by Kate McFarland | Sep 1, 2016 | News
Ontario’s provincial government is on track to begin a pilot study of a guaranteed minimum income, according to the latest comments by former Conservative senator Hugh Segal. A more detailed report will be available in mid-September.
In June, the government of Ontario appointed Hugh Segal — a long-time proponent of a guaranteed income — to advise officials in the design and implementation of the pilot study, which is currently on track to begin before April 2017.
The pilot is designed to test a guaranteed minimum income, in which participants’ total incomes are topped up to above the poverty line. This income subsidy will supplement any support received from existing anti-poverty programs, which will not be eliminated or replaced during the pilot.
Thus, although it is often referred to by the term ‘basic income’, the policy to be tested in Ontario should be distinguished from the commonly discussed “demogrant” model of basic income, wherein all individuals receive a regular payment of the same amount, regardless of other earnings or total income. Ontario will be investigating a program that supplements the earnings only of individuals whose incomes are below a certain level (e.g. the poverty line). In this respect, the pilot is similar to Manitoba’s well-known “Mincome” experiment of the late 1970s.
As under a demogrant model, however, there would be no work requirement or other conditions that poor Canadians would need to meet to qualify for the guaranteed minimum income. All would be eligible, whether working or not.
According to CBC News’ most recent report (dated August 30), Segal has suggested that the government could run two types of pilots: one in a small community in which the entire community would receive a guaranteed income (as was the case in the Mincome experiment), and another involving a sample of individuals within a large community. The latter design would allow the beneficiaries of the guaranteed income to be compared against a control group, as in the recently-announced design of the basic income experiment in Finland.
Statements in the CBC’s article suggest that the participation in the pilot will be voluntary [1]. This would contrast with the Finnish experiment — in which, as a measure to prevent bias in the sample, participation is mandatory for those individuals selected to participate.
The CBC News report also notes Ontario will not receive direct financial support from Canada’s federal government — despite the fact that the majority Liberal Party endorsed guaranteed annual income as party policy at its convention in May. The provincial government itself has earmarked $25 million for the pilot.
According to CBC, Segal is planning to publicize a preliminary report on the pilot project in mid-September, making it available for three months of public consultation.
[1] Context: “…the pilot will not eliminate or consolidate existing poverty-reduction programs, but rather be designed as a top-up to such programs to lift its voluntary participants above the poverty line [emphasis added].”
Addendum (December 8): In light of the continued high frequency of view of this post, we note that the report in question was published on November 3. See the Basic Income News summary — and links to the full report — here.
References
Dean Beeby, “Ontario to test guaranteed-income program amid warnings about costs, effectiveness“, CBC News; August 30, 2016.
Roderick Benns, “New report out for Ontario pilot on basic income“, Basic Income Canada Network; August 30, 2016.
Rob Rainer, “Ontario moving toward basic income pilot”, Basic Income News; July 23, 2016.
André Coelho, “CANADA: Ontario reaches further into basic income implementation”, Basic Income News; June 26, 2016.
Photo CC BY-NC-ND 2.0 Commonwealth Secretariat
by Toru Yamamori | Sep 1, 2016 | News
The Forum on Shrinking Society is hosting its 35th symp
osium on 11 September 2016. The symposium’s theme is Unconditional Basic Income for Shrinking Society.
Time of Symposium:
13:30-19:15 (UTC+9)
11 September 2016
Venue:
Lecture room 3, New Building of Faculty of Letters
Yoshida (main) campus, Kyoto University
(Number 8 on this map)
Speakers:
Toru Yamamori
Kimio Ito
Hiroshi Matsuhisa
The language used in the symposium is Japanese. However, at the reception (see program below), there will be some people who could communicate in English, including speakers of the symposium. One speaker is fluent in Italian as well.
