by Guest Contributor | Aug 3, 2016 | News
For the Forum’s press release, click here.
Revenu de base Québec (RBQ) and the Mouvement Français pour un Revenu de Base (MFRB) have teamed up to organize a series of initiatives spanning this years World Social Forum, to be held from August 9th – 14th in Montreal.
Various activities will be organized to help people learn, create and exchange views on a number of issues relating to basic income. Hoping to advance the idea during one of the largest global gatherings of civil society.
Discover the program (in French here):
Créathon
In the style of a “hackathon” this creative marathon will be held over two and a half days and bringing together creators from different backgrounds: art, activism, technology, etc., who share an interest in basic income.
Wednesday, August 10th: 13h-18h
Thursday, August 11th: 9h-18h
Friday, August 12th: 9h-17h
Location: UQAM – Pavillon Hubert-Aquin, rooms A-1824 and A-1825
Ğeconomicus game
Ğeconomicus is an economic simulation game to discover the influence of money creation on trade. Players will buy and sell economic values in order to create new ones. There will be two sessions.
Wednesday, August 10th: 13h-15h
Friday, August 12th: 13h-15h
Location: UQAM – Pavillon Hubert-Aquin, Room A-1825
Convergence Assembly: “Basic income: From realistic utopia to public policy”
The goal of this convergence meeting is to bring together activists from all backgrounds to reflect on methods and actions to be taken at all different levels when it comes to turning the ideas of a realistic utopia into public policy. The scope extends from municipal politics to international politics, through experiments, and creating synergies between the various actors of civil society.
Wednesday, August 10th: 16h-18h
UQAM – Room A 1824 (Pavillon Hubert-Aquin)
Convergence Assembly: “Income, a non-medical remedy?”
An assembly of healthcare workers, people active in helping the poor, activists of basic income and anyone interested in the link between income and health, in order to find common ground and ways to work together.
Thursday, August 11th: 16h-18h
UQAM – Room A 1824 (Pavillon Hubert-Aquin)
Debate: “The universal allowance and the maximum wealth”
Can a basic income be implemented without its corollary, maximum wealth? With the explosion of inequality and tax competition between states that threaten social achievements, market regulation through a “floor” and “ceiling” of income and individual capital seems like a promising idea in the direction of greater social and economic justice.
Thursday, August 11th: 13h-15h
UQÀM – (Pavillon Hubert-Aquin, room A-1825)
Grand Conference “Basic income: social innovation for the 21st century”
Friday, August 12th: 18h- 7:30 p.m.
Concordia University (Hall Building, room H-110)
For the Grand Conference, we will welcome the participation of stakeholders from various backgrounds who will paint a picture of the situation of basic income around the world:
Karl Widerquist
Associate professor at SFS-Qatar Georgetown University (Washington DC). He holds a PhD in Economics from the City University of New York and a doctorate in political theory from Oxford University. He participated in six books. Many relate to basic income, including his latest: Independence, Propertylessness, and Basic Income: A Theory of Freedom as the Power to Say No (Palgrave Macmillan, 2013). He is a founder and editor of the journal Basic Income Studies. His articles have also appeared in several magazines including: Political Studies; The Eastern Economic Journal; Politics and Society; and Politics, Philosophy and Economics. He is co-chair of Basic Income Earth Network (BIEN), the leading global network of research and action on the basis of income.
Marcus Brancaglione
He describes himself as a “libertarian activist of basic income and direct democracy.” He is the president of ReCivitas, coordinating a basic income guarantee project in the city of Quatinga Velho, in the state of Sao Paulo, Brazil. He is the creator of the digital platform for direct democracy Governe-se.com and alternative IP site RobinRight.org. He has published articles and books and is regularly invited to give lectures on these subjects.
Rutger Bregman
Historian and opinion shaper, he is the author of several books, he is best known as one of the editors of the permanent media platform online De Correspondent, created in 2013, when his book De geschiedenis van de vooruitgang was named by the Dutch to be the brightest non-fiction book of the year. In 2015, he co-wrote with Jesse Frederik the philosophical essay Waarom vuilnismannen meer dan verdien Bankiers. The English translation of his latest book, Utopia for Realists, gave him a far reaching international reputation.
