This short video introduces the new book, The Prehistory of Private Property, by Grant McCall and me. The book examines the origin and development of the private property rights system and the experiences of peoples who have lived in other systems to debunk three false claims commonly accepted by contemporary political theorists. These false claims are: (1) Inequality is natural and inevitable, or egalitarianism is unsustainable without a significant loss in freedom. (2) Capitalism is more consistent with negative freedom than any other conceivable economic system. (3) Private property is somehow “natural,” meaning that when free from interference people tend to appropriate and transfer property in ways that lead to a capitalist system with strong, individualistic, and unequal private property rights.
The book presents a great deal of anthropological and historical evidence that show that all three of these claims are false: (1) Many societies known to anthropology have maintained egalitarianism and freedom. (2) The least free people under capitalism are significantly less free than people in societies with common access to resources. (3) The first people to “appropriate” property tend to share resources; the elite private ownership system was forced on the world by the colonial and enclosure movements beginning only about 500 years or so ago and not fully complete yet.
The book is not primarily about Universal Basic Income (UBI), but it attacks many arguments used against UBI and other forms of redistribution. It also makes a brief case for UBI in the very last chapter, as the video explains.
As a bonus, early in the video, if you look closely, you can see Alexander de Roo eating breakfast in the background.
Thanks to Ali Mutlu Köylüoğlu for inviting me to give this talk and for recording and posting it.
-Karl Widerquist, Morehead City, North Carolina, June 17, 2020
There is a translation of this article into French
On 30 April 2020, the six political groups met through video conference to deliberate on a long-awaited report. Since 2017, an ad hoc committee has been studying the possible advantages and conditions for a Basic Income in the island of Corsica. The report was proposed by Jean-Guy Talamoni, the chairman of the Assembly, who got deeply involved in the preparation work.
The mechanism proposed by the report is inspired by Tony Atkinson’s “basic income flat tax proposal”. * Since 2019 the French tax administration has been aware of almost all of the income of individuals on a monthly basis. Using this data, a monthly tax is computed using a personalized rate. For most of the top 20% of incomes, the tax calculation follows a strict formula: 30 % of the income less 498.52 euros per individual (thus 498.52 for a single person and 997.04 for a couple).
As a matter of fact, the amount granted to the least advantaged in the society – known as the RSA – is almost the same: 497.01 euros for a single person, often supplemented by housing and family benefits. The Corsican project proposal is for a monthly Negative Income Tax to bridge the income tax calculation and the allowance for the poor.
Each month the tax administration would compute the difference between a 500 euros notional ‘basic income’ for each adult and 30 % of the income earned during the past month. This way, all people with a monthly income below 1,667 euros will receive their 500 euros less the tax by automatic transfer to their bank account. Those with higher incomes will automatically be charged monthly by the tax less 500 euros.
The next step of the project is to gain support from the French ministry of Finance to implement an experimental monthly income tax calculation in Corsica.
For many decades, millions of tourists flew to Corsica because of its unique landscape, beaches, mountains, culture and history. The island of Napoleon Bonaparte will certainly continue to welcome visitors and maybe display in the near future the pride of experimenting with the first wholly financed genuine Negative Income Tax with a notional basic income in Europe.
A translation of the Corsican report is available here for international review and comments.
* A.B. Atkinson, Public Economics in Action: The Basic Income/Flat Tax Proposal, Oxford: Clarendon Press, 1995
Marc de Basquiat is Chair of the French Association pour l’Instauration d’un Revenu d’Existence (AIRE)
An article about the initiative can be found here.
Forty years ago today—February 7, 1980—was a small milestone for the Universal Basic Income (UBI) movement: Milton and Rose Friedman dedicated an episode of their television show to a form of basic income guarantee called the Negative Income Tax. This episode might have been the last gasp of the UBI movement’s second wave, which came very close to the centers of power in the United States and Canada in the 1960s and early 70s but had been declining for nearly a decade.
I’m a little embarrassed that this TV show and its accompanying book was my entry into the UBI movement because I disagree with the Friedmans on so many other issues now, but I have to give them credit.
Although Friedman brought his fame and Nobel-Laureate credibility to UBI and related policies, that broadcast did little to stop the decline in UBI’s popularity. It gradually vanished from mainstream politics in the United States and in most countries. It remained an idea for academics, minor parties, fringe activists for decades, only to emerge—seemingly out of nowhere—as a growing worldwide movement over the last 10 years.
So, that day wasn’t a huge milestone for the UBI movement. But it was a big day for me. It was my 15th birthday. I watched the show. I was enthralled with the idea. So, today is my 55th birthday and 40th anniversary as a UBI supporter. That’s probably a good time to write a personal account of what it’s been like following the UBI movement as it fell and rose again.
