by Andre Coelho | Jul 21, 2018 | News
Jeff Bezos. Picture credit to: Evening Standard
Leonid Bershidsky, in this article, posted on the 18th of July, says that the best way to enact basic income is to “persuade tech billionaires to fund universal pay plans”. Motivated by Obama’s latest speech on Mandela’s (posthumous) 100th birthday, he suggests Obama should try have their attention – and money – to finance a basic income. Bershidsky is also convinced that a basic income cannot be financed through more taxes on the wealthy, which would only, according to him, “have a negative effect on growth and innovation”. There are those, however, who object this purpose of growth for its own sake, and propose other directions for society, such as degrowth.
Bershidsky affirms that others may be able to fund a basic income, such as Norway, but that is inconceivable in the United States. In the simplest of ways, he determines the cost of basic income as 327 million people times 500 US$/month, which equals around 2 trillion US$ per year. This kind of reasoning has been done many times before, but it lacks mathematical sense, as Scott Santens has already pointed out. Santens, on a more generous assumption for a basic income in the US, has suggested a gross cost of 3,3 trillion US$ per year. However, and most importantly, that is gross cost, not net cost. Net costs, according to him, can be zero, or even negative, if several reforms occur in welfare and the tax system, such as the elimination of welfare programs (turned obsolete due to their own means-tested nature), the abolition of invisible welfare benefits (those which benefit high earners), reforms in social security (turning pensions and disability benefits into supplements, as basic income is phased in), application of a carbon tax, a financial transaction tax, implementation of seigniorage reform, introduction of VAT (value-added tax) and LVT (land-value tax). To this could be added all the savings possible with the reduction or abolition of poverty, in health care, education and social security.
More information at:
Leonid Bershidsky, “Obama and Bezos Could Make Basic Income Work”, Bloomberg Opinion, July 18th 2018
Scott Santens, “How to Reform Welfare and Taxes to Provide Every American Citizen with a Basic Income”, Medium, June 5th 2017
by Guest Contributor | Jul 20, 2018 | Opinion
Written by: Michael Laitman
There is no controversy about the benefits of breast milk, but its politicization is giving us food for thought. The New York Times claimed that the US government unsuccessfully threatened to retaliate against nations backing breastfeeding to favor the $70 billion-dollar infant formula industry, an accusation fervently denied by the current administration. Beyond the sensational headlines, the key factor is that such an important health-related topic for mothers and children has been put back on the table. It is also time to open the discussion about practical measures to encourage breastfeeding to benefit society.
Breast milk is rich in nutrients and includes antibodies to fight off viruses and bacteria protecting the baby from infections and allergies. While those who can’t breastfeed can use baby formula from a site like tastyganics.com, it may not provide that same level of protection. In fact, breastfeeding can save a baby’s life. It boosts the immune system, reduces infant mortality, and helps for a quicker recovery from common childhood illnesses. A Harvard study in 2016 estimated that 3,340 premature deaths a year among both mothers and babies could be prevented in the US alone given adequate breastfeeding. It also lowers a mother’s risk of breast and ovarian cancer, and osteoporosis.
It also reduces stress for both mother and baby, which helps to relieve common ailments such as colic. Whilst many believe that something like Infacol is the best cure for colic, gripe water, which has been used for generations, has been found to be just as effective. Gripe water, which is a simple syrup that can be made at home, has slowly been replaced by medication such as Infacol, and whilst, yes, they can be used together, there’s really no need to use Infacol when a natural alternative exists. This is a similar situation to breastfeeding, with formula slowly replacing natural milk over the years. The formula industry now has such a hold on new mothers that it’s hard for many of us to remember a time when breastfeeding was considered normal.
Besides the physical benefits and what laboratory experiments show, breastfeeding is one of the best ways of bonding with a baby. It releases oxytocin, which is the hormone responsible for other loving behaviors that make us feel good about a person.
Extended breastfeeding for the first two years of life allows for the child’s proper development, and women express more maternal sensitivity well past the infant and toddler years, according to a study by the American Psychological Association. Beyond such findings, there is also a natural inner connection between the mother and the child that allows for positive biological and internal development, which starts inside the womb.
The Need to Support Stay-at-Home Mothers
Considering the vital role mothers play in each individual’s development from the earliest of ages, it stands to reason that stay-at-home mothers should be given all the support possible to raise the next generation. They need to be entitled to receive financial assistance that will let them perform their remarkable duties without worrying about how to make ends meet, giving them a sense of freedom and control of their lives.