Nicole Teke
Coordinator of Public Relations for MFRB and secretary of the European network UBIE, she will also participate in the Main Conference as the host and a speaker to present the progress of basic income in Europe.
Pre-registration to the activities on basis income come from all continents, it will be a truly global forum on the subject.
More information: https://site-845609-9101-5923.strikingly.com/
Contacts:
RBQ: gosselin.luc@gmail.com
MFRB: nicole.teke@revenudebase.info
by Andre Coelho | Aug 1, 2016 | Opinion
The following is a critical response to Brookings’ “Money for nothing: Why a universal basic income is a step too far,” by Isabel Sawhill.
Isabel Sawhill wrote a short essay about basic income, arguing that it may be a step too far. To me, what has been “too far” is precisely this present day Kafkaesque system of oppression, where poverty runs rampant (even in the so-called “rich” countries), levels of inequality are breaking records, all while societal and environmental stress reach all-time highs. Nonetheless, the article deserves a response because Sawhill manages to aggregate the most common criticisms/preconceptions regarding basic income: that we cannot afford it, that the wealthiest should not be “helped” and that without obligation people do not meaningfully contribute to society (a nuance on the trendy “people will just be lazy” argument).
So let us deconstruct each of these arguments.
“(…) logic is inescapable: either we have to spend additional trillions providing income grants to all Americans or we have to limit assistance to those who need it most.”
This logic is not inescapable. In fact, it is wrong. Financing a basic income does not just amount to thinking of an amount for the grant (say $1000 per month), multiplying it by the country’s population (319 million people) and then paying the bill (in this case, $319 billion per month, or $3.828 trillion per year). That is very bad math. A more sensible tax policy will transfer a part of the taxes collected from the relatively wealthier to those relatively poorer. Actually, the former will be net-payers of basic income, and the latter will be net-receivers of basic income. Depending on the taxation levels at a certain moment in time, this redistribution of income can even be done without any supplementary cost.
Another fallacy is this idea that a basic income could “limit assistance to those who need it most”. How would that even be possible, if the basic income is enough for basic human needs, and is universal and unconditional? Would it not then provide the assistance to those in need?1 It will, but only in a much better way than in the present system: it would do it without policing, without stigmatizing, without controlling and with much less bureaucracy. In fact, part of the money necessary to finance basic income will come from savings in conditional social assistance grants that have become obsolete, mainly because beneficiaries no longer meet their requirements (mostly means-tests). Furthermore, there are too many targeted social safety net policies in the US, which nevertheless fail to effectively eradicate poverty. In an analysis by Karl Widerquist, around 7 percent of workers live in poverty, as do 22 percent of children. The idea is that basic income can circumvent all of these conditional assistance programs, providing universal unconditional support, and reducing social assistance complexity, bureaucracy and cost.
“One option is to provide unconditional payments along the lines of a UBI, but to phase it out as income rises”
As long as one looks at basic income as an income redistribution scheme, this is just stating the obvious. As income rises, and taxes paid also rise, then on a net basis people will of course be paying for basic income, not receiving.
“Liberals fear that such unconditional assistance would be unpopular and would be an easy target for elimination in the face of budget pressures.”
Fear has never been a wise consultant, but, philosophy aside, there is no evidence that basic income would be unpopular in the US, even considering the precocious opposition from leading political figures. Plus, in the face of budgetary pressures, I do not see why basic income would be any more likely to be subject to cuts or to be targeted for elimination compared to other social security policies. Actually, as a wider policy than targeted programs, and one that would make some of these targeted programs obsolete, basic income would likely be more difficult to eliminate since more would be at stake (in comparison to just losing a tax benefit or food stamps eligibility).
“(…) poor and jobless are lacking more than just cash. They may be addicted to drugs or alcohol, suffer from mental health issues, have criminal records, or have difficulty functioning in a complex society. Money may be needed but money by itself does not cure such ills.”
Now let’s think a bit about this. What can bring on addiction or addictive behaviours? What can cause mental health issues? What can lead to criminal behaviour?
