by Kate McFarland | Sep 22, 2016 | News
A debate about universal basic income was held in the House of Commons of the British Parliament on Wednesday, September 14.
A video of the debate is viewable on the Parliament website (the debate on UBI begins at 16:37), and TheyWorkForYou has a published the transcript.
Ronnie Cowan (“as in cow, as in ‘moo’”), MP from the Scottish National Party, opened the debate. Cowan has advocated for UBI in the past, such as at the SNP’s spring conference.
In his opening remarks, Cowan emphasized that the UK’s current welfare system is not working:
If we were all given a blank sheet of paper and asked to design a welfare system, nobody—but nobody—would come up with the system we have now. They would need thousands of sheets of paper and would end up with a mishmash of abandoned projects, badly implemented and half-hearted ideas and a system so complicated that it lets down those who need it the most.
Throughout the debate, Cowan advanced additional reasons to favor a UBI–as did other supporters. Notably, the discussion was joined by the Green Party’s Caroline Lucas–a long-standing proponent of UBI who, last June, tabled an Early Day Motion calling on the national government to commission and fund research on basic income. Among other concerns,
Caroline Lucas MP
CC BY 3.0 Tanoshimi
Lucas voiced worries about automation and precarity in the labor market:
Well-paid jobs on permanent contracts have dwindled, while short-term, zero-hours contracts and bogus self-employment are rife. Alongside a genuine national living wage, a basic income would provide a vital buffer against this new age of insecurity and an escape route for those caught in the trap between a complex, punitive and quite simply outdated social security system and low-paid, insecure and all too often exploitative employment.
Lucas also pointed out that basic income recognizes the value of unpaid labor:
There is far more work that needs to be done than that which is simply parcelled up into what we call jobs. We only have to look around our local communities to see railings that need painting, older people who need visiting and allotments that people would love to tend, but we cannot necessarily do many of those things—they are in some ways important economic activities—because right now we are penalised for doing so.
Other debate participants included Paul Monaghan (SNP), Eilidh Whiteford (SNP), Geraint Davies (Labour), Kate Green (Labour), Debbie Abrahams (Labour), Julian Knight (Conservative), and Damian Hinds (Conservative).
Whiteford and Abrahams both evinced some attraction to UBI, and expressed their intent to “keep an open mind”. However, they registered skepticism–or at least caution–with respect to some of the details in implementing the policy. For example, Abrahams notes that “[t]o allow for variations in need, UBI would need to be supplemented with additional top-ups, increasing its expense and complexity”, leading to the worries that a UBI might be either too costly to implement or fail to help those with greatest need.
On the opposing side, Knight and, especially, Hinds challenged Cowan on the cost of UBI and the potential for UBI to disincentivize work. Hinds stressed the virtues of the UK’s current system of universal credit in recognizing the value of work (viz., paid employment):
The Government’s approach to welfare has been about recognising the value and importance of work, making work pay and supporting people into work, while protecting the most vulnerable. A universal basic income goes against every aspect of that approach.
Basic Income UK co-ordinator Barb Jacobson welcomed the debate–the first of its kind by MPs in this generation. About critics like Knight and Hinds, she says, “Even though the Tory response was predictably negative, we know there are some MPs on that side interested in it.”
She complained, however, about what she saw as one serious omission:
[It was] a shame the MPs who supported basic income didn’t bring up the high marginal tax rates on current welfare – and on Universal Credit for that matter (was originally supposed to be around 75%, now with cuts more like 85-90%). This is the key reason any ‘benefit trap’ exists. This is something basic income eliminates because people would be taxed only on what they earn on top of it.
The Citizen’s Income Trust, BIEN’s UK affiliate, calls the debate “fair and well-informed”. However, the CIT goes on to point out that the MPs overlooked some of the CIT’s research on basic income schemes for the UK. Damian Hinds cites the CIT as concluding that a basic income would require “huge amounts of additional tax” and still create “many losers”. However, another scheme studied by the CIT “shows that an increase in Income Tax rates of only 3% would be required for a Citizen’s Income of £60 per week, that such a scheme would generate almost no losses among low income households” (as stated in the CIT’s blog post).
