by Kate McFarland | Nov 7, 2016 | News
David Thigpen, Research Affiliate at Institute for the Future, has written a short report on basic income for the progressive American think tank Roosevelt Institute.
The report considers universal basic income primarily as a response to the rise of the gig economy, increase in precarious work arrangements, and decline in full-time permanent employment. In Thigpen’s words, these changes in the economy leave the country “on the verge of a critical dilemma”:
If the traditional form of work—full-time employment paying middle class wages with benefits—is no longer a realistic expectation, how will we sustain a large middle class in the future? And if the spending power of millions of middle-class families is sharply reduced, what will be the effect on economic growth? These are the big questions universal income addresses (p. 5).
In the remainder of the report, Thigpen outlines different types of basic income proposals, looking especially at two general ways in which a basic income might be funded: taxation and revenues derived from common assets (as in the Alaska Permanent Fund Dividend).
Thigpen recommends a combination of both funding models, taxes and co-ownership, to finance a basic income. He also advises that a basic income “should not reduce the amount of money allocated to the poor” and that “for tactical reasons” the initial level of the basic income should be modest (p. 8).
Read the report here:
David E. Thigpen (October 2016) “Universal Income: What Is It, and Is It Right for the U.S.?” Roosevelt Institute.
Reviewed by Robert Gordon.
“Uber” photo CC BY-NC 2.0 Melies The Bunny.
by Kate McFarland | Nov 6, 2016 | News
In the last week of September 2016, the website Ideas for India published a symposium on universal basic income, featuring essays by six well-known Indian economists.
The e-symposium was conducted by Parikshit Ghosh, Professor at the Delhi School of Economics. Contributions are as follows:
• Pranab Bardhan (University of California, Berkeley) “Basic income in a poor country“
In his contribution, Bardhan allows that a universal basic income might be unaffordable in rich countries like the US and UK. But he argues that, nevertheless, a UBI is both feasible and desirable in India. Specifically, he considers a basic income set at about 75 percent of the poverty line, which would replace some but not all welfare programs. (Bardhan mentions public education, healthcare, childhood nutrition programs, and public works employment guarantee programs as ones that are important to retain.)
In addition to countering the argument that basic income would not be affordable, Bardhan responds to the objections that the policy would undermine the value of work and that poor individuals would squander their money. He admits, however, that gaining political support poses a struggle.
Bardhan’s article is an updated and extended version of a piece written for Project Syndicate in June.
• Abhijit Banerjee (Massachusetts Institute of Technology and GiveDirectly) “Universal basic income: The best way to welfare“
Banerjee’s essay is a reprint of a piece initially published on the Indian Express in June, framed in the context of the defeat of the Swiss referendum on basic income. Banerjee argues that, despite the failure of the Swiss referendum, the debate on basic income is not over–and, specifically, India should consider UBI as a way to reduce bureaucracy and make the welfare system more efficient.
• Maitreesh Ghatak (London School of Economics) “Is India ready for a universal basic income scheme?“
In his article, originally published on NDTV, Ghatak argues that India can afford a basic income–specifically, one sufficient to bring every Indian above the poverty line–by cutting subsidies, reducing wasteful spending, and reforming the tax code. He maintains, additionally, that a basic income is not a silver bullet to eliminate poverty, and would need to be introduced in addition to (rather than in place of) other anti-poverty programs and strategies.
• Debraj Ray (New York University) “The universal basic share“
Ray develops a proposal for what he calls a universal basic share in India: a policy in which a fixed percentage of the country’s GDP is set aside to distribute to residents in the form of individual cash transfers. He admits that he has “no clue whether we have the political will to pull something like this off” but is hopeful that the ability to start with small shares might make the policy more tractable politically.
• Kalle Moene (University of Oslo) with Debraj Ray “The universal basic share and social incentives“
In a jointly authored piece with Moene, Ray expands upon the projected benefits of a universal basic share (UBS)–for social cohesion, economic growth, and even possibly sustainable development. They argue, moreover, that UBS can accomplish some of these goals more effectively than UBI.
