by Guest Contributor | Dec 27, 2017 | Opinion
We know that basic income has risen dramatically in the public consciousness and also up the political agenda in the last two to three years. How has this been achieved? The academic literature offers theoretical explanations but no empirical evidence from any of the existing pilot projects. Therefore, I carried out research in four of the locations undertaking pilot studies, Finland, Scotland, the Netherlands and Ontario, to understand how basic income was legitimised as a policy, what problems they hope to address, and how the interpretation and implementation of basic income varies between them.
Through interviews with policymakers, experts and advocates involved in these pilots and in the promotion of basic income in these countries, I discovered a great deal of similarity in the factors which have allowed basic income onto policy agendas. Some have occurred by accident, some through long-term advocacy and political lobbying, and some through economic change. Importantly, these factors occurred at similar points in time, enabling them to interact and strengthen each other.
In all four of the pilot locations interviewees described how long-term support and advocacy for basic income has allowed public and political opinion about the idea to develop over time. Alongside this, long-standing problems such as unemployment and poverty have proved extremely difficult to address, and dissatisfaction with existing policies has grown. Interviewees explained how anxieties about the changing nature of work and the inability of social security systems to properly adapt to this new world have led increasing numbers of people to look to basic income as a radical alternative. Existing systems are seen as delivering poor outcomes, stigmatising those in poverty and being overly complex and bureaucratic. The assessment of basic income as a holistic and intersectional policy, capable of delivering multiple outcomes, was cited by several interviewees as reinforcing the desire to implement a pilot. Each pilot study aims for a range of positive impacts, both economic and social, pragmatic and ethical.
Interviewees in all four of the pilot locations reported high levels of public debate and engagement with the idea of basic income, and this appears to have been crucial in legitimising it as an idea . Public interest reached a critical mass, which, coupled with other factors, prompted political action. These pilot studies have not been developed solely by civil servants in a bureaucratic bubble but have been strongly influenced by campaigners, basic income advocates and experts from think tanks and academia. Evidence from the interviews shows that formal and informal coalitions and collaborations between these different groups has helped to shore up support and consolidate basic income as a legitimate policy.
Interviews in all of the pilot areas noted a context of growing interest in evidence-based social policy, and each pilot is framed as an experiment, not necessarily the precursor to a full roll-out of basic income. In Finland for example, both advocates and opponents of basic income supported setting up the pilot in order to evaluate if basic income can live up to its promises. The emphasis on experimentation was an important factor in enabling the Finnish pilot to take place but also meant that it does not necessarily signal deep political or social change.
It should be noted at this point that none of the pilot studies that are running (Finland, Netherlands, Ontario) are experimenting with a ‘full’ basic income: a universal, non means-tested payment with no obligations or conditions attached, paid regardless of other income.
Each study retains some element of conditionality, targeting or an earnings cap, above which the basic income payment is reduced. A clean break with existing policies and paradigms of social security has not been achieved or indeed attempted for the most part. Interviewees discussed political, bureaucratic, and experimental pressures that led to compromises in the scope and ambition of their pilots. These compromises appear to have been critical in allowing the pilots to take place, as they resulted in proposals that were deemed to be politically and experimentally acceptable. At a detailed level, each of the pilots look very different in how they were designed, whom they target, and how they operate; local influences proved powerful in translating the core concepts of basic income into operational models.
These compromises could be considered as a de-radicalisation of basic income, and have resulted in a curious situation in which pilots are not testing a ‘full’ basic income but have retained the basic income ‘brand’. This appears to be a presentational issue; many interviewees described a desire amongst politicians to demonstrate innovation, leadership and radical thinking, and basic income was seen as a way to do this. Retaining the basic income ‘brand’ even though the experiments deviate in important ways from the core ethical and economic values of basic income confers a positive light on those involved and attracts international attention.