The House of Commons Library has published an accompanying Research Briefing. The Research Briefing contains a thorough overview of recent publications on the prospects of a UBI for Britain, including reports published in the last year by the RSA, Compass, and the Fabian Society. Additionally, it provides information about planned basic income experiments in Finland, the Dutch city of Utrecht, and the Canadian province of Ontario.
The Research Briefing clarifies that–despite the current of interest in UBI among British politicians, labor unions, and think tanks–the UK government “has not undertaken any research on Universal Basic Income proposals, and has no current plans to do so”.
More Information:
Video of the Westminster Hall debate on UBI (begins at 16:37)
Transcript of debate
Parliamentary Research Briefing on UBI
Citizen’s Income Trust blog post on the debate
Reviewed by Genevieve Shanahan
Image: “MPs Debate in House of Commons Chamber” CC BY-NC 2.0 UK Parliament
by Roland Duchatelet | Sep 19, 2016 | Opinion
Social security emerged in Western Europe with voluntary solidarity contributions within labour unions in the late 19th century developing into a mandatory insurance contribution organised by the state in 1950. A mandatory insurance payable to the state is a tax, in this case a tax on labour. Because the employer pays all if it, it does not matter if legislation categorises it as employee’s contribution or employer’s contribution.
In addition, the 20th century saw the birth of a new type of tax: the income tax, designed to capture the total income of wealthy people. However, after 1950 the income tax started to hit the rising incomes of the working class. It became the second component of the tax on labour. Zero in 1930, insignificant in 1950, the total tax on labour is now by far the most important tax income for Western European states. It varies between 50 to 200 percent of the net labour income of the workers, making the cost of labour on average twice as high compared to what the worker gets.
The history of its creation explains why social security is linked to labour participation. The political class assimilates “job creation” to welfare: the more people work, and the longer they do, the more taxes are paid and the better for the state budget. This thinking induced many countries to increase the age of retirement. Obliging older people to work longer when there is a five-fold increase of unemployed young people waiting for a job, is absurd. It is an example of wrong collective thinking by people indoctrinated by the “Labour Church”, because they assume “full employment” is still possible.
In the cultural sector, the high tax on labour is a problem. We can watch fantastic artists for free on television. High taxes on labour increase the wage cost of artists. Most local performances cannot compete unless they get subsidies, which is now current practice in most Western European countries. Would it not be more straightforward to have no taxes and no subsidies in the cultural sector?
Education and healthcare are heavily subsidised in many countries to cover the cost of their employees including the tax on their labour and other expenses. Their net finances would be the same if taxes on labour would be set to zero and subsidies lowered with the same amount.
Same for services completely paid by our tax money like police, justice, the military, federal and local administration: the labour tax cost included into the payroll expenditure of the state is paid and collected by the state, the same wallet. Setting their labour tax to zero would not affect their net finances.
In Western Europe, 40 to 50 percent of employment is publicly funded which means the corresponding labour tax has no effect on net state receipts.
For a state, the real proceeds of labour tax come from the non-subsidised private sector. Hence, the proceeds are much lower than what policymakers are tempted to believe while looking at public accounts which provide gross rather than netted labour tax income figures.
Meanwhile, the high tax on labour effectively increases the cost of services for those who want their shoes, a washing machine or a bike to be repaired. Mind that the “Labour Church” does not allow citizens to trade services. Services should be acquired from service companies because allowing citizen’s to work for each other by exchanging services would be unfair competition to the firms selling such services.
These firms charge a labour cost at least twice as high as what their workers get, because of the tax on labour. This higher price obviously reduces the demand for repair services and many people try to paint their house themselves, maintain their garden themselves and their kids drive bikes without proper lights or brakes. The tax on labour reduces exchange of services, hence it reduces the creation of wealth in the proximity economy.
In Western Europe, the labour Church created this barrier to social inclusion by segregating contractual labour from voluntary and informal work. Helping each other in an informal way, like our grandparents did, is not permitted anymore: the labour tax collectors are chasing offenders. However, poor people can get help from subsidised workers if they successfully find and convince the right state personnel that they are really poor. Clearly, the economic religion put in place by the “Labour Church” does not empower the population to help each other.
