This Review was originally published in the Review of Political Economy, December 6, 2009. It’s reproduced here as originally published.
In Our Hands: A Plan to Replace the Welfare State, by Charles Murray, Washington, DC, AEI Press, 2006, 230 pp., $20.00 hardcover ISBN 0-8447-4223-6
Charles Murray is not known as a friend of the poor. His 1984 book, Losing Ground argued that the government should ‘zero-out’ all programs designed to help the poor. His 1994 book, The Bell Curve (co-authored with Richard Herrnstein) used questionable methodology purporting to show that people are poor because they are less intelligent than average and that blacks are disproportionately poor because they are genetically less intelligent than whites. If racism is the belief that your race is mentally or physically superior to others, The Bell Curve is a racist book. Yet, his new book, In Our Hands: A Plan to Replace the Welfare State, Murray puts forth a plan to provide more healthcare, more retirement security and more actual income to the poor with no supervision or conditions attached.
For those familiar with universal basic income, Murray’s proposal sounds very familiar. Murray calls it ‘the Plan,’ saying, ‘I have not been able to contrive a better name,’ but it is essentially a version of the program known as ‘basic income,’ which has been widely discussed by political philosophers in the last twenty years. Basic income is a regular government-ensured grant provided to every citizen on an individual basis without a means test or work requirement. People with middle or higher incomes pay more in taxes than they receive in the grant, but everyone receives the grant in cash every month. A great deal of literature has appeared on basic income in the last twenty-five years. Basic income is similar to, but not quite the same as, the negative income tax, which was widely discussed in the United States in the 1960s and ‘70s. The major difference between the two is that the negative income tax is given only to net recipients and phased out for people who earn above a certain amount, so that no one both receives a grant and pays income taxes. Both programs are ‘guaranteed incomes’ in the sense that they are designed to ensure that everyone has a small but reliable income, and both programs eliminate ‘the poverty trap’ in which some people find that they can attain a higher income by not working than by working.
Murray cites some of the literature on the negative income tax, but he appears completely unaware of the basic income literature, giving the impression that he reinvented the idea independently. When he discusses people who might drop out of the labor market, his example of what they might do is surf. This example is well-known in the basic income literature from an exchange between John Rawls and Philippe Van Parijs, neither of whom is cited by Murray. Is it a coincidence or is he merely neglecting to connect himself with that movement?
The Plan is most similar to a little-known basic income proposal by Leonard Greene, and elaborated by Irwin Garfinkel, although this connection is probably coincidental. Both Murray and Greene propose canceling everything the US government is currently doing to support individual incomes and use all of that money to finance a basic income for every citizen. The Plan is not quite a universal basic income. Only people age 21 and over are eligible, but it is a basic income in the sense that it has no means test and it is given to everyone who reaches the age of eligibility regardless of income.
Murray promoted the book and the Plan with several lectures in 2006. When questioned whether a guaranteed income is an affront to the work ethic, he responded, ‘You’re a conservative. I’m a libertarian.’ But make no mistake, Murray is profoundly conservative. His books have blamed the welfare state for everything that a conservative might find wrong with modern society, from welfare dependency though unwed motherhood to a decline in ‘man’s’ ability to craft a meaningful life. Many of the benefits he expects from the Plan align with conservative goals. He believes it will lead more people to attend church, more people to support private charities, and more of the poor to adopt the superior values of middle- and upper-class people.
Many people were shocked that a man who wrote a book arguing to zero-out the welfare state would put forward a plan for a basic income and universal health care. But it should not be completely surprising. Murray was sympathetic to the negative income tax in his contribution to Lessons from the Income Maintenance Experiments; and in What it Means to Be a Libertarian, he wrote that some form of income guarantee was the next best thing to the complete elimination of redistribution.
