by Kate McFarland | Jan 26, 2017 | News
Videos of two lectures on Finland’s basic income pilot are now available online. The lectures, delivered by Marjukka Turunen and Olli Kangas of Kela, were originally aired as part of a public event on Finland’s “social innovations”.
As previously announced in Basic Income News, Kela, the Social Insurance Institution of Finland, held a series of short lectures called “Socially Innovative Finland” on January 12, 2017. The event, which was open to the public and streamed lived online, highlighted two “social innovations” from Kela: the eight-decade-old maternity package, under which all mothers-to-be receive a package of child necessities, and the two-year basic income experiment launched this year. Two speakers, Marjukka Turunen (Head of Legal Affairs Unit) and Olli Kangas (Director of Government and Community Relations), discussed the basic income experiment and fielded a variety of questions from the live and online audiences.
Olli Kangas: “Basic income – Part of tomorrow’s social security?”
Kangas situates Finland’s basic income experiment in its political and economic context: the center-right government that took office in May 2015 decided to investigate a basic income as a way to remove the disincentives to work and reduce the bureaucracy inherent in Kela’s current programs of unemployment compensation; meanwhile, changes in the labor force underscored the need for a revised system of social security.
Kangas describes the rise of short-term labor contract labor and the threat of automation as general sources of motivation for basic income. Then, focusing specifically on the Finnish context, he discusses the country’s increase in self-employment as well as its high rate of structural unemployment. He goes on to explain how Finland’s current welfare system can creates a disincentive to work. In some cases, as he describes, individuals who leave unemployment benefits to take a job face an effective marginal tax rate of 80-100%. Moreover, the current system creates “bureaucratic traps” whereby individuals are deterred from accepting short-term work (asking, e.g., “If I accept the job for six months or so, do I again qualify for the benefit I used to have?”).
Marjukka Turunen: “How the basic income experiment works in practice”
Turunen provides an introduction to Finland’s basic income experiment, including an overview of the experiment’s design, motivation, and implementation. She explains why the researchers hypothesize that the basic income will provide an incentive for unemployed persons to take on paid employment–the main outcome that the experiment has been designed to test–and describes other potential benefits to individuals. For example, she notes that financial security brings “peace of mind” and allows individuals to plan for the future with less uncertainty. Furthermore, the basic income eliminates the time-consuming task of applying to Kela to maintain unemployment benefits–which, as she mentions, requires the submission of paperwork every four weeks–or to change benefit status due to sickness or childbirth. Recipients of the basic income are not required to inform Kela of their employment status, income, or other life changes.
Turunen also describes Kela’s process of selecting a sample of 2000 individuals for the experiment, contacting them, and distributing the first funds. She points out that researchers will not conduct interviews of the subjects during the course of the experiment, in order to avoid a possible source of influence on their behavior. Moreover, it is the policy of Kela not to disclose information about the basic income recipients to the media. Nonetheless, Turunen notes, some recipients have themselves divulged information about their situations and reactions to the basic income trial; she reviews some of these preliminary reactions near the end of the lecture.
Reviewed by Danny Pearlberg
Photo: Helsinki, CC BY-NC-ND 2.0 Jonathan
by Kate McFarland | Jan 24, 2017 | News
The Indian Statistical Institute hosted its 12th Annual Conference on Economic Growth and Development (ACEGD) on December 19-21, 2016. ACEGD’s plenary sessions included a 90-minute panel on universal basic income and its relevance for India.
Universal basic income (UBI) has become a hotly debated issue in India. At the end of January, the Ministry of Finance will release its Economic Survey, which is expected to include a chapter addressing UBI. Leading economists have defended various forms of UBI for India (see, for example, a recent e-symposium in Ideas for India), and MPs such as Varun Gandhi and Jay Panda have voiced support.
Perhaps unsurprisingly, then, a panel on UBI was also held as part of the latest Annual Conference on Economic Growth and Development, held in December at the Indian Statistical Institute (ISI) in Delhi. This conference included a panel on UBI, featuring five economists: Debraj Ray (New York University), Kalle (Karl Ove) Moene (University of Oslo), Rajiv Sethi (Columbia University), Himanshu (Jawaharlal Nehru University), and Amarjeet Sinha (Government of Bihar).
Ray and Moene have jointly developed a proposal for what they call a “universal basic share” (UBS) in India. Like a UBI, a UBS would provide each citizen with regular unconditional cash transfers of an equal amount. However, in contrast to most UBI proposals, a UBS fixes the amount of these transfers to a fraction of the GDP rather than a specific monetary amount. Ray and Moene recommend that India dedicate 12% of its GDP to the provision of a UBS. They calculate that, at present, this would provide each adult citizen with a basic income approximately equal to the country’s poverty line.
