by Ulrich Schachtschneider | Apr 29, 2020 | News
As in other countries, the coronavirus shutdown makes the economic situation increasingly precarious for many people. For many, this is a sudden new experience, especially for self-employed people who have no reserves and do not receive short-time work benefits. It is true that in Germany the payment of the subsistence minimum by the social welfare office (approx. 400 €/month) is being administered generously in the crisis, but bureaucratic hurdles remain, and for many people it is simply too little to be able to pay their current living costs in view of a total loss of income. Also, the income of partners and roommates is still taken into account.
In this situation, a number of very successful petitions quickly emerged. The largest, with 460,000 signatures in four weeks, is the collection launched by designer Tonia Merz ‘With the unconditional Basic Income through the corona crisis’. It demands an unconditional Basic Income for 6 months. The argument is based on the plight of the self-employed, artists, etc. in particular: they do receive loans, but how are those supposed to be paid back if no income can be expected for several months (or even years)?
However, the petition points out that the Basic Income should not only apply to the particularly affected group of the small self-employed enterprise. That is understandable, because administrators cannot judge each case fairly. For example, it is not possible to determine whether someone is a ‘full-time’ self-employed person, an artist or not, and so on. Many are self-employed in addition to other mini-jobs. The 6 months Basic Income should therefore be given to everyone – and at the same time it should be a test for the principle of an unconditional Basic Income in general.
In addition, there is a similar petition with 288,000 signatures from countertenor David Erler entitled ‘Help for freelancers and artists during the Corona shutdown’, which is explicitly aimed at freelancers and demands ‘unbureaucratic bridging money, e.g. in the form of a temporary (unconditional) basic income’. (This income does not quite conform to the definition of a Basic Income because it is not universal.)
Both public petitions are, however, legally non-binding, even though they reach a large public, and many people have thus committed themselves to a Basic Income for the first time. But there is also a very successful official petition to the German Parliament. It comes from the Basic Income activist Susanne Wiest. It calls for the introduction of an unconditional Basic Income for all citizens ‘in the short term and for a limited period of time, but for as long as necessary’ due to the economic impact of the Corona pandemic. It should ‘secure livelihoods and enable participation in society. An amount of 1000 € per person is conceivable’.
Such parliament petitions have some small hurdles to overcome when signing: You have to register, then you get a password etc. Therefore, the figures cannot be compared with informal petitions. Nevertheless this petition reached 176,000 signatures in four weeks: The electronic petition with the highest number of supporters ever.
Since the quorum of 50,000 was reached, the initiator must now be heard in a public meeting of the Petitions Committee and the proposal must be discussed in the Parliament. This will certainly lead to a further upswing in media coverage and the social discussion about a Basic Income in the crisis, but also about the general idea, as has been clearly felt in recent weeks.
This is because the justification for a Basic Income in the Corona crisis is the same as the justification for a Basic Income in general. It gives everyone a basic security in the event of economic crises or downturns, regardless of how they are triggered: By a virus, by ecological restrictions, or by a change in consumer habits and production structures.
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by BIEN | Apr 21, 2020
What is a Basic Income?
A Basic Income is a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement.
Sometimes called Universal Basic Income, a Citizen’s Income, or a Citizen’s Basic Income, it is not the same as a Minimum Income Guarantee; A Basic Income does not reduce as one earns more. For more information: About Basic Income
Why do we need it?
Because someone’s Basic Income would never be taken away, it would
- provide a secure financial platform to build on
- enable the employment market to become more flexible at the same time as enhancing income security
- give to everyone more choices over the number of hours for which they were employed
- enable carers to balance their caring and other responsibilities
- make it easier to start new businesses or to go self-employed, and
- encourage personal freedom, creativity, and voluntary activity
Because everyone would get a Basic Income, it would
- create social cohesion, and
- carry no stigma
Because the Basic Income would never be withdrawn, it would
- reduce the poverty trap for low income families, enabling them to lift themselves out of poverty by seeking new skills, better jobs, or additional hours of employment
- reduce the unemployment trap, so getting a job would always mean additional disposable income
Because Basic Income would be simple and efficient, it would
- be easy to understand
- be cheap to administer and easy to automate
- not be prone to errors or fraud
Many current benefits system are no longer fit for purpose. They assume that everyone has a stable single employment, that household structures don’t change, and that individuals’ circumstances change very rarely. Our lives are no longer like that: and as technology and the employment market continue to change, our benefits systems will become even less appropriate.