To register online:
https://confreg.ate-mahoroba.jp/confreg?conf_idstr=byBxaD90pgTqIM9nkdINSvb3876
Detailed program:
13:30-15:00 Toru Yamamori (professor, Doshisha university): Keynes’s prophecy, Meade’s degrowth, and the Working Class Women Liberationists’ Prefiguration
15:15-16:00 Kimio Ito (professor, University of Kyoto): From Operaismo to Autonomia: Wages for Housework, Unemployment, Students, etc. in Italy
16:00-16:45 Hiroshi Matsuhisa（professor emeritus, University of Kyoto): A provisional plan for Shrinking Society based on UBI
17:00-17:30 Discussion
17:45-19:15 Reception（3000 yen at a different venue nearby）
About The Forum on Shrinking Society:
The phrase ‘Shrinking Society’ might sound unfamiliar to readers. The organization deliberately chose the term after collective discussion. They found that terms such as ‘sustainable’ and ‘degrowth’ are not sufficient to represent their purpose, because they believe that “it is necessary to shrink the physical size of society” (as they put it in their founding).
The whole statement is as follows:
The economic growth strategy is facing a dead end. Fossil fuel depletion and environmental concerns have been the topic of discussion recently, with the only solution provided being to hold some superstitious belief that future technological advancement will somehow overcome the problem. In order to maintain the current exponential economic growth, available resources and land must also increase annually. Even a 2 percent annual growth rate will in 100 years lead to a 7.2 fold, and in 200 years a 52 fold increase in necessary land and resources. This is obviously not possible and will only result in a world-wide corruption. The whole world will be fighting over scarce resources. In fact, the war over fossil fuel is already underway. This is why the discussion for “de-growth” and sustainability has come under the spotlight in recent years.
So what kind of “sustainability” are we talking about? Is it that of the current economic growth, lifestyle, environment, or resources? It’s simple – we’re talking about sustaining resource and environment for our future generations. For this, we must reduce our resource usage. Say we have a 100 years’ worth of fossil fuels. If we reduce our usage of this valuable resource by 1 percent a year, there will be another 100 years’ worth of fossil fuels left forever. If we reduce our usage further, the resource will be available for more than 100 years. This is the most practical way of preventing resource exhaustion.
In terms of the environment, the amount of carbon dioxide in the air will perpetually increase as long as we continue to use fossil fuels. If we can reduce the usage of fossil fuels then we can also slow down the increase in carbon dioxide emission. If, in the future, a new resource or technology becomes available, then an adjustment can always be made to this reduction plan. However, it is not smart to continue the current growth with an unsupported hope “for an alternative resource to become available and make everything fine”.
The current economic system is based on mass production and mass consumption with quantitative growth and global competition. As a result, our lives are flooded with physical “stuff” which we have become addicted to. Our ever-growing society is already showing signs of discordance instead of happiness. The desirable model of shrinking
society on the other hand supports local production and consumption, which requires less energy, is more ecological, and more durable in the long-term. People will no longer be addicted to physical “stuff” but instead nurture each other and promote creative life.
After the drastic earthquake that hit Fukushima, Japan’s electric power usage has decreased by 10 percent. This in itself shows that the above-mentioned road to shrinking society is possible. Happiness comes from not only physical abundance but also affluent community life and creative work. By following the road to shrinking society we are taking responsibility for our future generations.
The economic growth strategy is facing a dead end. In order to avoid crisis, it is necessary to shrink the physical size of society. At present, there are many problems, such as resource depletion, environmental pollution, population explosion, expanding inequality and terror attacks and wars. The Forum on Shrinking Society is being created to link and unite professionals from various fields in hopes of finding solutions to these problems.
January 22, 2013
by Roland Duchatelet | Aug 31, 2016 | Opinion
About 80 years ago, academics and policymakers in the US wondered if the country’s wealth was improving every year or not. They decided that the “added value” that was created in a country was the appropriate measure for wealth creation.
These policymakers looked at the quantity and price of goods sold by agriculture, deducted the value of goods acquired, like chemicals, tractors and fuel, to define the added value of agriculture in the economy. They did the same for the manufacturing and building industries and for services provided by bankers, hair dressers, restaurants and shops.
True, the wealth provided by a restaurant is short-lived, but industrial products do not last forever either. What you pay for a product or service is probably the best possible practical measure of its value. It all made sense.
Then they wondered what to do with services consumers didn’t pay for, like police and public administration. Those services were added to the “wealth of the country” at cost, since they were definitely contributing to our welfare by avoiding chaos. In 1930, public employment in the US was only seven percent of the total work force. That has most definitely increased, with more and more people entering public administration through universities similar to Norwich University.
