthy: they are employed, hard working, and “need it most.” He thus reassures the reader that the recipients are deserving.
In contrast, the answer given by Foster in the July 2017 town hall promoted a “no strings attached” UBI. The Economic Security project and associated individuals encourage research and debate around Basic Income and guaranteed incomes; the parameters of upcoming affiliated projects like the Stockton Demonstration (yet to be fully released at this time) suggest an interest both in UBI and in guaranteed income systems.
More information at:
KCET Facebook feed, ‘Town Hall Los Angeles: Q&A with Chris Hughes and Natalie Foster’, KCET Broadcast and Media Production Company, 26th July 2017
Chris Hughes , ‘Fair Shot: Rethinking Inequality and How We Earn’, FairShotBook.com (‘Amazon Review: Fair Shot: Rethinking Inequality and How We Earn’, Amazon.com)
‘Kirkus Review’, KirkusReviews.com, 24th December 2017
Kate McFarland, ‘NEW BOOK: Raising the Floor by Andy Stern’, Basic Income News, 11th June 2016
Andy Stern, ‘Moving towards a universal basic income’, The World Bank.org Jobs and Development Blog, 4th December 2016
Kate McFarland, ‘Overview of Current Basic Income Related Experiments (October 2017)’, Basic Income News, 19th October 2017
by Toru Yamamori | Jan 24, 2018 | News
During the World Economic Forum during 23rd-26th January in Davos, Switzerland, universal basic income (UBI) will be discussed at several sessions:
11:00 GMT 23 January: How Is Rentier Capitalism Aggravating Inequality?
For the summary, speakers and live streaming, please see here.
11:30 GMT 26 January: Guaranteed Income for Growth?
For the summary, speakers and live streaming, please see here.
Guy Standing, a Research Professor in Development Studies, University of London, and an honorary co-president of the Basic Income Earth Network, who will be on the panels of the above two sessions, will also speak for UBI in the following two sessions:
13:30 GMT 23 January: Social Safety Nets for the Fourth Industrial Revolution
16:30 GMT 23 January: Bringing Dignity with Basic Income
The details of these two sessions is not yet disclosed online. UBI was also discussed the World Economic Forum held in 2017.
More information at:
Toru Yamamori, “INTERNATIONAL: Christopher Pissarides, a Nobel Laureate, argues for UBI at the World Economic Forum at Davos”, Basic Income News, 6th February 2017
by Micah Kaats | Dec 24, 2017 | News, Research
In the three years since its initial publication, Rutger Bregman’s Utopia for Realists has helped spur a global conversation on universal basic income (UBI). The book has become an international bestseller, garnering praise from intellectual heavyweights and propelling its author to the TED stage this past April. However, Stephen Davies, education director at the Institute for Economic Affairs (IEA), remains skeptical of many of the young Dutch journalist’s ideas. He makes his case in the most recent edition of the Journal of Economic Affairs.
“Rutger Bregman’s book is both interesting and irritating,” declares Davies in the opening line of his review. To clarify, he quickly notes that it is interesting “not so much because of its particular content…but because it gives us an insight into what may turn out to be a development of both intellectual and political importance” (p. 442). Such an off hand rejection of a book advocating basic income from the education director of a think tank advocating free market capitalism may be unsurprising to some, but Davies’ response is actually not as inevitable as it may seem. Historically, UBI has found supporters on both sides of the political divide.
Davies distinguishes between two types of arguments Bregman makes for basic income. The first considers UBI to be a pragmatic solution to the shortcomings of the current social welfare system. The second considers it to be a necessary means of radically transforming the existing social order. While Davies may be more sympathetic to the second line of reasoning, he spends most of his time critiquing the first.
Steven Davies. Credit to: The London School of Economics and Political Science
In Utopia, Bregman draws on a wealth of research to highlight deficiencies in the means-tested benefit programs that constitute the welfare states of most developed societies. He notes that many of these programs create negative incentives, keeping beneficiaries locked in a poverty trap. Even worse, financial instability can result in a scarcity mindset, making it even harder for poor people to make responsible financial decisions. According to Bregman, unconditional cash transfer programs (UCTs) have proven to be the most successful remedy to this vicious cycle of poverty and dependence. In support of this view, Bregman offers additional in-depth analyses of related programs, including Richard Nixon’s Family Assistance Plan, negative income taxes, and the Speenhamland system.
Davies acknowledges the implications of this body of research. He writes, “Much of the evidence presented by Bregman is indeed very striking and should encourage us simply to trust people more and have greater confidence in their judgment and their knowledge” (p. 447). However, he is far more hesitant to interpret these results as evidence for universal basic income.
Davies notes that many of the policies Bregman touches on are in fact means-tested in one way or another, and may therefore be more analogous to standard welfare programs than basic income. Additionally, Davies argues that many of the UCT programs discussed in Utopia for Realists have not been around long enough to show lasting impacts, and he calls for more research to determine the specific amounts at which UCTs can begin to induce behavioral change. Yet, even more worrisome for Davies is the “bold assumption that there is no meaningful distinction between single lump-sum payments and continuing income stream” (p. 448). He notes that while individual cash transfers may bring sudden and liberating benefits, similar effects of ongoing basic income payments may become muted over time.