Movements don’t come from nowhere even if they seem to. I realize now that the groundwork for UBI’s takeoff had been building since the mid-1980s even as it receded from the mainstream political dialogue, and even as the people involved had no way to know at the time. I can’t take any credit for UBI’s rise, but I followed it very closely, so maybe my personal account will be useful.
Although I was a firm supporter from 1980, I couldn’t do much for the UBI movement, because there wasn’t much of one, and I had to go through high school and college. Then I bounced around between crappy, low-paid jobs for three years, before starting graduate school.
The two things I could do for UBI in that period were think and talk about it. The more I thought about it, and the more I learned about politics and economics, the stronger my support became. I began to see UBI as the centerpiece of a just society.
1980 was a depressing time to become a UBI supporter—especially in the United States. There were small waves of support for it in various places around the world during this period and an intellectual movement for UBI began growing in parts of Europe by the mid-80s, but none of that news reached me in the USA. There was no internet. I had the mainstream media, the library, and word of mouth, which was nearly useless.
Margaret Thatcher and Ronald Reagan
I found myself arguing for an increasingly unpopular idea. As the memory of its popularity in the 60s and 70s faded, fewer and fewer people even knew what it was. Politicians like Ronald Reagan in the USA and Margaret Thatcher in the UK were slowly but successfully dismantling the welfare systems in their countries and vilifying just about everyone who qualified for benefits. People to the left-of-center were so much on the defensive that they were afraid to admit that the current welfare model needed improvement, because they were afraid any admission like that would make it more vulnerable to attack. Left-of-center people often argued that unconditionality was good in the abstract but political support for “the work ethic” was so strong that the only way to make sure benefits were adequate and safe from attack was to direct them exclusively to “the truly needy.”
The obvious weakness of this indirect argument amazes me. Almost all benefits in the USA, the UK, and many other countries, have been based on the model of separating the “truly needy” from the “undeserving poor” since their inception, but they have seldom if ever been adequate, and never free from attack.
Even some nominally left-of-center parties joined in, such as in 1996 when Bill Clinton led a bipartisan effort to “end welfare as we know it,” which basically meant reducing or eliminating benefits for the poorest children in the country because supposedly their mothers were bad people for taking care of children instead of “working.” Never mind that minimum wages weren’t enough to get single mothers or their children out of poverty, much less pay for child care. Never mind that this popular belief coincided with an equally popular belief that mothers whose husbands had money were bad people because they “worked” instead of taking care of children.
Watching things get worse for the least advantaged galvanized my opposition to conditions. Money is power. Propertylessness is powerlessness. Our society uses a judgmental, punitive system to force the least advantage to work for poverty wages. So, my support for UBI as a 31-year-old recent PhD in 1996 was as strong or stronger than it had been as a 15-year-old high school freshmen in 1980, and by now I had some of the skills I needed to work on it in the way I most wanted to—as an academic researcher. There are an infinite number of ways to contribute to a movement. So, I did what I thought I could do well.
Michael A. Lewis
My entry into the UBI movement began in the summer of 1996 while having breakfast the 7A Diner with Michael A. Lewis and Pam Donovan—two other recent PhDs and from the City University of New York. We’d been talking about politics a lot throughout our grad-school years. We had very different perspectives, but that day we all agreed that UBI or something like it was the most important social policy our country could introduce it right now.
Pam said, “then we have to write a paper on it.”
Pam was too busy to collaborate a paper together, but Michael and I had the time. We wrote the paper, and we have been collaborators on-and-off ever since. The feeling that I wasn’t the only one left in the world willing to work for this policy was great. It got my started writing on this issue, and I’ve been doing it ever since.
When Michael and I had a draft of a paper (that would take ten years to publish), we looked through academic journals in our fields (economics and sociology) to find people who’d written recently on the issue, and asked them for feedback. We had to search under at least a half dozen different names (guaranteed income, social dividend, etc.) because UBI had not yet emerged as the standard term. But we found about 20 people’s names and email address. We began getting to know people working on this topic.
In 1997, while I was working at the Levy Institute of Bard College in upstate New York, Malcolm Sawyer asked if I new about the Basic Income European Network (BIEN), as it was then called. I soon learned BIEN had been holding conferences on this idea since 1986. I got online and made plans to attended the next BIEN Congress, which was in Amsterdam in 1998. I can’t describe the feeling of being in a room with of several hundred UBI supporters after 18 years feeling like I was the only one. I’ve attended every BIEN Congress since.
At the conference, I was a new PhD, just getting started, with zero publications. So, I was a little nervous when I introduced myself to the organizer, Robert van der Veen, one of the key UBI researchers whose work had helped bring this issue back into the academic dialogue a dozen years earlier.