When look at their specifics, each pilot in the study is different, influenced by myriad local factors. However, each pilot demonstrates striking similarities in the clustering of a number of factors that have allowed basic income onto the political agenda. Broad agreement on the importance of tackling poverty and unemployment, and the steady rise in public interest in basic income coupled with a desire for evidence-based policy and the hope that basic income could tackle multiple problems. As a small-scale, qualitative study, these findings cannot be considered a ‘how-to’ guide for other places hoping to develop their own pilot project but may prove useful in understanding how a radical idea such as basic income can find a place in mainstream policy.
Anna Dent is a consultant working in employment and skills policy and implementation for the public and non-profit sectors. She has particular interests in low-income workers, the changing nature of work, and welfare benefits. She holds an (Master of Science) in Public Policy from the University of Bristol, and is a fellow of the RSA (Royal Society for the Encouragement of Arts, Manufacturing and Commerce).
by Hilde Latour | Dec 23, 2017 | News
On October 30th 2017, the Canadian Association of Social Workers (CASW) released a position paper recommending a Universal Basic Income Guarantee (UBIG) of $20,000 for all individuals, regardless of income. CASW’s UBIG fulfils the definition of a Basic Income. CASW argues that a UBIG is superior to a Negative Income Tax, which is being tested in other experiments (1).
CASW argues that a universal demogrant model, or UBIG, is “a cost-effective and socially responsible mechanism through which Canada can ensure dignity for all”.
CASW states there have been many federal promises to end poverty in Canada over the past 30 years, in many different forms, including Canada’s support for the United Nations’ Sustainable Development Goals which specifies the need to “end poverty in all its forms everywhere”. Yet in 2016, 4 million Canadians (12.9%) were living in poverty and child poverty rates even increased between 1989 and 2013.
According to CASW, conditional and heavily monitored programs are insufficient and expensive. The combined income support-related expenditures of all federal, provincial, and municipal levels of the Canadian government cost just over $185 billion. Furthermore, their implementation causes a great deal of stress given their unreliable nature, with individuals reporting stress brought on by stigma, marginalization and feelings of disempowerment and hopelessness.
CASW claims that “current social assistance systems in Canada are inadequate and contribute to a cycle of poverty”.
Poverty is a well-known social determinant of physical and mental health. CASW illustrates this with several UBI-related examples from Canada:
- a difference of more than 20 years in life-expectancy between the high-income and low-income population in Hamilton, Ontario;
- a reduction of 8.5% on hospitalization during the Mincome basic income pilot project in Dauphin, Manitoba (2);
- people between 55 and 64 years of age are 50% more likely to experience food insecurity compared to seniors 65 years or older who receive the Old Age Security pension.
From CASW’s perspective, the strengthening of Old Age Security (OAS) and the introduction of the Canada Child Benefit were solid steps towards realizing a UBIG in Canada. Programs like the OAS, which are universal in nature and have few eligibility criteria, are quite inexpensive to operate. In 2013, the total cost of operating the OAS program was 0.3% of the total annual program cost. In contrast, the total administrative cost of Employment Insurance, a program with a high degree of gate-keeping and extensive eligibility criteria, was 8.1% of the total annual program cost.
According to CASW, this cost-saving potential is a fundamental strength of the UBIG which would operate under significantly fewer operational and administrative costs than, for example, a negative income tax model.
CASW further argues that the so-called “benefit trap”, that makes the adoption of part-time work unattractive and is often used to argue against a basic income guarantee, in fact only exists within the negative income tax model. Therefore, the true benefits of a basic income guarantee cannot be realized within the negative income tax model which has formed the basis of all of the pilot projects run so far in Canada.
In addition, a universal demogrant model involves significant benefits to the middle classes giving it a wider support base compared to a program that only targets low-income households. It will therefore have more likelihood of success.
CASW recommends a UBIG of $20,000 per year with the possibility of additional fully-remunerated casual, part-time, or full-time employment. Individuals with disabilities would receive an extra $6,000 tax free per year. The UBIG should replace only traditional welfare or social assistance programs – not all existing social programming. One’s net income will then be taxed according to progressive tax brackets. This model encourages participation in the labour market.
