by Guest Contributor | Jul 30, 2019 | Opinion
The Dream of a Just Society Found in Basic Income
[Interview] Meeting with Gyeonggi province governor Jae-myung Lee
Interviewed by Jun-ho Oh
Author of Basic Income Can Change Our World (2017, in Korean)
Translated by Hee Su Jung
“The combination of basic income, local currency, and national land holding tax will make the majority of the people happy.”
“It pains me to see people having no land misunderstand the national land holding tax.”
Governor Jae-myung Lee introduced the “Seongnam Youth Dividend” in 2016 during his term as the mayor of Seongnam city. It was a partial basic income, which provides 1 million won per year to 10,000 24-year-olds residing in Seongnam city. At the time, he faced negative reactions from the former Park Geun-hye government of South Korea and was criticized for being a populist, but gained strong support from local businesspeople and the youth.
After being elected as the governor of Gyeonggi province in the local election of 2018, Lee started to provide the Gyeonggi Youth Basic Income to 175,000 24-year-olds residing in Gyeonggi province since April 2019.
The amount of Gyeonggi Youth Basic Income is 1 million won per year, and it has been paid in local currency. The increasingly positive reactions towards the policy after the implementation of the Seongnam Youth Dividend helped to make this policy a reality throughout the province. Lee wants to go further than Gyeonggi Youth Basic Income and create a universal basic income covering all citizens of South Korea, along with the implementation of “basic income funded by national land holding tax” to fund the proposal.
The interview with Jae-myung Lee was held at Gyeonggi Provincial Government Building, at 11 am, June 20th, 2019.
Unlike other politicians, you are a strong advocate of the basic income movement. What aspects of basic income were you drawn to?
On one hand, basic income resonates with my dream of a just society. Also, I think that it is an unavoidable policy in order to preserve our societal system. The decrease in the importance of labor due to the fourth industrial revolution, and the current situation where a few wealthy individuals hold excess profits makes it nearly impossible to prevent society from collapsing. Historically speaking, when social inequality reached a certain point, the system collapsed. This may be what our society is facing, which is the reason why policies should be revisited. In my opinion, basic income may be our only choice. Another problem caused by the excessive concentration of wealth and exaggerated excess profits is that it decreases resource efficiency. Distributing wealth to the people, who have fewer opportunities to work compared to the past, will aid in sustainable economic growth, regime maintenance, ultimately achieving real freedom and equality.
There were a number of basic income experiments held abroad, but they primarily targeted the poor. In contrast, Gyeonggi Youth Basic Income was implemented where it was given to every single 24-year old. What is the significance of the policy?
As you know, basic income aims to provide all people with a minimum amount of livelihood regularly in cash. What we are doing here is limited to a certain age, so it does not completely correspond with basic income. It may be quite insufficient, but the form and principle are similar. I would like to stress that it was an introductory measure. As to the reason why I chose the youth to be the recipients, the youth these days are in the most disadvantageous position in their overall lifespan, but at the same time, they are least protected by the state. In the past, we used to say “The hardships of youth are invaluable,” “There is always a second chance” to young people who had ample opportunities, but the situation is different for the youth nowadays. I thought young people needed special political consideration. I also considered the ripple effect of the policy. It is not yet a perfect system, but a process of throwing a buzz to society. In terms of necessity, the young needed this most, and, I think, there would be an explosive power of a basic income policy for the young in making basic income a social agenda.
One of the unique elements of Seongnam city Youth Dividend and Gyeonggi Youth Basic Income is that they are paid by local currency. On the other hand, there are criticisms of the dividend not being paid by cash. Why did you choose local currency? (Gyeonggi province local currency can be used either in the form of a certificate or a rechargeable debit card. It can be used similarly as cash at affiliate stores in the region. Businesses with large revenue including big retailers are excluded.)