But when I thanked him for the work he’d done organizing the conference, he looked at my name tag and said, “And thank you. It was when I got your proposal, that I knew there would be at least one good paper at this conference.”
That comment gave me confidence that I had something to contribute. I hope that helps me remember to compliment others.
I also spoke to another key researcher, the secretary of BIEN, Philippe Van Parijs. I asked him how I could get involved with the network. Because BIEN was a European organization at the time, he said they really needed Americans to organize something like BIEN in the United States. Michael and I had a mailing list of about 20 interested people. That’s a start.
Because I was the only one who had time, they let me be coordinator and write the newsletter, eventually named the NewsFlash. That job gave me the opportunity to scour the internet for any UBI-related news I could find every two months. Sometimes it was hard to find, but I was surprised that there was always something to put in the NewsFlash. And that always put me in a good mood.
Jurgen De Wispelaere
I was the editor and main writer (sometimes the only writer) of the USBIG NewsFlash for it’s first 15 years, and it became a lot of work, but it also was a great education. It was a hard and sometimes thankless job, but I learned so much about the movement, it led to writing a lot of things that weren’t thankless, like writing this article, and collaborating on various projects with Michael Howard and Jurgen De Wispelaere.
From the early 2000s, I was all in with the UBI movement. I’ve attended every USBIG and BIEN and BIEN Congress since then. I’ve written as much as I could in UBI, and I volunteered for whatever I was able to do.When BIEN expanded from a “European” to an “Earth Network” in 2004, USBIG became an affiliate and several USBIG members, like Eri Noguchi, Almaz Zelleke, and me) joned the executive committe at various times. Eventually I was elected cochair along with Ingrid Van Niekerk, and later Louise Haagh.
Gradually, I became a recognizable part of the group of people working on UBI.
BIEN chair, Louise Haagh
But the group didn’t even feel like a movement. It felt like a discussion forum. Most of the membership were academics, and even the activists didn’t have critical mass to organize many actions. Instead, they tended either to focus on policies that were steps in the direction of UBI or to write about UBI like the academics but in more accessible way.
The movement was not only small; it was greying. In the mid-2000s, Guy Standing, referred to me as one of “the young people.”
I said, “Guy, I’m like, 40 years old.”
But that was young enough to be one of the younger people at the BIEN Congress.
Guy Standing–probably the most prolific author of UBI research–occupying Washing in 2011
Now that people in their teens and twenties working harder for UBI than anyone else, it’s hard to believe that as recently as 10 or 15 years ago, we were worried about getting young people involved. The movement was still made up mostly of die-hards from the second wave of UBI support, which had subsided more than 20 years earlier. I couldn’t even count myself as an exception because I learned about at the tail end of that wave of mainstream support. Maybe the UBI movement was the a ghost of Guaranteed Income movement of the 1960s.
Michael Howard unconditionally supporting the umbrella
In retrospect, the perception that the movement would slowly die off is obviously wrong. Even though UBI was continuing to recede from the mainstream political dialogue in most countries, subtle signs that the movement was regaining strength were visible. The first national Basic Income network began in the UK in 1985. The first international conference was held in 1986 and it led to the foundation of the first international network, BIEN. Since then local, national, and international groups had been gradually appearing around Europe and around the world. Minor parties in Parliaments in various European countries and elsewhere had been gradually endorsing UBI.
Localized waves of mainstream interest in UBI came and went throughout this period in places like Denmark, the Netherlands, Canada, and South Africa. Even after these waves subsided, they left behind diehards who contributed to the growing international discussion and activism for UBI.
As USBIG’s Newsletter editor in the 2000s, I watched the subtle growth of the movement continue without really noticing that significance of its gradual acceleration. Not many other people did either. I never heard anyone saying this discussion and these actions are growing in a way that’s going to lead to a worldwide wave of UBI support that would make it a visible part of the mainstream political discussion across dozens of countries by in the 2010s.
Allan Sheahen
In 2006, US two activists, Al Sheahen and Steven Shafarman got a member of U.S. Congress to submit a bill to introduce small UBI. This bill was supposed to part of a strategy to rally support and press attention to UBI. Despite a lot of lobbying efforts by Al, Steve, and a few others, only two Members of Congress signed on to support the bill; there was basically zero press attention to it and zero activism for it. No one bothered to reintroduce the bill in the 2007 Congress. And the two Members of Congress (Bob Filner and Jesse Jackson Jr.) both ended up convicted of unrelated crimes a few years later.
