by Furui Cheng | Jul 30, 2017 | News
Shenzhen City
Shenzhen is one of the four current first-tier cities in China, and the other three are Beijing, Shanghai and Guangzhou. In February 2017, Shenzhen Innovation and Development Institute, a famous think tank founded in 2013, issued an “Outline of Shared development in Shenzhen”, which calls for a social dividend program in a package of reform measures.
Shenzhen is the first Special Economic Zone in China. In 1980, it was a poor rural area with 30,000 people. But now, more than 30 years later, it has a population of almost 20 million, with 11.9 million local permanent residents. Its total GDP is similar to Hong Kong, one of China’s Special Administration Regions. Shenzhen citizens’ per capita GDP was US $25,400 in 2015, and it is stepping into global middle developed cities. “The Sharing Shenzhen” is a new strategy after the previous “The Speed Shenzhen” and “The Quality Shenzhen”.
Although Shenzhen’s nominal per capita GDP is similar to that of South Korea, its per capita disposal income is only half of the latter’s. At the same time, the housing price in Shenzhen is double that of South Korea. Most people are living in substandard conditions, especially those 8 million non-permanent residents who have been totally excluded from the local social security system. Furthermore, no matter their income levels or social security levels, there are big gaps among even permanent residents. The Gini coefficient in Shenzhen per capita income is almost 0.5.
Shenzhen is thus facing a very big challenge of adjusting income structures to achieve social justice. Twenty Suggestions for “The Sharing Shenzhen Outline” include:
- One billion tax relief program, to help enterprises and people;
- To continue to raise the minimum wage;
- To raise working income and expand the proportion of middle-income workers;
- To improve the salaries and benefits of civil servants, so that the city managers can share the fruit of urban reform and development;
- To establish state-owned capital dividend fund, letting all the people share the results of reform and development of state-owned enterprises;
- To restart the “common prosperity” plan, to reduce the gap between permanent residents and the immigrants;
- To raise and expand the minimum guarantee income system, to cover the whole population;
- To expand the social assistance system to the medium income families including the immigrants;
- To establish a more equitable social security system covering the immigrants;
- To put the non-household residents into the housing security system, to achieve the safe living dream for everyone;
- To establish the welfare and service system for the elderly;
- To establish the universal social welfare and relief policies, so that Shenzhen’s warmth and sunshine can reach all children;
- To develop social charity system;
- To reduce the subway and bus fares;
- To promote equal employment;
- To promote fair education;
- To reform the expensive medical system;
- To relax the conditions of household registration, to make more people permanent residents;
- To control and reduce the high housing prices, to make young people full of hope and dream;
- All residents to enjoy the right of participation in social management and assume the obligations.
For the specific suggestion No. 5, the outline suggests Shenzhen should learn from Singapore, Hong Kong and Macau to give citizens a social dividend from the city’s fiscal surplus. In 2015, Shenzhen had 918.1 billion yuan [US $135.9 billion] total assets of state-owned enterprises, 461.6 billion yuan [US $68.3 billion] net assets, and 36 billion yuan [US $5 billion] profit. In addition to the corporate tax, the municipal government should get their net profit of 12.7 billion yuan [US $1.88 billion] per year as shareholders. Based on the average dividend payout ratio of Chinese listed companies, at least one third of the annual net profit could be distributed in cash as social dividend among all the residents. Given present figures, that would be 1,000 yuan [US $148] every two years for every resident. While this dividend might appear small, it is just a very conservative part of the net profit, and we can expect an increase in the future.
In the above description, Shenzhen is basically China’s miniature. The whole country faces similar problems and situations. So this plan captured the national attention after its announcement. Additionally, the director of the Shenzhen Innovation and Development Institute, Zhang Siping, is the former deputy mayor of Shenzhen city itself, and many councilors of the Institute are formerly from government sectors. They know the real crux of the city’s development, and they are making a fair plan out of their offices. This is another reason why “The Sharing Shenzhen Outline” is so striking in China.