In today’s world, however, this is not the case. The bulk of the burden falls on the mother, who is usually expected to prioritize her career over her family, juggling tasks and becoming increasingly exhausted and unsatisfied. With the massive rise in the cost of living, mothers in most societies struggle to manage a balanced life, considering work as an economic necessity rather than liberation and personal progress and fulfillment. It can be difficult for mothers to get this balance right. Necessities are of different kinds. Home amenities like HVAC, electricity and water requirements are in addition to long-term and current expenditures. They need money for their family, but they also need to look after their kids, so they can’t work. This means that mothers often have no money to do anything, such as home improvements. So many stay-at-home mothers want to improve their homes, but they have no money to do so. They want faux stone panels on the outside of their home, but they are unable to do this. That’s why it’s so important that these mothers get more financial support to make sure they can improve their home or provide more for their family. Mothers get caught in an ever-tightening entanglement of commitments at work and home with very little restitution at any level. In extreme cases, there have been situations where work-stressed mothers abandoned their children while they rushed to work, e.g. a hospital CEO forgetting her child in a hot car where the child died, or a McDonald’s employee leaving her child alone in a public park while she worked her entire 9-hour work day.
Moreover, childcare can be extremely expensive and many women usually work just to cover its costs, challenging the whole purpose of going to the workplace. The so-called advancement of women’s rights to choose is in practice an oxymoron. At the end of the day, women who decide to fulfill a traditional role as stay-at-home mothers do not receive enough recognition, value, and economic support from society, as if raising a new generation were not the most important enterprise of all.
The same way science has been unable to create an artificial uterus that brings an embryo to life, a mother’s role of nurturing and educating the child is irreplaceable. We cannot pretend to be wiser than nature. If we really want to empower and foster women’s self-determination, society should create conditions for a comfortable motherhood.
Why UBI Should Prioritize Mothers
This is precisely where UBI can enter to encourage mothers who wish to raise their children full-time. UBI should benefit women first and foremost, particularly mothers who based on their own personal preference choose to leave the workplace in order to raise their children. Basic income should be provided for mothers without preconditions: not as welfare or charity, but as a remuneration for a crucial job in society.
Prioritizing UBI for mothers would be a win-win situation: it not only would help mothers, it would directly boost support for the entire next generation of society that mothers are now raising. Many personal and social problems, such as depression, anxiety and mental illness later in life, can be traced back to phenomena such as childhood neglect, stress, and traumas. Therefore, UBI would let mothers live with reduced economic stress, freeing them up to focus on caring, bonding with, and raising their children.
Likewise, as I’ve mentioned before, basic income for mothers would allow their participation in pro-social, connection-enriching activities, such as groups for pregnant women, parenting and home economics, among others, to enhance their motherly abilities with a supportive social climate. Naturally, such engagement in society would also positively influence their children.
Instead of treating mothers as second-class citizens, they should be recognized as “society’s CEOs”-the ruling force in creation, the only ones capable of giving birth to and nurturing a whole new generation. Keep in mind that the world is our roof, humanity is our home, and women are the pillar of this structure. Motherhood plays a critical role in giving birth to a new humanity. Therefore, taking a step forward in promoting UBI as critical support for mothers is a decision of utmost importance for a more promising future to all.
Michael Laitman is a Professor of Ontology, a PhD in Philosophy and Kabbalah, an MSc in Medical Bio-Cybernetics, and was the prime disciple of Kabbalist, Rav Baruch Shalom Ashlag (the RABASH). He has written over 40 books, which have been translated into dozens of languages.
by Jason Burke Murphy | Jul 16, 2018 | Opinion
Interview with Democratic Presidential Candidate Andrew Yang
By: Jason Burke Murphy
[Note from Jason Burke Murphy. This interview took place on June 11th, 2018. Yang took time out of one of his presidential campaign rallies and fundraisers to speak with me. I describe the rally in US Basic Income Guarantee Network’s blog. After I stopped recording, he expressed his hope that supporters of basic income would get behind his campaign early. Andrew Yang was then, and still is as of this writing, the only announced candidate for the Democratic Presidential nomination.]
Murphy: How did you first hear about basic income?
Yang: I think I heard about it first for sure from Martin Ford’s book Rise of the Robots. I heard about it before then in articles but Martin Ford’s book made an impression. Andy Stern’s book Raising the Floor cemented the idea while coming from a different angle. Martin is a technologist and Andy is a labor leader. Stern’s book clinched it for me. I found myself coming to the same conclusion. Now basic income could no longer just be about technologists over-hyping the near-term progress of automation. Stern is someone who has a firm grasp on the labor market in the US.