At the ACEGD panel, Ray introduces the idea of UBS, after briefly outlining the present worldwide interest in UBI, precursors such as the Alaskan Permanent Fund and Dividend and the Government Pension Fund of Norway, and several sources of the present interest in UBI in India, including the pilot studies in Madhya Pradesh, the Goan permanent fund, and political and popular “exasperation” with the nation’s current subsidies for the poor. Following Ray, Moene elaborates upon the UBS proposal and some of its advantages, such as encouraging risk-taking and allowing individuals to do the work they want. Moene also replies to the common objection that a basic income would discourage work, stressing that this is not what is observed in the most generous welfare states, nor what’s observed when wealthy people receive an inheritance.
Sethi, who has studied UBI primarily in the US context, presents additional arguments in favor of the policy, including its cross-partisan appeal and its ability to mitigate economic shock due to automation. He also raises questions concerning the precise design of a UBI, such as whether the basic income should extend to minors and how it would be linked with macroeconomic policies.
The last two panelists, Himanshu and Sinha, argue that India should prioritize public spending on universal basic services, rather than simply distributing cash to individuals. About UBI, Himanshu states that the question is not whether it should be adopted, but why and when. While allowing that UBI is a good idea in principle, he maintains that it is not yet time to introduce such a policy in India, given that many in the country lack clean water, access to education, and other essential public goods. Sinha, expanding on Himanshu’s thesis, stresses that “we should not lose sight of the need to craft credible public systems” — and worries that a UBI would divert money and attention from necessary improvements of education, health, housing, and public infrastructure.
Video, Part 1: Ray, Moene, Sethi
Video, Part 2: Sethi (cont’d), Himanshu, Sinha
The five presentations were followed by a 30-minute Q&A session, touching on such topics as private versus public provision of services (which Ray eventually describes as a distraction from the real issues), immigration and basic income, UBI versus UBS during economic downturns, and others.
Video: Q&A
Reviewed by Danny Pearlberg
Photo: Delhi, India CC BY 2.0 Ville Miettinen
by Kate McFarland | Jan 22, 2017 | News
On November 19, 2016, the BBC podcast In the Balance aired an episode called “Universal Basic Income: Has its Time Come?”
Special guests included Michael Faye (cofounder of GiveDirectly, the non-profit launching a basic income experiment in Kenya), Louise Haagh (Reader of Politics at the University of York and Co-Chair of BIEN), Michael Tanner (Senior Fellow of the CATO Institute), and Ian Gough (Visiting Professor at the London School of Economics).
During the approximately 25 minute episode, host Ed Butler questioned the guests on the many common concerns surrounding basic income, from its affordability to its political feasibility to charges of causing inflation and disincentivizing work. The guests also debated what types of programs and services a basic income would replace, as well as the question of whether and when cash transfers are more effective than transfers in-kind. Another topic to emerge was the role of pilot studies, with Faye defending the relevance of GiveDirectly’s studies in Kenya to the developed world and Haagh raising the point that, while useful, pilot studies are not needed to justify basic income, which she sees as motivated by the need to eliminate dysfunction in the current welfare system and make the disbursement of support “more humane”.
Faye, Haagh, and Tanner spoke generally favorably about basic income, although their precise reasons for supporting such a policy varied. Gough, meanwhile, maintained that the idea is impracticable, with any basic income scheme being either insufficient or unaffordable.
Listen to the full episode here.
Reviewed by Danny Pearlberg and Dawn Howard
Image: British Coins CC BY 2.0 Images Money
by Kate McFarland | Jan 20, 2017 | News
A Parliamentary session on universal basic income (commonly known in the UK as “citizen’s income”) was held at the University of Birmingham on January 12, 2017.
This session had the status of an “inquiry”, a formal call for information on the topic of citizen’s income, in the form of an oral evidence session to the Work and Pensions Committee of the UK Parliament.
While this is not the first time in recent history that citizen’s income has been discussed in the UK Parliament (in September 2016, MPs debated the topic in the House of Commons), it is the first event of its status as an oral evidence session, at which selected experts were called to address questions from a cross-party committee of MPs.
Seven panelists took part in the session, selected by the committee on the basis of their background and interest in the basic income (and in part on the basis of the results from a request for participants released in October 2016). During the event, each panelist was given time for opening and closing statements on basic income, with about an hour allotted for addressing questions and concerns from the MPs on the committee. Questions focused on general information about basic income, its relationship to the existing welfare state, and arguments for and against it.
An article by André Coelho on the content of the oral evidence session in forthcoming in Basic Income News.
The entire session can be viewed here:
Panel Participants
• Louise Haagh (Reader at the University of York and Co-Chair of BIEN). Haagh supports a basic income as part of a system of progressive reforms.
• Annie Miller (Chair of Citizen’s Income Trust and founding member of BIEN’s affiliate Citizen’s Basic Income Network Scotland). Like Haagh, Miller supports a basic income, but only in conjunction with other benefits. Specifically, she believes that separate housing and disability benefits are needed in addition to a basic income.
• Becca Kirkpatrick (Chair of UNISON West Midlands Community Branch). Kirkpatrick agrees with Haagh and Miller that basic income should be adopted as part of progressive reforms (cf. her union’s 20-point manifesto, which includes a proposal for a basic income “micro pilot”).
• Ben Southwood (Head of Research at the Adam Smith Institute). Southwood is not only on the viewer’s right of the first three panelists but also the political right: he supports a basic income or negative income tax but only as a replacement to the majority of the UK’s existing welfare system.