In fact, China has not only local but also national state-owned enterprises, and the latter ones have much bigger profits. “The Sharing Shenzhen Outline” mentions only the former. All Chinese people could expect to get a national dividend plus a local one in the future.
More background information at:
Karl Widerquist, “SINGAPORE: Government gives a ‘growth dividend’ to all adult citizens”, Basic Income News, June 8th, 2011
Special thanks to Kate McFarland for reviewing this article.
by Julen Bollain | Jul 28, 2017 | Opinion
The Spanish publisher RBA has just released a new book by Daniel Raventós, Renta básica contra la incertidumbre (Basic Income against Uncertainty), in its “los retos de la economía” (Economic Challenges) collection. The book updates the most important developments in basic income and discusses recent writings. The collection, in which the book is included, is not academic, but one which presents the basic elements of today’s concerns (inequality, the welfare state, and so on) to non-specialist readers, in such a way as to serve as a basis for further study.
Raventós’ book not only discusses the theoretical issues of basic income, but also gives an account of the social and political situation which has led to this proposal becoming widely known and regularly debated in social movements, the media, political parties and trade unions. Just a few years ago, this was unimaginable. Some people were complacently asserting that basic income could never be openly recommended because it would “shock” or “repel” the population, or at least a good part of it. It would have to be introduced, if at all, through the back door.
Well, we have lived to see the day! Here we offer an extract from the introduction of Renta básica contra la incertidumbre, which will soon appear in an Italian edition. The book has six chapters in which Raventós discusses the normative aspects from the standpoint of political philosophy (with particular reference to property and freedom); how basic income has been received in social movements like feminism and environmentalism, as well as in trade unions; how to finance it; experiments with basic income in various parts of the world; the role of basic income in an increasingly unequal world, in which mechanisation is advancing at a dizzying pace; and the paradox of support from both the right and left.
“Basic income will be paid out to people simply because they exist as citizens or accredited residents, independently of gender, ethnic group, income, sexual orientation, religious affiliation or lack thereof. Hence, like universal democratic suffrage, basic income is a proposal with the formal characteristics of laicism, unconditionality and universality.
Basic income has to confront considerable intellectual, social, philosophical, economic and political resistance, often in the form of questions. Is basic income a just proposal? Do people who disdain a salaried job have the right to an unconditional cash transfer? Will it abolish poverty? Aren’t the usual welfare state conditional cash transfers a better way to combat poverty? Will people get or stay in jobs if they have a basic income? Wouldn’t it be better to aim for full employment? Would workers have better bargaining power if they received a basic income? How would basic income affect migratory flows of impoverished people from poor countries to rich countries? Would everyone, both rich and poor, gain with a basic income? Would or wouldn’t women benefit from a basic income? Given the threat of robotisation in many areas of work, does basic income have something to offer?
Since inequality between a tiny minority of extremely rich people and the rest of the population is constantly increasing—as Joseph Stiglitz, Nobel-Prize-winning economist and others have pointed out and studied—would basic income be a good idea? If basic income has supporters on both the right and left, are they advocating the same thing?
Then there is the most frequently repeated objection, also in the form of a question. Can basic income be financed? In fact, it would be more precise to say that it was “most frequently repeated until recently”. Although there are not many studies which demonstrate in detail and with technical competence how basic income can be financed, those that have been published are compelling. Whatever they might have in common, each region and each country is different in economic terms, but financing a basic income would have to take the form of changes in budgetary priorities and reforming tax systems. For example, there are proposals advocating the introduction of special mechanisms for taxing financial transactions.
These reforms would bring about a substantial reduction in inequality of income distribution and allow for simpler, more coherent tax and welfare benefits systems. Basic income is not a panacea or a quick-fix for all the world’s social and economic problems but, in view of many who study and espouse it, this measure would mean that people would be better equipped to participate in productive activities, social inclusion would improve, communities would be stronger, political and social participation would be revitalised, and there would be a significant reduction of poverty and all the problems that go with it.