Firstly, we would like to encourage anyone reading this who is suffering from an addiction to reach out to someone and get assistance in whatever way you can. This could mean asking for help at a homeless shelter, going to recoverydelivered.com in Florida, or just reaching out to your family. Addiction is crippling and the fact it’s being used to counter an argument is despicable. Addictions may come into a person’s life for a multitude of reasons: past traumas, family issues, health problems, professional pressure…and poverty. Poverty has been extensively shown (ex.: A primer on Social Problems, Effects of Poverty) to be a generator of many social problems, including malnutrition, health issues, and distress. So it is obvious that poverty bears a feedback relation to trauma, family unrest, health and professional pressure, although it is not the only cause of social ills — rich people also share some of society’s problems.
Addiction specialists, like Katarzyna Gajewska, are also not convinced that basic income can have an exacerbating effect on addictive behaviour, due to its multifaceted nature. It is just not the monetary facet that is affected, but there is also a need for emotional healing from addiction that is needed for the ones facing this problem. Meanwhile, no basic income trial test to date has found significant increases in the use of addictive substances due to unconditional cash transfers (Scott Santens, 2016). As for mental health issues, in fact, the Canadian “Mincome” experiment has found a correlation between basic income and reduced hospitalizations due to mental illness, as described in the relatively recent report by Evelyn Forget. And as for crime, hard data from the basic income pilot study in Namibia has shown a 42 percent decrease in the crime rate attributable to the distribution of an unconditional basic income for nine months.
Somehow Isabel resists the idea of a basic income on the grounds that it stems from a flawed assumption that money alone can cure society. But, looking at this evidence from the “cause” perspective, lack of money – that is poverty – is indeed at least partially causing these problems of addiction, mental illness and crime. And so money, although not a cure in itself, is bound to substantially reduce these social illnesses.
“A humane and wealthy society should provide the disadvantaged with adequate services and support. But there is nothing wrong with making assistance conditional on individuals fulfilling some obligation whether it is work, training, getting treatment, or living in a supportive but supervised environment.”
There is, actually, something wrong about a conditional social programs. Social Security in the US is very complex, particularly due to means-tested criteria. Plus, there is evidence that social security programs can lead to stigmatization (to which political and media discourse also contributes in an important way). Moreover, the worry that people will just stop working without a work obligation is unfounded – all basic income experiments to date have shown little to no work reduction on average. That’s despite the fact that most research tells us that people work too much (particularly in the US), and that is a bad thing generally. So a cut in average worked hours would actually be welcomed. And this is not even discussing the type of work performed (useful or not, meaningful or not, benefiting society or not). Every workplace should have health and safety precautions in place to prevent staff from overworking at all. In fact, this extends to so many health and safety measures such as fire exit signs and hazard precautions in general (look these up here for example). Although these are the obvious forms of health and safety in the workplace, sometimes people forget that overworking along with stress and mental health can also be a contributing factor to the ill health of employees within a business. Some do try to relax and find pleasure by watching adult videos (check these porn site reviews, for example) and other similar recreational activities. However, overworking still tends to be a cause for concern.
“In the end, the biggest problem with a universal basic income may not be its costs or its distributive implications, but the flawed assumption that money cures all ills.”
Indeed. Money is not everything. But too many people suffer the consequences of not having enough of it on a daily basis (around 24 million in the USA alone), which is totally unnecessary and utterly avoidable. And while not having enough money makes people stressed and desperate to find more of it just to meet their basic needs, they are not enjoying the non-monetary parts of life: quality time with family and friends, leisure, acquiring meaningful knowledge, participating in public/cultural life, volunteering and so on.