Promotional for Andrew Yang’s book presenting his argument for Basic Income, Medicare for All, and “human capitalism”.
Murphy: How did friends and family react to your decision to run for President?
Yang: Oh, my parents were initially anxious and worried about it. Friends had a range of reactions. One cried tears of joy and has been immensely helpful. Others were skeptical. I will say now that support is very strong with friends and family. When you tell someone about a decision, they might react one way but when the decision is made in public, then they have a different attitude and stance.
Murphy: Joseph Biden, a possible candidate, has explicitly rejected basic income. It seems like other presumptive candidates have stayed quite distant. Why do you think that is the case?
Yang: I think in Joe’s case—and I read his comments—he is stuck in this framing of a subsistence model in which value is tied to showing up at an hourly waged job. His explicit argument for why basic income is a bad thing is that people need work. What he doesn’t realize is that universal basic income is pro-work. It is pro doing work that people actually want to do. Joe is stuck in an era when we thought that, if someone had a certain amount of money in their pocket, they would want to do nothing at all. That is an old welfare-era framework that I think was never true. [Laughs.] In Joe’s mind, that relationship is still there. Other Democrats are going to resist making commitments in this direction because they are afraid of being painted as “socialists” or economically unsophisticated. In truth, it requires a degree of economic sophistication to understand basic income and to see how it would be great for our economy and our people.
“Other Democrats in my opinion are not sophisticated enough to understand the impact a basic income would have in the economy… They do not realize that we would be channeling money back into our economy through the hands and the decisions of our citizens.”
Andrew Yang
Murphy: Do you think as people hear about basic income, they are going to think more about economics?
Yang: What happens right now is that people are stuck in this scarcity mindset in which they ask how we can afford it. Won’t it cause rapid inflation? Won’t it make purchasing power go away? None of that is true! [Laughs.] So, other Democrats, in my opinion, are not sophisticated enough to understand the impact a basic income would have in the economy. They are stuck thinking that the money would be “gone” and we would need to “go get more of it.” They are not realizing that we would be channeling money back into our economy through the hands and the decisions of our citizens. The vast majority of the money would be spent in our regional economy every day. The Roosevelt Institute’s estimates that it would create four and a half million new jobs and grow the economy by two and a half trillion.
Murphy: I really liked that paper. For one thing, it is methodologically very cautious. For another, I liked basic income before I knew it would be that good.
Yang: Yeah, their projection was based on it coming from deficit spending and they posited a lower impact if it was paid for by taxes. Whereas, I am very confident that, simply by shifting money to the hands of the people most likely to spend, you would induce economic growth. One thousand dollars a month in the hands of a really wealthy person does absolutely nothing. It just becomes a line item somewhere.
Murphy: Money in the hands of the wealthy, if spent at all, goes into the streets that are already looking pretty good.
Yang: It just stays in someone’s account. When money goes to anyone in the bottom half of the US population then it will be spent on things that will manifest themselves in local businesses in the community.
Murphy: One of the reasons I support a basic income is that I grew up in Arkansas. A region like the Delta is invisible politically. I just know that very few other approaches are going to get anything down there.
Yang: That’s right. Virtually nothing else.
Murphy: If someone has a big plan for education and job training, I am not against those, but I doubt it will actually get to the neighborhoods I worked in there in Arkansas.
Yang: You are right.
Murphy: How are you looking to fund a basic income?
Yang: The main way we need to fund it is through a value-added tax. A VAT is an efficient way to raise revenue, it taxes consumption, which is what we ought to be taxing instead of something like work and labor. We are the only industrialized economy that does not use the VAT. We would be harvesting the gains of automation and new technologies much more effectively than income-based taxes.
Murphy: There are a few other proposals like a carbon tax or a tax on income above the one percent. What do you think of these other proposals that pop up?
Yang: I think some proposals try to finesse something that cannot be finessed. We try to find a way to fund a basic income without causing any pain or friction. I support taxing carbon and we will tax rich people. But we are talking about re-organizing the way that value is distributed in our society. So we can’t think that we can do that in some elegant way that leaves most people untouched.
[Note from Murphy: Yang’s platform also includes a financial transactions tax, which we did not discuss. There is also a call for an end to the current favorable tax treatment for capital gains and carried interest. That is not listed as funding for a BI.]
Murphy: Thinking of that, sometimes supporters present basic income as a reformist measure and sometimes others present it as a very radical transformation.
Yang: You can put me in the “radical transformation” category.
“Fifty-nine percent of Americans can’t afford to pay a surprise $500 charge. Our life expectancy is declining due to a surge in suicide. Seven Americans die of opiates every hour. Americans are starting businesses, getting married, and having kids at record low level or at the lowest in multiple decades. So, society is disintegrating and even very sick.”
