by Karl Widerquist | Dec 13, 2017 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in October 2005.
Dividend checks from the Alaska Permanent Fund (APF) go out this month paying $845.76 (US), to every Alaska resident. (The APF is the only existing Basic Income in the world. It pays yearly dividends based on earnings from an investment fund created out of the state’s oil tax revenues.) The amount is down slightly from last year. The reason for the decline is that each year’s returns are tied to stock market returns over the last five years, and recent market returns have been much lower than returns in the late 1990s. The recent increases in oil prices are increasing the total size of the fund, but it will be years before their effects are felt in the yearly dividends.
The idea of the fund is gathering more and more attention around the world. The Alberta government is preparing to send checks of $400 (Canadian) to every resident of the province. The checks are a one-time response to the province’s large budget surplus, which has been caused largely by the recent increase in oil tax revenue. Although this is a one-time grant, the program’s architects credit the APF as inspiration. New Mexico, which also has a growing budget surplus thanks to the recent increase in oil prices, maybe the soon follow suit. Governor Bill Richardson and prominent members of the state legislature have been discussing a one-time tax rebate in the neighborhood of $50 (US) per person.
The spread of the Permanent Fund idea does not stop with Alberta and New Mexico. Recent editorials have discussed the idea around the world. Kevin O’Flynn, writing for Newsweek International, mentioned the APF as one of the possible models for reform of Russia’s oil industry. Two recent editorials have argued for a permanent oil dividend in Iraq. Lenny Glynn, writing for The Weekly Standard, argues than enshrining an oil dividend into Iraq’s constitution would be a force for democracy, national unity, and economic development. It would almost certainly make the constitution more popular. Ronald Bailey, writing for Reason on line: Free Minds and Free Markets, includes the creation of an “Iraq Permanent Fund” in his list of things the Bush administration should have done for a successful post-war Iraq (https://www.reason.com/links/links081805.shtml).
Petroleum.com: Latin American Energy, Oil & Gas included a commentary by Michael Rowan, entitled “the Sinkhole,” praising Permanent Fund and comparing it to Venezuela’s nationalization of its oil industry. Governor Jay Hammond began setting up the permanent fund at about the same time that Carlos Andres Perez nationalized Venezuela’s oil industry in 1976. Rowan argues that nationalization of 100% of Venezuela’s oil revenues had no noticeable effect on poverty in Venezuela, but the Alaska fund, which distributes only a fraction of the taxes on Alaska oil revenues, has provided a real and verifiable benefit to low-income Alaskans—and has been especially important in reducing poverty among indigenous Alaskans. “If [Perez] had done what Hammond did in 1976, Venezuela’s Permanent Fund would have about $120 billion this year, paying a dividend of $1,500 to each of 8 million Venezuelan families.” The editorial is hostile to activist government policies, but it is not hostile to policies that effectively help the poor. Rowan’s endorsement shows that the Permanent Fund idea is a good way to promote anti-poverty policies with the political right, but that’s not all there is to it. People who normally favor redistribution should not ignore Rowan’s argument that getting money into the hands of the poor can be more effective toward economic equality than putting a government in direct control of resources. Rowan’s commentary is online at: https://www.petroleumworld.com/Ed081105.htm.
-Karl Widerquist, Oxford, UK, October 2005
by Guest Contributor | Dec 4, 2017 | News
A new report from the International Labour Office (ILO), a United Nations agency dealing with labour-related issues, mentions Basic Income as an option for the reform of social security:
… is a renewed debate about a universal basic income (UBI) as a way of improving income security in the face of uncertain availability of jobs. As argued by proponents, it would guarantee a minimum standard of living for everyone irrespective of employment, age and gender, and would give people the freedom and space to live the life they want. Its proponents also argue that a UBI may contribute to alleviating poverty while reducing the administrative complexity and cost of existing social protection systems. A wide range of proposals are being discussed under the label of UBI, highly divergent in terms of objectives, proposed benefit levels, financing mechanisms and other features. Opponents of UBI proposals dispute its economic, political and social feasibility, question its capacity to address the structural causes of poverty and inequality, and fear that it may entail disincentives to work. Moreover, it is argued that a UBI – especially neoliberal or libertarian UBI proposals that aim at abolishing the welfare state – may increase poverty and inequality and undermine labour market institutions such as collective bargaining. (p.180)
To read the whole report, click here.