There is in fact a long history of free-market conservatives who have seen an income guarantee as a streamlined, conservative alternative to the complex, conditional welfare system. F. A. Hayek and Milton Friedman promoted the negative income tax on those grounds, and it seems to have been part of the motivation behind Richard Nixon’s watered-down negative income tax proposal in 1970. Most recently, Governor Sarah Palin pushed through a bill for a one-time increase in Alaska’s regular basic income (the Alaska Permanent Fund) from $2000 to $3200 per person per year. The free market appeal of an income guarantee is twofold. From the point of view of taxpayers, conditional welfare programs waste a large percentage of their budgets in overhead cost that could be saved under an income guarantee. From the point of view of the recipients, the rules and constant oversight of a conditional welfare system can be humiliating and oppressive.
Murray’s earlier books give the impression he believes that the poor are unproductive, genetically unintelligent people with bad values who have babies just to get welfare checks. One might therefore wonder why he cares about freeing the poor from oppressive government supervision. The answer is that while Murray seems to believe capitalism is a near-perfect meritocracy and that the poor are genetically inferior, he honestly believes that the poor should be free and that humiliating supervision by government bureaucrats cannot make the lives of the poor better. This kind of thinking led Murray to reinvent basic income.
This book—typical of Murray’s research—seems designed to give laypersons the impression of broad knowledge while having little concern with giving that impression to people who know the field. It is a thin volume with lots of numbers and footnotes but without a deep understanding of the research he cites. His discussion of the negative income tax is a case in point. He is aware that Milton Friedman supported the idea and that experiments were conducted on it, but he misstates what a negative income tax is and what the experimental results were. He gives the impression that a negative income tax has a 100% take-back rate, meaning that for each dollar earned privately recipients lose one dollar of their grant. If so, recipients who make money in the private labor market are no better off financially unless they get a job that pays more than the entire grant (pp. 8–9; 74). Almost no one who supports the negative income tax supports this draconian variant. Friedman supported the negative income tax largely because it could be designed to eliminate the work-incentive problems of conditional welfare programs, and none of the experiments tested a 100% take-back rate. Murray also implies that the experiments found evidence that large number of recipients dropped out the labor market. In fact, none of the experiments found evidence that anyone dropped out of the labor market. The relative decline in hours for the experimental group was 2–9% among primary wage earners and up to 20% for mothers of young children, but none of this relative decline represented anyone ‘dropping out’ of the labor market. It was instead attributable to people who happened to become unemployed taking longer to find their next job. Perhaps most importantly, the relative decline of work hours was not always an absolute decline. The largest predictor of whether recipients worked was not whether they were in the experimental or control group but the health of the economy. The people who conducted the experiments concluded that the work disincentive effects were small and did not put the viability of the program at risk.
Murray has not been careful with the facts, but is his plan a good one? Is the Plan a good workable idea that people who actually have sympathy for the poor could support? The answer is mixed. It is small; $10,000 per year minus $3,000 for mandatory private health insurance minus $2,000 for possibly mandatory retirement savings with no additional provision for children’s healthcare. That is, $5,000 per year ($416.67 per month) if retirement savings is mandatory and $7,000 per year ($583.33 per month) if it is not mandatory—for each adult whether she lives alone or with children. A single parent will be able to sue for child support out of the grant to the noncustodial parent, and so might have access to something in the neighborhood of $833.33 per month for herself and her children. But even an adult with no dependents is well below the official poverty line of $9,359 if she tries to live on $5,000 a year. (Following Murray, I’m using 2002 figures.)
Murray’s typically conservative response is that they can double-up with friends and relatives and they can all go out and get jobs at minimum wage. He calculates that when you add $583.33 to the income from a minimum wage job it would get most people—even single mothers with one dependent—out of poverty. He neglects to mention that this strategy involves mortgaging their retirement savings so that they will be more than $4,000 below the poverty line in retirement if they do this every year. He also neglects to mention that he is an opponent of the minimum wage. Since the whole idea of getting rid of the minimum wage is to enable employers to pay their workers less, we can assume that all of his calculations about how well off the recipients will be after they get these jobs are overestimates. He also neglects the very possibility that unemployment might exist, that the market may not be able to absorb the millions of new entrants to the labor market he hopes to see, and that most single mothers cannot work full time or in many cases even part time.
