In February 2019, then-Stockton Mayor Michael D. Tubbs launched the Stockton Economic Empowerment Demonstration (‘SEED’), a 24-month guaranteed income initiative, the first mayor-led initiative of the sort in the US. Two years later, the preliminary results from the first twelve months of the experiment (through to February 2020, before the pandemic) have been released and the key findings are positive with the guaranteed income reducing income volatility, enabling access to full-time work, improving mental health and allowing better control over one’s time and decisions.
Program design
Under the SEED program, 125 Stockton residents were randomly selected to receive $500 per month for two years with no conditions attached to the handout and limited eligibility criteria namely: being at least 18 years old, being a Stockton resident and living in a neighbourhood at or below the median income ($46,003 in Stockton). A control group of 200 individuals meeting those same criteria was also established for research purposes.
The experiment is funded with private donations including a $1 million grant from the Economic Security Project, an initiative that aims at “making the economy work again for all Americans” with a specific focus on guaranteed income and anti-monopoly action.
The program is being evaluated by two researchers, Dr. Stacia Martin-West of the University of Tennessee, and Dr. Amy Castro Baker of the University of Pennsylvania under a ‘mixed-methods approach’ consisting in both a quantitative and qualitative analysis of data collected before and during the experiment. The data was collected through both surveys and in-person or group interviews (participation in the experiment was not conditional on participating in these interviews).
The experiment was designed in close cooperation with public authorities and community members to tailor it to local specificities (disbursement timing and mechanism for instance) and to build trust between recipients, control group members and SEED staff. This work was necessary to address initial concerns around the unconditional and guaranteed nature of the income (considered ‘too good to be true’) and the risk of loss of eligibility for other benefits (covered through specific work by the Economic Security Project).
Key findings
The preliminary results show that recipients made rational decisions about the income they were receiving, mostly spending it on ‘necessities’ (food, utilities, auto care). The researchers also found positive spillover effects with recipients being able to assist people in their extended networks more. Recipients also faced less income volatility and, noticeably, reported being more able to face unexpected expenses with cash or a cash-equivalent than before.
The guaranteed income gave recipients more time to engage in meaningful activities (socialising, spending time with children). This, according to the researchers, highlights how “financial scarcity generates time scarcity”. Participants also reported improvements in mental health when members of the control group did not experience the same improvements. Participants also reported improvements in mental health compared to the baseline measures when members of the control group did not experience the same improvements.
Finally, the program also resulted in an increase in full-time employment. 28% of recipients had a full-time job at the beginning of the project. After a year that proportion had risen to 40% (in the control group the proportion only moved from 32% to 37%). Some individuals indicated that the guaranteed income allowed them time to train or complete a degree or simply gave them more confidence to apply for certain positions.
Reactions
Reactions to the release of the study have been positive with the findings seen as further evidence that these programs do not remove incentives to work and that, as the researchers put it, “poverty results from a lack of cash, not of character” making cash transfers an effective way of addressing poverty (the researchers as well as Mayor Tubbs are quick to point out however that these cash transfers cannot be the only solution to the issues faced by residents of a city such as Stockton).
On the other hand some have pointed out that SEED remains a small-scale and relatively short experiment and have cautioned about drawing conclusions too rapidly from the study. Another limitation of the study is that tracking of expenses from the guaranteed income relied on recipients collaborating with the researchers (the income was transferred to a prepaid debit card to be used directly and through which researchers had access to spending records, or to be withdrawn as cash or to another account. In those cases, about 40% of the recipients, researchers had to conduct specific surveys). Finally, some critics have used the fact that the experiment was being privately funded to argue that basic income was too expensive for public authorities.
Regardless, these results are sure to add to the growing debate about basic income in the US. Other experiments are ongoing, and in June 2020, Michael Tubbs and the Economic Security Project founded Mayors for a Guaranteed Income, a network of around 40 mayors across the US working on implementing guaranteed-income experiments in their cities.
