by Patrick Hoare | Nov 9, 2017 | News
As part of the Economic and Social Research Council’s (ESRC) Festival of Social Science 2017, the European Social Survey (ESS) is teaming up with Ronnie Cowan MP in a free event that will be held in Portcullis House, Westminster, from 9am on Thursday 16th of November to discuss the UK’s attitude to Universal Basic Income (UBI).
For the first time in the history of the ESS, a question was included in the welfare section of face-to-face surveys asking the participant’s opinion of a UBI. Using the data collected, which was released in October 2017, the event will discover whether there is an appetite for introducing a UBI in the UK. ESS will also present analysis of data in the context of other welfare attitudes gathered throughout the survey. Following presentations, there will be an open Question and Answer session in which attendees will have an opportunity to ask speakers what they think the implications of this data are for public policy.
Analysis of responses gathered through the ESS will be presented by members of the ESS HQ team, including the Director, Professor Rory Fitzgerald, who is based at City University, London. Professor Fitzgerald said: “This is the first time that we have included questions in the European Social Survey on the concept of a universal basic income so we are really excited to discuss the results. We will focus on how the UK compares with other European countries, and public opinion on other items included in our welfare module”.
Ronnie Cowan MP said: “A universal basic income is an idea which has been considered in various forms for over two hundred years. Luminaries such as Abraham Lincoln and Dr Martin Luther King have supported the concept as a way of helping alleviate poverty and providing society with a safety net… I wholeheartedly welcome the Scottish Government’s recent commitment to establish a fund to support local authorities as they develop their own basic income schemes… The Basic Income pilot projects are vitally important to the debate. To design, run and monitor pilots and analyse the results takes a great deal of expertise and effort but they may have the potential to shine a light on any shortcomings – opportunities and ultimately produce solutions… I believe a universal basic income is an idea whose time has come and I very much look forward to discussing the subject further.”
You can register for the event here.
More information:
‘The future of welfare: Basic income?‘, European Social Survey News, 25th October 2017
by Cordelia Holst | Nov 6, 2017 | News
On Thursday, October 19th, activists, social justice advocates, economists, futurists, venture capitalists, writers, community organizers and politicians gathered at the Old Mint in San Francisco – a symbolically poetic building – to talk about Cash. Organized by the Economic Security Project, the goal of the conference was to “reimagine what an economy built on the well-being of everyone could look like.”
Cara Rose DeFabio and Sandhya Anantharaman were the MC’s for the day, introducing each segment, panel or presentation, showcasing a range of thoughts around how cash transfers can shape society. See the full schedule here.
The conference embraced a range of reasons why giving cash through a Universal Basic Income is an appealing concept. Most segments were in a panel format with experts in their field, moderated by one of their own. This allowed participants to see the differences in thinking across the movement as well as its broad appeal, regardless of what brought these thinkers into to the movement. The first panel was a discussion on automation’s effect on the work force, and how UBI could provide economic security during retraining, between jobs, or to supplement part time work. Another panel, with representatives from three different venture funds, discussed how a UBI might encourage entrepreneurship, while a third panel talked through historical and current systemic racist and sexist policies and practices, and how a combination of a UBI plus a wealth tax to help fund it could course correct extreme inequality.
A general acceptance for the benefit of cash transfers seemed to be the most basic common denominator. The audience was educated on the results of past cash transfer and basic income experiments, as well as updates on current experiments. You can view a high level video of some of the outcomes of these experiments here.
Mayor Tubbs of Stockton talked about his plans for a UBI in his city. Elizabeth Rhodes also gave an update on the Oakland Y-Combinator project. Then Joe Huston, CFO of Give Directly spoke to the effectiveness of cash transfers and positive outcomes in their work in Kenya and Uganda. He announced that Give Directly is now involved in its first US based project, where they are giving debit cards with $1500 directly to victims of Hurricane Harvey in the Houston area. He noted the work that still must be done changing perceptions around what people will do when they are given cash unconditionally, joking that employers don’t say, “I would like to give this employee their bonus, but I’m worried they might drink it away,” yet this is somehow common thinking that needs to be changed based on research results.
Aisha Nyandoro, CEO of Springboard to Opportunity spoke about where the current Welfare system in the US fails. She illustrated the challenges that families living in poverty in Mississippi have piecing together welfare benefits from the government – housing voucher, electricity voucher, and food stamps. The system creates poverty traps and the benefits don’t cover many of the real needs these families have, but cash would. Cash would also limit interaction with the system and remove the feeling of being judged, as well as the stigmas around welfare.