More information at:
Isabel Sawhill, 2016. “Money for nothing: why a basic income is a step too far“, Brookings, June 15th 2016
Steven E. Barkan, 2012. “A primer on social problems“, Creative Commons 3.0 licence, November 29th 2012
Tyler Prochazka, 2016. “Beyond temptation: scholar discusses addiction and basic income“, January 28th 2016
Claudia and Dirk Haarmann, 2015. “Relief through cash – impact assessment of the emergency cash grant in Namibia“, July 2015
Notes:
1 – That’s not to say that special needs would not be attended to, like disabilities or disease supplements. For those special needs, basic income just needs to be topped up with an extra amount which can satisfy them.
by Kate McFarland | Jul 31, 2016 | News, Testimonies
Nina Šoštarič obtained her Master’s Degree in Philosophy from University of Ljubljana, Slovenia, with a thesis titled “Basic Income as a Step towards Environmental Justice”. She is now a PhD student at University College Dublin in Ireland, where her research lies in the intersection of equality issues, social justice, and degrowth.
Nina has published two articles — “Between Socialism and Capitalism: Universal Basic Income” (2012) and “UBI in the Light of Global Environmental Crisis” (2011) — and edited the book Where are we headed? Thoughts on Ending the Crisis (2013) (all in the Slovenian language).
In a recent Basic Income Interview, Nina explained her interest in the idea:
I first heard about basic income years ago in college when my professor Igor Pribac, later my supervisor, talked about basic income at a module called Social Philosophy. Immediately I thought it was an amazing concept.
I support basic income because it is truly an inspirational idea. Every individual and the society as a whole could benefit immensely from it, if implemented properly. Basic income would provide a safety net for everyone in this precarious era. I think it has a big transformational potential.
Nina recommends the website Sekcija UTD for more information about the basic income movement in Slovenia.
Photo used by permission of Nina Šoštarič.
Basic Income Interviews is a special recurring segment of Basic Income News, introduced in July 2016 by Jason Murphy and Kate McFarland. Through a series of short interviews, we aspire to display the diversity of support that basic income receives throughout the world.
Have your own thoughts to contribute? Want to see yourself in a future Basic Income Interview? Visit our interview form.
by Florie Barnhoorn | Jul 30, 2016 | News
Highlights from the first half of 2016
The early days of 2016 brought a pleasant surprise for the Vereniging Basisinkomen (VBi; Association for a Basic Income), the Dutch branch of BIEN, which celebrated its 25 year anniversary in January. The political leader of the small Cultural Liberal Party, Norbert Klein, initiated a memorandum for the Members of The Tweede Kamer (Second Chamber) of Parliament. “The labour market is changed fundamentally. The introduction of new, innovative concepts like a basic income are urgently needed to prevent large scale social inequality, social unrest and to provide income protection,” he argued in his memo called Zeker Flexibel (Security and Flexibility). This was the first time since the 2000s that the highest political levels were challenged to discuss basic income.
However, the Minister for Social Affairs and Employment, Lodewijk Asscher (of the Partij van de Arbeid or Labour Party) said that although he recognizes the importance of a social and political debate on the future shape of social systems, I’m sure having some great lobbying tips would help in these efforts. He prefers to continue with the existing policy, because he cannot guarantee that areas such as healthcare and social participation would be secured after the introduction of a basic income.
According to Guy Standing at the opening of the 16th World Congress of BIEN, held in Seoul 7-9 July 2016, the best way to attract the attention of politicians is to highlight the growth of the precariat and the growth of related social unrest. The unconditional basic income (UBI) is the most practical, feasible and positively inspiring response to those problems for years to come.
A recent poll by Dalia Research found that 68% of people across all 28 EU member states said they would definitely or probably vote for a universal basic income proposal.
In recent years, the VBi too witnessed an increasing interest in the idea of a basic income, not only among the general public but also in the media. The association increased from a handful of older members in 1991 to a robust movement with more than 500 subscribers both young and elderly. This growing awareness has compelled the VBi to think about new strategies to spread the message: the implementation of an UBI in The Netherlands.
One of these strategies is the establishment of so-called ‘Basisteams’ (Basic teams), local groups who have the important task to inform people and to raise enthusiasm among the population for the advantages of a basic income. Full knowledge of the concept of a UBI is a prerequisite that must lead to political decision-making and acceptance.