The Institute for Policy Research (IPR) at the University of Bath is seeking a post-doctoral research associate for a new programme of microsimulation research on Universal Basic Income (UBI).
The IPR is collaborating on research into UBI with the newly formed Freiburg Institute for Basic Income Studies by convening a Microsimulation Research Group, consisting of academics and civil society partners with interest and expertise in microsimulation studies of basic income schemes.
The Research Associate will conduct microsimulation research for the group and organise its collaborative activities, under the direction of Prof Nick Pearce, Director of the IPR. Expertise and experience in using microsimulation models such as EUROMOD is essential. The post is offered for two years in the first instance, with the possibility of extension in due course.
The proposal for European universal basic income & European Social Pillar Action Plan & long-term post-COVID-19 recovery strategy
V. KORO EC, a social policy analyst from Slovenia, suggested that the European Commission examine the idea of a European Universal Basic Income. The UBI would be paid directly from the ECB’s “helicopter money.” The suggestion was made within the debate of the European Social Pillar Action Plan. The proposal stems from the observed shortcomings of the current social security systems related to the COVID-19 crisis, the efforts of the United States, India and many other countries made in this direction and the research done by OECD, IMF, ILO, UNICEF, European and Slovenian experts. This proposal is not the same as the European Citizens’ Initiative “Start Unconditional Basic Incomes (UBI) throughout the EU“, for which signatures were collected starting on 25 September 2020. However, this proposal does take a similar direction as the European Citizens’ Initiative. One day Europeans will receive a local, national, European and global basic income to safeguard and foster democracy and ecological-economic development.
The proposal for European UBI & European Social Pillar Action Plan & long-term post-COVID-19 recovery strategy.
The current solutions in the European Social pillar, the 13th principle (unemployment benefits) and the 14th principle (minimum income), make the safety net conditional on incentives to reintegrate into the labour market. This is obviously not the right solution in the case of COVID-19, where work is not allowed. When people are not allowed to work (as in the case of COVID-19), it does not matter how educated they are, what the agreement on the minimum wage is, how good the social and economic dialogue is and so forth. In such a case is the most important social security system, a safety net that guarantees the minimum income as a kind of ‘universal insurance system’ that helps everyone, including people on the labour market, to be compensated for loss of earnings and to receive reimbursement for lost investment etc.
On the other hand, the 12th principle (social protection) and 20th principle (access to essential services) are combined with the prerogative to satisfy the conditions “to be in need and not to be able to work”. To prove this is such a demanding administrative task that is obviously not suitable in times of emergency such as COVID-19 when there is no time or resources. We have already seen in 2008 that the current system is not suitable in time of national emergency, but that is only good for ‘normal’ situations – which is exactly the opposite of what people expect from national social security systems. The COVID-19 situation also made it clear – again – that the current national social security system is good for some workers in ‘standard employment’ and not for workers in ‘non-standard’ jobs.
In the policy brief “Supporting livelihoods during the COVID-19 crisis: Closing the gaps in safety nets“, the OECD starts with a similar finding: the COVID-19 crisis has exposed the pre-existing gaps in social protection provisions (2020: p. 2). It continues with the recognition of the effectiveness of universal unconditional cash transfers (2002: pp. 13-17): “In a crisis situation, universal cash payments, made to everyone, can maximise coverage and, depending on the size of the payment, help the entire population to make ends meet. Universal transfers can be rolled out quickly as they do not depend upon the income, assets, or prior contributions of the recipient avoiding costly and time-consuming means tests. The appeal of this simplicity has led a number of OECD countries to announce plans for such schemes during the COVID-19 pandemic.” (OECD 2020: pp. 16-17, Box 4).
