by Kate McFarland | Oct 10, 2016 | News
Former US Secretary of Labor Robert B. Reich (now Chancellor’s Professor of Public Policy at University of California, Berkeley) has produced a short video on basic income.
In the video, Reich argues that a universal basic income is a solution to job loss and inequality caused by developments in technology and automation.
The video was made in collaboration with the charity GiveDirectly.
This is not the first time that Reich has spoken out in favor of a basic income, especially in response to technological unemployment.
For example, he spoke on the “inevitability of basic income” last May at the Future of Work conference in Zurich, Switzerland:
For links and discussion of earlier remarks from Reich about UBI, see:
Karl Widerquist (September 5, 2015) “Former Labor Secretary Robert Reich focuses attention on Basic Income” Basic Income News.
For a recent critical response to Reich’s recent video, written from the perspective of a right-wing UBI supporter, see:
Tim Worstall (October 1, 2016) “Robert Reich Sure Doesn’t Understand Economics – iEverything And The Universal Basic Income” Forbes.
Inequality Media, “Universal Basic Income“, YouTube; published on September 29, 2016.
Photo CC BY 2.0 HarvardEthics
by Kate McFarland | Oct 8, 2016 | News, Research
The Canadian Centre for Policy Alternatives (CCPA)–a national independent research institute studying issues related to social, economic, and environmental justice–recently released two reports on basic income:
– David Macdonald (October 5, 2016) “A Policymaker’s Guide to Basic Income“
– Alex Himelfarb and Trish Hennessy (eds) (October 6, 2016) “Basic Income: Rethinking Social Policy“
David Macdonald, a senior economist at CCPA, considers two general types of basic income policies (defining a “basic income” as “a ‘no strings attached’ transfer from government to individuals or families”): a universal basic income, in which cash transfers of equal value are distributed to all Canadians regardless of income, and a negative income tax, in which benefits are tapered so that the poorest Canadians receive the full amount while the richest Canadians receive nothing.
For each of these two general approaches, Macdonald simulates four different scenarios, which vary according to the amount of the basic income and which (if any) existing programs are eliminated. He then analyzes, for each scenario, the effect on poverty reduction (for children, adults, and seniors), the consequences for net earnings across income groups, and the cost of the program to the government.
Based on his analyses, Macdonald concludes that basic income programs that replace all current welfare programs in Canada would result in “dramatically higher levels of poverty”. Even at relatively high levels of the basic income, a policy that eliminates Canada’s pension program would require “ethically and politically unsupportable compromises where seniors are pushed into poverty to lift up adults and children” (p. 8). Thus, he believes that the preferred approach, should the Canadian government pursue a basic income, would be to introduce the basic income guarantee in addition to existing programs. Moreover, Macdonald favors the negative income tax approach, as opposed to universal cash transfers, due to NIT’s lower cost and comparative effectiveness in reducing poverty.
Press coverage of Macdonald’s report tended to emphasize his point that basic income is not a “silver bullet” against poverty (see, e.g., reports in The Star, CTV News, and Huffington Post).
Alex Himelfarb and Trish Hennessy provide an edited volume of twelve short essays (not including their own introduction to the volume), which encompass a variety of viewpoints on both the benefits and limitations of basic income.
In a series of essays in the first half of the volume, proponents of basic income lay out several cases in favor of the policy–invoking (in different contributions) such considerations as homelessness, seasonal work and cyclical unemployment, and the social and economic determinants of health. Other contributions are more critical, although rarely opposed to basic income (at least in its progressive variants). For example, Jennefer Laidley critically assesses whether a basic income can really alleviate poverty, and Margot Young discusses limitations of basic income with respect to the difficulties faced by lone mothers. Michael Mendelson points out differences between right and left proposals of “basic income” and urges Canadians not to blindly consent to any program that bears the name, preferring a gradual approach to a progressive basic income. Louis-Philippe Rochon and Toby Sanger, meanwhile, argue that the government should focus its attention on full employment–which, while not incompatible with a basic income guarantee (as they admit), is a goal they believe should take precedence.
The CCPA was founded in Ottawa in 1980 by faculty Carleton University. Since this time, the organization has expanded, now holding branch offices in other cities and provinces, including Vancouver, Winnipeg, Regina, Halifax, and Toronto. While officially nonpartisan, the CCPA has been described as “left-leaning” and describes itself as “one of Canada’s leading progressive voices in public policy debates”.
Reviewed by Dawn Howard
Photo: “Toronto Homeless” CC BY-NC 2.0 Anton Bielousov
by Kate McFarland | Oct 7, 2016 | News
As previously reported in Basic Income News, Finland’s first international basic income seminar (BIST2016) was held in Turku on August 25. BIST2016 was organized by Varsinais-Suomen Piraatit (Southwest Finnish Pirates) in collaboration with BIEN Finland, the Pirate Party of Finland, and Pirate Youth of Finland.
Videos of the some of the lectures are available on YouTube, and copied below.