Enno, Schmidt
But things were changing. Also 2006, Enno Schmidt and about a half dozen other people put paper crowns on the heads of passerbys in a public space in Switzerland and explaining the meaning of a too-often-forgotten UBI slogan “everyone a king.” Despite my doubts that it would lead anywhere, I was delightfully shocked that someone, somewhere was doing activism for UBI.
About that time, networks in Switzerland, Germany, and Austria created the first International Basic Income Week, which has grown every year since, and now takes place on all six inhabited contents. But it took me several years even to hear about it because it had no web-presence in English.
Zephania Kameeta, Namibian Minister of Poverty Eradication and former Bishop of the Lutheran Church of Namibia
At 2006 BIEN Congress, Zephania Kameeta, slammed his fist on the podiumand said, “Words, words, words. It’s time for action.” I was thinking, “Here we go again. Someone else is going to curse the people lighting candles in the darkness and tell them that they need to stop what they’re doing and start working on his idea.” But he instantly surprised. He announced he raised enough money to start a UBI pilot project in Namibia–the first such experience since 1980, and the forerunner of dozens that are happening now.
These days I look back at 2006 as the year that the UBI reached an inflection point and started to take off, but even following the news as closely as I was, I didn’t notice until 2012.
Before then, the news and research about UBI was small enough that I had time enough to read or listen to a lot of it, seemingly most of it, or at least most of the English-language stuff that seemed important to me. It was getting easier to fill the newsletter, but I felt like I had a good handle on it.
It went smoothly for about a year, but in 2012 Yannick, Joerg, and I all noticed something was happening. Suddenly, there was so much UBI-related news, that the three of us together couldn’t keep up with it.
The three of us knew that UBI was taking off. It’s been rising ever since.
I’d finally noticed that the third wave of UBI movement was happening. And the period in which I had to wonder whether the third wave was going to be as big as the second wave was extremely brief. In about 2010, I was asked to write a chapter called “Is Basic Income Still Worth Talking About?” (not my idea for a title and my answer was yes). But by the time book came out the question already sounded dated. More UBI activity was going around the world than at any time before.
The third wave dwarfs the second wave, and it’s the first genuinely worldwide wave of UBI support. I stepped down as editor of Basic Income News, five years ago (Andre Coelho took over), but I still follow the news as much as I can.
I discussed a dozen or so sources of this rise in another article. I won’t reiterate them here.
Barb Jacobson, one of the many people who work on the European Citizens Initiative for UBI and helped turn it into UBI-Europe
Today, the wave continues to grow from multiple sources even as its most visible driver keeps shifting every couple of years. First, it was two activist-led experiments in Namibia and India. Next, it was two petition drives to get UBI on the ballot in Switzerland and the European Union. Then two campaigns together raised over a half million signatures, and the EU campaign organized in every single EU member state. Somebody took the time to ask people in Malta to gather signatures for UBI. Somebody in Malta said yes. And some people in Malta—along with 350,000 people across 18 other countries—signed.
Look how small and out of the way that place is
After that, the media generated by those two initiatives inspired different kinds of activism around the world. Local, regional, national, and international groups seemed to appear everywhere.
At about the same time, the automation discussion exploded with tech industry people including some deep-pocketed and/or famous entrepreneurs, some of them used their position and resources to promote the idea. Then governments and large institutions around the world started running Basic Income experiments, sometimes in partnership with wealthy individuals or firms. So many experiments are now underway, it is hard to keep track.
Today, the most visible driver of the movement is Andrew Yang‘s campaign for U.S. Present. He’s the first major candidate to make UBI his central campaign issue. In
Andrew Yang upholds UBI as the Freedom Dividend
the 1972 US election, both major-party nominees endorsed forms of UBI, but neither of them made much of an issue of it.
Writing for the USBIG Newsflash during the 2000-2008 elections, I was unable to find any U.S. major parties’ Presidential, Gubernatorial, or Congressional candidates (aside from the two jailbirds mentioned above) even being asked about the issue. The issue was endorsed by Green Party candidates (thanks in part to Steve), and it was in alive in top-level politics in some other countries. But mainstream U.S. politicians almost always either ignored it completely or distanced themselves from that radical idea.
Steven Shafarman
In the 2012 and 2016 election cycles, mainstream politicians including Bernie Sanders, Barak Obama, and Hillary Clinton started being asked about it. Instead of feeling like they had to distance themselves from the idea, they tended to say favorable things about it while trying to convince UBI supporters that the most effective way to move in that direction right now was to join them in supporting some very non-UBI policies. That kind of response indicates that they recognized that UBI movement as worth courting, and that doing so was a net benefit over any negative they might get from association with an idea that had been too radical to touch since 1972—when even George McGovern quietly deemphasized it after receiving a difficult attack from Hubert Humphry in a primary debate.