Nowadays there are about ten active groups and eight more groups in the pipeline. The groups differ considerably in size and scope. Some are large and put their focus on the organisation of meetings and debates; others are smaller, more regionally oriented. Mostly they start with making a page on Facebook. They come together in the local pub or community centre, hand out pamphlets and deliberate about how to change old systems into something entirely new. The vice-president of the VBi coordinates the ‘Basic teams’.
A crucial achievement of the local groups is that they have convinced municipalities to start experiments with a basic income in their communities.
Utrecht Sunset CC Tambako The Jaguar (flickr)
The pilot in Utrecht among welfare beneficiaries, conceived mainly with the intention to get rid of the sanctions and the obligation to apply for jobs under the current welfare scheme, is set for January 2017. Another four experiments — in Wageningen, Tilburg, Groningen and Nijmegen — will follow as soon as the Secretary of State for Social Affairs and Employment, Jetta Klijnsma (Labour Party), has finalized the administrative decree for allowing experiments in the context of the welfare system.
More experiments will follow as long as basic teams continue to push the local authorities to start pilots with a basic income. Often, these groups are helped by the Dutch Green party, not only on a local level, but also on the national level. In November 2015, the Green Party succeeded in clearing the way for experiments by filing a motion to parliament. It was supported by all political parties, except those of the right-wing liberals of Prime Minister Mark Rutte and the populist Freedom Party of Geert Wilders.
The VBi has also called upon its active members to reach out to co-fighters within their political parties and labour unions and to start discussions during meetings and congresses. As a result, some political parties have positively responded to the idea of a basic income as a social agenda for the sake of the general welfare and against precarious conditions and growing inequality.
After the Green Party and the Democrats 66, the majority (61%) of the Partij van de Arbeid (Labour Party) recently voted for a large experiment with a basic income. The leadership is not yet convinced, but members are very committed to the idea of a basic income and they want the issue to play a major role in the forthcoming campaign for the national elections of March 2017. “A basic income as part of the modern welfare state becomes more and more the ultimate goal for people. A society that includes everyone and where everybody contributes according to their capacities and needs: paid work, volunteering, education, the establishment of a company, et cetera,” says VBi’s most active member in political lobbying.
Many voters of the far left (Socialist Party) endorse the idea of a basic income. However, the leadership has firmly rejected it. Hence the party decided not to adopt it.
Last June, the youth organisation of Democrats 66 passed a policy framework “Moedig Voorwaarts” (Courageous Forward) that states that every adult will receive €600 – €1200 per month and each child €300. The proposal guarantees that nobody will live in poverty. The creation of a basic income is to also be combined with tax reforms.
Last spring a National Poll was held about the following question:
Everyone receives a basic income from the government, regardless of other income and without the obligation to work. The system of taxes and benefits will be adjusted accordingly. Do you find this a good idea?
The results were encouraging: 40% of those surveyed said they are in favour of a basic income as described in the poll, 45% said they are against it and 15% didn’t know.
Most members of right-wing parties declared themselves to be against the idea: 73% of right wing liberals and 61% of the Christian Democrats. Supporters and opponents were roughly in balance among the supporters of Democrats 66: 44% and 45% respectively. Most voters of three left-wing parties were in favour: 60% of the Green party, 54% of the Socialist Party, and 53% of the Labour Party. Interestingly, voters of the populist right-wing Party of Freedom of Geert Wilders were divided: 37% were in favour of the idea, 46% were against it and 17% did not know.
In the Netherlands, people are beginning to recognize that a basic income, as an unconditional floor under the existing welfare state, could be very beneficial for us all by opening up new ways to end inequality, provide stability and freedom to choose. This is especially true for welfare claimants. In recent months, the labour union FNV (Dutch Federation of Trade Unions) organised two rounds of policy debates about basic income with more than 1000 welfare claimants, who are members of an affiliate union. Most of them were in favour of introducing a basic income, because it guarantees financial security, more freedom and less stress. Further, these beneficiaries call upon the FNV Congress 2017 to adopt a proposition stating that the implementation of a basic income will be an explicit trade union objective.
The appetite for such initiatives is also fuelled out of frustration with workfare programmes that turned out to be “hugely expensive and humiliating for those involved”, says Rutger Bregman, the author of Utopia for Realists: The Case for a Universal Basic Income.