The Gross Domestic Product, GDP, became a faith of the “Labour Church”. That it is faith and not reason was illustrated the last years by the huge impact on financial markets by statistically irrelevant changes of China’s growing GDP, like 0.5 percent, while its measuring inaccuracy is around 2.5 percent (see publications of Harry Wu, economics professor at Hitotsubashi University in Tokyo).
Since 1970 machines, robots and computers have massively reduced the work force in agriculture and industry, considerably reducing the “added value” in those sectors.
I will now give examples of why GDP is not a good measure of wealth anymore.
- During the seventies, many European countries tried to solve rising unemployment following productivity gains in industry by creating new jobs in public service. Whether the newly appointed public servant did useful things or not, it supposedly increased the wealth of the country, since its cost, not its value, was counted in the GDP,
- Imagine that parents living in a village of the US have organised themselves to collectively watch their young kids and organise festivities for the community. That sort of work is not a part of the GDP. In Sweden, it is. Towns there enroll parents to take care of kids and organise parties and other events. This way, voluntary work is converted into paid work and thus GDP.
- If a country, for example Greece, drastically increases the number of its public servants and increases their salaries, they boost their GDP and make the IMF, the EU and creditors happy until the deadline comes to pay the loans used to fund the fantasy-growth of their GDP.
The examples show the same root cause of the problem, being the belief that unpaid labour has no value and paid labour has value even if the work is useless.
The approximation to count public services at cost is a design error in the GDP. It induces some countries to implement wrong policies to get a “better” GDP, at least for a short time, the time to get re-elected.
A nation is wealthy if it takes care of its people. For example, Belgium distributes an average of €550 in cash and another €420 pay-in-kind (free education and health care) per month per citizen. Many countries are now distributing a lot of money to the population (see this Economist graph). All of them do that in an incredibly complex way because the system grew over decades without being re-engineered. It is very likely that most wealthy countries will streamline their social security systems to make them more efficient and fair, like Finland is currently doing. No doubt that version 2.0 of our social security systems will contain a “basic income” core.
Shortly, my friends, within a few decades, the purchasing power distributed by a country to its citizens will replace the GDP as the measure of their wealth.
by Toru Yamamori | Aug 27, 2016 | News
Liisa Siika-aho (provided by herself)
As we’ve already reported here, Finland’s Ministry of Social Affairs and Health has announced their most recent move in a plan to launch a basic income experiment. On 25th August the Ministry canvassed for the Finnish public’s opinion on a bill regarding a basic income experiment. Here is a follow up with the Ministry’s comments and experts’ responses.
Liisa Siika-aho, director, Ministry of Social Affairs and Health responded to BIEN on 26th August as follows:
Q: What is the basic income experiment and what is its aim?
A: The basic income experiment is included in Prime Minister Juha Sipilä’s Government Programme. The experiment is one of the activities aiming to reform social security so that it better encourages participation and employment.
Q: Why is the basic income experiment carried out?
A: The objective of the legislative proposal is to carry out a basic income experiment in order to assess whether basic income can be used to reform social security, specifically to reduce incentive traps relating to working.
Q: How are the participants selected?
A: Persons receiving Kela’s unemployment-related benefits, under certain limitations, would be included in the experiment. From the target group, a test group of 2 000 persons would be selected by means of random sampling.
Q: Is it mandatory to participate in the experiment?
A: Participation in the experiment would be mandatory for those selected.
Q: When will the experiment start?
A: It is suggested in the legislative proposal that a basic income experiment will be carried out in 2017–2018.
Q: What would be the level of basic income in the experiment?
A: The level of basic income would be EUR 560 per month. Basic income would be tax free for the receivers.
Q: How is the experiment financed?
A: A total of EUR 20 million has been reserved in the budget for the basic income experiment.
In addition to this, the benefits that Kela is paying at the moment would be used as an addition for those persons who are receiving basic security benefits at the beginning of the experiment.
Q: Who is responsible for carrying out the experiment?
A: The Social Insurance Institution of Finland (Kela) would be responsible for carrying out the experiment.
Finland has a long history of advocating UBI (for a brief summery, see here). Here are those advocates’ Comments.