• Peter Alcock (Emeritus Professor at the University of Birmingham). Alcock opposes basic income, which he describes as “such an appealing idea that it’s too good to be true” (referencing his 1989 article “Unconditional benefits: misplaced optimism in income maintenance”). He believes that, in the current system, demands for a citizen’s income are distractions from more pressing issues.
• Declan Gaffney (independent political consultant; policy advisor to the previous Mayor of London). Like Alcock, Gaffney believes that universal basic income is “too good to be true” — which, as it happens, are the precise words used in the title of a piece he wrote on the topic for The Guardian after Finland announced its pilot plans in late 2015. According to Gaffney, basic income is a useful “thought experiment” but not practically feasible or necessary.
• Andrew Harrop (General Secretary of the Fabian Society). Harrop endorses a related policy of “individual credits” for adults in the UK (cf. his report for the Fabian Society published last year); he stresses, additionally, that basic income and similar policies should be viewed through the lens of tax reform.
Photo: University of Birmingham at twilight, CC BY-NC-ND 2.0 Samuel George
by Kate McFarland | Jan 19, 2017 | News
Photo: Buchanan Institute team at a brainstorming event.
The Buchanan Institute, Scotland’s only student-led think tank, has prepared a report (“A Secure Foundation to Build Our Lives”) that makes a case for universal basic income in the UK.
The report will be launched at a University of Edinburgh event on January 26.
The Buchanan Institute’s recommendations for a UBI draw upon previous work by the Royal Society of Arts (RSA), especially the report “Creative Citizens, Creative State” by Anthony Painter and Chris Thoung, and the Citizen’s Income Trust. In particular, it looks to the RSA’s proposal as one that meets three core requirements laid out in the report: “that the proposal is fiscally sound, practically achievable and is within reasonable budget constraints; that it ensures that the least-well-off, particularly low-earners with children, are well supported; and that it ensures low marginal deduction rates, making work pay for the majority of earners.” However, the Buchanan Institute proposes some adjustments to the RSA’s basic income scheme, specifically concerning the amount of the basic income allotted to adults aged 18 to 24 (who, under the RSA’s scheme, would receive transfers lower than those paid to adults over age 25) and to children.
After assessing previous models and research on basic income, the Buchanan Institute proposes a UBI of £7,420 per annum for adults over age 65 (i.e. current pensioners), £3,692 for adults aged 18 to 65, £2,925 for children aged 5 to 17, £3,839 for firstborn children under age 5 and £3,387 for additional children under age 5. The report estimates the cost of such a UBI, implemented across the UK, at between £14 and £19 billion per annum — an amount that the author claims is not out-of-line with previous revenue decisions (e.g. tax cuts) and “affordable and achievable with the necessary political will”.
In conclusion, the report recommends that the British government commission a pilot study in a “medium-sized” city or town (defined as having a population between 250,000 and 500,000), in which participants are provided with an unconditional basic income at levels matching those proposed by the Buchanan Institute. Additionally, it recommends the Work and Pensions Committee of the House of Commons, which recently held an oral evidence session on basic income, to investigate the Buchanan Institute’s proposed UBI.
The report is authored by Jonny Ross-Tatam, founder of the Buchanan Institute and a student of history at the University of Edinburgh.
Launch Event
The official launch of the report will take place at a public event at the University of Edinburgh on January 26, 2017.
The event will also feature talks from Glasgow Councillor Matt Kerr, who has been instrumental in spearheading the movement for a basic income pilot in the city, and RSA Scotland leader Jamie Cooke, who is also involved in the planning of regional pilots in Scotland. At present, basic income pilot studies are being considered in both Fife and Glasgow.
While emphasizing that the Buchanan Institute is “very supportive of pilot projects being commissioned anywhere in the UK,” Ross-Tatam expresses hope that the organization can begin to act on its recommendations within the Scottish context: “As part of our launch, we will call on those leading the basic income pilots in Fife and Glasgow to consider the payment levels we have proposed for these pilot projects. We hope that the Buchanan Institute and our work on basic income can contribute to any pilot projects that take place in Fife and Glasgow.”
For more details about this free event, as well as registration information, see its pages on Facebook and Eventbrite. (Note that, as is just and fair, wine and beer will be served at the beginning of the event.)
More Information
• Ross-Tatam has written a summary of the report for the RSA’s blog (December 21, 2016).
• “A Secure Foundation to Build Our Lives” develops ideas that Ross-Tatam earlier articulated in his TEDx talk “Why we shouldn’t have to work just to survive” (February 2015), in which he argues that a basic income should be supported as a way to allow people to pursue their passions:
N.B. Two days following the Buchanan Institute event, BIEN’s Scottish affiliate, Citizen’s Basic Income Network Scotland, will be holding an event in Kelty, Scotland, with further discussion of the pilots currently being planned in Scotland.
Article reviewed by Jonny Ross-Tatam and Danny Pearlberg.
Images used with permission of Jonny Ross-Tatam.
