by Stanislas Jourdan | Apr 12, 2016 | News
The French Republic’s main consultative body has announced that it will undertake an assessment of the potential economic impact of introducing a basic income in France.
The Economic, Social and Environmental Council’s (CESE) announcement on March 22nd that it has launched a referral on basic income as a way to “re-start economic activity” marks another major political breakthrough for the basic income movement in France.
The CESE, sometimes called the “third assembly of the Republic,” is a consultative assembly composed of 233 members representing employers associations, trade unions and civil society groups from different social, economic and environmental areas.
The CESE usually publishes reports at the request of the French government or parliament, but it also has the authority to conduct self-initiative reports, as its economic activities section exercised in this instance.
“Maintaining strong economic demand – particularly through consumption – is an essential driver of stability for economic stakeholders.” This, the CESE explains on its website, is one of its main reasons for investigating basic income. Furthermore, the referral emphasizes the fact that high unemployment, poverty and precarity are undermining economic demand: “The fact that a significant – or even growing – part of the households are outside of the production (and therefore consumption) flows is a burden for our economy and a systemic threat.”
The CESE will undertake a two-step study. The first phase will explore the parameters of a basic income policy and provide an overview of the various experiments already carried out.
The second, more ambitious, phase will assess the potential consequences of introducing a basic income on, among other factors, domestic consumption, different sectors of the economy, entrepreneurship, social inclusion, employment and demographics across the regions of France.
Once the rapporteurs of the study are designated, civil society stakeholders will be invited to contribute. The economic committee will then develop and present a report, which will be ultimately voted on in a plenary session by all CESE members. If accepted, the final report will then be presented to the prime minister, the National Assembly and the Senate.
This new development follows an increasing wave of interest towards basic income among the French political class for the past few months.
The French Movement for a Basic Income (MFRB) and the Association for the Introduction of an Existence Income (AIRE) have both declared they will take part in the consultation.
It usually takes three to nine months for the CESE to adopt a report, which means there is a chance that the report will be adopted ahead of the next parliamentary and presidential elections.
Picture CC Jacqueline Poggi
by Andre Coelho | Apr 1, 2016 | News
Andrew Little at WelTec. Credit to: Stuff.co.nz.
Following the lead of countries like Finland, Netherlands and Canada, New Zealand is now making its first steps towards a basic income. In a recent Stuff news article, Andrew Little, leader of the Labour Party, the second largest party in the New Zealand’s parliament, says Labour is considering a basic income. This interest is mainly motivated by the rise in structural unemployment, which guarantees profound changes in how New Zealanders work. Automation and precariousness of employment, self-employment and new business models are all affecting the way people work, and these structural changes occupy a central place in present day Labour Party concerns.
Indeed, the Party made these concerns – as well as the possibility of a basic income to address them – central to its Labour’s Future of Work Conference, which took place earlier this week, on the 23rd and 24th of March. The Future of Work Commission has released two background papers on universal basic income, one of which can be found here. This paper, by researchers Max Harries and Sebastiaan Bierema, analyses basic income in general and in the New Zealand context, also mentioning that a pilot programme could be an important first step into a future fully-fledged basic income implementation.
What Labour Party leaders in New Zealand will do, it’s hard to say. However, Keith Rankin, a New Zealander author who has written about basic income, highlights some possibilities in a recent article. These possibilities are similar to other basic income tax reform ideas presented, based on income tax redistribution. Keith proposes taxing income from both labour (work wages) and land (property) at a rate between 33 and 37%, and redistributing that money to all adult residents.
More information at:
Blake Caryton-Brown, “Labour leader Andrew Little promises debate on universal basic income”, Stuff.co.nz Politics, March 14th 2016
Chris Weller, “New Zealand is debating a plan to give people unconditional free money”, Tech Insider, March 14th 2016
Keith Rankin, “Universal Basic Income and income tax reform”, Briefing Papers, March 22nd 2016
André Coelho, “Miguel Horta: “Negative Income Tax in Portugal [Negative Income Tax em Portugal]””, Basic Income News, June 3rd 2015
New Zealand Labour Party, “The Future of Work” website.
Max Harris and Sebastiaan Bierema, 2016, “A Universal Basic Income for New Zealand”, Proceedings of the Conference The Future of Work, New Zealand
by Kate McFarland | Mar 30, 2016 | News
Gerd Leonhard, the acclaimed futurist speaker and author, believes that a Basic Income Guarantee (BIG) might be a necessary consequence of increased automation.
Last February, Hank Pellissier of the Institute of Ethics & Emerging Technologies interviewed Leonhard on his “opinions and forecasts” regarding BIG.
In the brief interview, Leonhard discusses the conditions that he sees as prerequisites for the adoption of a BIG, concluding that “a basic income guarantee is only possible once we unbundle work money, and once the traditional mantra of profit and growth at all costs has collapsed.” He is optimistic that, eventually, societies will assume this post-capitalist outlook.