Jan Otto Andersson with an article in the Helsingin Sanomat (taken by Toru Yamamori)
Jan Otto Andersson, Emeritus associate professor at Åbo Akademi, has been advocating UBI since around 1980 and is a founding member of the BIEN (European Network at that time). On 26th August, he had this to say:
It is not a test for what a basic income for all in the society would mean, but for just to see how it affects those who have been unemployed. …. So it is limited but interesting. It will improve the discussion which has been here for a long time….It [my feeling on the experiment] is positive because this makes the idea more well known.
Osmo Soininvaara, a former minister of Social Services with the Finish Green League and another long term advocate of UBI in Finland, posted a harsh criticism on his blog on 26th August, where he calls the experiment as ‘such a stupid model’. His reasons were as follows:
……
In a proper BI model, the received basic income does not, indeed, get smaller when your income level rises, but taxation starts from the very first euro earned. That’s why a proper basic income does not bring net income gains to people in mid-income jobs.
In this experiment taxation is left untouched. If you get into a 4000 euro per month job, you will earn 560 euros more than the person doing the exact same job next to you. We cannot afford to increase the income level of every job earner by 560 euros per month.
In this regard, the model is guilty of the accusations levelled against BI by those people who do not understand who basic income is supposed to work.
…..
(translated by Otto Lehto)
Otto Lehto, the former president of the BIEN Finland, gave us his comments, which seems to have a more nuanced tone:
Feelings, as an individual and academic, formerly of BIEN Finland, can be summed up as follows: The research parameters are about exactly the sort of compromise that one would expect to emerge as a result of the recommendations of an expert coalition commissioned by a wide-ranging coalition government spurred to action by a vague and compelling sense that something needs to be done, but equally held back by the realization that many toes will inevitably be stepped on, and many special interests will need to be reconciled, before anything can be done. Change breeds fear, and fear breeds paralysis. To allay skepticism, the parameters are designed to be the least offensive to, and the smallest possible departure from, the established norms and expectations of the Finnish workfare/welfare-state. In particular, excluding young people and students is, in my opinion, a moralistic choice of little merit and little justification, but it makes sense as a compromise within the status quo, and as a precaution against the critics of “free money to lazy students.”
The budgetary constraints and time constraints are beyond Kela’s control, so the main fault lies within the government. They also set the original goals and parameters within which the labour market participation focus has been raised as the main criteria, with the predictable result that human right, liberty. equality and other considerations of social justice bent have been largely set aside, to the chagrin of many (myself included). This. however, is the state of things, and can only be changed in the next general election of 2019.
2000 participants is a small sample, but if the budget does not change, this cannot be helped. Limiting the sample to people on the government unemployment benefits makes nominal sense as a result of the government’s single minded focus. But it skews the experiment by excluding a number of potential beneficiary groups, including people on low-paying jobs, students, the self-employed, etc. This does not even make sense from the government’s own (limited) perspective, since labour market participation is a more complex notion than the old-fashioned distinction, reflected in the official unemployment statistics, between people who are “in” and “out of” work.
The taxation aspect is another potential disaster. If taxation cannot be changed to reflect the new benefit structure, this will inevitably make SOME recipients of basic income better off than their peers, while some of them will be worse off than their peers. Such a model, with its creation of a massive budget-deficit, cannot be generalized for the whole national economy, as Osmo Soininvaara, the father of the Greens’ basic income model, has written in his recent blog, very critical of the government’s/Kela’s proposal.
I am very skeptical this experiment will produce any really interesting scientific results, but it serves the function of satisfying the nominal requirements of the government’s plan, and the pressures from the various interest groups. It does not appear too radical, too left-wing, nor too right-wing. It might serve a useful purpose in propelling the basic income discussion forward. At the same time, many instances will probably try and use to it squelch any further discussion, too.
Beyond my own views, I will now say something about how this proposal has been received more generally. The overwhelming consensus among my own group of friends, representing multiple parties, left-wing and right-wing, those opposed to basic income as well as those in favour, is that the experiment seems disappointing in many respects, and perhaps even doomed to fail. (Some will conspiratorially add: consciously?) Many people, including opponents and skeptics, would like a more thorough, larger-scale and better designed experiment. The lukewarm success, bordering on failure, of the experiment, before it has even gotten off the ground, is a good indication of the difficulty of institutional change in our country. Good ideas become OK ideas, bad ideas become OK ideas, until we are left with nothing but OK ideas. So, yes, this experiment seems… OK.