• T.N. Srinivasan (Yale University) “Minimum standard of living for all Indians“
Srinivasan revisits a minimum income policy that was debated in India during the 1960s.
Reviewed by Robert Gordon
Photo CC BY-NC 2.0 Rishi Bandopadhay
by Kate McFarland | Nov 4, 2016 | News
The latest step to Ontario’s basic income pilot occurred on Thursday, November 3, 2016, when the Ministry of Community and Social Services released a call for public input on the design and objectives of the study and published a new comprehensive report from Project Adviser Hugh Segal.
In February 2016, the provincial government of Ontario, Canada announced a budgetary commitment to finance a pilot study of a basic income guarantee. In June, the government appointed former senator Hugh Segal — who has been promoting basic income in Canada for more than a decade — as the project’s Special Adviser. (For some of Segal’s past writings on basic income, see here.)
Segal has now released a detailed and comprehensive discussion paper in which he lays out his recommendations for the design and administration of the pilot. The government is soliciting input from the public before it makes its final decision.
This release of this proposal for Ontario’s basic income study closely follows the publication of details about the upcoming pilots in Finland and the Netherlands, as well as the charity GiveDirectly’s study in Kenya.
A Negative Income Tax Model
If the provincial government of Ontario decides to adopt Segal’s newly announced proposal, it will test a basic income guarantee (BIG) — wherein cash payments are disbursed automatically and unconditionally to individuals whose income falls below a certain threshold — as a replacement to its Ontario Works program and Ontario Disability Support Program.
Segal recommends that participants in the pilot be guaranteed a monthly income of at least $1320, or 75 percent of the province’s Low Income Measure, with an additional $500 supplement to those with disabilities.
In Segal’s proposal, the BIG is to be structured as a negative income tax (NIT), in which the amount of the subsidy is tapered off for higher earners, in contrast to a “demogrant” model wherein all participants would receive a fixed monthly payment regardless of other earnings. That is, the government would “top up” the earnings of pilot participants whose incomes fall beneath $1320 (or other level chosen for the basic income guarantee). Those who earn more than $1320 per month would receive smaller benefits or, depending on earnings, none at all.
Eligibility is to extend to all residents of the selected communities between the ages of 18 and 65, regardless of current income. All participants will be guaranteed a minimum income, as per the NIT model summarized above. However, depending on their initial and subsequent earned income, some participants may not receive any payment during the course of the experiment. As Segal’s discussion paper notes, “even though the program is based on a principle of universal access, not all participants will receive symmetric payments or any payment at all.”
Segal offers two reasons for his recommendation that the pilot test a negative income tax rather than a universal demogrant. First, this makes the design unique: no other planned trial of a basic income guarantee will employ the NIT model; thus, outside of Ontario’s pilot, no data on the impact of this specific model will be collected. Second, Segal believes that a demogrant, unlike an NIT, is not realistically affordable in Canada (nor in other developed nations).
Experimental Design
Segal recommends two types of studies:
(1) A randomized control trial, to be conducted in an urban center, in which different treatment groups receive different levels of guaranteed income and/or pay different rates of taxes on additional earned income. Subjects will be randomly sampled from all residents (of at least one year) between the ages of 18 to 65, with participation in the experiment being voluntary. Participants would then be randomly assigned to one of four groups, including a control.
(2) “Saturation sites” in which all members of a community receive the basic income guarantee (and are subject to corresponding changes in the tax schedule). Ideally, according to Segal’s report, “one saturation site would be located in southern Ontario, one in northern Ontario, and one would be chosen and planned in close collaboration with First Nations communities.”
In each case, the study is to last a minimum of three years.
Measured Outcomes
According to the discussion paper, the “core question” that Ontario’s pilot endeavors to answer is, in Segal’s words, “Is there a more humane and efficient way to reduce poverty, a way that better respects the rights of those in poverty to make their own life choices, reduces stigma and growth in bureaucracy, yet produces improved outcomes in terms of work and life prospects?”
In order to answer this question, Segal lays out many variables that he urges researchers to monitor and analyze in the pilot, including the following:
- Administrative costs or savings to the government.
- Health outcomes, as measured by (for example) prescription drug use or number of visits to primary care physicians, emergency departments, and hospitals.