After addressing questions on BIG-related topics, including Switzerland’s basic income referendum and technological unemployment, Leonhard broaches the idea of “automation tax,” which “companies would pay for each job replaced by a machine.” In Leonhard’s view, an automation tax may be an effective means of providing governments with money to reinvest in “creating a flourishing society and allowing for human happiness.”
Read the interview here:
Hank Pellissier, “Basic Income Guarantee will allow us to move the Maslow Pyramid – interview with Gerd Leonhard”. Institute of Ethics & Emerging Technologies, February 7th 2016.
For more about Gerd Leonhard, including videos and descriptions of speaking topics, see his website.
Image credit: ictQATAR
by Guest Contributor | Mar 25, 2016 | Opinion
By Johanna Perkiö
First published on January 25, 2016, by Kela, the Finnish government agency in charge of welfare benefits. The original article is available here.
With the expressed commitment of the Prime minister Juha Sipilä’s centre-to-right Government to conduct an experiment to evaluate the effects of a basic income system, the idea of a universal basic income has come to the forefront of the Finnish political discourse. Discussions centring on the idea of a universally guaranteed basic income have a long and varied history in the Finnish political arena, and several initiatives and practical models have been made public since the 1980s.
A recent working paper published by the Finnish Social Insurance Institution (Kela) charts the history of the basic income debate and outlines solutions put forward for a true basic income system or one that bears some features of a universal basic income. The working paper will be used as background to analysis preparing the ground for the planned basic income experiment.
An idea with a long history
The working paper begins by presenting the history of ideas behind the discussion on a universal basic income or citizen’s wage, the latter being a term which is often used alongside ’basic income’ in the Finnish debate.
The way in which a universal basic income is conceptualized and the goals that are attached to it have varied throughout the years. In the 1980s, a universal basic income was presented as a response to unemployment caused by a decline in industrial employment and as a way to achieve meaningful participation in society for individuals outside the labour market. In the aftermath of the economic depression of the 1990s, discussion turned towards the potential of the universal basic income to increase flexibility in the labour market and to offer support to those in irregular and low-wage work. In the 21st century, the universal basic income has been discussed mainly in terms of improving incentives for work and as a way to provide economic security to those who are self-employed or employed only intermittently.
Various models for a universal basic income system have emerged from both political and academic sources. The models differ with regard to the level of the proposed income, eligibility for it, and how it would relate to the rest of the welfare system, as well as in terms of how the reform should be funded and what would be its main objectives. In addition to actual basic income models, a number of other social security reforms have been proposed that somewhat resemble a universal basic income system. The objectives that the universal basic income and other similar reforms have been proposed to meet include streamlining the benefits system, simplifying administrative structures, eliminating disincentives that have to do with the interplay between various benefits, and preventing needy persons from falling between the cracks of the welfare system.
Most of the proposals published in Finland are partial basic income models where the level of provision would be so low as to necessitate supplemental income-tested benefits, which usually means at least housing benefits. Also insurance-based income-related benefits would be left intact.
A number of alternatives exist for funding a basic income system. Generally, a reform of income taxation is proposed, which would entail clawing back via the tax system the additional money that those with medium and large incomes would gain under the basic income system. Income taxes could be accompanied by other direct and indirect taxes or fiscal policy measures. Shifting the emphasis in funding away from income taxes would make it possible to reduce marginal tax rates, which are perceived as a disincentive.
Recent proposals for a universal basic income reform
Most recently, theoretical models for a universal basic income system have been put forward by the Green Party (in 2007/2014) and the Left Alliance (in 2011). Under the Green Party model, all persons of working age who are covered by the Finnish residence-based social security system would receive a basic income of EUR 560. This would be financed by taxing annual earnings of less than EUR 50,000 at a rate of 41 percent and any earnings above that at 49 percent. Investment income under EUR 40,000 per year would be taxed at 33 percent and at 35 percent above that. Additional funding would come from raising the property tax rate and from reducing environmentally harmful tax subsidies. The model also incorporates a small basic tax deduction for individuals with low earnings in order to incentivize employment.
Under the model proposed by the Left Alliance, all persons of working age would receive a basic income of EUR 620 per month. This could be supplemented by an additional EUR 130 which is subject to welfare eligibility conditions. The basic income would be financed by taxing earnings and investment income on a progressive scale of 30-57 percent.
Under both models, supplementary provision would be available in the form of housing benefits, additional payments under the social assistance programme, and certain earnings-related benefits. Microsimulation analyses show both models to reduce poverty and income disparity by a small amount. The Left Alliance model has a greater impact on poverty and income disparity because of the proposed higher level of basic income and supplemental welfare provision and the progressive tax rates outlined in the model. Other analyses show that the desired effects of the basic income models described above, especially in regard to creating greater incentives for employment, might not necessarily be achieved. This is due to reciprocal effects between the various forms of welfare.