The same applies to emerging and developing economies, where the development of universal social protection is supported and guided by several recent key international initiatives: ILO Recommendation 202 on Social Protection Floors, and the “Leave No One Behind” agenda as an integral part of the 2030 Agenda for Sustainable Development. SDG goal 1.3 calls for “implementing nationally appropriate social protection systems and measures for all, including floors, and substantially increasing coverage of the poor and vulnerable”, while goal 3.8 calls for universal health coverage including financial risk protection. Health coverage is an important part of living, people need to know that they are being protected in case they get ill. Covid has shown just how many people are vulnerable to what is out there, that is why there are Final expense insurance policies and policies similar that are available to those who want to be prepared in case they do get ill. Health coverage can only go so far, but life insurance can help after a loved one has died.
In 2018, the High-Level Panel at the European Development Days discussed how to address inequalities and “Leave no one behind” agenda in the EU. As described in the report Addressing inequalities: A seminar of workshops (EC 2019) three experts out of four spoke about income inequality. Two of them, Fratzser (pp. 32-37) and Raitano (pp. 55) suggested that the EU should start thinking about a universal basic income, while the third, Callan, suggested that social policy should be based on facts and results of microsimulations (pp. 75).
Prior to COVID-19, the OECD, IMF, ILO and UNICEF had already studied the idea of universal basic income (UBI) in detail. There is an important history of research on the sustainability of UBI funding and its implications for income distribution based on microsimulations, e.g. OECD (2017) and IMF (2018). The findings of the above-mentioned papers were also confirmed in a paper based on microsimulations (KORO EC 2019), which was presented in 2019 at the International Conference on Universal Child Grants organised by ILO and UNICEF to explore the conditions and possibilities of introducing UBI for children. The microsimulations proved that in developed countries UBI can be introduced at a level just above the current Guaranteed Minimum Income scheme (GMI) within the same fiscal envelope (i.e. budget-neutral).
Some Europeans mistakenly assume that the idea of universal basic income is not the right solution for the EU. They think that the EU is the part of the most developed world with the best social security systems. They seem to have overlooked the fact that because of automatisation and digitalisation, the most developed countries have the biggest problem with ‘non-standard’ employment. It is no surprise that Japan and Korea were the two countries, besides the United States, that introduced ‘new universal transfers’ (OECD 2020: p. 4). They also seem to overlook the fact that the EU is heterogeneous. The EU Member States have different social security systems. There are also major divergences in the effectiveness of national administrations in the use of ‘EU money’. Different success in using the ‘Covid-19 money’ will only foster additional divergences in Member States, which can easily turn into political divergences.
As stated at the Bled Strategic Forum (31 August 2020) by some Eastern EU countries, they are ready to follow their own path, as they do not wish to be the ‘second tier’ of the EU. These are the political reasons for the proposal that the EU should distribute the ‘ECB helicopter money’ as a European universal unconditional cash transfer directly to EU citizens. There is also an economic reason: to effectively stimulate aggregate demand in Europe (EP 2016). This has been proposed a number of times since 2008. In Slovenia, we have two papers by an eminent economist on this subject (Mencinger 2015 and Mencinger 2017).
EU citizens expect the EU Commission to take into consideration the facts about a universal uniform unconditional individual cash transfer that are based on data and microsimulations. It could be called a European UBI. This transfer should be financed by the ECB. The same for all Europeans, to foster social convergence. This is the main difference with the current EU approach in the domain of the European Social Pillar and post-Covid-19 recovery plan with country specific measures that foster further divergence. Hopefully, the new European Citizens’ Initiative for UBI in the EU will be an additional, democratic sign for the European Commission and the European Parliament of what EU citizens want and expect from them in the area of social security: the Universal Basic Income. The European UBI could be the first step towards a world in which all people will eventually receive a local, national, European and global basic income in order to safeguard and foster democracy and ecological-economic development.
Editor’s note: The use of the term ‘basic income’ or ‘universal income’ here does not correspond to BIEN’s definition of basic income, since the payments each month will fluctuate with income. ‘Socle citoyen’ corresponds more closely to a Negative Income Tax, adjusted on a monthly basis.