Basic income is not a political economy, per se, but would be part of one, as well as a general project aiming to guarantee and underpin the material existence of the whole population. It might also be seen as a kind of indemnity for past and present wrongs since it requires more privileged citizens to contribute towards achieving the right of existence for everyone. And herein lies one of the main political obstacles for basic income.
This is also the point which makes it possible to explain the apparent paradox of left and right support for basic income. The book notes that the difference depends on financing. The left focuses on additional taxes on the rich, while the right wants to trim down existing welfare to pay for basic income.
“In other words, the left-wing position does not entail any cuts to existing social services or social rights, in education, health, support for dependents, housing, etc., all of which are essential in any welfare state worthy of the name.”
by Furui Cheng | Jul 27, 2017 | News
Macau City
The government of the Macau Special Administrative Region (SAR) in China has announced the “Wealth Partaking Scheme 2017” (WPS), under which local permanent residents are entitled to receive a small annual unconditional basic income of 9,000 patacas [US $1,128 (1)] and non-permanent residents 5,400 patacas [US $672]. With the Administrative Regulation No. 18/2017, the scheme came into effect on 6th June 2017, and its implementation officially started on 3rd July.
Since 2008, the government of the Macao SAR has given an annual state bonus to its all citizens. The WPS 2017 is very similar to the 2016 one. This year, there are 638,600 Macau permanent residents entitled to WPS, and 62,000 non-permanent residents. The total budget for the WPS 2017 is 6,080 million patacas [US $757 million].
Recipients must have been holders of valid or renewable Macau SAR Resident Identity Cards as of December 31, 2016 to be entitled to receive the cash premium, according to a statement from the Financial Services Bureau (DSF). Holders of a valid or renewable Macau SAR Resident Identity Card who are currently residing abroad will be granted the cash premium, provided they can prove that they are unable to renew their Macau SAR Resident Identity Card due to being either bedridden or completely or partly paralyzed. Those who submitted the relevant documentation and were granted the cash premium in the previous year may be exempted from document resubmission if the Social Welfare Bureau (IAS) concludes that no new evidence is required.
A direct bank transfer will be arranged for those who are receiving financial assistance or senior citizen subsidies from the IAS, according to the statement. The same will apply to retired civil servants receiving a retirement pension and other persons receiving such a pension for the family of the deceased. Most of the rest of the populace will be awarded the cash premium through a crossed check via mail. The crossed check can only be deposited into the payee’s account. In this way, the DSF notes that even if one receives a check addressed to another, it cannot be cashed.
A different procedure applies to beneficiaries under the age of 18. They will each receive a check made payable either to themselves or their parents, which may be deposited either into the beneficiary’s account or the account of one of their parents.
In addition to the WPS state bonus, the Macao SAR government has injected an annual capital into all qualified Provident Fund Individual Accounts since 2010. Provident fund individual accounts are provided to Macao SAR residents of the age of 22, and they are used to receive the “incentive basic fund” and “special allocation from budget surplus”. No formalities are required for the individual accounts of those who are already on the list of special allocation from budget surplus, which is 7,000 patacas [US $872] for 2017. Individuals who are entitled to the allocation of funds for the first time will also be allocated the incentive basic fund of 10,000 patacas [US $1,245].
Notes:
(1) – At July 2017 exchange rates.
More information at:
Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Plano de Comparticipação Pecuniária no Desenvolvimento Económico do Ano 2017 [2017 Wealth Partaking Scheme]”, 2017
Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Fundo de Segurança Social [Social Security Fund]”, 2017
Paulo Coutinho, “Handout distribution starts next month”, Macau Daily Times, July 3rd, 2017
Furui Cheng, “China: Macao gives an annual state bonus to all citizens”, Basic Income News, August 31st, 2016
Karl Widerquist, “China: Macau residents to receive annual basic income”, Basic Income News, June 30th, 2015
Karl Widerquist, “Macau: Government Distributes Temporary Basic Income”, Basic Income News, August 23rd, 2014
Article reviewed by Kate McFarland.
by Kate McFarland | Jul 26, 2017 | News
Dutch journalist Rutger Bregman, whose bestselling book Utopia for Realists was influential in generating interest and support in basic income in The Netherlands, spoke on basic income at TED2017, held April 24-28 in Vancouver, British Columbia, Canada.