Rutger Bregman CC Bond van Nederlandse Architecten (flickr)
Andy Stern, the former president of the Service Employees International Union (SEIU), which represents nearly 2 million American workers, puts it like this in a conversation with Bourree Lam about his book Raising the Floor: “What I’m hoping for is that unions can look up from the defensive crouch they’re in, look into the future, and understand that so many of the things they’re doing now that are enormously important could be very insufficient. And that they’ll begin to think of universal basic income …”
In Christian circles one also hears people making a strong case for basic income. On the website of the Christian union for employees, employers and the self-employed (CGMV), a staff member reacts to the biblical directive that “He who does not work, shall not eat”. In an article with the title “Is everyone entitled to a basic income?”, referring to the many volunteers in organisations that have replaced paid workers, he asks: How then should we interpret another biblical text that says that “a labourer deserves his wages”? How can these volunteers get money to buy food? And how can we defend this attitude towards people who have tried to get a job so hard, but who did not succeed in finding one and who have to deal with rules that cripple their capabilities and creativity?
And there are more projects going on in the Netherlands that draw attention to basic income. A group of citizens has launched a big digital campaign to collect at least 40.000 signatures for the introduction of an unconditional basic income for every adult in 2018. The Parliament is legally obliged to discuss and vote on a topic, once it has been undersigned by more than 40.000 Dutch individuals. Right now (11-07-2016) the counter stands at 51.780 signatures. On to the 100.000! The more signatures, the stronger our voice! See https://basisinkomen2018.nl/.
In April an anchor woman of RTL-Z, an affiliate of the RTL Group (an European entertainment network) in the Netherlands, started the “Basic Income Bullshit Bingo Pot“: every time someone uses the words ‘basic income’ in a wrong way — that is, other than in the sense of an individual, universal, unconditional basic income that is high enough for a dignified life — he or she has to pay a Euro. The pot for the Euro donations can be found here: https://basisinkomen.eu/donatie-aan-vereniging-basisinkomen/.
In May, ‘Haagse Anne‘ (a young woman, artist and living in The Hague) received the second crowd funded basic income for a year. No strings attached! Liesbeth van Tongeren, Member of Parliament for the Green Party, handed her a symbolic plaque. The second publicly financed basic income is an initiative of MIES (Maatschappij voor Innovatie van Economie en Samenleving, a.k.a. Community for the Innovation of Economy and Society).
Another project of MIES, ‘OnsBasisinkomen’ (OurBasicIncome), can be found on this page. Readers are asked to tell what they would do if they were to receive a basic income tomorrow. So far, over 1800 Dutch people have told their story, of which 600 responses have been scientifically analysed. Two provisional findings emerged from the survey: people are not lazy and social participation is a multifaceted concept.
I cannot wait until the next report for this big news: Just a few days ago, the Financiële Dagblad (Financial Journal) announced that four municipalities will get the freedom to experiment with fewer regulations under the existing social welfare schemes. Some of the benefit claimants will be temporarily relieved of the duty to apply for jobs or to follow a reintegration program. Others may earn a bit without having their payment reduced from their benefits. The Secretary of State for Social Affairs and Employment, Jetta Klijnsma, has now agreed because the scientific assessment framework – a partnership between the four major cities and four collaborating universities – is now ready. If after the summer recess the Council of Ministers and the First and Second Chamber quickly agree, the cities of Utrecht, Tilburg, Groningen and Wageningen can start with the experiments in January 2017.
Authors: Florie Barnhoorn, Adriaan Planken
by Michael Lytton | Jul 26, 2016 | Opinion
The editorial below is a response to Pranab Bardhan’s “Could a Basic Income Help Poor Countries?”
Pranab Bardhan is a professor of economics at the University of California, Berkeley. Writing on the Project Syndicate website, he is skeptical about a universal basic income in rich countries, but asks if it isn’t both fiscally feasible and socially desirable in poor countries.