Andrew Yang
Murphy: You are the first candidate [for the Democratic Presidential nomination] to announce. This is giving you access to curious people. I saw an article in which you were meeting with New Hampshire Democrats. That is a new crowd for basic income. How are these meetings working for you?
Yang: They are interested in what I have to say. Most of what I have to say revolves around the fact that we are going through the greatest technological and economic shift in human history. That is objective. That is data-driven. People find it very resonant. They sense that this is true. Most of our conversations are around what is happening with technology and labor and the economy and job polarization—all things that we are experiencing right now. One of the dangers of basic income right now is that it can seem like we are debating different versions of utopia. When we turn someone’s attention to the depth and breadth of our current social problems, we can talk about what can actually make a difference. The situation you saw in Arkansas is becoming more and more true for more and more Americans. May I give some of the stats that I feature in my book and in speeches?
Murphy: Absolutely.
Yang: Fifty-nine percent of Americans can’t afford to pay a surprise $500 charge. Our life expectancy is declining due to a surge in suicide. Seven Americans die of opiates every hour. Americans are starting businesses, getting married, and having kids at record low level or at the lowest in multiple decades. So, society is disintegrating and even very sick.
Murphy: We often use words like “self-employed” and “side hustle” for people who are…
Yang: Who are being exploited by a billion-dollar tech company that says “be your own boss” but pays you nickels on the dollar.
“We need to quit measuring everything based on GDP and profitability at the expense of human values. We should direct our energy towards thing that improve lives. The concentration of gains in the hands of a few is a toxic way to move forward.”
Andrew Yang
Murphy: Not long ago, we would hear people say that we need to choose between universal health care and basic income. Your platform simply has both. It seems like we are having a similar moment with a jobs guarantee. We keep hearing that we need to pick one or the other. It seems like many good people think that basic income crowds out something they are very concerned about.
Yang: That is an unproductive approach. We should not get lost in dueling utopias. If you are for universal health care, you should think about how much one thousand dollars a month will open up access to health care. If you care about gender equality and you want to see women avoid abusive workplaces and domestic situations—a thousand dollars a month could be vital. Let’s start with the cash because that will be the easiest thing to get done.
Opening page of Andrew Yang’s Presidential Campaign website.
Murphy: Your platform has multiple issues alongside basic income.
Yang: Definitely. I am all for single-payer health care and we can certainly do better with health than we are at present. That said, even after I win the Presidency, giving everyone cash will be easier to execute than universal health care. Andrew Stern points out that the government is terrible at many things but it is excellent at sending cash to many people promptly and reliably.
Murphy: Any ideas on how a basic income would affect foreign policy?
Yang: In the end, I think basic income will rationalize our spending, make us more optimistic, and smarter about our resources. Our citizens may end up less likely to want to lose a trillion dollars on military interventions worldwide.
Murphy: You call your worldview “Human Capitalism”. For some people “capitalism” refers to markets. For others, it refers to the domination of wealthy people.
Yang; First, I would agree with those who think that our current version of capitalism and corporatism is why our disintegration is happening. I am not a fan of continuing down this road. We have to reverse course as fast as possible. Reversing course, however, does not mean abandoning the things that have made capitalism effective. The problem is that our measuring sticks are all wrong. There are more effective ways to do things. Markets can help find the effective ways. We need to quit measuring everything based on GDP and profitability at the expense of human values. We should direct our energy towards the things that improve lives. The concentration of gains in the hands of a few is a toxic way to move forward. This is bad even for the so-called “winners” in society. Studies have proven that the winners in an unequal society are more anxious and depressed than the winners in a more equal society. This is enlightened self-interest. I can sympathize with anyone who thinks that “capitalism” is a dirty word. The first line in the description of human capitalism on our website is “Humans are more important than money.”
Murphy: Thank you for speaking with me between events. Is there any last word you want to make to readers?
Yang: I am hoping to get support soon from the basic income community. I have been campaigning for about four months. We are drawing from their ideas. We hope we can see them sign up because we need their support.
You may disagree with some item on my platform but I hope you can see that the direction and the spirit are right and that we can push a genuine conversation about basic income. We could really use their passion. We need a movement that recognizes that our community is disintegrating and that basic income is an essential answer. I hope that basic income activists can believe in this campaign.
Photo of Jason Burke Murphy (Left) and Andrew Yang (Right) shortly after this interview.