One reason is to overcome resistance. The notion of giving youth cash met criticisms of being populistic, and I had to admit that. New policies always meet resistance, no matter how ‘correct’ the policy is. But resistance decreases when the effect of the policy and the people who gain from it increases. Since it is a policy project funded by public finance, we have designed it to benefit the self-employed and the local economy as a whole, even though it may raise a few inconveniences caused by the local currency for the youth who use it. Another reason is about gaining the support of traditional market merchants and small businesses. This was an effect proven in the case of Seongnam city Youth Dividend. Sales of traditional markets in Seongnam city increased by 26% in the year 2016, when the policy was implemented.
You insist on giving all citizens universal basic income, going further than Gyeonggi Basic Income. At the Gyeonggi province basic income international conference held at April 29th, you have argued to “distribute profit that comes from the commons”, and are consistently arguing for the implementation of basic income funded by a national land holding tax. What is your specific plan in introducing universal basic income?
Making a new policy is important, as is combining necessary policies. One of the biggest problems in our society is the unearned income issue. People do not make creative efforts in a society with excessive unearned income. In such a society, people are trying to take power and take away power from others.
The problem of unearned income must be solved to build a ‘normal’ society where labor is respected and people are assured their share in accordance with their contributions. The biggest issue is a sharp increase in unearned incomes from lands and real estates. And that has significantly worsened compared to the past. One reason is the low real estate holding tax. The way to recapture unearned income from real estate is to increase the tax on it. Currently, real estate holding tax is about 0.3 percent. This is one-sixth of the automobile tax, which is about 1.8~2 percent despite the fact that it is the same type of tax based on property. Why is a tax on cars, usually owned by ordinary people, so high when the tax on land is so low? After fully understanding the situation, there will not be as much resistance towards raising tax rates to 0.5 percent, which is about half of the tax rates in advanced countries. By collecting 15 trillion won more in addition to this, we can pay each citizen 300 thousand won per year.
Is it to combine basic income and policies that aim to recapture unearned income from real estate?
Let us combine the important policy project of overcoming a ‘republic of unearned income from real estate’, and a basic income policy. It is an aim worth pursuing which will make the majority of the people happy. The combination of basic income, local currency, and national land holding tax make sense. This is how to raise support for my policies. You need to change people’s lives, gain support, and minimize opposition. For this, we had to start off with a partial basic income, small amounts of basic income and find a source of revenue that can be agreed upon among people. Land is the most typical type of common wealth and nobody can completely own land in this country, even though s/he has the ownership of that land. The Constitution states a public concept of land. Also, there is no reason for it to require a massive source of revenue at this moment. A child allowance implemented this year by the government is an example of a partial basic income. We can give out child allowance to children under seven, give basic income to 24-year-olds in Gyeonggi province, give basic pension to all the elderly regardless of income level in the future, and fill the gaps as we proceed. In the end, we will be able to build a basic income system even though it may be a low amount at the beginning. The amount can be increased. Implementing a basic income is not about financing sources, but about the authority’s will.
Distrust against the proper use of tax revenue is common in South Korea.
We need to get people to experience that if they pay tax, it would benefit them. 15 trillion won from national land holding tax might only pay 300,000 won per year to all citizens. But people will think “Did I get what I paid for? Would I get more if I pay more?” South Korea is a “low burden, low welfare” society and we need to increase both taxes and welfare. If we only support the poor, the taxpayers would think “Why do I have to pay taxes to help them?” In order to decrease resistance, we have to make the taxpayers think that paying taxes will benefit them. In the Nordic countries, people do not complain that they pay almost half of the GDP to tax, because the majority of the people benefit more than they pay. I want Koreans to have the same experience. After experiencing first-hand, it wouldn’t be difficult to increase basic income from 30,000 won per month to 50,000 won per month, or even more. This will allow for increasing taxation without resistance. At present, there is no taxation power for local government. One possibility is that the National Assembly makes related laws, based on the public concept of land stated in the Constitution, and local governments then enact the municipal ordinance.
Could you comment on the significance of what you’re doing for basic income supporters abroad?