Comparing applicability of a Universal Basic Income (UBI) between advanced and low-or middle-income countries, Bardhan argues that there is a better fit where “the poverty threshold is low and existing social safety nets are both threadbare and expensive to administer.” His response to his own question is still cautious. “In India,” he says, “the answer could be yes.”
Unfortunately, his argument is muddled. He correctly diagnoses the administrative chaos that is India, and identifies sources of funding for a UBI in subsidies and tax exemptions that could be ended. At the same time, he warns that existing key social welfare programs cannot all be eliminated, nor should the government get out of the business of public education, health care, preschool nutrition or employment guarantees in public works. In effect, a UBI would supplement existing programs and thereby loses its rationale as a reducer of bureaucracy.
Bardhan also paints a contradictory picture of the results, describing it as both a “reasonable basic income”, yet “severely limited,” which is why other social welfare programs can’t be discontinued. And ignoring the ample evidence to the contrary from cash transfer experiments in India, he says there is “no way to ensure that individuals would allocate enough of it to achieve socially desirable education, health or nutrition levels.”
Apparently agreeing with “prominent advanced-country economists” who warn that a UBI is “blatantly unaffordable,” Bardhan uses the United States as an example. He writes that an annual payment of $10,000 per adult would “exhaust almost all federal tax revenue, under the current system,”, and suggests that this sort of arithmetic explains the failure of the Swiss UBI referendum last month.
Invoking the specter of affordability to end debate on UBI is reminiscent of earlier and now discredited arguments that it is too expensive to do anything about climate change, which is tantamount to saying our world is short of wealth, so “Say goodnight, Gracie.”
The Global Commission on Economy and Climate makes the evidence-based argument that climate-smart cities can spur economic growth and a better quality of life—at the same time as cutting carbon pollution. Recent research (from economists, no less) has found that investing in compact, connected, and efficient cities will substantially reduce greenhouse gas emissions and generate global energy savings with a current value of US $17 trillion by 2050 (Gouldson et al., 2015).
To these savings can be added reduced pollution impacts and costs. In 2013, the World Bank conducted its first-ever economic assessment of environmental degradation in India and reported the amount to be 5.7% of the country’s GDP (World Bank, 2013). And in another first-of-its-kind study conducted in 2015, the Organisation for Economic Co-operation and Development (OECD) found that air pollution-related illnesses and mortalities cost $1.7 trillion annually in OECD countries, $1.4 trillion in China, and $0.5 trillion in India (WHO Regional Office for Europe, OECD, 2015).
And then there is inequality. The global inequality crisis is reaching new depths, with the richest 1% now having more wealth than the rest of the world combined. The wealth of the richest 62 people on the planet rose by 45% in the five years since 2010 to $1.76 trillion, while the wealth of the bottom half fell by just over a trillion dollars in the same period—a drop of 38% (Oxfam et al., 2016). Meanwhile the tiny elite at the top is using its power and privilege to manipulate the economic system to further concentrate returns to capital.
Paying taxes is not high on the agenda of the absurdly wealthy, and the use of tax havens and other tax-dodging practices afflicts countries of all income levels, even the poorest. It is estimated that tax dodging by multinational corporations costs developing countries some $100 billion annually, and a global network of tax havens enables the richest individuals globally to hide $7.6 trillion. As taxes go unpaid due to widespread avoidance (with political approval and support), government budgets shrink and vital public services and social programs are diminished. Levying higher taxes on less wealthy segments of society just hurts the poor and makes inequality worse.
Despite Professor Bardhan’s quick dismissal, the United States would seem to be a good test case for UBI. For a number of reasons, the country has been characterized as an outlier among developed nations. It is one of the richest in the world, but among wealthy nations it has the highest income inequality. It has high private but low public social spending, with vast differences within the country as a result of states’ rights under federalism. Public expenditures have tended to shift toward the disabled and elderly, and away from those with the lowest incomes—consistent with a widespread belief that people are poor because of laziness or lack of incentive. Tony Judt’s rejoinder is, “Anyone who thinks that the poor like living on a pittance should try it.”