Photo: “Unemployment line” at FDR Memorial, CC BY 2.0 woodleywonderworks
by Eduardo Abreu | Dec 1, 2017 | News
Charles Clark. Credit to: Michael Swan
Writing for The Catholic Register, Michael Swan reports on a talk by Charles Clark, Vatican’s top economic advisor, at an interfaith conference on universal basic income (UBI), held in St. Michael’s College in Toronto on October 20th, 2017.
This talk takes place during a period when a UBI pilot program is running in Lindsay, Thunder Bay and Hamilton, in Ontario, targeting those who qualify as low income.
Primarily, catholic social teaching focuses on human good and UBI aims to promote human well being so, although not directly a part of its teachings, UBI successfully puts in place a framework for catholic practice, said Marquette University’s Jesuit Theologian Fr. Joseph Ogbonnaya.
In Clark’s view there isn’t a Catholic economic policy, but he notes that in light of the Catholic social teaching, which advocates for equality it is sensible for any Catholic, to put forth policies that lead to less poverty and greater social mobility and inclusion, such as UBI. Still, UBI is not a panacea, meaning that we need public goods and the state for public education, public health, for welfare, he said.
Since we live in a society where we obtain what we need through markets, Clark states that we must ensure everyone has sufficient income, at a minimum level, to participate in it and have a decent living.
According to Clark, there is an increasingly unequal distribution of wealth, a result of wages that stall in the face of productivity growth. This is important since for a democracy to work there must be mobility, which in turn depends on equality being ensured, something that society needs to work on, said Clark.
Comments on UBI coming from the Catholic Church have been rare, so in this regard, public appearances as such from a Vatican related figure are refreshing.
More information at:
Michael Swan, “Basic income can’t be ignored, says Vatican expert”, The Catholic Register, 27th October 2017
by BIEN | Nov 30, 2017 | News
At the Web Summit in Lisbon, Portugal, from November 5th to 8th, Guy Standing took part in this big event. Over 60,000 participants from 170 countries attended the event; the event hosted about 1,200 speakers.
Some speakers included influential individuals like Elon Musk, Al Gore, Bono, Margrethe Vestager, Travis Kalanick, Jack Dorsey, Reed Hastings, Mike Krieger, Eva Longoria, Professor Stephen Hawking, and others. In addition, the 800th anniversary of the Charter of the Forest, which is a companion document to the Magna Carta, was also celebrated and represented at the event.
It was held in the Speaker’s Chamber of the House of Commons. Guy Standing’s panel asked, and was themed, on two questions, “Is it the answer to inequality for which we have all been waiting? Or a convenient way for governments to evade the provision of real social services?”
More information at:
Web Summit, “University of London’s Guy Standing, Kela’s Marjukka Turunen, GiveDirectly’s Michael Faye, Government of Portugal’s Augusto Santos Silva & Yahoo Finance’s Rob Pegoraro”, November 2017
by Micah Kaats | Nov 24, 2017 | News
In recent years, basic income has found support across the political spectrum. While some have justified it as a human rights issue, others believe it to be necessary in the fight against poverty and rising inequality. According to many supporters, these are sufficient justifications in their own right. However, many basic income proponents also cite the growing threat of automation to employment. Put simply, as robots become smarter and cheaper, more and more workers will find themselves out of a job, and basic income programs will be required to offset rising unemployment and job displacement. This view is particularly popular in Silicon Valley and has been championed by the likes of Elon Musk, Richard Branson, and Mark Zuckerberg. However, a new report from Pearson, an education publishing company, challenges this line of reasoning.