While there were basic income experiments in other countries, we are actually implementing the policy. To be honest, the amount is not enough to result in experimental effects. 1 million won a year is insufficient as a basic income. But I am trying to spread the idea of basic income through this policy. Anyway, it will benefit over 150 thousand people a year, and hundreds of thousands for some years ahead. Even though we started with a small amount of basic income for a particular age group due to financial reasons, but we should expand the recipients and increase the amount in time. A national decision is necessary, which is ultimately made by the people. In order to do so, people need to know about the basic income idea and have a desire for it. I think this policy would help them with that.
Note. This article is a translation of an interview included in the first issue (link: https://basicincomekorea.org/wp-content/uploads/2019/07/BasicIncomeMagazine_Issue001-Summer2019.pdf) of Basic Income Magazine (quarterly published by the Basic Income Korean Network). The magazine is in Korean, and this article is a summarized version of the original article.
by Andre Coelho | May 29, 2019 | News
Night view from Coorg valley, India
It seems the promise of a solid financial ground for all poor citizens in India was not enough to win the Congress Party a leading position on the Indian parliament in New Delhi. The country just counted its votes on the past 23rd of May, and the incumbent Bharatiya Janata Party (BJP) was reappointed to power by a landslide, winning more seats than all the other parties combined (56% of all votes). The Congress Party, the second most voted party, got less than one fifth of the BJP won constituencies. Although there has been some contention on the voting procedure, BJP election seems indisputable.
The BJP party had also spoken about a cash transfer, unconditional in principle, to poor farmers, but that was clearly on an electoral spell, and only because the Congress Party had already gone public with its plan to roll out a basic income-type of policy if elected. In any case, the amount proposed by the BJP was many times lower than the former, and limited to poor farmers, so that shouldn’t have been the motive for the Congress defeat on these elections.
Congress Party had announced and defended the implementation of a basic income in India on the basis of reducing poverty. However, statistics show that poverty has been dropping sharply in India through the last decade. The Indian government stated that 22% of its population lived under the official poverty line in 2012. In 2015, that number had been reduced to 12,4%, according to World Bank Data. Also, as of 2019, only about 3% of the Indian population now lives in extreme poverty, according to the World Poverty Clock. This means that, as far as escaping poverty is concerned, things have been doing fine in India lately, and that helps to explain this election’s result: the BJP is not perfect, but has been making sure the trend in reducing poverty is maintained. And that collects a lot of votes.
In Sikkim, the small northern Indian state in which the ruling party (Sikkim Democratic Front – SDF) was seriously considering rolling out a basic income for its 600 thousand people, once re-elected, things gone the other way around. The ruling party was defeated – by a small margin – by a contender (Sikkim Krantikari Morcha), and with it goes the would-be policy of guaranteed income for all. Maybe the decision on choosing a leader, at this moment in time, was less related with basic income (Sikkim is one of the wealthiest states in India, enjoying low inequality and relatively high living standards on average), but with other issues. One of these could be the fact that SDF had been in power for 25 years, and so might have worn the seat too much, which easily happens in a democracy.
Some analysts consider this election to be a huge failure for the Congress Party. That is certainly an understandable connection and the result surely worried Congress leaders. However, trying to promote plurality, secularity, and now the “radical” redistributive policy of basic income, cannot be wrong in itself. It shows, rather, the mark of progressive politics. It’s just that the contemporary average Indian voter seems to be more interested in maintaining what he/she has gained in the last few years – which has, nonetheless, amounted to, on average, a great uplift in living conditions – and in securing a national identity (an easier Us vs Them mentality), then aligning with an all-encompassing pacifying agenda that doesn’t interest markets, GDP or (a power-driven) foreign policy.
In any case, and if examples like Finland have any relevance, this is not the end of basic income in India. Just a momentary stop on the roadside.