Damareo Cooper, Director of the Ohio Organizing Collaborative shared his personal story also highlighting how the current welfare system and prison system fails children and young people, making a convincing case for switching to cash. Almaz Zelleke, professor of Political Science at NYU Shanghai, went further, explaining why a UBI must be paid as cash and not a negative income tax.
Throughout the day, however, there seemed to be a lack of consensus on aspects surrounding universality and unconditionality of a cash transfer policy. The range of standpoints could be seen clearly in a panel with Hawaii State Representative Chris Lee and Alaska State Senator Bill Wielechowski, as well as Joseph Sanberg, the founder of Golden State Opportunity Foundation. Bill educated the audience on the Alaska permanent fund. On the aspect of Universality and Unconditionality he said, “Universality is critical. If the policy was needs-based it would diminish it. The fund is framed as each resident’s ownership of shared resources. This is something that Alaskans share together.”
On the other side of the issue, Joseph Sanberg said, “The social contract is work and you will be able to have economic security.” He tied work requirements to the right to economic security and his efforts have been focused on California Earned Income Tax Credits.
Chris Lee from Hawaii seemed to be working out his state’s position on the issue, noting that for their Earned Income Tax Credits they have expanded the definition of work, looking at where people are spending their hours – for example, caregiving. He did note that his task force is looking at a universal benefit across all economic classes.
Aisha Nyandoro cited the work she does as evidence that work requirements are difficult and policy makers are out of touch on the issue. She invited any policy makers that wanted to get in touch to call her. Anne Price, President of Insight Center for Community Economic Development, explained how racism and sexism shaped current welfare policy around judging who is deserving and who is undeserving. She noted that it is degrading to be on the receiving end of morality, and shared her vision for dignity for all: universal benefits – working or not.
How to pay for it was touched on by some, with ideas ranging from a wealth tax to combat inequality, to a shared patrimony dividends, like Alaska, or some combination of these revenues.
Other highlights of the day included a session by Jane McGonigal from the Institute for the future, and A Frank Conversation about Money with Chris Hughes, co-founder of Facebook and Co-Chair of the hosting Economic Security Project. Jane coached the audience on how to create empathy for our future selves and envision a future with Universal Basic Income. Anna Sale from “Death, Sex, and Money” interviewed Chris Hughes about his thoughts and feelings around his own fortune and why he supports Universal Basic Income.
The organizing team is clearly very competent and professional, as the entire conference ran very smoothly from check in, AV, lunch, and seating. All details were thought out and executed well. Participants had many opportunities to make connections and discuss the themes.
All in all, this was a very important gathering for the movement.
by Patrick Hoare | Nov 4, 2017 | News, Research
In a paper released in October 2017, the International Monetary Fund (IMF) has analysed the feasibility and effects of introducing a Universal Basic Income (UBI) in various economies, looking at how it might help ease destructive levels of inequality present in many societies around the globe.
The ‘IMF Fiscal Monitor: Tackling Inequality’ focused on how fiscal policy can help governments address high levels of income inequality (from here simply ‘inequality’) while minimizing potential trade-offs between efficiency and equity. As part of the second half of the discussion, the UBI was considered as a mechanism of fiscal redistribution currently being widely debated.
Underpinning the analysis of UBI were a number of premises. The first of these was the assumption that some inequality was inevitable within a market-based economic system. Even though data reveals a decline in the global levels of inequality over the last three decades, the increased inequality within certain economies has had adverse effects, not only in terms of social corrosion and political polarisation but also in terms of economic prosperity. As such, the inequality the report sought to address was the type that was specifically having a negative impact.
The second premise clarified that measures aiming to alleviate inequality should not come at the expense of achieving economic GDP growth. Supporting this, data was presented showing that between 1988 and 2008, across all types of economies, there had been an average growth of real income per capita across every income bracket, even if the increases had been greater for those earning more. It was also shown that an increase in overall growth between 1985 and 2015, in particular in East and South Asia and the Pacific Region, had coincided with huge reductions in relative poverty and absolute poverty, and, therefore, with increases in social welfare. With no clear trend between increased inequality and growth, and with various studies suggesting, contrarily, either that redistributive policies may slow growth or that redistributive policies may help growth (given that the marginal propensity to consume among the poor is higher), it was determined that, on balance, growth should not be unduly undermined.