Consider a single mother with three dependent children at ages that make it difficult if not impossible for the parent to work outside the home. Her poverty threshold is $18,307. If she’s on her own and retirement contributions are mandatory, her income ($5000) is less than a third of the poverty threshold. If she can effectively sue the father for his entire grant (an optimistic assumption), she can increase her income to $10,000. If she and the father both mortgage their retirement savings, she can get up to $14,000. That is probably enough to keep her family off the street, but it is still more than $4000 below the meager US poverty line. Murray suggests combining incomes is as a solution. If she cohabitates with another mother in exactly the same situation, their combined income is $28,000—still $1,600 below the poverty threshold for a two parent family with six children of $29,601.
The grant is too small to give a dignified life to the poor without at least the addition of a child grant, but is it better than the current system? I have to admit that on this point, I am inclined to agree with Murray. As horrible as it sounds, in most states, TANF recipients work for less than they would get unconditionally under the Plan. Many people who aren’t eligible for TANF, SSI, or Unemployment Insurance get far less or nothing at all. Even the small grant of $416.67 a month can help many people get by if it is unconditional and tax free. The Plan would save many people from the utter destitution and homelessness that they experience in the United States today. On top of that, a retirement fund of $2000 a year put into a protected savings system would make for a better retirement than many Social Security recipients experience today, and $3,000 per capita could buy basic universal health coverage, solving one of the most important problems in American society today. If the Plan were put in place now, maybe we could eventually get the benefit increased to a decent level. Therefore, despite all of its faults, the Plan would be an improvement for many people living at or near the margins in the United States.
One of the contenders for the leadership of the UK’s Liberal Democratic Party has edited a a book of policy ideas for the party: Build Back Better. Among those policies is a Basic Income:
Nothing could be more uncertain than what will happen as we emerge from coronavirus. People have lost their jobs or are uncertain if there’ll be jobs to go back to. There has been an exponential increase in food bank usage. A huge number of people are applying for Universal Credit – many for the first time – and are left waiting five weeks for their first payment, pushing them nearer and nearer the brink. This comes on top of the likelihood of a deep recession, with all the ensuing impact on our wellbeing and our hope for the future.
UBI is not a silver bullet; we would, for example, need a separate, properly funded system to ensure that everyone has a safe and secure home. What UBI does is turn on its head our idea of the value each of us hold. It starts us on a clear path to a more equal society. It’s a tipping point at which we can reshape our society and our economy for the better.
When I first heard about UBI, I was far from convinced. But I watched, I worried, I read and I changed my mind. (Cllr Rhys Taylor, pages 29-30
How a World Basic Income can be sort of mostly free.
The economic downturn associated with the coronavirus is causing a humanitarian and economic disaster. Now is the time to push for a World Basic Income (WBI) paid to every human on the planet. It should be high enough to cover the cost of living, at least in the developing world. This payment would not just stave off hunger and extreme poverty, but also work as a general stimulus for the global economy, which faces a potentially catastrophic contraction.
While the greatest benefits of this payment would be felt in the developing world, where the increase in income would be bigger in proportion to their current income, it would also provide important benefits to the developed world.
A WBI would pump demand into the global economy by raising the non-wage incomes of the population as a whole, including workers. This would reshape the global labour market, lessening migration pressures and the severity of cross border wage competition, because workers in and from the developing world, protected from absolute destitution, would be less inclined to work in appalling conditions for miserable wages.
There would also be a dramatic increase in consumer spending power in developing nations, which would increase the number of workers required to meet domestic demand for goods and services, meaning fewer still would be available to work producing exports to the developed world. At the same time the market for exports from the developed world would expand.
This would compound the original effect, and further strengthen the position of workers in the US “rust belt,” and equivalent populations in other developed countries, whose jobs would become harder to send offshore.
WBI would do this without the implementation of tariffs, which might spiral into a trade war, further contracting the global economy. A WBI is a mechanism that can achieve the same goals in terms of protecting developed world jobs and wages, without adding to the contractionary pressures that the global economy faces.