Notes
(1) – A Negative Income Tax does not pay an unconditional income to every individual. Instead, it tops up earnings below a threshold, and charges tax on earnings above the threshold. The administration of a Negative Income Tax poses more challenges than the administration of a Basic Income.
(2) – This is a significant amount considering the Canadian Institute for Health Information in 2014 put the total health expenditure in Canada as upwards of $200 billion.
More information at:
Colleen Kennelly, “Universal Basic Income Guarantee: The Next ‘BIG’ Thing in Canadian Social Policy”, Canadian Association of Social Workers (CASW), October 2017
Picture: Two sides of the same Loonie … (10/100), Jamie McCaffrey, CC BY-NC 2.0
by Faun Rice | Dec 21, 2017 | Research
“Wise Cities & the Universal Basic Income: Facing the Challenges of Inequality, the 4th Industrial Revolution and the New Socioeconomic Paradigm” by Josep M. Coll, was published by the Barcelona Centre for International Affairs (CIDOB) in November 2017. CIDOB is an independent think tank in Barcelona; its primary focus is the research and analysis of international issues.
The Wise Cities Model
CIDOB has published other works about a concept it calls “Wise Cities,” a term intended to holistically encompass words like “green city” or “smart city” in popular usage. Wise Cities, as defined by CIDOB and others in the Wise Cities think tank network, are characterized by a joint focus on research and people, using new technologies to improve lives, and creating useful and trusting partnerships between citizens, government, academia, and the private sector.
The 2017 report by Coll opens with a discussion of the future of global economies; it highlights mechanization of labour, potential increases in unemployment, and financial inequality. It next points to cities as centres of both population and economic innovation and experimentation. A Wise City, the paper states, will be a hub of innovation that uses economic predistribution—where assets are equally distributed prior to government taxation and redistribution—to maximize quality of life for its citizens.
Predistribution in Europe: Pilot Projects
Universal Basic Income (UBI) is one example of a predistribution policy. After touching on UBI’s history and current popularity, Coll summarizes European projects in Finland, Utrecht, and Barcelona in order to highlight city-based predistribution experiments. Coll adds that while basic income is defined as unconditional cash payments, none of these pilots fit that definition: they all target participants who are currently, or were at some time, unemployed or low-income.
Finland’s project began in January 2017, and reduces the bureaucracy involved in social security services. It delivers an unconditional (in the sense of non-means-tested and non-work-tested after the program begins) income of 560 €/month for 2,000 randomly selected unemployed persons for two years. Eventual analysis will consist of a comparison with a larger control group of 175,000 people, and the pilot is a public initiative.
The city of Utrecht and Utrecht University designed an experiment which would also last two years, and would provide basic income of 980 €/month to participants already receiving social assistance. The evaluation would assess any change in job seeking, social activity, health and wellness, and an estimate of how much such a program would cost to implement in full. The author comments that the program was suspended by the Netherlands Ministry of Social Affairs, and the pilot is currently under negotiation.
Barcelona has begun an experiment with 1,000 adult participants in a particularly poor region of the city, who must have been social services recipients in the past. “B-Mincome” offers a graduated 400-500 €/month income depending on the household. After two years, the pilot will be assessed by examining labour market reintegration, including self-employment and education, as well as food security, health, wellbeing, social networks, and community participation. Because the income is household-based, and not paid equally to each individual, it is not a Basic Income, but the results could still provide useful evidence for the possible effects of a future Basic Income.
The Implications
Coll identifies several key takeaways from a comparison of these projects. None of the experiments assess the potential behavioural change in rich or middle class basic income recipients. In addition, multi-level governance may cause problems for basic income pilots, but these issues may be mitigated as more evidence assessing the effectiveness of UBI builds from city-driven programs. Coll also acknowledges that all of the experiments listed in his paper are from affluent regions.
In conclusion, the author argues that UBI is a necessary step to alleviate economic inequality. While cities are experimenting with the best ways to implement UBI, they are often not real UBI trials (as they are not universal), and they do not always take an individual-based approach; however, they are nevertheless useful components of the Wise City model.