A handful of models for reforming the social security system with certain similarities to a universal basic income have been published in recent years. The ”basic account” model advanced in 2014 by Libera, a Finnish think tank, is founded on the idea of a loan-based system of social provision. Under this model, each person would receive an initial payment of EUR 20,000 which would be deposited into their personal account and which they would grow by paying 10 percent of their income taxes into the account. The model would allow unlimited withdrawals as long as the account remained at least at its initial level, or EUR 400 per month should the account dip below the initial balance. The account could have a negative balance of any amount, and any deficit would be forgiven when the account-holder reaches the age of 65 years. Means-tested welfare benefits could be retained to supplement the basic account. According to Libera, by adjusting the parameters of the model it can be aligned more closely with either side of the political spectrum.
Also the model put forward in autumn 2015 by the Christian Democratic Party, which it refers to as ”active welfare”, includes the idea of an individual citizen’s account to which both salaries and social security payments would be deposited. This model is akin to a universal basic income in the sense that it would consolidate all welfare benefits into a single form of support which (unlike the basic income) would be means tested. Taxes and benefit payments would be adjusted in real time according to each person’s current level of income so as to retain financial incentives for work.
The ”general security” model proposed by the Social Democratic Youth Organization consists of three tiers: the lowest is a means-tested but automatically disbursed guaranteed income, which functions in the same way as a negative income tax; the middle tier is a conditional “general” income; and the highest tier is an ”active” income provided in reward for taking personal initiative in improving one’s employability. Also under this model, there is real-time coordination between earned income, social security and taxation so as to ensure that any amount of gainful employment will always provide additional income.
The challenge of removing disincentives
An analysis of the universal basic income models proposed shows that each of the models require further development if they are to eliminate the disincentives in the way of employment. Because the welfare system is complex, and there would still remain benefits which supplement the basic income, the desired incentivizing effects might not be achieved. One potential solution to this would be to adjust the link between earnings and benefits, most importantly housing benefits (or even to include housing benefits in the basic income scheme), and a suitably high level of basic income that would prevent continual need for social assistance. Any incremental amounts paid for dependent children should also be factored into the proposed models for a universal basic income.
One possibility would be a negative income tax system offering benefits only to those under a certain income limit and reducing, on a sliding scale, the amount of income transfers as personal income increases. A proposed national registry of incomes, allowing the real-time tracking of incomes from any source, would make this possible. Compared to a proper basic income, a system based on negative income tax would be more responsive, for example, to fluctuations in housing costs or to the type or amount of assistance needed as family circumstances change.
Among the effects that a universal basic income system would be likely to produce, the most interesting are obviously those which are of a dynamic nature, i.e., related to the behaviour of people and enterprises. The experiment planned by the Government will go some way towards meeting the need for such information. It is quite likely, however, that many of the psychological, social and structural effects of a universal basic income system will not emerge during the two-year experiment. The choice of model included in the experiment, as well as the overall economic situation, naturally will also affect the final results. Still, the experiment is an important step towards creating a more functional system of basic welfare provision.
Source: Perkiö, Johanna (2016) Suomalainen perustulokeskustelu ja mallit. (Public debate and proposed models for a universal basic income system in Finland.) Kelan työpapereita.
Johanna Perkiö is a basic income expert and a doctoral student at the University of Tampere (Finland).
by Toru Yamamori | Mar 25, 2016 | News
[Witten by Hosang Ahn, co-organizer of the BIEN Congress 2016]
Basic Income Korean Network (BIKN, president: Namhoon Kang) held the joint press conference to demand that the next National Assembly should discuss and legislate the basic income scheme on the 16th March at the city center of Seoul. Nine organizations including BIKN and some candidates for the general election who set forth basic income policy as election promise participated in it. They are Basic Income Youth Network, Catholic Farmer Association, Labor Party, Green Party, Cultural Action, Alba (part time job) Union, Left Youth and Co-op Gajangjari (fringe) except Korean Network.
Lots of political and social issues have risen as the general election in April is coming, among which the most important one is how to give all people the economic stability. Junghoon Park, president of Alba Union said “today unemployment is normal and employment is exception for part time workers, so they should be given stable income, basic income guarantee to protect their rights as workers.” And Namhoon Kang insisted “basic income guarantee is a sole way which we, human beings could live and survive as humans under the economic system Al would change.” Under these circumstances, Green Party and Labor Party, small and extra-parliament parties in Korea, promise basic income scheme their major policies, and some politicians in office interest in it.
Basic income guarantee has been just an idea in Korea up to recently, but now many consider it as a concrete means to overcome economic crisis and to give people material condition as they understand that other policies cannot work. Korean Network is going to organize various events to promulgate basic income idea and to make effort to institutionalize it.
Namhoon Kang, president of BIKN, speaking at the Joint Press Conference