[Note from Murphy. Some portions of this interview were edited slightly for clarity as we moved from spoken word to written word. No content was altered. Thank you to Andrew Yang for taking time out of his campaign to speak with me. Thanks to Tyler Prochazka for proofreading.]
by Harry Curzon | Jul 15, 2018 | News
A working group has been set up by the Citizens Basic Income Trust (CIT), the Basic Income Earth Network (BIEN) affiliate in the United Kingdom, with the task of conceptualizing what a basic income policy might look like in the UK. The educational exercise came up with a working title of Fair Allowance Act. Within the draft proposal some key points were laid out, such as who’s entitled to the allowance and pilot schemes.
To receive the payment a person must meet the basic conditions which consist of being “at least 16 years old, is in Great Britain and is not a person for whom Child Benefit is in payment.” As a no means tested welfare policy, the draft policy only sets limitations on payment regarding the age of the individual and does provide payment to an individual regardless of employment status. “No amount may be deducted in respect of earned income or unearned income”, it is stated in the document.
Additionally, the draft lays out limitations on the State’s ability to enforce “any work-related requirement on any individual as a condition of receiving Fair Allowance.” However, the draft does fail to state possible costs and pricing of the policy, although it further sets out framework for how pilot schemes on the issue should be implemented.
Developments on British Universal Basic Income (UBI) policy come since half of all Britons suggest that they want a form of universal income that is given out regardless of employment status. Although this proposed legislation is only illustrative, it represents the first tangible step towards basic income policy in the UK and certainly provides the template for further legislative ideas on the issue.
More information available at:
Citizens Income Trust. “Illustrative draft legislation for a Citizen’s Basic Income – Citizen’s Income”. June 14th 2018
Harriet Agerholm, “Half of Britons want all UK citizens to get a universal basic income”. The Independent, September 11th 2017
by Karl Widerquist | Jul 1, 2018 | News, Opinion, The Indepentarian
[This article is a draft chapter of my book, A Critical Discussion of UBI Experiments, adapted as a blog post]
Like the experiments the 1960s and ’70s, the current round of experiments appears at a time when concern about poverty and inequality is rising and people are rethinking the existing redistributive strategy. The context is otherwise very different. The welfare state has been under attack and greatly pared back in many countries since the 1970s while it has been gradually expanding in many countries from the 1930s to the 1970s. The concern that automation disrupts the labor force that played a small but significant part the 1960s BIG movement, now plays a far larger role in the debate today. The two U.S. experiments are both largely funded by tech entrepreneurs who are particularly concerned this issue. One might think that the increased concern with automation would decrease the concern that UBI might decease work effort, but this does not seem to be the case for all of the experiment. Many still seem tacitly to assume that decreased work effort is necessarily a bad thing.
The current round of experiments is taking place in a much wider context. Including the Namibian and Indian projects that were completed several years ago, the current round involves experiments in four different continents, in very wealthy and much less wealthy countries, and in countries with very strong or with rather weak welfare systems. The different contexts make different testing opportunities possible, but they also bring in new constraints, because researchers have to comply with local laws which can significantly constrain the project. This is particularly important in Europe where experiments have to comply with national and European Union law.
Researchers in different political contexts are understandably interested in very different questions, but they should be aware of the experience in other countries for at least three reasons. First, they might learn how to defend their experiments from criticism that they had not expected in their political context. Second, researchers might consider attempting to replicate each other’s findings with different methods and/or in different circumstances. Third, researchers might try to look for things that other experiments have neglected to examine.
Researchers today obviously have access to much more sophisticated computer statistics programs, but the logistical and financial difficulties of distributing cash to hundreds or thousands of people remain. Therefore, the experiments today are, for the most part, comparable in size and scope to the 1970s experiments. Only in less wealthy countries have significantly larger experiments become feasible.
The next several sections give a brief overview of several current or proposed experiments on or closely relating to UBI.
GiveDirectly in Kenya
At the home of recipient Rispa Atieno Okoyo in Koga village on 22 October 2014. Rispa used the cash to build this goat pen, she bought 2 cows, and planted maize and beans. Rispa with her children in front of their house.
GiveDirectly is a U.S. non-profit organization that has recently established the world’s largest UBI experiment in Kenya. The project is motivated largely be the desire for an evidence-based approached to international charity and development aid, and the belief that evidence so far indicates that the poorest people in the world find cash is extremely helpful. The experiment will involve tens of thousands of people across dozens of villages for several years. It will combine the techniques of RCTs and saturation studies with a significant number of control and experimental villages. The project is able to be so large both because GiveDirectly has raised a lot of money and because Kenya has such deep poverty. Some villages will receive a UBI of as little as US$0.50 per day. Others will receive $1 or perhaps more.