A payment like this is not a new idea, it even has a dedicated NGO, simply called “World Basic Income.” They propose a payment of $30 USD a month. Which they say could be funded using “rents” on global commons like airspace, and “international taxes” such as a carbon tax.
But it is a mistake to assume that we have to first “gather up” the money before we can pay it out.
Since the pandemic began, they are also starting to question this. Having recently pondered whether in “emergency times such as these, borrowing or currency creation could also be used to quickly generate the money needed.”
This is an encouraging sign. But they still seem to be of the view that money creation or borrowing as inherently problematic, if perhaps necessary given the current situation. This is the wrong way of thinking about it. Money creation and deficit spending are not signs of desperation, foolishness, or failure. They are necessary tools for good economic management, in relatively “normal” times as well as emergencies. It is not that, as it is sometimes put, “deficits don’t matter”, it is that deficits are good. The theory behind this is a little complex but it can be summarised as it is here by Cory Doctorow:
Government debts are where our money comes from. Governments spend money into existence: if they “balance their budgets” then they tax all that money back out again. That’s why austerity always leads to economic contraction — governments are taxing away too much money.
There’s one other source of money, of course: bank loans. Banks have governments charters to loan money that they don’t actually have on hand (contrary to what you’ve been taught, banks don’t loan out their deposits).
When there’s not enough government money in circulation, people seek bank loans to fill the gap. Unlike federal debts, bank loans turn a profit for bank investors. The more austerity, the more bank loans, the more profits for the finance sector (at everyone else’s expense).
The empirical case is pretty simple, and arguably even stronger: The US government has run deficits nearly every year since the early 30s. For all its current woes, the US is in a far better economic state now than it was then. In fact, some of the best years, like the “post-war boom,” were immediately preceded by the highest levels of deficit spending (the largest injections of cash into the real economy).
The same is true for most developed economies. Governments always promise budget surpluses, but rarely deliver. And that’s a good thing, because what they practice is better than what they preach.
So when it comes to a universal basic income, even in the “good” times, the best answer to the question: “how will we pay for it?” is that we will not pay for it.
At least not all of it, not directly, and certainly not upfront. If we do pay for it upfront, we suck as much money out of the economy as we pump in.
A “costed” or “revenue neutral” UBI plan would help protect the poorest from the effects of the crisis, but it would stunt the stimulatory effect we are also aiming to achieve. There would still be some stimulatory effects. Transferring income to poorer people leads to a greater portion of that income being spent, so the velocity of money (the overall rate of spending in the economy) increases and with it GDP. But expanding supply and velocity simultaneously, as a fiat-funded UBI could, would work much better.
In essence, we should just get the money the same way we ultimately get all money: We just collectively believe it into existence. This has the advantage that it doesn’t require us to convince or compel anyone to pony up in advance. And it would mean we could pay a higher WBI, starting perhaps at $1.90 USD a day, the UN’s “internationally agreed poverty line” , and then, when the sky doesn’t fall, rising further, perhaps to as much as five or ten dollars a day over the course of several years or a decade.
Of course, no one can predict in advance how people, and therefore the world economy, would really respond to a payment of this level. No one knows what the ideal level for a WBI is. But there’s no reason to think it is zero.
The global charity and advocacy organisation Oxfam does not back a WBI, but does explicitly recommend a kind of fiat money creation, or something very much like it. In a recent media briefing entitled Dignity Not Destitution it lays out suggestions for responding to the hardship caused by the pandemic. The plan includes the allocation of a trillion dollars worth of Special Drawing Rights, which are interest-bearing assets, a bit like treasury bonds, created by the IMF. SDRs are defined in relation to five major global currencies and can be used by nations to pay back debts to the IMF, or traded with each other for liquid currency.
By rapidly increasing the supply of this “paper gold”, as they did following the 2008 financial crisis, the IMF could help nations around the world increase their liquidity, allowing them to spend money to help the needy. This has also been requested by a number of nations and the IMF has said it is “exploring” that option.
Here we see a pattern emerging at the global level which resembles closely that developing at the level of national policy discourse.