- “Life choices” such as career decisions, education decisions, family decisions, and choices in living arrangements.
- Education outcomes of participants and their children, including completion, attendance, and standardized test scores.
- Work behavior, including employment status, hours worked, number of jobs, and participation in job-search activities. The report mentions participation in the underground economy as another outcome of interest.
- “Food security” status as assessed through the Canadian Community Health Survey and the researchers’ own surveys or interviews.
- Subjects’ “perceptions of their place in society, their capacity to contribute, their social environment’s capacity to protect them” as collected through interviews.
- Interactions between the basic income guarantee and other welfare programs (e.g. the Canada Child Benefit).
- In saturation sites, community-level impacts such as changes in rent and prices of goods and services, crime and incarceration rates, civic participation, and the use of public services.
Thus, the Ontario pilot is likely to examine a much wider and more diverse range of outcomes than the impending basic income pilots in Finland and the Netherlands, which focus more narrowly on assessing the impact of a basic income guarantee on employment.
This difference follows in part from a deliberate decision not merely to reproduce these studies. Segal states Ontario should not duplicate research being conducted elsewhere, for the sake of “maximiz[ing] the diversity of various different data sets generated by such endeavours.”
National Context
Segal recommends that Canada’s federal government “consider partnering with any willing province on any Basic Income pilots now being considered or contemplated.”
As Segal describes in the report (links added), Ontario is not alone in Canada in its interest in pursuing a basic income pilot:
“[T]he federal government introduced an enhanced child benefit in July 2016, with the objective of constructively increasing the income of low and middle-income Canadian families with children. Moreover, the House of Commons Finance Committee recommended in its pre-budget report that the government of Canada move forward with a pilot project on Basic Income.
“In its most recent ministerial mandate letter, the government of Quebec instructed the Minister of Employment and Social Solidarity to modernize income support programs and embrace better ways of reducing poverty, including a Basic Income guarantee. The Quebec Liberal Party Youth Wing, in August 2016, summoned the government to implement a Basic Income guarantee in lieu of the province’s current welfare system. The government of Nova Scotia has initiated a comprehensive social support review looking for better ways to eliminate the welfare wall and to better support the working poor. The mayors of Calgary and Edmonton have welcomed the idea of a Basic Income guarantee and associated pilot projects, as has Alberta’s Minister of Finance. In August 2015, the Government of Saskatchewan Advisory Group on Poverty Reduction also recommended a Basic Income pilot.”
Call for Input
As announced on November 3, 2016, Ontario’s Ministry of Community and Social Services will be conducting consultations to solicit public input on the basic income trial, guided by Segal’s discussion paper. Consultations will run through January 2017.
Those who want to provide input may contribute in one of two ways: attend an in-person meeting (see the schedule here) or share feedback online (until January 31, 2017).
The first stage of the pilot study — selecting the sites, obtaining access to data sources, and selecting and obtaining consent from participants — is slated to commence before the end of March 2017.
More Information
News release from the Ontario government (Ministry of Community and Social Services): “Ontario Seeking Input on Basic Income Pilot”
Discussion paper: “Finding a Better Way: A Basic Income Pilot Project for Ontario” by Hugh Segal.
Thanks to Jenna van Draanen for proofreading a draft of this article.
Cover photo: “Terminally Invisible” CC BY-NC 2.0 Kat Northern Lights Man (taken in Toronto, Ontario).
by Florie Barnhoorn | Nov 2, 2016 | News
A citizens’ initiative for the introduction of a basic income in the Netherlands in 2018 recently handed over a petition containing 58,800 signatures calling for a debate in the Parliament. The signatories are advocates of a guaranteed income of approximately 1000 EUR per month for all adults, plus basic health insurance and an extra payment for children under the age of 18 years. The supporters say that a basic income will allow everyone more freedom to decide whether to work, study, start a company or, for example, take care of elderly family members, instead of being stuck in a hated job to provide for their families. The citizens’ initiative has collected 58,800 signatures, significantly more than the 40,000 needed to place a controversial issue on the agenda of the Parliament.