On November 26 2020, the National Assembly voted on the resolution tabled by the group Agir Ensemble launching a public debate on the creation of a universal income called “Socle citoyen.” Why do you welcome this vote?
Marc de Basquiat: This vote is historic for three reasons. First of all, it was very broad, bringing together the votes of deputies belonging to five political groups close to the centre of the political spectrum: LREM, Agir Ensemble, MoDem, Libertés et Territoires, Socialists and related parties. Credit for this result goes to Valérie Petit, a northern representative, who launched and led an informal working group on the Socle citoyen project based on the platform we published in the Observateur on May 4 with the support of 80 co-signatories, including 50 parliamentarians. In-depth work was carried out, with a series of remote (because of Covid) meetings. The 48 deputies who tabled the resolution voted on November 26th really know the stakes and the key principles of the technical solution that we propose to study.
The second reason to applaud is the strong support of the La République En Marche deputies. Seventy of them voted in favour of the Agir Ensemble group’s resolution. At a time when many people have doubts about representative democracy, we can salute here the joint search for consensual solutions for our country by representatives from diverse groups, including the governing party. Let us recall that at its creation in 1988 the Revenu Minimum d’Insertion in 1988 received the deputies almost unanimous support. Yes, a reform as ambitious as the one proposed by this resolution aims to achieve consensus from all parties of the National Assembly. This is the process that Brigitte Bourguignon, Minister Delegate for Autonomy, supported with her speech.
The third reason to celebrate this advance is the fiscal nature of the Socle citoyen proposal that it is to be studied. Let us quote from the enacted text:
“The Socle citoyen is unprecedented in that it combines tax reform and improvements in social benefits. First of all, we propose to establish the universality of income tax: every French person, from the first euro of income, is taxed proportionally. This very fact constitutes being a part of and being responsible to the national community. It links one to the collective destiny and at the same time ensures assistance and solidarity.
With the mechanism of the Socle citoyen, the universal income becomes an individual tax credit, negative or positive. Thanks to tax withholding at the source, calculation and payment are now possible in almost real time. This is one of the great social benefits of this major tax reform: it makes it possible to calculate and automatically pay out the Socle citoyen, based on the universal tax, at the same time the reform achieves universality.
The fact that universal income is approached from a tax perspective revolutionizes the question of its economic feasibility. It is not a question of creating an nth social benefit that is painfully financed, but, first of all, of ensuring that all citizens are involved, in their own way, in the financing of public services. The same “right for all” is possible because, beforehand, we ensure the same “fiscal duty for all.”
Is this a sign that something is changing, at the parliamentary level and elsewhere, with regard to universal basic income?
Despite the trauma of the 2017 presidential campaign and the failure of Benoît Hamon’s project for a Universal Existence Income, many—of all political stripes, I can attest to that—grasped the importance of a transfer mechanism that would automatically guarantee a minimum of resources to everyone, regardless of the vagaries of life. But until recently, we hesitated to talk about it for fear of being suspected of providing a caution for the Hamonist party, Generation-S.
I believe that with the Covid-19 crisis, we all understand that the issues we are facing go far beyond political posturing and partisan arrangements. I am happy that the only Hamonist deputy in the Assembly, Régis Juanico, has lent his voice to the resolution drafted by Liberal deputy Valérie Petit. It is by working together that our elected officials will be able to re-inspire politics!
On the other hand, I am disappointed that no Les Républicains representatives dared to break with a conservative voting directive. The speech of LR deputy Stéphane Viry started well, but its conclusion is saddening:
“The group Les Républicains salutes the willingness of the National Assembly, the most essential forum for public debate, to address this major issue, since it touches on the fight against poverty, for work, and social cohesion. These are all foundations on which to build a social project, national cohesion, dynamism for our country. As part of our efforts, we must constantly, all together, open up new horizons. (…) You are right to put this debate on the table, and our group is very much in favour of a frank reflection on work, on activity for all, on social protection, on the fight against poverty. However, as it stands, as formulated, we will not follow your proposal.”