Reviewed by Cameron McLeod.
by Kate McFarland | Aug 25, 2016 | News
Finland’s Ministry of Social Affairs and Health has drafted a bill proposing a basic income experiment to test the effects of unconditional cash payments on work incentives.
According to a press release dated August 25, the bill recommends that a basic income experiment be conducted in Finland from 2017-2018, under the guidance and direction of the Social Insurance Institution of Finland (Kela). This is consistent with previously announced plans [1].
Under the proposed experiment, Kela will provide a basic income of 560 EUR per month (equivalent to about 630 USD), exempt from taxation, to 2000 individuals who are currently receiving unemployment benefits. The sample will be randomly selected from a pool of current beneficiaries of unemployment-related aid. To prevent selection bias, participation in the basic income scheme will be mandatory for those selected.
A control group will also be drawn from this population; individuals in the control group will continue to receive their typical unemployment benefits.
According to the press release, the primary objective of the experiment is “to obtain information on the effects of basic income on the employment of persons”. In particular, the government is interested in determining whether basic income effectively reduces the incentive traps associated with means-tested benefits (e.g., unemployment benefits that are lost once the recipient finds a job). The government’s hope is that basic income will encourage more individuals to accept jobs.
Given the primary concern with employment effects, students and elderly persons are to be excluded from both the experimental and control groups.
Although the experiment is designed to test the effect of basic income on work incentives, the Finnish government is also interested in basic income as a way to “reduce bureaucracy” and to “simplify the complicated benefits system in a [financially] sustainable way”.
The amount of 560 EUR per month was chosen to ensure that no individuals would endure a net loss in support under the basic income trial. According to an article in Yle, “A full basic income that would replace existing earnings-related benefits would not be politically or economically feasible” [1].
Jurgen De Wispelaere, a basic income researcher at the University of Tampere, has provided the following commentary on the announcement:
The draft bill released today by the Ministry of Social Affairs and Health signifies a crucial next step in the development of the Finnish basic income experiment. We now not only have a clear commitment from Juha Sipilä’s government that they are proceeding with piloting the first nation-wide basic income scheme. The proposed legislation also clearly sets out the parameters of the proposed pilot scheme, which was the topic of quite a lot of speculation in the media. Assuming the bill is approved by the Finnish Parliament and it passes the scrutiny of the constitutional committee, Olli Kangas and his research consortium will spend the next months working out many practical issues to ensure the experiment can kick off as planned in 2017. For basic income advocates, however, continued engagement with key political stakeholders in Finland remains a must. This is merely the start of a political process towards a universal and unconditional basic income in Finland.
The Ministry of Social Affairs and Health will hear opinions on the proposed legislation until September 9. After this date, it will submit the proposal to Parliament. If passed, the act authorizing the experiment will go into force on January 1, 2017.
The official press release (in English) is available online:
Ministry of Social Affairs and Health, “Ministry of Social Affairs and Health requests opinions on a basic income experiment“, Sosiaali-Ja Terveysministeriö; August 25, 2016.
Olli Kangas, Research Director at Kela, has also written a blog post covering the announcement (in Finnish). In the post, Kangas explains that a partial basic income, as selected for the experiment, was the only feasible model given budgetary and time constraints.
“Kokeilulaki osittaisesta perustulosta lausunnoille“, Kela; August 25, 2016.
[1] See, for example, these previous Basic Income News stories:
Vito Laterza, “FINLAND: Basic income experiment – what we know” (December 9, 2015)
Will Wachtmeister, “FINLAND: The world’s first country with truly experimental governance” (December 18, 2015)
Kate McFarland, “FINLAND: KELA has sent preliminary report to Prime Minister” (April 5, 2016)
[2] “Basic income pilot takes shape – mandatory participation for 2,000 unemployed“, Yle; August 25, 2016.
Reviewed by Robert Gordon
Photo (“Three Smiths” statue in Helsinki) CC BY-SA 2.0 Rob Hurson
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