Scott Santens with Conrad Shaw (“the UBI guy”/filmmaker) in a good mood after the Basic Income March, October 26, 2019
Yang’s version of UBI is ambitious, but not as much as most UBI supporters want to see. However, he’s been inspired by and considers himself a part of the UBI movement. His plan is a start. He’s received dedicated support from one of the most prominent UBI activist-writers in the United States, Scott Santens. Should UBI supporters endorse a candidate? I, for one, suggest we endorse the candidate who has endorsed us.
Yang’s campaign has raised UBI to greater prominence that it’s ever before received in the United States. It has forced all the Democratic candidates to state a position on the issue. He’s made it more difficult for other politicians to dismissively say nice things about the movement while trying to sell supporters on a non-UBI policy. If they’re not ready to endorse UBI right now, they have to explain why not, and often those arguments against UBI-now don’t look that great for people who see themselves as left-of-center. They sound reactionary and judgmental. If you’re serious about inequality, poverty, making sure everyone (no just the 1%) benefit from our prosperity: stop judging, start helping.
A small part of the Yang Gang in Los Angeles
Yang has built a network of “Yang Gangs” around America, and these groups are rallying around UBI more than any of Yang’s other policy proposals. Many dedicated members of the Yang Gang did not know what UBI was a year ago. Whether these gangs will grow into a long-term movement for UBI remains to be seen, but they’re giving a big boost to the UBI movement right now, and it’s spreading around the world.
Yang’s campaign has certainly reached more people than Milton Friedman’s TV show. Whatever happens it will leave behind many dedicated UBI supporters who will bring their ideas and enthusiasm to UBI research activism for a very long time. Maybe some of them will write articles in 2060, looking back on 40 years of activism–hopefully with a lot of successes to look back on.
Although Yang’s campaign is the most visible driver of the movement, right now, much more is going on–too much to chronicle. Experimental results will begin trickling out soon, and that will keep UBI in the news for years. Several documentaries about UBI are in production. UBI has become a major issue in India–especially in the state of Sikkim.
James Felton Keith & Diane Pagen
James Felton Keith, a candidate for Congress in Harlem, recently teamed up with long-term UBI activists, such as Diane Pagen, to organized a Basic Income march in October 26, 2019 in New York. The idea quickly spread around the world: 30 cities heald UBI marches that weekend.
Two other candidates for Congress, Chivona Newsome in the Bronx, and Agatha Bacelar in San Fransisco participated in the march and have given UBI a prominent place in their platform. I’ve gotten to know J. F. Keith. He’s not just someone who’s willing to say something nice about UBI. He’s a part of the movement. His voice in Congress could greatly raise the prominence of the idea.
From 1980 to 1996, I was an isolated UBI supporter. Then I was part of what felt like an all-but-hopelessly marginalized group of UBI supporters for another 15 years or so. For nearly a decade, I’ve been a part of growing movement that seems to reach new milestones every few months. In the process, I’ve gone from being one of the kids of the movement to a member of the old guard. I’ve had the chance to speak about UBI on all five continents. I even got to speak at the 2019 UBI March in New York.
Congressional candidate, Chivona Newsome, who is making UBI in issue
Being a respected part of this movement is the most satisfying part of my professional career. There is no group whose repect I value more. I hope everyone knows the respect is mutual. The chance to meet and correspond with so many people working for UBI in so many different ways has a been an adventure. The diversity of this group–so many people working in their own way on their own version of UBI or something like it–is what keeps this idea growing.
I’ve watched this movement grow with my mouth hanging open. Each success surprises me. People have given me and other visible members of the old guard way more credit for this wave of support than we deserve. Nobody saw this coming. Nobody said, this is what’s going to happen, and this is how we’ll do it. I can say that because I’ve attended most of the major UBI conferences since 1998.
Congressional candidate, Agatha Bacelar, who is making UBI an issue
Asking who should get the credit from the UBI movement is like asking which brick holds up the wall. The wall is the bricks. The movement is the people involved. The third wave of the UBI movement is being driven by extremely diverse support coming from all over the world for different reasons. The third wave is happening because a bunch of different people tried a bunch of different things–and some of it worked.
If you’ve said anything nice about UBI any time in the last 40 years, you helped build a movement. There’s no way to sort out who to credit and no point in trying.
We don’t know what happens next. This wave might be the one that makes UBI happen, but support might go into a period of decline for an unpredictable amount of time before picking up steam again. All I can say is whether the movement stalls or grows, don’t give up. Support has gone up and down several times, but it’s trended up for over 100 years. The diehards who kept working on UBI when it fell out of favor in their country made it into a bigger movement than it ever was before. It was that tiny group of people putting paper crowns on the heads of perplexed passerbys that started the snowball of activism that made it easy for the UBI march to spread all over the world. Or maybe 100 other little actions started the snowball.