The third condition stipulated that, given the limited fiscal space most economies operate within, simulations measuring the impact of a UBI should be performed under the assumption of budget neutrality. The vast drop in progressivity among the tax systems of the OECD member states, in particular the drop in the average top rate of personal income tax (PIT) from 62% to 35% between 1980 and 2015, does not seem to have been economically motivated, since during this period there was no evidence of: increased income tax elasticity; proportionally less income going to the top earners (the opposite was the case); increased support for the social welfare of the rich; decreased support for redistribution (the opposite was the case); or, a more progressive tax system being harmful to growth (there was some evidence to suggest the opposite could be the case). It was therefore accepted that this lower progressivity must be the consequence of political preference. As such, in order to control for various political perspectives, the funding for a UBI would have to come from a combination of spending cuts and increased taxes.
Following the establishment of such conditions, the central examination of the UBI was based around simulations of implementation within eight economies: Brazil, Egypt, France, Mexico, Poland, South Africa, the UK and the US. The choice of countries controlled for heterogeneity in geographical area, developmental stage (emerging market and advanced economies), and the generosity and progressivity of the countries’ current noncontributory transfers. The analysis of a UBI was then judged on whether it could increase coverage (the number of beneficiaries) and progressivity (those most in need benefiting proportionally more) of current redistributive programs, without impeding growth.
In almost all cases coverage increased, given the universality of UBI, however improvements in progressivity very much depended on the financing method and the existing level of progressivity within a particular economy. Where UBI was seen as a replacement for current benefit systems, countries with low progressivity but high coverage, such as South Africa, saw larger swathes of their lower earners suffer at the expense of a smaller percentage of beneficiaries within the same income category. In this circumstance, where consumption inequality is higher as a consequence of income inequality, progressivity as well as coverage could be improved if a UBI was financed by increased indirect taxation (consumption tax) rather than through cuts to the current system. In economies where both coverage and progressivity are already relatively high, such as the UK and France, replacing the current system with a UBI would be regressive. Similarly, even in a country where progressivity is high but coverage low, such as Brazil, the introduction of a UBI as a replacement would likely trade one off against the other, ultimately negatively affecting lower income households. In the situation where PIT among the top-earners is increased as a way of financing a UBI (altering the economic behaviour of these payers), the model calibrated to the US economy (moderate coverage and progressivity) found that, although efficiency, in terms of output forgone, was lower than against a system with indirect taxes, the PIT increase yielded greater overall welfare, especially where aversion to inequality was high. The final scenario, where simulations focused on comparing a UBI funded either directly, indirectly or through cuts, against the expansion of a benefit – the Earned Income Tax Credit (EITC) in the US – at the same fiscal cost, found that, due to the targeted nature of the EITC subsidy, welfare improvements were higher than would experienced under the implementation of a UBI.
In summary, The Fiscal Monitor concluded that a perfectly implemented means-tested system would always be superior to a UBI, since it would ensure the necessary coverage and provide the greatest level of progressivity within the bounds, constraints and conditions assumed. Therefore, in countries where there is a ‘good’ transfer program, the finance necessary to fund a UBI would be better used on improving the current system. That said, in reality, given the existence of imperfections in such systems, a UBI could be a powerful means of combating poverty and extreme poverty, especially in countries where both progressivity and coverage is poor. It was also noted that a UBI could be implemented for other reasons, such as in combatting job market disruptions associated with technological progress.
More information at:
IMF Publications, ‘IMF Fiscal Monitor: Tackling Inequality, October 2017’, International Monetary Fund website, October 2017
by Claire Bott | Nov 3, 2017 | News
A short-term universal basic income (UBI) pilot in India has been found to have positive effects years after it concluded, according to a recent follow-up study. Researchers who returned to the villages involved in the original pilot study, which took place in 2012-2013, found that many of the improvements caused by a year of basic income had been wholly or partially maintained.
In a few cases, there had even been what are called “momentum effects”, in which behaviour changes due to the year-long UBI had continued to build during the intervening years. For example, in the original study, it was found that, prior to the provision of the UBI, women (or “the spouse of the head of the household” as it is expressed in the report) made decisions on how to spend money only about 9% of the time. At the end of the original study, women were making monetary decisions nearly a quarter of the time, while in the recent follow-up, this had gone up to virtually one-third of the time.