The low level of the UBI in the GiveDirectly project is necessary because of the great poverty and inequality in Kenya. Many of the villages where GiveDirectly operates have average incomes less than $1 per day. If GiveDirectly were to give everyone in one village $2 per day, they could easily make that village four-times-richer than the control or non-participating village down the road. This could create animosity and resistance to the program. Until they can afford the give the grant to everyone in Kenya, it has to be small.
But the small size of the grant makes a very large study possible. Researchers for GiveDirectly are able to combine RCT and saturation techniques and to run a fairly long-term study that is like to produce a great deal of valuable data about how UBI affects various quality-of-life indicators. Although the effects of a very small UBI on severely impoverished villages in Kenya might not tell us a lot about low a large UBI will work in wealthier nations, this study promises to provide a great deal of useful information about how UBI will work in lesser developed countries.
Finland
Olli Kangas of Kela
As I write, Finland is in the middle of a small-scale, two-year UBI experiment, which is being conducted by Kela, the Finnish Social Insurance Institution. It involves about 2,000 participants between ages 25 and 58, selected by a nationwide random sample of people receiving unemployment benefits. The experiment replaces unemployment insurance benefits of €560 per month with a UBI of the same size. The Finnish parliament rewrote the law to make participation in the experiment mandatory for unemployment benefit recipients who were selected.
The Finnish effort has been criticized because the UBI is so low and because, being drawn from people receiving unemployment benefits, it incorporates the conditions of eligibility attached to those unemployment benefits. Kela responded that it simply does not have the budget to conduct an experiment across a large selection of low-income individuals.[i]
The make-up of the Finish experiment has at least two advantages as a UBI test. First, the low-level of the grant makes it comparable to the existing program, eliminating problems of distinguishing the effects of the size and type of program under investigation (as discussed in Chapter 4 of my book). Second, even though people had to be eligible for unemployment benefits to be selected for the study, once they were assigned to the experimental group, all or most conditions were eliminated. Therefore, although the study is not designed to examine how a large UBI would affect a large cross-section of the public, it is well designed to examine how a small UBI would affect people currently on unemployment benefits. And that kind of study reveal a great deal of useful information about UBI.
The stated goal of the Finnish experiment is, “To obtain information on the effects of a basic income on employment.”[ii] This concern is very similar to what became the focus of the four U.S. experiments in the 1970s, but the design and focus of the study makes it very different. One of the motivations of the experiment is the fear that Finland’s long-term unemployment insurance eligibility criteria created significant disincentives to work.
Because the Finnish project tests UBI only on people currently receiving unemployment benefits (that is, people currently not working), and because UBI eliminates eligibility criteria that might inhibit unemployed people from taking jobs, the study might find that UBI increases employment among study participants. The study does not increase marginal tax rates for participants and so it will provide a much higher overall income for low-income workers in the study,[iii] but it will be expensive to replicate that program design on a national scale.
Canada
Issues such as poverty, inequality, and the complexity of the social insurance system have inspired the Canadian experiment. The Ontario government is conducting an experiment at three sites in Ontario: Hamilton, Thunder Bay, and Lindsay, and might later include an additional study at a First Nations community. The study so far involves an experimental group of up to 4,000 low-income people aged 18 to 64. One of sites has been described as a “quasi-saturation site,” but I have been unable to clarify that that means. Researchers hope to examine the NIT’s effects on quality-of-life indicators as well as work behavior, education, and entrepreneurship.[iv]
Evelyn Forget of the University of Manitoba
Although the people conducting the study call it a “basic income,” it is a negative income tax that is conditional not only on household income, but also on household size. Single people receive a maximum of C$16,989 per year while couples receive a maximum of C$24,027 and both face a take-back rate of 50% of earned income.[v]
The 6th Chapter of my book explained that the inclusion of a marginal tax rate is an element of the NIT model, but it is needed to approximate the impact of marginal tax rates on recipients. The fact that the maximum benefit for a couple is not simply double the maximum benefit for an individual is a form of conditionality that departs from the UBI model in a way that is not strictly necessary for the purpose of conducting experiments. That is, unlike the UBI model in which individuals receive the same amount regardless of whether they live in small or large households, in the Ontario study two people living together receive considerably less than two people living separately. The motivation for this conditionality is probably to save money. Two people living together can live more cheaply than two people living apart. By including this condition the program can provide a poverty-level BIG at a lower cost, but they create an incentive for people to live apart, and might create a situation in which recipients pretend to live apart.