In 2016, the Senate had carried out a mission of information on basic income, in which all the political movements, from the right to the communists, took part, leading to the formulation of a consensual report that illuminated the way forward. Let us hope that the 11 deputies who voted against the resolution on November 26 will discover, moving forward, that the Socle citoyen has no other ambition than to strengthen cohesion, economic dynamism and fraternity in our country.
What are the liberal arguments to defend the proposal of a universal basic income and what form does it take in this framework?
What seems to me to be common to all liberals—whether one feels on the right or on the left for that matter—is the importance one places on individual choice. A Socle citoyen can be formulated as follows: everyone pools the same share of their income (around 30%) and benefits from the same individual transfer (around 500 euros per month). With this single rule, which is easy to implement using the mechanism of withholding tax, everyone is in the same boat and knows exactly how the income tax they pay or the assistance they receive will evolve according to the events in their lives: change of job or loss of work, marriage or divorce, etc. the impact is always easy to calculate.
Such a proposal is not really a revolution. In fact, for tax households that are subject to the 30% marginal rate, my proposal is just a reformulation of the current tax calculation, with an identical result. For 2020 income, taxpayers in this bracket pay a tax whose monthly calculation is 30% of the taxable income of the previous month, minus €498.52 per tax share (let’s say €500 for a single person and €1,000 for a couple). This would not change much.
The Socle citoyen amounts to applying the tax calculation formula for wealthy taxpayers to everyone! A single person without income who currently lives with an RSA of €497.01 plus a housing allowance would receive €500 and still receive the same housing allowance. No change in his or her case. On the other hand, all other cases of poor and low-income households would be winners, to what extent, depending on what they have today.
You have been defending universal basic income for several years, as president of the Association pour l’Instauration d’un Revenu d’Existence (AIRE) and as a Free Generation expert. Do you think that the coronavirus crisis can bring about a change in opinion?
In March, with the crisis, millions of people discovered unemployment. In restaurants, transport, household services, construction, shops… All these jobs where you work hard, where you get up early. The State has multiplied measures, first by taking over from employers to pay more than half of the wages! We can see that a hazard can bring the bravest of workers to their knees, making them dependent on the community to ensure their subsistence.
This invites everyone to question the solidity of their inclusion in society. Am I in this position only because I deserve it? Do I owe nothing to anyone? How could the country have endured a “laissez-faire” logic, where everyone was left to fend for themselves in order to make a living despite the fear of catching a virus—whose danger was not really understood at the time?
Today, everyone knows they are vulnerable. Everyone has also experienced their own docility! During the first confinement, we were happy to cheer from the windows, it gave us a recreation and a semblance of social interaction. But deep down, we really understood that we are vulnerable and that we have a vital need of others. This is why the ” Socle citoyen ” project speaks to everyone: we contribute as citizens—through taxes—to ensuring a vital base for everyone. In these circumstances, no one is spreading foolish rhetoric about handouts?
Is the Socle citoyen universel an effective response to the economic crisis that is looming with the coronavirus?
No one knows how the crisis will evolve. In the second quarter of 2020, China is the only G20 country whose GDP has grown. Germany posted -12%, France -18%, India -24%. The second wave caused us to fall back, less sharply, but global economic balances will take time to readjust. Public debt is exploding. Even if it is relatively painless in the short term, no one can predict what interest rates will be in 10 years. Our accumulated debts may weigh very heavily, preventing governments from playing their role as buffers against social shocks. At that time, we will be happy to have established a Socle citoyen, the universal distribution of part of the income among all, so that no one will be in total destitution.
We can also venture the hypothesis that our country will regain the growth necessary to adapt and face the planetary challenges. Here again, the egalitarian sharing of a portion of the fruits of growth will be a tremendous driving force for national unity, a multiplier of energies.