According to Davies, all of this “reveals confusion over what a UBI is thought of as being – is it a way of establishing a floor or minimum that is guaranteed to all or is it a redistributive mechanism designed to narrow income differentials?” (p. 449). This confusion motivates Davies’ second critique of Bregman’s argument for universal basic income as a response to the widening global wealth gap. While basic income programs may go a long way in ensuring no one lives in a state of absolute poverty, Davies writes that “it is not clear how a UBI by itself will do anything to reduce relative poverty or inequality” (p. 449). In fact, he notes it may even make the problem of inequality worse if UBI programs seek to replace other means-tested benefits.
However, while Davies takes issue with many of Bregman’s pragmatic arguments, he seems much more sympathetic to the idealistic aspects of his account. As automation increases and “bullshit jobs” proliferate, Davies grants Bregman his assumption that UBI could become a useful tool to decouple meaningful activity from paid work. He writes, “This is clearly the vision that truly inspires Bregman, the utopia of his book’s title, and he would have done better to stick to this rather than muddy the waters by conflating it with more limited and pragmatic discussions of a guaranteed income in a society where wage labor is still widespread and predominant” (p. 456).
While he may be unmoved by Utopia for Realists, Davies clearly recognizes the significance of the political and intellectual movements it represents. The book’s international success seems to reflect a growing anxiety about stagnation of big ideas in the face of an increasingly unsatisfying status quo. Davies concludes, “What we are starting to see is an attempt to work out what a non-capitalist or, more accurately, a post-capitalist political economy would look like” (p. 457).
Davies review appears in the most recent edition of the Journal for Economic Affairs.
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 Pablo Yanes | Dec 19, 2017 | News
Zone 10 – Guatemala City.
With the support of the Swedish Embassy and Oxfam in Guatemala, the Central American Institute for Fiscal Studies (ICEFI) has presented a new book entitled Universal Basic Income: More Freedom, More Equality, More Jobs, More Well-being. A Proposal for Guatemala (2019-2030), was presented in simultaneous events held in Guatemala City and Quetzaltenango. The book explains how inequality is affecting people’s lives and undermining the possibilities of strengthening democracy and development in the world, and Guatemala in particular. In light of this reality, the book proposes a universal basic income (UBI) of Q175 per month (20 €/month) accompanied by increased social spending from 2019 to 2030, which could eliminate extreme poverty and reduce inequality, while generating 4.7 million jobs and potentially boosting economic growth as much as 50%. It also gives scenarios for its financing – including a progressive tax reform – and the main challenges to its effective public administration.
When studying social inequality in Guatemala, the book mentions income inequalities, worker insecurity, the scourge of child labor and lack of employment guarantees, the still unaffordable cost of the basic food basket, the acute chronic malnutrition ravaging Guatemalan children (especially indigenous and rural children), the visible discrepancies in women’s political representation in public and private power arenas, widespread poverty and extreme poverty – also more and more wearing the face of indigenous and rural women – and the complex, institutionalized racism permeating all realms of society. All this is reinforced by the overwhelming problems of corruption and lack of transparency, by paltry public spending on the production of universal, quality goods and services, and by a tax policy that lacks legitimacy among the citizenry due to the unfair way in which taxes are collected and certain economic sectors are granted privileges.
For ICEFI, this reality requires alternative proposals to help mitigate social inequality and its more harmful effects and build economic, social and fiscal scenarios for underpinning sustainable, inclusive economic development. Together with improved public goods and services, a UBI – understood as a sum of money allocated by the State to each citizen or resident – would have a positive impact on Guatemalan society. With a monthly per-person amount of Q175, the UBI could eliminate extreme poverty and reduce inequality. The study, which should be considered a seminal work subject to discussion and more in-depth examination, also reveals that a UBI such as the one proposed could generate 4.7 million jobs in the coming years (33% of the working-age population in 2030), spread out over the entire national territory in agriculture, industry, finance, and commerce – an effect that could boost economic growth by close to 50%. Moreover, the related bankarization would promote the formalizing of businesses aimed at providing goods and services to the public. Inequality would be reduced from 0.538 to 0.472, as measured on the Gini index – better than Costa Rica (0.504 in 2014) but still far from what has been recorded for Uruguay (0.379 in 2014).
As for taxes, the proposal includes financing mechanisms (with and without tax reform). The tax reform scenario is based on a modernization of the income tax, elimination of tax privileges, and gradual reduction of income and value-added tax evasion. The book also emphasizes that implementation of a public policy such as the one proposed implies a revaluation of the State’s role as the main guarantor of individual rights and booster of development and democracy. Fiscal policy can potentially close the current gap between the economy and citizen well-being. With a modern fiscal outlook and political agreement for a profound fiscal reform, the country could have the resources for financing a UBI and other public programs aimed at enhancing social well-being, smoothing the way for compliance with the 2030 Agenda for Sustainable Development while driving productive transformation, access to credit and economic formalization.
In this book, ICEFI recognizes that a UBI would not solve all the problems the country urgently needs to face as a result of its past and present. Together with improved public services, however, it could provide a minimum though effective floor of social protection for tackling inequality and all its related phenomena. At a time when most citizens are unhappy with the current economic and political model, the study can also serve as a basis for debate on alternatives for change. Discussion of a UBI in Guatemala is expected to bring together small, medium, and large enterprises, merchants, producers and cooperatives, as well as social organizations pushing agendas for development and democracy.
The study is available in Spanish.