Modern Monetary Theory advocates like Stephanie Kelton argue that the US government cannot run out of money any more than a sports arena can run out of points. But they do not support UBI, arguing instead for a Federal Job Guarantee. UBI advocates like Andrew Yang want a UBI but think they need to pay for it pretty much upfront with increased tax revenues.
But a growing cohort of thinkers are beginning to examine what happens when these herecies intersect. UBI advocate Alex Howlett is one of them. He coined the term Consumer Monetary Theory or CMT to distinguish his view from MMT. Another is Geoff Crocker, who talks of “Basic Income and Sovereign Money”. Martin Wolf, associate editor and chief economics commentator at the Financial Times, also backs both soft money theory and a UBI, as does Australian heterodox economist Steve Keen.
The four thinkers listed in the bottom right square all have unique perspectives, and among them only Howlett identifies their work with the CMT title. However it seems useful to me as an umbrella term for those who agree with MMT regarding the nature and constraints of government spending, but who promote a Basic Income rather than a Job Guarantee.
It is important to note that both MMT and CMT do think tax policies matter, just not in the ways we are usually told they do. One role they see for taxes that is relevant to this proposal is the idea that taxes demanded by a government in a specific currency help ensure the value and widespread acceptance of that currency, another is the way taxes help manage the build-up of currency and the amount of spending in the economy to prevent inflation.
In conventional thinking, taxes fill a bucket, the “government coffers”, and spending is a hole in that bucket, through which money escapes. In soft currency thinking, spending is the inflow of money, the bucket is a flower-pot — representing the economy — which requires frequent watering. Taxes are the drainage holes, there to stop the soil getting too saturated.
If we were to look clearly at the flowerpot representing the world economy, we would see the soil is bone dry. It is worst at the edges, where the dieback has already started, but the center, where the roots are thickest and thirstiest, is not far behind. The plant is starting to wilt. The good news is that the water is free. It is time to get the hose, attach a spray nozzle, and spray.
The Great Global Monetary Hack
The world lacks a true global reserve. The US dollar is the main currency of global trade, but that role is diminishing, and in any case it is managed by a government and central bank who are only mandated to pay attention to the needs of the global economy as and when these needs affect their domestic goals.
In terms of a truly global, globally managed, reserve, SDRs are the closest thing we’ve got. We cannot use them directly for a WBI, since they can only be held by nation states and other “designated holders”. But these are considered durably credible enough that their value held in 2008, even as the total stock increased roughly 10 fold, from around $20 billion to $200 billion. The additional trillion Oxfam have recommended be created, divided by 8 billion is $125 per person, or 34 cents a day for a year. It is not enough. But we’re getting somewhere.
Since individual human beings cannot hold SDRs, which are, formally, not money. We could issue a new currency, tied to these. A People’s Bancor, in honour of Keynes’s proposed global currency.
The basic framework would be:
The IMF announces it will be holding an auction of SDRs starting in say, three months time, and continuing at regular intervals from then onward, that these auctions will be conducted using the new currency: the People’s Bancor.
The IMF creates digital wallets for the citizens of all participating nations and starts to issue these new digital credits (which may be cryptographically minted) at regular intervals directly to every adult individual on the planet.
Governments exchange national currency to obtain PBs. Either directly or by accepting them as a means of (partially) paying (some) taxes. This would cause businesses, individuals and exchanges to gain confidence in the new currency.
Governments buy SDRs from the IMF with PBs, which are then taken out of circulation.
Poorer nations, especially, could be guaranteed a certain quota at a set price, separate to the portion auctioned in batches.
Another way to validate this currency would be by charging global taxes in it.
A United Nations could create a world tax authority and through it could demand taxes in this new currency. These should be demanded, at least at first, from the national governments themselves, who would thus be compelled to buy PBs using local currency.
So long as the monetary metabolism can be kept active, substantially more can be issued in currency than is collected in taxes.
A carbon tax is, of course, an important idea. And so is a tax on military budgets, if you think about it. This is a great opportunity to go after tax havens and the many billions held there illegitimately?