The paper invitation to sign the petition was spread as a ‘Civil Relief Assessment Notice’, similar to an assessment notice directed to all Dutch taxpayers. According to Johan Luijendijk, one of the initiators of the citizens’ initiative and co-organizer of Basicincome2018, an informal digital platform for sharing information on basic income and the exchange of experiences, the threshold of 40,000 signatures was already met in April: “This happened so fast that we adjusted our ambitions to 100,000. But the growth slowed down, so if we continue at this rate, we will not achieve our goal soon.” He believes that the general public is still unfamiliar with the subject and that the relatively small circle of proponents has been reached: “I suppose that many people still have ’cold feet’ to endorse the rather radical idea of a unconditional basic income”, he says. Hence, it was decided to submit the initiative this week.
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Civil Relief Assessment Notice
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After the presentation of the petition to Members of Parliament, the signatures will be counted and validated. The whole process can be completed in about a month, according to RTL. It is also checked whether this is a topic parliament hasn’t dealt with recently. Last September, members of the Second Chamber of Parliament (House of Representatives) discussed with the Minister for Social Affairs and Employment, Lodewijk Asscher (Partij van de Arbeid / PvdA / Labour Party) a memorandum initiated by Norbert Klein, leader of the Vrijzinnige Partij (Cultural Liberal Party) wherein he advocates the introduction of a basic income. However, the MPs have postponed the voting procedure, so there is a chance that Parliament is obliged to consider the current initiative. If a majority is in favor of the proposal, the responsible minister will be asked to change his or her policy towards a basic income.
At present, the basic income movement has to transfer its focus to the upcoming elections for new members of the House of Representatives in March 2017. Political parties are now making their programmes. So far, only a few of them (Party for the Animals with 2 seats in Parliament; Cultural Liberal Party with 1 seat; Pirate Party no seats) have explicitly included a guaranteed income in their programmes for the next four year. Intensive debates will take place with GroenLinks (GreenLeft), PvdA (Labour Party), D66 (Democrats 66), SP (Socialist Party) and the minority of proponents in VVD (People’s Party for Freedom and Democracy) and CDA (Christian Democratic Appeal) in order to persuade these political parties to adopt an unconditional basic income as an indispensable part of their political ambitions (according to an email communication with Alexander de Roo, the chairman of the Dutch branch of BIEN). “We are also planning to intensify our lobby towards entrepreneurs. We want them to speak openly about the benefits and necessity of the introduction of a universal basic income.”
Thanks to Ali Özgür Abalı for reviewing a draft of this article.
Credit Picture ‘Public debate on basic income‘ CC Zeptonn
Credit Pictures’ Civil Relief Assessment Notice‘ Verlichtingsdienst
by Kate McFarland | Oct 19, 2016 | News
Economist Michael Ash (Professor at University of Massachusetts, Amherst) spoke about public debt and basic income on the September 22 episode of The Benjamin Dixon Show, a progressive news talk show.
In the program, Professor Ash talks about both the short- and long-term benefits of basic income. In the short term, he maintains, a basic income would stimulate spending and boost economic growth. Thinking longer term, he believes that a basic income is further necessary to increase the bargaining power of workers and free people from the “tyranny of bad work”. To these ends, he suggests combining a universal basic income with shorter work weeks and living wages.
In subsequent comments to Basic Income News, Ash remarks on an additional argument in favor of basic income:
In the interview, I did not mention an important aspect of Basic Income as a form of compensation for unpaid labor. There is excellent work in feminist economics (see for example the research of Nancy Folbre or Diane Elson) on the many ways that our capitalist economic system free rides on unpaid domestic or family labor, without which the wheels simply wouldn’t turn. The next generation of workers, i.e., the reproduction of the working class, is essentially a “donation” from this unpaid family or domestic labor to the economic system. An additional case for Basic Income is that this labor should be recognized and compensated, if not with a direct wage (which is also a reasonable case) then at least with a Basic Income. The Basic Income would be both fair — rewarding those who do the work — and efficient — permitting the next generation to be raised in a healthier environment more supportive of their full development as human beings.
Watch the full interview below:
Reviewed by Genevieve Shanahan