If you want to get involved, there are an infinite number of valuable things you could do. Find something other people aren’t doing or that we need more people doing. If you need ideas about what needs doing, I have lots of them.
I don’t know how long it will take, but I think UBI will win eventually. The conditional welfare state, extreme capitalism, and extreme socialism have consistently failed to solve the underlying problems of inequality, poverty, and privilege. The have failed because even if they know that property is power, they have failed to realize that propertylessness is powerlessness and that making powerlessness the default position of everyone but the 1% is the ultimate class privilege.
UBI March, New York, 2019. Photo by Franklin Chávez
As long as inequality, poverty, and privilege exist, so does the opportunity to build the movement for UBI. The struggle doesn’t end until justice wins. Justice doesn’t win until the privileged stop telling the poor what to do so we can end the powerlessness that makes so many people in world weak, vulnerable, and marginalized.
-Karl Widerquist, Hey Cafe, New Orleans Louisiana, February 7, 2020 (with parts writted earlier and in other places). Updated February 9, 2020
AUTHOR’S NOTE: This article makes no attempt to comprehensively cover the UBI movement. It’s the view from my perspective. It’s about the small slice of the enormous UBI movement that I’ve interacted with most closely. My apologies to the hundreds of dedicated people whose names just didn’t happen to come up.
That’s me giving my talk at the UBI March in the New York.
There is a fear that a disproportionate part of Universal Basic Income would be paid to housing. Under current circumstances, a large portion of the income is paid to rent. A person UK in 2019, if receiving benefits only, in many cases is paying over fifty percent of their income for housing. If UBI was to come into effect, it is possible the same problem would occur. On the minimum wage in the UK (currently 8.21 per hour), over 43 percent of the income of a person living in a city will go to renting a single room. For first-time buyers, this can be devastating to their finances and can leave them asking questions such as “What are Bank and Mortgage Company Overlays?” in an attempt to pay off their debts.
If UBI becomes a transfer of funds from everybody in the economy to the landlords in the economy, then it cannot be progressive. These landlords are not particularly in need or poor. Therefore, the campaign for UBI must be approached keeping in mind where that income ends up.
Looking at rent rises in the last 29 years, one can see that that inflation between 1989 and 2019 makes everything roughly two and half times more expensive. So, anything that is 1 will be 2.50 today. Another way to put it is that 1 in 1989 is equal to 2.50 today. In the same time, the lowest wage rose from about 3.00 to 8.21 and tax on the minimum full-time wage decreases from twelve percent to five percent.
The biggest difference is rent and everything that comes with it, such as insurance from companies like Epremium. In terms of rent, 1 is equal to 10.50, or what was a 50 per calendar month is now 550.00 pcm. In buying terms, the lowest-priced homes cost about 35,000 in 1989 or six times the minimum wage annual income. In 2019, the average price of a two-bedroom flat varies widely. However, it is not uncommon to see a two-bedroom flat priced at 200,000 or twelve times the minimum wage. This would indicate that buying a house takes a similar trajectory as rent. In 1989, a person could have obtained a secure home, and put aside some money that comprises the state pension. If the property prices and rent had not risen and had stayed at about 9 percent of minimum income wages today, then this would be the case too. Even If there was a shortage of housing, they would have been able to initiate a build via a housing association or even through their own income.
Table 1 Wage falls as rent rises
Year
Monthly
Annual Rent
Annual Disposable Income (after rent, tax and national insurance)
% of Minimum Wage for rent (After Tax and NI)
% of Minimum Wage paid for tax factoring in tax free allowance
1990
40.00
480.00
4,658.75
9.34%
12.16%
1995
62.85
754.26
5,113.24
12.85%
9%
2000
98.77
1,185.21
5,562.40
17.56%
6%
2005
155.20
1,862.40
7,100.89
20.78%
9%
2010
243.88
2,926.51
7,565.72
27.89%
9%
2015
383.22
4,598.62
7,923.37
36.72%
4%
2019
550.13
6,601.60
8,632.19
43.34%
4%
2020
602.18
7,226.11
8,629.68
45.57%
4%
2021
659.14
7,909.70
8,595.00
47.92%
5%
However, the rent and property price rise that took place meant that each time the minimum wage was raised (in line with inflation) to keep somebody at the same standard of living on minimum wage, the rent rise took a larger and larger portion of their income. In the beginning, the rent rise takes 25 percent of their pay rise, then taking about 50% of their pay rise, and in many years is a 100 percent or near 100 percent. In a few cases, it was more than 100 percent.