There is bipartisan aversion to taxes, especially among the rich — it is difficult to imagine how much worse income inequality might be had the United States spent even less on reducing poverty. Progressive taxation that would redistribute wealth from the rich to the poor is political anathema, and taxation is increasingly regressive—the poor pay higher effective tax rates than the rich. Enforcing tax avoidance and tax evasion is correspondingly weak.
It is one of the richest nations in the world, and yet among the 35 wealthiest countries it has the second highest child poverty rate (Adamson, UNICEF, and Innocenti Research Centre, 2012). More than one in five children is food insecure, and nearly one-third of U.S. children are in a household where neither parent holds full-time, year-round employment. The cost of child poverty in economic and educational outcomes has been recently estimated to be half a trillion dollars a year, or the equivalent of nearly 4 percent of the Gross Domestic Product (Coley, J. and Baker, 2013).
Reducing child poverty seems sufficient in itself to justify a UBI experiment. Not only would public social assistance costs fall, but families with more income are better able to purchase nutritious meals and better housing, and support child development with higher quality family relationships and parental interactions. Some observers warn that current poverty levels combined with the growing wealth gap threaten to destabilize the US democracy and curtail the social and economic mobility of children for generations to come (Coley, J. and Baker, 2013).
Professor Bardhan would also have found money for UBI just by crossing the Berkeley campus. His colleagues at the Institute for Research on Labor and Employment (IRLE) published a research brief in 2015, titled The High Public Cost of Low Wages: Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families.
Over the past three decades the share of income going to labor has been declining in most countries around the world, while the capital share has been rising. Unemployment is part of the problem. The International Labour Organization (ILO) estimates that over 201 million people were unemployed around the world in 2014, an increase of over 31 million since the start of the global financial crisis. The ILO reports that this trend is common in all regions of the world, despite an overall trend of improved educational attainment. At the same time, wages are not keeping up with the productivity of workers. In the US between 1973 and 2014, net productivity grew by 72.2 percent, yet inflation-adjusted hourly pay for the median worker rose by just 8.7 percent. (Oxfam et al., 2016).
As the authors of the IRLE research brief point out, when jobs don’t pay enough workers turn to public assistance to meet their basic needs. These programs provide vital support to millions of working families in the United States whose employers pay less than a living wage. The researchers found that between 2009 and 2011, more than half of the combined state and federal spending on public assistance went to working families—a total of $152.8 billion per year. “Overall, higher wages and employer provided health care would lower both state and federal public assistance costs, and allow all levels of government to better target how their tax dollars are used” (Jacobs, Perry, and MacGillvary, 2015).
Next stop for UBI, the United States.
Sources:
Adamson, Peter, UNICEF, and Innocenti Research Centre. 2012. Measuring Child Poverty New League Tables of Child Poverty in the World’s Rich Countries. Florence, Italy: UNICEF Innocenti Research Centre.
Coley, J., Richard, and Bruce Baker. 2013. Poverty and Education: Finding the Way Forward. Princeton, NJ: Educational Testing Service, Center for Research on Human Capital and Education.
Gouldson, A. P., S. Colenbrander, A. Sudmant, N. Godfrey, J. Millward-Hopkins, W. Fang, and X. Zhao. 2015. “Accelerating Low Carbon Development in the World’s Cities.”
Jacobs, Ken, Ian Perry, and Jenifer MacGillvary. 2015. “The High Public Cost of Low Wages: Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families.” Institute for Research on Labor and Employment, UC Berkeley Center for Labor Research and Education.
Oxfam, Deborah Hardoon, Sophia Ayele, and Ricardo Fuentes Nieva. 2016. An Economy for the 1%: How Privilege and Power in the Economy Drive Extreme Inequality and How This Can Be Stopped. Briefing Paper 210. Oxford, UK: Oxfam GB for Oxfam International.
WHO Regional Office for Europe, OECD. 2015. “Economic Cost of the Health Impact Air Pollution in Europe: Clean Air, Health and Wealth.” WHO Regional Office for Europe, Copenhagen.
World Bank. 2013. “India-Diagnostic Assessment of Select Environmental Challenges: An Analysis of Physical and Monetary Losses of Environmental Health and Natural Resources.” World Bank.