Would it not be more effective to convert the directive, complex, fraud-prone and costly social security allowance system into its basic income equivalent and allow the social economy to thrive again by allowing people to work for each other in an informal way, like our ancestors did until 50 years ago?
by Kate McFarland | Sep 17, 2016 | News
Reinvent has produced a video series called the “This Future of Sharing”. Several guests in the series — including Andy Stern, Robin Chase, and Natalie Foster — speak about the benefits of a universal basic income in light of the flourishing of the “sharing economy” in the United States.
In the US, one of the striking economic changes over the past decade has been the rise of the so-called “sharing economy” — also known as (or closely related to what’s known as) the ‘collaborative economy’, ‘on-demand economy’, ‘access economy’, ‘peer economy’, and many other terms — exemplified by such services as Uber and AirBnb.
The YouTube channel Reinvent has recently produced a series called the “This Future of Sharing“, consisting of extensive one-on-one video interviews with a variety of noted individuals who have thought in-depth about the implications of the sharing economy.
According to the description of the video series:
This Future of Sharing project sets out to answer the key question: How can we make the sharing economy work better for everyone? We’re going to spend 2016 in conversation with thought leaders who deeply understand the sharing economy and its potential, as well as the people who run and understand cities, including those wary of any excesses and rough edges.
While it also encompasses many other topics, the series includes several interviews that directly engage with the idea of universal basic income, including the following three.
• Andrew Stern, “A Proposal for Universal Basic Income from the Former President of SEIU” (published July 20, 2016):
Andrew Stern, former president of the Service Employees International Union (SEIU) and author of Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream, believes a universal basic income is the best way for the United States to deal with massive changes in our economy—changes that will only be exacerbated by increasing automation.
• Robin Chase, “Speeding the Pace of Evolution to Avoid Revolution” (published June 9, 2016):
Zipcar Co-Founder Robin Chase believes the status quo is broken, and that sharing economy platforms—which she refers to as “peers inc”—are part of the solution. Chase chose this terminology because of the mutual importance of what she sees as two halves of the equation: the platform and the peers.
Chase brings up UBI around 35 minutes into the interview, stating that it’s part of the solution, but cautioning that it should not be considered as a stand-alone policy. (She adds that we would still need universal health care and universal child care.)
Beginning at around 37 minutes, Chase describes her reasons to support UBI in some detail: in brief, a guaranteed basic income would provide one with the ability to refuse bad jobs, pursue one’s passions (including passions that are not readily monetized), and perform multiple jobs if one wishes, exploring new interests and engaging multiple facets of one’s personality.
• Natalie Foster, “Creating New Norms for the Way We Work Today” (published July 27, 2016):
Co-Founder of Peers.org Natalie Foster is a strong proponent of creating a new social safety net outside the bounds of traditional employment. Even if we wanted to bring back the unionized jobs that built the American middle class, Foster says, we can’t. “Work is shifting away from protected jobs, and towards service and retail sectors.”
Foster mentions UBI near the very end of the interview, after being asked about automation. She describes the policy as the “ultimate” portable benefit (portability having been a major theme of the preceding conversation).
Reviewed by Cameron McLeod
Zipcar lot photo CC BY 2.0 Timothy Vollmer
This basic income news made possible in part by Kate’s supporters on Patreon
by Florie Barnhoorn | Sep 15, 2016 | Opinion
Last August 21, the Dutch woke to find an interesting article in their morning paper, written by Mrs. Annemarie van Gaal. In her weekly Monday column she suggested abolishing the AOW and all other income schemes for individuals above 60 years of age, with their unworkable obligations, bureaucratic regulations, and fees and punishments. Instead, AOW recipients would receive an unconditional basic income of €1100 to €1200 a month. This would greatly decrease the seriousness in which they need to take these 9 considerations to make before you retire into account, decreasing worries and stress for the elderly.
For many people, the article came as a surprise, because it was published in the daily journal, De Telegraaf (The Telegraph), which is legendary for its right-wing liberal and right-wing populist bias. And a recent poll among right-wing voters revealed that the majority do not approve of the idea of a basic income.