We must avoid this temptation to fix everything at once, and stay focussed. The number one priority is for these global taxes to validate the currency. And we need it to happen fast. We do not have time for nations to enter into complex multilateral bargains over the rules of such a system. We need something that is equally attractive to all parties.
What I suggest is that, at least at the start, we tax the money itself. At the end of each financial year, the government could be liable for a sum of PBs equal to, for example, 20 percent of the amount received by their population over the previous 12 months.
As it happens, this stands in stark contrast to the position taken by Howlett, who as I mentioned before coined the term Consumer Monetary Theory. He says that “tax revenue is meaningless” and that we should therefore focus on taxing the specific behaviours and phenomena we want to discourage. Since we want economic activity, money is the worst thing to tax. This is a rule I generally agree with, but this is one case (and there are others) where it makes sense to make an exception.
By removing the complications implicit in attaching these initial taxes to anything in particular, we remove reasons for various countries to say no. If we view the government as an extension of the population, which it rightly should be, then all we are asking them to do is accept a dollar, on the basis they will later have to pay back 20 cents.
Imagine a simplified example where a country’s population receives 100 PBs a year in total.
Here’s how that would play out over the next twenty years:
As the graph shows, the national stock of PBs would grow over time as the amount received by the population outpaces the amount the government has paid in global taxes. So long as the rate of taxation is less than 50 percent, this will be the case.
This rate wouldn’t, obviously, be something that we could “set and forget” but would be a policy lever, similar to central bank interest rates, which could be adjusted in response to real world results. If the currency starts to lose value, the rate should be increased, if its value is too high relative to national currencies, it should be decreased.
Such an agreement would be most perfectly championed by the G20, then implemented by the IMF and UN in concert, with the IMF issuing the currency and the UN collecting (and destroying) it.
But any group of nations collectively representing a significant chunk of world product could also create their own version of this through a treaty outside existing global structures. This currency club could grow gracefully, one new member country at a time. Countries should be free to opt out at any time, making joining the obvious choice.
It would have to have a central administrative office, with dedicated staff alongside observers and advisors from member nations working to regularly assess the effectiveness of the current settings, and adjust UBI levels, taxes due, the number and type of SDR sales (assuming IMF cooperation), and so on.
Perhaps the best thing about this plan is the lack of downsides. It is, I contend, counterintuitively plausible that national governments would sign up for such a plan, especially as the economic crisis, likely to be the worst in a century, deepens.
If it does not work, then the currency will be stupidly cheap and the participant governments will easily be able to get enough to cover their obligations.
If it does work, and the value of the currency holds, then their economy is experiencing a sudden inflow of valuable currency, equivalent to a steady and substantial increase in remittances. There would be, inevitably, some cost to the local governments, in that they would either exchange their national currency for PBs, or accept it in taxes (instead of their national currency). But every dollar, pound, yen, rupee or dinar spent in this manner would have many times the stimulatory effect of normal spending, since when you buy one PB, you validate the rest out there in circulation. They could also just just print the money with which to make these transactions, since their own citizens will in most cases accept this as payment.
Governments that do not want to do this, or could not for some reason (a lack of their own currency, for example) could simply introduce a new tax on the wealthy and/or high-income earners, payable in PBs. This would compel these better-off members of society to exchange some of whatever currency they have for PBs. The effect of this transfer would be similarly multiplied as the other PBs in circulation were validated by it. Whether it is stimulatory spending or this tax-driven redistribution, you get much more bang for your buck this way than you would usually.
If it works too well, and the new currency is valued too highly against local currencies, making it difficult for governments to meet their tax obligations without inflating their own currencies, that means we can print and distribute more, until the price of a PB falls (while the value of the basic income increases), or lower these tax obligations.
This plan will not solve every problem, but it would be the biggest economic stimulus, and the greatest step towards ending deprivation, so far in the history of humanity. It is of course optimistic to imagine that our leaders are capable of seeing clearly enough, and acting boldly enough, to set a plan like this in motion. But sometimes a crisis can bring out the best in people, and the economic crisis, which will extend beyond the pandemic, may not give them the option of sticking to conventional responses.