Other instances where positive and long-term effects have been maintained well after the end of the subsidy include an improvement in regular income (related to using the UBI to invest in farming equipment or to set up businesses), and a considerably larger percentage of girls in education.
However, there are also some areas where the effects of the UBI have been found to have been rolled back over the years. One of the most prominent of these is in the area of indebtedness. In the original study, the villagers who were provided with the UBI found that 70% had reduced their debt, but the new study found that there is no longer any statistically significant difference in indebtedness between those who had received the UBI and those who had not.
The study also includes a number of case studies and quotations, including one from the head of the village school, who stated, “The experiment gave a major push to the economy of the village in many ways. In front of my eyes, I could see things changing. Equally, I have also noticed a major positive behavioural change in these people because of that experiment.”
The original study, which was a pilot to test the effects of UBI, involved nearly 140 people in two villages, one of which was provided with a UBI and one of which acted as a control. Every precaution was taken to ensure that the two villages were as similar as possible in all socio-economic characteristics.
The study’s authors include Guy Standing, who is a Professorial Research Associate at SOAS University of London and co-founder of BIEN, as well as Sarath Davala, a sociologist who co-wrote a book entitled Basic Income: A Transformative Policy for India with Standing and Renana Jhabvala, another of the study’s authors. The report concludes by recommending that further UBI pilot studies take place, that existing welfare studies be analysed, and that an Independent Commission on Universal Basic Income is established.
Asked to comment, Davala provided the following statement: “We went back after four years to the same village that received Basic Income for a year in 2012. It was heartening to see that some of the effects still continued when we compared with the situation in the control village. So, what does that show? That unconditional basic income payments have a deeper psychological impact, and that even when they are given for a short period like a year, they do leave a lasting positive impact. They provide people with a sense of economic security. This is a very valuable insight for us and policy makers.”
by Patrick Hoare | Nov 1, 2017 | News
David Simon. Credit to: Flickr
Whilst talking about his new HBO show ‘The Deuce’, David Simon, creator of the award winning series ‘The Wire’, has advocated for a “guaranteed income” to be introduced in the US.
During an interview with David Remnick on The New Yorker Radio Hour on the 29th of September, when asked about the nature of his politics given the content of his journalism and shows, Simon said that he was a “lefty” on “around 85% of the issues” citing a “guaranteed income” as an example of a policy he supported. He explained that, as far as he could see, “we’ve reached the death of work”, and “where we’re going as a society” in terms of “automation” means that we should be guaranteeing people some sort of income. Whilst it was not clear from the interview whether Simon was referring to a Universal Basic Income (UBI) or some form of Guaranteed Minimum Income (GMI), he explained that direct cash transfers to the financially poor were economically viable since the “20 or 30 or 40 thousand dollars” people would receive would go “right back into the economy”. He also pointed out that former US president Richard Nixon initially supported a form of GMI in the 1970s, alluding to the fact that even those who weren’t traditionally seen as being in favour of governmental welfare based solutions to economic growth could be amenable to related mechanisms.
Simon’s thoughts are somewhat of a continuation of the ideas he expressed in a talk at the Festival of Dangerous Ideas in Sydney in 2013. In a critical analysis of the prevailing iteration and implementation of capitalism, he lamented the idea that ‘profit’ was the metric through which we judged the health of both an economy and a society. Although he was unwavering in his support of capitalism as an economic model through which growth and progress occurs, he said that the use of it as a framework to assess the moral justness of people’s experience was mistaken and has led to ‘greed’ being considered as good. In order that we fulfill the notion of what he considers society to be – “that everybody feels as if, if the society succeeds, I succeed, I don’t get left behind” – he believes that “labour doesn’t get to win all its arguments, [and] capital doesn’t get to [either]”, but rather that “it’s in the tension, it’s in the actual fight between the two, that capitalism actually becomes functional”. In this regard, his advocacy of some sort of guaranteed payment policy chimes with other social commentators such as Peter Barnes, author of ‘With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don’t Pay Enough’, who see basic income as a social dividend rightfully distributed to everyone as a way of representing the fact that the majority of wealth is created together by society.
More information at:
David Remnick, ‘David Simon on the Rise of Pornography’, New York Public Radio, 29th September 2017
‘About Basic Income’, Basic Income Earth Network
Peter Barnes, ‘With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don’t Pay Enough’, Amazon Books, 30th August 2014