In a context of rapid change, the only useful system is a simple one. A Basic Income is as simple as it gets.
For a list of 101 reasons for a Basic Income, see Malcolm Torry’s book, 101 Reasons for a Citizen’s Income.
Why pay money to the rich when they don’t need it?
It is efficient to pay the same level of income to everybody of the same age and then tax it back from those who don’t need it. The alternative is to means-test incomes so that only those who are poor receive them: but that results in complexity, stigma, errors, fraud, and intrusive bureaucratic interference in people’s lives.
Would Basic Income be financially feasible?
Tests for a Citizen’s Basic Income scheme’s financial feasibility might be listed as follows:
- Revenue neutrality ( – that is, it would be funded by making changes to the current tax and benefits system), or sustainable additional funding should be shown to be feasible
- Poverty and inequality need to fall
- Low income households should suffer no significant losses at the point of implementation, and no household should suffer unmanageable losses
- Income Tax rates should rise by a clearly manageable amount
- A significant number of households should be released from means-tested benefits
Would people still work?
If by ‘work’ we mean ‘paid employment’, then the answer is yes. In the short to medium term, we are unlikely to see a Basic Income that would be sufficient to live on, so everyone would need additional sources of income. And because Basic Incomes would not be withdrawn as earnings rose, any family taken off means-tested benefits by their Basic Incomes would experience a reduction in withdrawal rates, and would experience more incentive to seek employment, or to start their own business, than they do now.
If by ‘work’ we mean purposeful activity of any kind, then the answer is again yes. By providing a secure layer of income, a Basic Income would enable people to readjust their employment hours in order to undertake additional caring and community work.
Why pay money to people who do nothing?
In many countries we are already paying means-tested benefits to people who do nothing, and the complexity and sanctions associated with those payments demotivate people and can tip their families into poverty. A Basic Income would take a lot of people off means-tested benefits, and so would encourage economic activity. Pilot projects in India and Namibia showed that in countries with less developed economies, and without comprehensive benefit systems, even quite small Basic Incomes increase economic activity among households with the lowest disposable incomes.
Would immigration go up?
As with other benefits, a government would be likely to require a period of legal residence before someone could receive a Basic Income. Because Basic Income would provide everyone with a secure layer of income, and therefore a greater employment incentive than means-tested benefits, anyone coming into the country would be even more likely to contribute to the economy than they are now.
Would wages fall?
Means-tested benefits function as dynamic subsidies – that is, they rise if wages fall, which can encourage wage-cutting. A Basic Income would not rise if wages fell, so employers would experience more resistance if they attempted to cut wages.
Some wages might rise. Because everyone would have a secure financial platform on which to build an income strategy, some workers would be more able to leave undesirable jobs in order to start their own businesses, or to learn new skills and seek new jobs; and workers would be able to spend longer looking for a job that they might want, rather than just any job. Either currently undesirable jobs would have to improve, or wages would have to rise in order to attract workers.
Some wages might fall. Because everyone would have a secure income layer, some people might decide to take a desirable job even if it didn’t pay very much. Wage levels for desirable jobs might therefore fall.
Would a Basic Income threaten the welfare state?
If a revenue neutral Citizen’s Basic Income scheme were to be implemented, then no cuts to public services would be required. The amounts of means-tested benefits received by households would fall, but only because those households were already receiving Basic Incomes. Benefits specifically designed to cover the additional costs of disability, and benefits to cover the differing housing costs in different areas, would continue.
Would a Basic Income cause inflation?