Y Combinator in the United States
Y Combinator Research (YCR) the nonprofit arm of Y Combinator—a private venture capital firm in the United States. It is run by tech entrepreneurs who are very motivated by the automation issue. Basic Income has become a major focus of YCR’s research, and it has taken on the effort to fund a large-scale UBI project with purely private funds.
Originally planned for Oakland, California, the organizers decided to move the experiment to two other states not yet announced. The experimental group will involve at least 1,000 people who will receive $1,000 per month for 3-to-5 years. More subjects will be included if funding allows. The experimental group will involve people aged 21 and 40 with total household incomes (in the year before enrollment) below the median income in their local community. Although researchers will gather data on how participants use their time and money, they will focus on the impact of UBI on social and physiological well-being—using both subjective and objective measures. The initial project proposal makes no mention of phasing out the grant as income rises.[vi] Therefore, YCR is testing a true UBI, but like the Finnish study, the YCR study implicitly assumes that recipients will face no higher marginal tax rates under a UBI system than they do now.
The Netherlands
The Netherlands experiment is a bit unusual for the times. While politicians in Greece, Italy, Spain, and several other places today are promoting proposals that are called “basic income” even though they share little with the basic income model, the Netherlands is experimenting with something that they do not call “basic income” even though it takes a significant step in the direction of basic income. The experiment seems to be motived in part by dissatisfaction with so-called “active labor-market policies” that are in place in the Netherlands and several other countries. These policies allow people to keep some benefits while in work, but subject them to harsh sanctions if they fail to search for work or to remain in work if they find it.[vii] These policies have proven to be cost-ineffective and often allow employers to capture some of the benefit intended for low wage workers.[viii]
Although the Dutch experiment is limited to welfare recipients under the current system, it frees people from job requirements of the current system and allows them to keep some of their benefits as they earn. These are two important features of a UBI. Because the cost-effectiveness record of active labor-market policies is so poor, this experiment could show that these steps in the direction of UBI will prove to be a more cost-effective means of achieving some of the ends of active labor-market policies.[ix]
The Dutch experiment is sometimes conceived of as a “trust” experiment because the existing system makes caseworkers responsible for enforcing rather draconian sanctions on recipients fostering distrust on both sides. Yet, this experiment conceptualizes “trust” in terms of fulfilling the obligations of a recipient of conventional social assistance—primarily to take work if they find it. In that sense they are not directly related to UBI, which is often conceived as a rejection of such obligations.
The Dutch experiment is actually several experiments that will take place in several different municipalities across the country—made possible by a 2015 law allowing experimentation at the municipal level. The experiments, launched in late 2017 and expected to last for two years, will study the effects on labor market and social participation, health and well-being of allowing social assistance claimants to maintain at least some of their benefits as their income rises while exempting them from the legal duties of seeking work and/or participating in training activities. The experiments involve several different experimental groups eligible for slightly different policies. Recipients are randomly assigned to the control group or one of the experimental groups in their municipality.[x]
Stockton, California
The city of Stockton, California has secured funding from private non-profits to launch a small-scale UBI project with about 100 participants receiving $500 a month for approximately 18 months. Like Y Combinator, major funders of the Stockton project are also largely involved in the tech industry and motivated by the automation issue.
Although the project has received a great deal of media attention, it is in the early planning stages and few details have been announced. The project is not called “the Stockton experiment” but “the Stockton Economic Empowerment Demonstration” (SEED). The organizers do not claim to be planning a “scientific experiment,” but a “a guaranteed income demonstration,” which could be taken as indication that it is aimed not to gather rigorous data but to present useful but possibly anecdotal evidence to further UBI politically.[xi] There is nothing wrong with conducting a smaller-scale and/or a less-rigorous study, and all the difficulties of clearly communicating what it does and does not say about the implementation of a full, nationwide UBI still apply.
Other experiments
Jamie Cooke of RSA, Scotland
The Scottish government has committed funds to conduct a full-scale UBI experiment, and is working with the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) and other institutions to design the project, but it is currently in the planning stages and few if any details about the experiment have been announced yet.[xii]
Barcelona, the principle city in the Catalonia region of Spain is conducting an experiment it calls “B-Mincome” in honor of the 1970s experiment in Canada. The projects literature draws inspiration from the UBI movement. The experiment involves about 1000 people group into ten small experimental groups and a control group of 1000 people. The various experimental groups will receive a NIT, some unconditionally and others attaching various conditional programs designed to encourage labor, entrepreneurship, community service, and so on.[xiii]
The government of British Columbia, Canada recently announced that it will conduct a UBI experiment, but it is only in the planning stages, and few details have been announced yet.[xiv]
There are many small UBI projects that aren’t necessarily intended as experiments. Small-scale charities, such as “ReCivitas” in Brazil and “Eight” in Uganda have been using the UBI model to help people for some time.[xv] A group of filmmakers have raised enough money to give a UBI of $231 per adult and $77 per child to about 20 people across eight states. The filmmakers will follow the recipients for two years, eventually producing a feature film or a television series, entitled “Bootstraps,” to document how the grant affects their lives.[xvi] Because these projects are so small and because they are not primarily focused on data gathering, they seldom make the list of experiments.