Since the minimum wage increase to keep up with inflation and they are handing over above the calculated inflation for rent to their landlords, they are no longer gaining the additional money to stay at the same standard of living. Their wage is dropping and their ability to save and prepare for the future is dropping. For example, in 1989, for every 1 a person gives 9 percent or 9p to rent. In 2019, for every 2.50 roughly equal to 1 then, a person gives 1.07 to their landlord or 43 percent.
If we look at rent increment per year and pay increment per year, taking the actual rises in the minimum wage from government records, and factoring the rent rise equally distributed over the full twenty-nine years. In order to get from a monthly rent of 50pcm to 550pcm. If equally distribute, then from about 1990 to 1999, the pay rise would have been higher than the rent rise. Some years all of the pay rise is transferred to the landlord.
In 1990, about a quarter of the pay rise is a transfer to the landlord. In 1999, 2008, 2011, 2012, 2014 and 2019, the full pay rise is transferred to the landlord. In most other years about 40 percent to 98 percent is transferred to the landlord except for five years.
For rent to rise from 9 percent to 43 percent of the minimum wage, the rent must have risen in some years higher than their pay rises. This would have been reflected differently in different accommodations. However, everybody who was renting would have observed the change at some point. In the following example, the rent rise is assumed to be equally distributed across the years, to show how the rent could have moved from 40pcm to 550pcm.
What about tax, during the same period the tax goes from 12 percent of the minimum wage to about 5 percent. Comparing tax and rent, the tax amount starts out higher than rent. By 1992 tax and rent are about equal outgoings, and then slowly rent increases tenfold, and tax decreases to about half the share it was in 1989. The rent doubles tax in 1998, trebles in the early 2000s, and by 2015 it is ten times the rent, as an annual outgoing for a person on the minimum wage.
Disposable income moves in the reverse direction. In 1990, a person on minimum wage has almost ten times the disposable income than they pay on rent. Disposable income after rent, tax, and national insurance contributions are 4,658.75, while rent is 480 per year. In 1996 it is six times, in 2002 it is four times and so on. By 2018 it is less than 1.5 times, and if the trend continues by 2022, rent will be higher than disposable income.
If house prices and all other items had increased in line with inflation and the minimum wage pay rise was the same, then a person would have the potential of savings to purchase a home or build a home with about half their accumulated life’s income. When they sold that home, they would regain the total value, less depreciation of the same home. Homeowners can also look at selling their current homes for cash through a ‘We Buy Houses‘ company or they can help them find buyers that are interested in buying their homes at the price point they had set out so they do not lose out on any money they have put into their current home.
Table 2 shows a scenario of house prices had not risen.
Year
Monthly rent went from 40 to 550pcm in 29 years.
Annual Tax for the year
Annual Rent (12 Months)
After RENT and Tax, NI per year
% of Minimum Wage for Rent (After Tax and NI)
% of Minimum Wage paid for tax factoring in tax free allowance
1990
40.00
711.25
480.00
4,658.75
9.34%
12.16%
2000
49.35
440.20
592.22
6,155.38
8.78%
6%
2010
73.34
1,017.70
880.13
9,612.11
8.39%
9%
2019
101.53
701.90
1,218.31
14,015.47
8.00%
4%
However, they would not have been able to set aside enough money to raise one or two children. The calculation for a child would be half the cost of living between age 0 to age 18, at half the cost of an adult. However, testing of goods and services for children are actually coming to a price of roughly half the cost of living, as they are assumed to have done in the past.
So, to reiterate, the minimum wage over a lifetime will not deliver to either a one- or two-income household, the returns for a home, investment in education to give higher wage opportunity, and a pension or putting aside money first to have children, plus the cost of bringing up children. Therefore, there is no choice for people on the minimum wage but to look for further state support. However, the truth of the matter much denied is, who is taking the subsidy, the person on minimum wage or precarious jobs, the end customers that are being given a lower price based on a low wage. The landlord is taking 43 percent of the income in real terms whether sourced in benefits or wage, or the hiring organizations who are saving a larger percentage of their budget for others who are paid more. Finally, that subsidy goes to shareholders whether it ends up mostly in the pocket of a small set of people, or a retirement fund which funds a large set of people. What is clear, people on minimum wage should not be blamed or made to feel guilty because of their poverty. Instead they should be enlightened educated on tools that may be able to help them in this time of need such as home equity. Many times people are sitting on money and don’t even realise that they can claim it. Find more information on this link – https://www.facebook.com/equityexperts.org/.
And the Universal Basic Income is an idea that can only be realized if each of the key areas of expense for a human being to live takes a reasonable proportion of the income. Otherwise, Universal Basic Income is just a guaranteed income for landlords today and maybe another industry tomorrow, and will fail to supply the basic set of goods and services it is designed to guarantee.