Advocates for basic income have long argued that it is much more than just a poverty relief measure. It is a matter of common justice that would enhance freedom and provide basic security for all. A new survey across six major European countries shows that people understand its potential to improve their lives. Not only do large majorities in France, Germany, Italy, Poland, Portugal and Spain favour basic income pilots and basic income as a permanent policy. The survey also reveals the advantages people believe a basic income would bring for themselves.
The poll, conducted independently by YouGov, found that two-thirds or more of respondents in the six countries were in favour of pilots and a national basic income system. Excluding the few ‘don’t knows’, support ranged from 65% in France to 87% in Portugal. Women were generally more supportive, particularly in Germany, France, Italy and Spain.
Even before the pandemic, European citizens were suffering from insecurity, stress and precarity, linked to rising inequalities. The pandemic has made things worse. In an era of shocks, policies to strengthen individual and societal resilience are vital. Instead, governments have resorted to measures aimed chiefly at propping up businesses, including furlough schemes, that have worsened inequalities and eroded resilience.
Resilience means being able to handle and recover from shocks. It is about feeling in control, able to handle setbacks because we can envisage a better future. But it cannot be provided by today’s labour market, increasingly characterised by flexible labour relations, insecure jobs and fluctuating wages, or by existing welfare systems, or by better public services alone, even though those are needed.
The survey provides cogent support for arguments in favour of basic income. High proportions of respondents said a basic income would reduce anxiety – over half in Poland and Portugal, and more than 40% overall, especially among women and youth. It is now well established that chronic anxiety increases the risk of mental and physical illness. A basic income offers the prospect of reducing ill-health and demands on health services. It might almost pay for itself.
Respondents also believed a basic income would open up opportunities for a better way of living and working. A high proportion of youths and women said it would give them more financial independence – 50% of young Italians and 41% of young Germans, for instance. This would reduce their sense of precarity, the feeling of being a supplicant reliant on others for discretionary help.
One horror of the pandemic has been the surge in domestic violence. Experiments have shown that, once women have basic income security, domestic tensions decline and women are more likely to walk away from abusive relationships.
Many youths said a basic income would enable them to pursue further education or training, including 49% in Portugal, 53% in Spain and 27% in Germany. This reflects the current inability of the precariat to develop their capabilities in the way they choose, because they must take whatever job they can get and put in as many hours of labour as possible. Basic security is conducive to the development of skills and a more educated society.
A basic income would also improve the quality of living. Young people, in particular, said it would enable them to take part in leisure activities that they cannot afford to do now – about a third in Portugal and Spain, for example.
And a basic income would foster work beyond ‘jobs’. Men as well as women, among all age groups, said a basic income would enable them to devote more time to their family. This was the case for one in five in Germany and more than a quarter of both men and women in Poland. The coronavirus pandemic has highlighted the extent to which society suffers from a ‘care deficit’. And pilots have shown that a basic income encourages men to do more care work, helping to weaken the gender dualism that feminists rightly condemn.
Basic income would also foster a more entrepreneurial attitude. A significant proportion of respondents said it would encourage them to launch a small-scale business – 8% in Italy, 10% in France, 13% in Germany and 19% in Portugal. Entrepreneurial enthusiasm was even greater among youths – 14% in Italy, for instance. Many youths also said a basic income would enable them to devote more time to volunteering or social activism, including over a quarter of youths in Germany and 13% in France. Society surely wants more socially engaged and active youth.
One lesson surely learned during the pandemic is that most of us are vulnerable, not just to illness but also to shocks to our finances, relationships and lifestyles. In what was a cross-section of people in six relatively rich countries, only small minorities said a basic income would make little difference to their lives – 11% in Italy and 6% in Portugal, for example. Long-term basic security is still something most of us value.
We should implore European policymakers to launch basic income pilots in communities around Europe. Ideally, some courageous governments would move in the direction of a national system. But failing that, surely it is time for pilots to explore the transformative potential of basic income. According to this survey, over 70% of Europeans want them.
Guy Standing is Professorial Research Associate, SOAS University of London, and honorary co-president of the Basic Income Earth Network.