Pearson’s analysis, with help from researchers at Nesta and the Oxford Martin School, diverges from previous reports on automation (Frey & Osborne, 2013; Arntz et. Al, 2016; McKinsey, 2017; Richard Berriman, 2017) in two key respects. While previous studies have tended to focus exclusively on the potentially destructive effects of automation, Pearson’s report also incorporates the potential for growth in jobs and skills that may be complemented by automation. The study also considers how automation may interact with seven specific global trends to affect supply and demand in the labor market over the next decade: (1) environmental sustainability, (2) urbanization, (3) increasing inequality, (4) political uncertainty, (5) technological change, (6) globalization, and (7) demographic change.
Pearson’s report relies on a combination of expert testimony and, perhaps fittingly, machine-learning. Two panels of artificial intelligence experts in the United States and United Kingdom were asked to rate the future prospects of thirty occupations in the context of the seven global trends identified by the researchers, and to report on how certain they were in their predictions. This information was then fed into machine-learning algorithms, along with data from the U.S. Department of Labor, to generate predictions for more than 1,000 occupations in the United States and United Kingdom.
Using this model, the researchers at Pearson reached the following six conclusions:
- 20% of the workforce are in occupations that will shrink.
This figure is smaller than previous high-end estimates of 47% (Frey & Osborne, 2013), but also larger than more conservative estimates of 9% (Arntz et. Al, 2016). In line with previous findings, Pearson reports that routine, physical or manual abilities will become less valuable over time. However, Pearson also notes that certain sectors typically considered doomed by automation such as agriculture, trades, and construction, may actually show pockets of job growth where new skills are required to complement new technologies. So, it can be said that there cannot be a complete elimination of people in the workforce. Instead, building skill sets to work alongside automated machines could be the way to go. For example, with large industries adopting newer technologies and automation to improve the production process, an automation parts supplier could be the need of the hour, as there will always be a requirement for people who have the necessary knowledge to handle new machines and implement efficient functionalities.
- 10% of the workforce are in occupations that will grow.
Specifically, the researchers argue that jobs involving judgment and decision making, teaching, active learning, interpersonal skills, complex problem-solving, originality, fluency of ideas, and systems thinking will all grow in value. Jobs in high demand will include teachers and education professionals, sports and fitness workers, caregivers, managers, hospitality workers, legal professionals, and engineers. Occupations in the public sector, as well as those resistant to globalization, emerge as particularly resilient. Further, jobs in the construction sector and those that involve outdoor manual work could also need constant manpower, as we see companies such as Crane Renovation Group reaching out to potential workforce to increase hiring and provide consistent jobs. Pearson also points out that jobs and skills that will become more valuable are not specifically confined to any one particular income bracket or skill level.
- 70% of the workforce are in occupations where their future is uncertain.
- So-called “21st century” skills will experience higher demand.
- Both knowledge and skills will be required for the future economy.
- Occupations can be re-designed to pair uniquely human skills with technology.
A global leader in education publishing itself, Pearson argues for sweeping reforms to education systems so that they may adapt faster to the changing needs of labor markets, and begin offering more flexible pathways to employment including credentials and microdegrees. Pearson also advises business leaders to start thinking of ways to redesign roles to balance technological and human resources. Finally, the researchers encourage individuals to develop skills that are “uniquely human” and commit to becoming lifelong learners.
However, the report is not without limitations and the researchers note the large degree of uncertainty baked into any analysis of job creation, which is notoriously more difficult to predict than job destruction. Critics have also argued that Pearson greatly underestimates the difficulty of implementing public and private reforms in the context of the political and social turbulence accompanying severe job displacement.
Nevertheless, despite these limitations and the challenges that lie ahead, Pearson’s researchers remain optimistic about the future of work. They summarize their findings rather succinctly: “The bottom line of our research, we can all stop agonizing about machines taking our jobs.”
You can download the full report here, or visit the microsite.