The overall theme of this official TED conference was “The Future You,” including talks by scientists and engineers on artificial intelligence and robotics. Bregman was among the speakers selected to discuss a “human response” to such technological developments.
Despite the conference’s focus on AI and automation, Bregman does not frame basic income as a response to technological unemployment. Instead, his starting point is to challenge the idea that poor people are poor because they are lazy, irresolute, or inexperienced in handling money. As reflected in the title of his talk, Bregman argues that poverty doesn’t result from a lack of character but simply from a lack of cash–and that, correspondingly, the best way to end poverty is just to give money to the poor. To bolster this claim, Bregman outlines the findings of Canada’s Mincome experiment, a four-year experiment of guaranteed annual income conducted in Manitoba in the 1970s. Bregman further argues that basic income would liberate not only the poor but also the many other individuals who, in the current economy, are forced to work long hours in unnecessary and unfulfilling jobs.
The talk met enthusiastic response from the audience, who applauded at lines such as Bregman’s remark that the government should do away with paternalistic bureaucrats overseeing welfare programs and just give their salaries to the poor people they’re supposed to help. Bregman wrapped up to a standing ovation.
The video of “Poverty isn’t a lack of character; it’s a lack of cash” was later uploaded to the TED website–where it had surpassed one million views by early July.
Watch the Complete Talk Below:
Cover Photo (Bregman at TED2017 – The Future You): CC BY-NC 2.0 TED Conference
by Kate McFarland | Jul 25, 2017 | News
Facebook founder and CEO Mark Zuckerberg has recently been traveling the United States on a listening tour, during which he aspires to visit every state in which he has not previously spent time, learning about the concerns and perspectives of residents. While in Alaska, Zuckerberg mentioned the state’s Permanent Fund Dividend (PFD) in a Facebook post, calling a “form of basic income” and commending it as a model for social welfare policy [1]:
Alaska has a form of basic income called the Permanent Fund Dividend. Every year, a portion of the oil revenue the state makes is put into a fund. Rather than having the government spend that money, it is returned to Alaskan residents through a yearly dividend that is normally $1000 or more per person. That can be especially meaningful if your family has five or six people.
This is a novel approach to basic income in a few ways. First, it’s funded by natural resources rather than raising taxes. Second, it comes from conservative principles of smaller government, rather than progressive principles of a larger safety net. This shows basic income is a bipartisan idea.
This post was Zuckerberg’s second public commendation of the idea of basic income. During his Harvard commencement address on May 25, Zuckerberg recommended exploring the policy, stating, “We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.”
In general, Zuckerberg’s remarks on the PFD were well received by the basic income community, who welcomed the high-profile endorsement and opportunity to raise awareness of the PFD, which is widely perceived as evidence that a basic income can be practically implemented. (For more on Alaska’s PFD, including recent updates, see “ALASKA, US: Survey shows support for Permanent Fund Dividend amid continued legal controversy” in Basic Income News.)
Some commentators, however, were less sanguine. Writers like Clio Chang (in New Republic) and Sonia Sodha (in The Guardian) worry that Zuckerberg–like many right-wing and libertarian supporters of basic income–sees the policy primarily as an excuse to cut other programs, as evidenced by his praise for “conservative principles of smaller government” and apparent opposition to raising taxes, which might leave many low-income Americans worse off.
Despite speculation that the tech billionaire is contemplating a 2020 run for US President, Zuckerberg denies that he is running for public office, maintaining that his tour of the US is only a means to broaden his perspective and understand his customers.
Photo: CC BY-NC-ND 2.0 kris krüg