More information at:
Josep M. Coll, “Why Wise Cities? Conceptual Framework,” Colección Monografı́as CIDOB, October 2016
Josep M. Coll, “Wise Cities & the Universal Basic Income: Facing the Challenges of Inequality, the 4th Industrial Revolution and the New Socioeconomic Paradigm,” Notes internacionals CIDOB no. 183, November 2017
by Donald Brown | Dec 20, 2017 | News
GiveDirectly, a nonprofit organization currently most known for unconditional cash transfers in East Africa, has decided to distribute cash among Hurricane Harvey victims, starting with those afflicted in Rose City, Texas with a population of about 500 people considered for the project. However, depending on the occupancy of the affected areas, the estimation is to cover at least 3000 people with cash aid. This aid should help go towards matters similar to Roof repair by 99roofers as well as food and supplies. This kind of help would allow people to regain some sense of normalcy in the midst of this disaster. There would be so many families whose houses have sustained significant water damage and would be in need of Water Damage Restoration Services from expert professionals. Hopefully, the people of Rose City will be able to recover from this disaster and be able to restore their lives back to a sense of normality.
As with their other initiatives in Kenya, Uganda, and Rwanda, GiveDirectly is proposing to transfer money to hurricane victims in Texas as an unconditional payment. Unlike the projects in East Africa however, where the transfers were via payments to phones through methods like mobile banking, the transfer for Harvey victims is being delivered via prepaid debit cards containing US$1,500. This initiative also differs from the African experiments in the sense that it is not designed as a basic income pilot: beneficiaries are targeted by applying “a range of criteria to select locations: degree of damage sustained, income levels, access to other aid resources, and size”, as transmitted by Piali Mukhopadhyay from GiveDirectly. Moreover, Hurricane Harvey cash transfer will not be monitored via a control group, so there is no comparison between treated and non-treated groups. Clarifying the “unconditional” reference above, it applies only to the way beneficiaries spend the money, which is completely free from control / conditions.
Disaster victim assistance is changing, from an in-kind-based approach to cash-based programming. Cash transfers were used after the Pakistan floods in 2010, and useful lessons were learnt about cash distribution systems, and in 2016 the method was discussed in a United Nations report. GiveDirectly’s project is therefore part of a trend. Experience so far suggests that providing cash rather than services is an efficient way to provide disaster relief because it supports the local economy at the same time as providing the goods and services that disaster victims know that they need. Homes may take huge hits resulting in different requirements to get them fixed so it is safe for a family to live in again. This will include not only the exterior of the home, wherein you might need an expert gutter cleaning company similar to a Clean Pro Gutter Cleaning Ann Arbor agency, or maybe a water damage restoration company who can look at the problems caused by the excess water in your house! The money given to the needy will come handy when these restorative and repair works will take place, as the latter is imperative to proper living standards for a community. Multiple companies are needed, from roof repairs by a reputable company (you can look on the Florida Southern Roofing info page if you are in this area) to stocking up on provisions after all food is lost. There are many ways in which an injection of cash can help those affected.
Whilst these experiments are not Basic Income pilot projects, the results are useful indicators of how different methods for distributing cash might work, and therefore of what the best methods for distributing Basic Incomes might be in different contexts; and the results might also inform a longer-term debate about how Basic Incomes might be preferable to longer term development aid.
More information at:
Ben Paynter, “This experiment will test if giving cash to victims is the best disaster relief“, Fast Company, November 7th 2017
by Karl Widerquist | Dec 7, 2017 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in August 2005.
Jay Hammond, the governor of Alaska from 1975 to 1982, who led the fight to create the Alaska Permanent Fund, was found dead at his Homestead about 185 miles southwest of Anchorage, on Tuesday, August 2, 2005. He led an amazing life. Hammond was a laborer, a fur trapper (by dogsled), a World War II fighter pilot, an Alaskan bush pilot, a husband, a father of three, a wildlife biologist, a backwoods guide, a hunter, a fisher with the U.S. Fish and Wildlife Service, and a homesteader. Hammond was one of the last people to take advantage of the Civil-War-ear U.S. law giving away land. Other than a requirement to build a house and farm the land for five years, it was given away free—no strings attached.