Other experiments of varying size and connectedness to UBI are being discussed or at least rumored around the world, in places such as France, Korea, and Iceland. Some of these initiatives might well come to fruition, but I have little definitive information about them at this time.
Will we re-fight the last war?
Earlier chapters of my book showed, in the 1970s, BIG opponents focused on two findings of the UBI experiments: the relative decline in hours worked and possible but controversial finding of a correlation with increased divorce rate. Opponents framed those issues in very extreme ways to make the findings appear definitive against BIG: any decline in work effort, no matter how small and no matter that it might be counteracted by other policies was taken not only as a “bad” thing, but bad enough to be a definitive reason to consider the policy a failure. Any decrease in the divorce rate was considered “good,” even if divorce was inhibited by keeping unhappy women financially dependent on men.
Will something like this happen again when these seven experiments start releasing their findings? It will probably not happen in the exact same way. Much of the discussion of the 1970s experiments was particular to the time and place: supply-side economics was on the rise within academia; the War on Poverty had decline in popularity politically; and politicians who vilified the poor were on the rise. But it is almost certain that less conscientious supporters and opponents will attempt to seize on whatever findings they can, framing them in whatever way necessary to spin the discussion in their favor. More conscientious participants of the discussion—whether directly involved in the experiments or not—with the benefit of past experience need to be ready this time.
I doubt the divorce issue will come back, but because the vilification of any non-wealthy person who balks and long hours for low pay is such a perennial favorite of the opponents of virtually any redistributive measure, people need to be ready for this sort of framing of the work-effort issue even if they do not expect it in their political context. It was not a major issue in India or Namibia because in those areas UBI was associated with increase work time. Similar results are expected in Kenya. The Finnish and Dutch experiments draw their samples in a way that is less likely to show a negative correlation between UBI and labor effort and may even show a positive correlation. This is so because conditional programs have a poverty trap that discourages people who don’t meet the conditions from leaving the labor force but encourages those who do meet the conditions to remain out of the labor force. By relieving the conditions, UBI is likely to be correlated with less work for those who had not been eligible and more work for those who had been eligible for redistribution under the conditional system. Most U.S. NIT experiments of the 1970s focused on people who had not been eligible for the largest redistributive programs, and so they were correlated with decreases in labor effort. The Finnish and Dutch experiments focus on people who are eligible for redistributive programs and so they might be correlated with increased work effort.
The other four experiments might now negative correlations and people involved should be consider ways to preempt or counteract any spin based on that correlation. Later chapters of my book consider how.
Of course, there are many other issues that people might use to spin the results of new UBI experiments. The issues will vary significantly by time and place. Knowing the specific political context and the international experience will help people preempt and/or counteract spin.
Dauphin, Manitoba: “the town without poverty”
Notes: contact me for full references:
[i] {Kangas, 2017 #1424}; {Kangas, 2016 #1425}
[ii] {Kangas, 2017 #1426}
[iii] {Kangas, 2017 #1426}
[iv] {Ministry-of-Community-and-Social-Services, 2018 #1433}; {Forget, 2016 #1427}
[v] {Ministry-of-Community-and-Social-Services, 2018 #1433}; {Forget, 2016 #1427}
[vi] {Y-Combinator-Research, 2017 #1428}
[vii] Loek Groot and Robert van der Veen, remarks made and the workshop on Basic Income experiments held at the Center for International and Regional Studies, Georgetown-University Qatar, March 26, 2018
[viii] {Bouquin, 2005 #303}
[ix] Loek Groot and Robert van der Veen, remarks made and the workshop on Basic Income experiments held at the Center for International and Regional Studies, Georgetown-University Qatar, March 26, 2018
[x]{McFarland, 2017 #1431}; {Groot, 2016 #1429};
[xi] {SEED, 2018 #1432}
[xii] {McFarland, 2017 #1431}
[xiii] {Colini, 2017 #1435}
[xiv] {British-Columbia-Government, 2018 #1438}
[xv] Recivitas.org; Eight.world
[xvi] Bootstrapsfilm.com