The Dutch abbreviation ‘AOW’ means ‘Algemene Ouderdomswet‘ – the 1956 law installed a state pension for the elderly, above the age of 65. From 2016 onwards, the retirement age is expected to increase quickly: to the age of 66 in 2018, and to 67 in 2021. And as of 2022, entering the AOW scheme will be linked to the average life expectancy. This brings to attention another point, and that’s life insurance. People heading towards retirement should be considering setting up a life insurance policy with help from companies like az money, and they should be doing this well before they are claiming a pension. With the uncertain health effects of a prolonged working life, seniors unfortunately need to start thinking about what will happen to their families when they die.
The plan for the increase of the pension age was agreed upon by the current coalition of VVD (People’s Party for Freedom and Democracy) and PvdA (Labour Party) in order to cut government spending. These austerity measures are expected to save the Treasury €3.6 billion by 2024. De Telegraaf was a vocal supporter of the increase in the retirement age.
Mrs. van Galen is a well-known TV personality and businesswoman. In her television program, she teaches benefit claimants how to get a job. She demonstrates how much money the candidate will earn from accepting certain kinds of work, sends him to intensive job application training, and gives him a full makeover: a new haircut, new clothes, and if necessary, new teeth. Dress for success!
Her suggested basic income plan is very appealing because it would affect two major social problems in Dutch society.
The first problem concerns the growing group of people over 60 who have lost their jobs, often in the crisis of 2008-2009, and during the austerity measures that followed.
As Mrs. van Gaal puts it:
The unemployed above 60 are not to be envied. Unemployment among this group has never been so high. Their whole life they worked hard. Now they have lost their work and as a consequence have to deal with sharply declining living standards, whereas their chances to find a new full-time job is nearly zero, so the years to come will be full of uncertainty before they get the state pension (AOW), and what at that time will be left of their saved pensions?
Despite their dire prospects, the UWV (Employee Insurance Schemes Implementing Body) requires that the unemployed over 60 continues to apply for jobs, whether they can or not. The meager allowances of those who don’t (or can’t) are cut down or withdrawn. In other countries such as America, it can become a lot worse, elderly citizens with no allowances or health care end up forgotten about, without insurance these elderly are very prone to medical emergencies, requiring the aging population to think about insurance early on in their lives. When it comes to dental insurance for seniors, PPOs are the most common insurance plan. They offer a network of preselected dentists that they can choose from. Only if they were to visit one of those dentists will they save money. Otherwise, the elderly population has minimal options when it comes to oral healthcare. Is this how it is looking for the Dutch?
But for businesses to take on an older applicant, the ten different allowances and arrangements assigned to them creates a process so complicated that it’s frequently necessary to hire a third party simply to manage the process. Creating this kind of bureaucracy in the workplace does no one any good, and is certainly no way to encourage employment.
In recent years, the Dutch government has pumped hundreds of millions of euros into job training, networking events, and other arrangements for the older and unemployed. And the effectiveness of these measures is yet unknown, says the Court of Audit, and is hardly expected to dramatically increase employment prospects anytime soon.
The second issue with AOW, is that it’s almost an unconditional income – the state pension is dependant on your living situation. If you are going to live with another person, whether it is a partner, a family member who provides care, or a lodger, you are financially punished, whereas if you choose assisted living you may receive more. And if you have little or no saved pension, pension benefits as supplements are means-tested, so to earn some extra money is nearly impossible. The healthy and elderly will not move in with their children, for example, to babysit the grandchildren, because their income will only be reduced. Strange, indeed, because it would save the government a great amount spent on medical expenses and childcare allowances.
Mrs. van Gaal:
Ultimately, a basic income is the best route for the future, so let’s introduce it on a limited scale, namely into the group aged 60 years and above, regardless of [if] they work or not, irrespective of their living conditions. [And] if you live with another 60 plus [you would] have twice that amount. Look after your grandchildren, start volunteering, help your neighbors, go traveling or take up a small job for a few hours per week. I’m sure we will [have] a much better society. All seniors will take part in society without restrictions and rules, without being cut and without compromising. How nice.
The reaction to Mrs. van Gaal’s column was overwhelming. Within a few hours she was invited onto several talk shows, and many websites took notice of the column and hundreds of comments appeared online. One site recommended appointing her as the first female Prime Minister of The Netherlands.