There are data gaps in the Rent to Income Ratio, the most Signiant of which are explained below
The starting rent in 1990 of 40pcm is derived from my own personal experience of renting a double room in a shared house. I remember at the time I chose a room that I could be comfortable in, and did not choose the cheapest room. I was moving from a room with relatives, where I paid 30pcm. The common room price in loot the listings paper which was the main source for finding lettings at the time was 30pcm to 50pcm, I believe that the bills were not included. The rent in 2019 was derived from a search for a double room on a website. There are many rooms that are priced over today’s rent of 550, which seem to be most rooms. However, through many searches of different websites, I can see that it is a common rent for a room in that area. This data could be improved by searching through archived copies of listings papers for the time. There are many rooms advertised at about 200 more than the rent I have quoted in some cities.
From starting rent to today’s rent, I am estimating a % increase year on year, equally distributed. This would end up with today’s rent. For future rent, I am taking the same % increase forward for a further twenty years
Minimum Wage: When referring to minimum wage, I am always assuming the full adult minimum wage and not the minimum wage for young adults
Minimum Wage in 1990 to 1998 I have real data from .gov site and from the guardian site from 1999. This is the year the minimum wage came into effect. Prior to this I have a sketchy memory of my take home pay in 1990. Therefore, the start salary 3.00 per hour is pure guess and would be slightly lower if I calculated using the future trend. Tracing back this goes to about 2.70. I feel that this would not be accurate as my take home pay would have been lower.
Future Minimum Wage 2019 to 2039 If I estimate a year on year % increase to take me from 3 to 8.20. The % increase is about 3.5% year on year. I am then using this for future years.
Minimum Wage 1999 to 2019 Data from tables on .gov websites and guardian websites. This data does not take into account which month the change came into effect and assumes a full year at the minimum wage increment for the year. This data could be improved.
Tax Calculations
If the rent year is 1990. The tax is calculated using figures for 1990, and the calculation is done against the full year from 1990 till today, therefore this data does not use the previous tax year for the last three months of the financial year. This would mean that tax would be slightly lower than shown here. Tax Personal Allowance, and all other calculations involving tax, including salary after tax also ignore the financial year change over. Therefore, this data could be improved. The overall trend of rent rises outstripping pay rises would not change.
National Insurance NI for 1990 to 1998 has been put at zero, because of confusion about the rules at the time. However, I believe it to be quite low for the minimum wage because of the exemptions for low wage at the time. This data could therefore be improved.
Jane Dodds and Liberal Democrat leader Jo Swinson. Picture credit to: The Week
Over fifty candidates for the UK’s Liberal Democrat party (Lib Dem) have signed a personal commitment to back basic income pilots in the next parliament, if elected.
The intention to run these basic income pilots, which would be implemented by removing conditionality rules from the standard element of the main Universal Credit benefit system, is already an official part of the party platform, voted for by Lib Dem members this autumn as part of the party’s ‘A Fairer Share For All’ package of anti-poverty proposals. With social security issues low on the agenda in the election overall, however, a number of the party’s candidates signed a separate declaration to bring attention to the policy.
The Liberal Democrats have a comparatively long history with minimum income as an idea, with citizens’ income proposals forming part of the party’s platform in its 1992 manifesto, and in recent years their proposals to abolish the sanctions system for social security, which they adopted in 2016, have seen them move back towards unconditional income policies. This comes alongside the Lib Dems’ wider pledges to spend more money on social security, abolish benefit sanctions, and end many of the other restrictions and claim delays that have caused problems with the Universal Credit system since its introduction. Lib Dems have been recognized by the Resolution Foundation to have progressive policies on welfare issues.
The backers of the minimum income statement, which was organized by a group of party activists, come from across Britain, covering all nations and regions and both urban and rural areas. Notable signatories include Andrew George, James Cox, Jasmine Sakura-Rose and Jane Dodds (Welsh Liberal Democrat), who has publicly spoken out in favor of the idea.
Quotes from signatories:
“I support a minimum income because it gives people the power to say no to exploitative jobs and a base from which to work to better themselves. Only with a minimum income or UBI in place can we begin to support real freedom for all.” – Oliver Craven, candidate for Sleaford and North Hykeham
“We can’t carry on with a system that doesn’t ensure that people have a stable, reliable minimum level of income. The instability people face under the current social security system badly impacts on their health and wellbeing, and we have to find a way out of that.” – Josie Ratcliffe, candidate for South West Norfolk
“As a Lib Dem I believe in empowering people, and one of the most important parts of that is ensuring they can care for themselves and their communities and pursue their own paths and goals without the constantly looming threat of income insecurity that so many people currently face.” – Charley Hasted, candidate for Eltham
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