Ville-Veikko Pulkka: “Notes on the Finnish basic income experiment”
Summary:
In autumn 2015, the Prime Minister’s Office invited bids for a preliminary study (published on 30 March 2016) as part of preparations for a basic income experiment. After evaluation, a consortium led by the Finnish Social Insurance Institution, Kela, was appointed to study the suitability of different basic income models for the experiment.
The assignment outlined four different options to explore and develop:
1) full basic income (the level of BI high enough to replace almost all other benefits, perhaps excluding earnings-related benefits)
2) partial basic income (would replace most of the basic security benefits, but leave some)
3) negative income tax (“basic income” via taxation)
4) other possibilities to test basic income (the research group analysed participation income and the British Universal Credit, but these systems would not enable one to test the effects of basic income due to their conditionality).
Even though a budget-neutral partial basic income cannot automatically diminish income and unemployment traps, the model appears to be both economically and politically the most feasible one to test. According to power calculations made by the economists in our group, the sample for the experiment should be approximately 10,000 people in order to observe statistically significant results if the employment rate changes by two percentage points. In an ideal setting, the randomisation of people is compulsory and two-pronged. In addition to the treatment group, there must naturally be a control group.
The crucial factor is to have at least nationwide randomization since local experiments do not produce generalizable results. A representative, nationwide randomisation can be combined with more intensive local experiments to capture externalities. Also, weighted samples of interesting special groups are possible if the budget constraints can be tackled. Our research group recommends focusing on low-income households since the elasticity of labour supply is supposed to be greatest among this group and the budget is limited.
Ville-Veikko Pulkka is a researcher at Kela, the Finnish Social Insurance Institution, where he is a member of the research group that is preparing the country’s basic income experiment. Additionally, Pulkka is a PhD candidate at the University of Helsinki, writing a dissertation on “digital working life”.
Photo by Toru Yamamori
Christian Engström: “Basic income: a concrete and calculated proposal”
Summary:
This talk introduces a concrete proposal for a basic income system for Sweden, including a cost estimate and financing. The basic income would be 8.333 SEK (900 EUR) per month for anybody between 19 and 65 who lives in Sweden and has no other income. When you start earning money the basic income would be reduced, but never by 100%, so there is always an incentive to work if you can. The cost of this system would be covered in full by letting the basic income replace the current systems for social welfare, student aid and unemployment benefits, and removing the VAT discounts that certain industries enjoy. To make the proposal politically realistic, there would be no increase of income taxes, and no reduction of current sickness benefits.
Christian Engström is a member of the Swedish Pirate Party and, from 2009 to 2014, was a Member of the European Parliament.
Photo by Toru Yamamori
Albert Svan: “Basic income possibilities – based on informal studies from Iceland”
Summary:
In Iceland the Pirate Party is preparing a policy for implementing a basic income scheme. The debate started a couple of years ago when congressman Halldóra Mogensen proposed a legislation on basic income at the Icelandic Parliament. Some preliminary calculations show that 1/3 of the Icelandic government budget already goes to direct money transfers to Icelandic individuals and that a modest basic income amount for all persons 18+ years old will cost 2/3 of the budget, while a negative income tax may cost a similar amount as the current social financial aid. Of many prerequisites one initial observation is that basic income criteria should be calculated regularly and that a legislation of lowest allowed salaries must be somewhat higher than the basic income criteria.
Albert S. Sigurdsson currently works for Statistics Iceland. He holds a master’s degree in geography from the University of Helsinki, and has previously worked at the Finnish Environment Institute, Iceland’s Environment Agency, Lionbridge Technologies, and Futuvision Media.
Reviewed by Genevieve Shanahan
Turku photo CC BY-NC 2.0 Mikael Korhonen
by Kate McFarland | Oct 2, 2016 | News
The David Pakman Show — a progressive news and politics talk show based in the United States — has broadcast several segments on basic income, such as an announcement of Finland’s plans to test the policy and an interview with BIEN’s Jason Burke Murphy. Pakman himself is attracted to the idea of a basic income.
David Pakman’s latest video on the topic, published on September 1, is a critique of the latest plans for a Finnish basic income experiment, which Pakman says is “set up to fail” and a “bogus way” to test basic income:
In his criticism, Pakman focuses on the fact that Finland plans only to test the effect of the basic income on individuals who are already receiving unemployment benefits, rather than considering a representative sample of the population. He also identifies a tension between the main objective of the Finnish experiment — that is, to test whether a basic income can promote participation in traditional jobs — and the major theoretical justification of basic income as a way to adapt to changes in the nature of jobs and work.
Pakman is not alone in raising criticisms and concerns with the design and scope of Finland’s basic income experiment. See, for example, Toru Yamamori’s interviews with several experts on the experiments and members of the Finnish Green Party. Other critical responses — such as those of Leonid Bershidsky and Basic Income News editor-in-chief André Coelho — have focused on the fact that the experiment is to test only a “partial” basic income.
Reviewed by Dawn Howard
Cover image CC BY-SA 2.0 Lauri Heikkinen
by Kate McFarland | Sep 26, 2016 | News
On September 9, the New South Wales Fabians hosted a discussion of universal basic income in Haymarket.