After a strong social mobilization, Law 13.982 was published on April 2, 2020, creating the Emergency Workers’ Aid (EWA), an exceptional social protection measure to face the health emergency. (The EWA is sometimes called an Emergency Basic Income, but it ought not to be as it does not fulfil the definition of a Basic Income).
Although the text of the law tries to induce the idea that the benefit is intended exclusively for workers who have lost their source of income during the pandemic, in the end this is not an eligibility requirement, since the EWA reaches even those who have long been in a situation of economic vulnerability.
In sum, the EWA is a payment of R$ 600.00 (US$ 115.00) per month to the person over eighteen years old, who does not have an active formal job, is not the holder of another social security or welfare benefit (except for the Bolsa Família), has monthly per capita family income of up to half a minimum wage (R$ 522.50; US$ 100.00) or total monthly family income of up to three minimum wages (R$ 3,135.00; US$ 608.00) and has not earned income above the income tax exemption range in the 2018 fiscal year. No more than two people from each family may receive the benefit. The law also recognizes the condition of special vulnerability of the woman provider of a single-parent family, granting her the value equivalent to two quotas of the aid (R$ 1,200.00; US$ 230.00).
On May 14, Law 13,998/2020 made some changes to the EWA, among which is its extension to mothers under 18 years of age. Amendments that extended access to the benefit, mainly by withdrawing the requirement of proof of income in 2018, were vetoed by the President of the Republic after being approved by the National Congress.
As for its coverage, at the beginning of the implementation of the EWA the government estimated that it would reach 54 million people. However, after 2 months 107 million applications had been submitted, of which 59 million were approved and 42.2 million were considered ineligible.
It should be noted that implementation is facing serious problems on the part of the Government. This has motivated the Brazilian Basic Income Network, along with 161 other organizations that support the measure, to prepare a report about the 20 main obstacles to the implementation of the EWA , among which is the delay in analyzing the applications submitted and the denial of applications without providing a valid justification.
It should be noted that the law provides that the benefit may be extended by the President of the Republic while the public health emergency caused by the COVID-19 lasts. However, the Government gives signs that, if it extends the EWA, it intends to do so with a monthly amount equivalent to one third of what is currently paid.
This whole context has raised to another level the public discussion about the importance of a right to income security and the respective public policy to ensure it, which transcends the conjunctural situation caused by the pandemic and leads several segments of society to seriously consider permanent policies, such as the Citizen’s Basic Income, approved by the Law 10.835/2004 with all the characteristics of a Universal Basic Income, but never fully implemented.
A local experiment
Maricá, a coastal town in the state of Rio de Janeiro, is experimenting with a local currency income-tested benefit for its own population. Articles about the experiment are available in both Portuguese and English. The articles use both ‘Universal Basic Income’ and ‘basic income guarantee’ terminology. Because the payments are only being paid to poorer households, and are therefore not a Basic Income, the use of this terminology is confusing. However, this is an important experiment, and it will be interesting to hear about its effects.
Tuvalu, a country in Polynesia, in the Pacific Ocean, has implemented an Emergency Basic Income for its population of 11,000.
Source: Social Protection and Jobs Responses to COVID-19: A Real-Time Review of Country Measures, by Ugo Gentilini (WB), Mohamed Almenfi (WB), Pamela Dale (UNICEF), John Blomquist (WB), Harish Natarajan (WB), Guillermo Galicia (WB), Robert Palacios (WB), and Vyjayanti Desai (WB) (World Bank, 2020)
Basic Income, Solidarity Economy and Social Protection
The 24th BIEN CONGRESS in Maricá & Niterói – Rio de Janeiro, Brazil – 27-29 August 2025
Maricá provides unconditional transfers to almost half of its population. 7 other cities in the state of Rio de Janeiro have already created their own local currencies inspired by Maricá’s Citizens Basic Income. Our other host city, Niterói provides transfers benefiting more than 100,000 individuals.
Pre-congress events: Latin America Day: 25 Aug. & Early Career Day: 26 Aug.