Hammond was also a hero to everyone who believes that no one should be barred from the resources they need to meet their basic needs—no strings attached.
Hammond got the idea for a resource dividend when he was mayor of a small town on Bristol Bay, Alaska in the 1960s. He realized that salmon were being taken out of the area without necessarily helping the town’s poor. He proposed a three percent tax on all fish caught in the area to be redistributed to all residents of the town. By an enormous stroke of luck, the man who had that idea (and saw it work in Bristol Bay) would be elected governor of Alaska just as the state was beginning construction of the Trans-Alaska oil pipeline. Oil companies stood to make billions of dollars, and of course, they argued that Alaskans would benefit through new job opportunities, but Hammond knew one way to make sure that every single Alaskan would benefit from the pipeline.
And so the Alaskan Permanent Fund was born. For the last 20 years, every Alaskan has received income from state oil revenues. A portion of the state’s taxes on Alaskan oil goes into an investment fund, which pays dividends from the interest on those investments—hence the permanent fund. Dividends vary, but they are usually more than $1,000 per year for every man, woman, and child living in the state.
The system is not perfect. Hammond told Tim Bradner, of the Anchorage Daily News, that his biggest regret was to let the legislature eliminate the state’s income tax. Without the citizens’ responsibility to pay taxes to support state services the fund will be vulnerable, and the legislature has been trying to raid the fund ever since. So far, the enormous popularity of the fund has protected it fairly well. Hammond also regretted that the fund was too small. Only one-eighth of the state’s oil tax revenues go into the fund. If half of oil tax revenues went into the fund, as Hammond envisioned, every Alaska family of four could expect to receive more than $16,000 this year. Hammond died campaigning to increase the size of the fund.
But the most important thing about the fund is that it exists. It’s simple, it works, and everyone in the state benefits from it every year. How many elected officials can say they did that? According to Sean Butler in Dissent Magazine, Nobel Prize-winning economist Vernon Smith, called the Permanent Fund, “a model governments all over the world would be wise to copy.” It is a pilot program for resource taxes and basic income plans all over the world. Economists have recommended the Alaska solution for resource-rich, poverty-ridden countries from Nigeria to Iraq. Just this summer the government of Azerbaijan sent a delegation to Alaska to study the Permanent Fund. You can’t keep a good idea down.
Jay Hammond spoke at the 2004 USBIG Congress in Washington, DC. Here is how Butler describes the event: “The father of the Brazilian basic income, Senator Eduardo Suplicy, also presented at the USBIG conference last year. During his speech, he noticed Jay Hammond sitting in the front row, and, to warm applause from the assembled crowd, descended from the stage to shake his hand. The two basic income pioneers had at last met. Hammond and Suplicy make an odd couple. The Republican Hammond, with his Hemingway-like white beard and grizzly build, wears his far north ethos of self-reliance with pride. Suplicy, a founding member of the left-wing Brazilian Workers Party and a U.S.-trained economist, has the dignified appearance of an intellectual and professional politician. Its tropical socialism meets arctic capitalism; yet somehow, when the two come together over basic income, they get along.”
I had the good fortune to attend that event and meet Governor Hammond. He was warm and engaging. He wasn’t there to bask in the glory of people who admired his past achievements but to fight to keep improving the APF. He was a genuine hero.
An article on Hammond and basic income by Sean Butler, entitled, “Life, Liberty, and a Little Bit of Cash,’ appeared in Dissent Magazine just a few weeks before he died.
There have been many good tributes to Hammond in the news and on the internet since his death. Here are just a few:
Frank Murkowski, current governor of Alaska, “Hammond’s Legacy Will Stand Out,” Alaska Daily News
Tim Bradner, “Hammond has passed; his ideas must live on,” Alaska Daily News
Douglas Martin, “Governor of Alaska Who Paid Dividends,” New York Times