The event featured a lineup of three speakers. First, Ben Spies-Butcher (Department of Sociology at Macquarie University) argued that Australia should pursue a universal basic income as a way to provide individuals with more freedom and control over their own lives and work. Next, Peter Whiteford (Crawford School of Public Policy at Australian National University) outlined the cost of a UBI. Finally, Louise Tarrant (formerly of United Voice) laid out many of the pros and cons of the policy. The three individual speeches were followed by the question and answer session with the audience.
About 80 to 90 people attended the event, which had been widely publicized on social media. Lachlan Drummond, president of the NSW Fabians, states that this crowd was the largest that the group has seen at any of its events over the past three years.
Among the unexpected attendees were two Italian members of the Five Star movement, who video-recorded the entire event:
The NWS Fabians have also released an audio-recording of the event as a podcast.
Drummond explains that several factors prompted the NSW Fabians to organize and host the event. First, the Fabians were interested in opening discussion of UBI simply because it is a “big transformative economic idea” that is already being talked about by the British Labour Party and some think tanks in the UK, as well as by other groups in Europe, Canada, and elsewhere. Second, the group saw a gap in Australian political discussion surrounding UBI:
We’ve seen some far-left and even some right wing groups talking about it here in Australia but none on what we might call the “mainstream centre left”. We wanted to help push that debate along. We know there are people in both the Greens and the ALP [Australian Labor Party] who are keen on the idea, but as yet we hadn’t seen one event where everyone was all brought together to discuss it.
Third, Drummond notes that many members of the Fabians are personally undecided on the issue of UBI–and yet, previously, UBI had never been given a fair hearing at any NSW Fabians event. When previous guest speakers had broached the issue, their comments were negative and dismissive. Notably, at a March event on The Future of Work, Dr. Victor Quirk of the University of Newcastle spoke against UBI in favor of a return to full employment.
Not content with such a swift rejection of UBI, Drummond said that the NSW Fabians “wanted to look at the policy in a systematic way–to go through the positives and negatives, to look at the numbers, and the political realities, and whether pilot studies have shown it to actually work”.
According to Drummond, the main goal of the event was to leave the audience better informed about the issues surrounding UBI–both moral and practical–and that, by this measure, the event was a “big success”:
I think when you see a big progressive idea like this, it can be easy to jump on it and say it’s a great idea without knowing the arguments and practicalities (or even some potential alternatives).
Ben Spies-Butcher was great on the moral arguments, and how it should interact with other parts of the welfare system. Peter Whiteford gave us some useful numbers on how much it would cost and what pilot studies had actually discovered. Louise Tarrant was also very clear headed on the positives and negatives, both practical, economic and political.
We also had great impromptu contributions from Eva Cox on shorter working hours, and Luke Whitington who rebutted the argument about inflation by stating we are currently in a deflationary environment, and by outlining some creative and progressive ways it could be paid for. The audience was really engaged and asked great questions.
Luke Whitington, Deputy Chair of the NSW Labor Party Economic Policy Committee, found it “well-organized” but believes that all three features speakers overlooked one of the most important reasons to support UBI:
None of the speakers talked about deflation, either in relation to the specific term of falling prices, nor in relation to the more general term for a long term low growth period, as exemplified by Japan since the 90s and the world in the 30s, and in milder form, advanced economies since the 70s, compounded and accelerating now with financialisation and automation. That none of the panel speakers raised the necessity of basic income as a counter deflationary mechanism was a pity, especially as Yanis Varoufakis’ speech on the topic has been on YouTube for a number of months. They did, however, inform the audience on a wide range of ethical and economic issues that a BI would affect.
As Drummond pointed out, though, Whitington was eventually able to broach the issue of deflation himself, in response to issues raised by Tarrant. On Whitington’s view, based on his experience as an organizer in the Labor Party, the most politically viable approach to a UBI in Australia is to promote the policy as a counter-deflationary measure and to support its financing through a sovereign wealth fund. This, he notes, was not stressed by the pro-UBI speakers at the NSW Fabians event.
In Australia it would be much more difficult to argue that unemployment benefits be paid without any activity or eligibility tests (which Spies Butcher correctly pointed out would immediately improve the lives of hundreds of thousands of people currently stuck in the welfare ‘safety’ net), than to set up a fund that collected mineral or other revenue and distributed it equally to all citizens as a dividend.
Douglas Maclaine-Cross, who has previously worked with Whitington to promote UBI, also attended the event. Maclaine-Cross was struck by the apparent level of agreement: “Generally nobody seemed to object to the policy [UBI]; on the contrary it seemed that most people were very keen on it”:
[P]eople generally agreed that it could be afforded though it would of course mean raising more revenue. The estimates and suggested amounts involved a more generous payment than I was thinking of, which I took as a positive sign. …
From the floor there was a plea on commercial grounds from a libertarian. There were a few very positive and inspiring comments. I heard the word utopia mentioned a few times. There seemed to be a consensus from the audience that growing inequality was a very real problem and needed to be addressed somehow. So perhaps it was a case of preaching to the choir. However having made the case to people from a broad spectrum of politics myself, there is a chance for bipartisan support; so I have very high hopes for the policy in Australia.