However, in stark contrast, some politicians reacted bleakly to the proposal. After all, they had worked hard (and were well paid) to develop and defend the new retirement pension scheme and all other relevant legislation. Coalition partners, VVD and PvdA, consider the plan too radical, too expensive and ‘the wrong solution’ to this particular problem. The VVD even said it ‘abhors’ the idea of a basic income. One of their MP’s pointed out that society should not exclude the elderly, and that according to him, that’s what a basic income does. “Then we say to the elderly: you are no longer needed and that is not true. Their knowledge and experience are highly valued in the workplace.”
Norbert Klein, the leader of the Vrijzinnige Partij (Cultural Liberal Party), a party with one seat [in the Tweede Kamer], is pleased with the ideas of Van Gaal – but the plans do not go far enough for him. He has written a memorandum that calls for an unconditional basic income for every Dutch citizen from the age of 18 onwards. On September 19th this memorandum will be discussed with members for the Committee for Social Affairs and Employment of the Second Chamber of Parliament and the Minister for Social Affairs and Employment, Lodewijk Asscher of the PvdA.
Several organizations as well are not very sympathetic to the idea of an unconditional basic income for the 60 plus. “Mrs. van Gaal acts as an elephant in a China shop,” said a spokeswoman for the Unie-KBO, the union for the elderly, “but we are pleased with all the attention [these urgent matters are receiving].” Nibud, the National Institute for Family Finance Information, considers €1100 or €1200 too low to cover all household costs.
But a huge amount of readers reacted positively and enthusiastically. “An idea which is very close to my heart”, commented someone. “Abolish the bureaucracy for 60 plus,” another responded, “finally, someone who really understands the problems of older unemployed”. Readers, too, hinted at a political career for the Telegraaf columnist. “This is a plan which a sane man cannot ignore. Better and more pleasant than the plans that are figured out by the pundits in The Hague. The government may try to increase job opportunity for this group, but now it is clear that this policy fails.”
Annemarie van Gaal:
Dutch people want a simpler society. No more complicated rules, no hassle with endless discounts or correct taxes. We want it to be simpler, easier to understand and implement for everyone. The introduction of an unconditional basic income is inevitable over time. Utopia? No, it just requires some guts of our government.
Reviewed by Cameron McLeod
by Jenna van Draanen | Sep 14, 2016 | News
UNITED STATES: U.S. Congress Discusses Artificial Intelligence, Robots, and Basic Income
Co-written by Jenna van Draanen and Dave Clegg
At the end of May 2016, the Joint Economic Committee of the U.S. Congress and Senate held a two-hour hearing entitled “The Transformative Impact of Robots and Automation,” which featured several expert speakers: Andrew McAfee, MIT research scientist, and co-author of The Second Machine Age; Adam Keiper editor of the New Atlantis and Fellow of the Washington based Ethics and Public Policy Center; and Dr. Harry Holzer economist and co-founder and director of Georgetown Center on Poverty, Inequality and Public Policy at Georgetown University.
While there is not much discussion of basic income at the hearing (most of the talk is about the implications and impact of automation and robots on the workplace), participants briefly bring up basic income as a possible social support for loss of jobs due to technological automation.
Mr. Keiper speaks to the BI briefly as an option, but he is most concerned about the loss of jobs because he sees jobs as “a source of structure, meaning, friendship and fulfillment.” A panel speaker, Mr. Lee, brings up a concern about the risk of subsidizing “non-work.” Dr. Holzer, admits that something like a BI might be needed but was worried that it would overburden the tax system.
To see the hearing and find further information, check out:
Joint Economic Committee, “U.S. Congress Discusses AI, Automation, Robotics and Basic Income.” Singularity Lectures, Youtube, May 28, 2016.
Or the JEC website: https://www.jec.senate.gov/public/index.cfm/hearings-calendar?ID=BB1C3FD8-9FD1-46BA-917C-E5B3C585F1CC
Matt Orfalea, “Basic Income discussed among US Senators at “The Transformative Impact of Robots and Automation” Hearing” Medium.com, June 7, 2016.