Inflation occurs when the amount of money available to spend is greater than the value of the economy’s productive capacity. In that situation, if the amount of money keeps growing, then each unit of money can buy progressively less, so money loses its value, sometimes rapidly. A Basic Income scheme paid for purely by making changes to the current tax and benefits system would not add to the money supply, so inflation would not occur. If the amount of money available to spend was below the productive capacity of the economy, then a government could create money until the gap was filled, and that new money could be used to pay a Basic Income: but if inflation started to occur, then money creation would have to stop, and new taxes would have to be used to pay for the Basic Income.
Has a Basic Income ever been tried?
Short pilot projects have taken place in Namibia and India, and something like a Basic Income has been implemented by accident in Iran. Experiments with the similar but different Minimum Income Guarantee and Negative Income Tax in the United States and Canada during the 1970s showed useful social outcomes and very little withdrawal from employment. The similarities between the economic effects of a Minimum Income Guarantee and Basic Income would suggest that the results of the Minimum Income Guarantee experiments would be replicated if a Basic Income were to be implemented; and the differences between them mean that the effects are likely to larger for Basic Income than for the 1970s experiments. Basic Income pilot projects and similar experiments continue in the United States, Uganda, Kenya, Spain, and the Netherlands, and experiments are planned for Scotland.
Further reading
More detailed responses to questions can be found in chapter 10 of Malcolm Torry, Why we need a Citizen’s Basic Income: The desirability, feasibility and implementation of an unconditional income, Policy Press, 2018.
Recently published introductions to the subject are as follows:
Louise Haagh, The Case for Universal Basic Income, Polity, 2019
Annie Miller, A Basic Income Handbook, Luath Press, 2017
Guy Standing, Basic Income: And how we can make it happen, Penguin, 2017
Malcolm Torry, Why we need a Citizen’s Basic Income: The desirability, feasibility and implementation of an unconditional income, Policy Press, 2018
For a detailed treatment of feasibility, see Malcolm Torry, The Feasibility of Citizen’s Income, Palgrave Macmillan, 2016
For chapters on many aspects of the Basic Income debate by world experts, see The Palgrave International Handbook of Basic Income, Palgrave, 2019
by Courtney Hallink | Apr 20, 2020 | News
The Dutch government has implemented a new programme for self-employed individuals who have suffered a loss of income due to the COVID-19 pandemic – the Temporary bridging measure for self-employed professionals (Tozo). The new arrangement entitles individuals who are self-employed to up to 1050 Euros per month for single individuals or up to 1500 Euros per month for couples for a total of three months.
After the 2008 financial crisis, thousands of individuals who applied for unemployment benefits – known as Bijstand – had to sell their homes before they were able to qualify. A notable feature of the new arrangement is that an individual’s eligibility is not reliant on whether or not they own a house or have any other assets. This is seen as a step forward for those would like to see the adoption of a Basic Income in the Netherlands.
The new arrangement does not, however, meet the criteria for a Basic Income for a number of reasons. BIEN’s definition of a basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirements. Under BIEN’s definition, a Basic Income has five key criteria: it is unconditional of income, there is no work requirement, it is individual, it is universal, and it is periodic.
It does not meet the first requirement as the new programme only includes individuals whose monthly income has fallen under the national minimum. It meets the second criterion in that there is no work requirement. It does not meet the third, fourth or fifth requirements as it is not individual (as less is paid to individuals in a couple) or universal, and it will only be provided temporarily. It is however quite generous as it is in line with the living wage.
While the new arrangement does not meet BIEN’s UBI criteria, it has helped to give UBI supporters the footing they need to push the Basic Income agenda further. Alexander de Roo, member of the Green Party and chairman of the Basic Income Network Netherlands, has written an open letter to Prime Minister Mark Rutte, calling for the adoption of a temporary UBI in response to COVID-19 and a permanent UBI to be implemented after the general election in March 2021.
The open letter referred to in this article can be found here. (Readers might wish to be aware that ‘Basisinkomen’ as used in this letter does not always accord with BIEN’s definition of Basic Income)
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