More information at:
André Coelho, “India: Congress party gets serious about basic income and reaches out to Thomas Piketty for policy design support”, Basic Income News, February 14th 2019
André Coelho, “India: Basic income is being promised to all poor people in India”, Basic Income News, February 1st 2019
André Coelho, “India: The Indian government also promises basic income to farmers”, Basic Income News, February 12th 2019
“India’s BJP tells opposition to ‘accept defeat with grace’”, BBC News, May 22nd 2019
Annalisa Merelli, “Indian elections 2019: What can Democrats learn from Congress failure”, Quartz, May 25th 2019
André Coelho, “India: Sikkim state is on the verge of becoming the first place on Earth implementing a basic income”, Basic Income News, January 11th 2019
by Daniele Fabbri | Mar 11, 2019 | Research
Credit Picture: CC(Billy Wilson)
The International Labour Organization published a paper investigating Universal Basic Income (UBI) proposals in light of ILO standards.
With the ILO Social Protection Floors Recommendation (No. 202) providing relevant guidelines for the discussion on the adoption on UBI, namely:
“(i) adequacy and predictability of Universal Basic Income (UBI) benefits to ensure income security, set at least at the national poverty line; (ii) social inclusion, including of persons in the informal economy; (iii) social dialogue and consultation with stakeholders; (iv) enactment of national laws regulating UBI entitlements, including indexation of benefits; (v) coherence with other social, economic and employment policies, and (vi) sustainable and equitable financing”,
the paper shows how some models of UBI can be in accordance with ILO standards, while others cannot.
The paper consists of five parts:
1) Universal Basic Income: A tool for social justice or a strategy to dismantle social security?
In the complex and variegated scenario of UBI proposals, the paper identifies two main currents, one which sees UBI as a tool for social justice which would grant social security to all, and the other, neo-liberal or right libertarian in its concoction, which seeks to substitute the welfare state with a minimalistic safety net.
The first is designed to reduce poverty and inequality, promoting individual rights and freedom, giving people the opportunity to engage in forms of work not recognized by the market (domestic work, volunteering). It would also reduce the administrative costs of existing social protection systems, and increase workers’ bargaining power providing an exit option. The second is a way to reduce the complexity of the modern welfare state and the degree of involvement it requires from governments. For UBI to be an instrument of social justice, the first current is the one to follow.
UBI impact on poverty and inequality, on growth, on work and employment, and on gender inequality varies depending on how the policy is designed, what its source of financing is, and on which level it set at. It is thus complex to generalize its effects, and even for specific contexts in which experiments have been done it would be an error to imply that local effects would be the same once replicated on a larger scale.
The positive effect attributed to UBI is that of tackling the issues of increased social and economic insecurity, growing inequalities and the existing gaps in social protection coverage. The growing debate surrounding it “reaffirms the necessity and importance to provide every member of the society with at least a minimum level of income security which is essential to the realisation of human dignity”, principles that are at the hearth of the ILO Constitution and the Recommendation No. 202. UBI would thus represent the income component of the recommended social protection floor.
Social protection floors should guarantee “effective access to essential health care and basic income security throughout the life course, to allow life in dignity.” This means that UBI can’t represent the entirety of social protection floor, as a nonmonetary component would nonetheless be required, and that UBI would need to be integrated in the institutional settings of the state.
2) Benefit levels, adequacy and coverage
For UBI to be a solution to inequality and poverty it needs to be set at a level sufficient to meet at least people basic needs, and needs to be financed in a sustainable and equitable way. With Recommendation No. 202 requiring social protection floors to be set at “a sufficiently high level to enable individuals to live in dignity and to ensure effective access to essential goods and services” a possible benchmark is represented by national poverty lines.
UBI proposals vary greatly in the suggested benefit levels, but given that in most of them it would supplant social assistance benefits, following the guidelines set by the aforementioned recommendation, the level should be enough to allow access to a set of necessary goods and services. Proposals built taking this into account are promising, whilst those with benefits level set below the poverty line are not able to fulfill the promises of poverty and inequality reduction.
The amount provided via UBI cannot be uniform through the populations, as it wouldn’t be able to account for those in special need, and if the amount was to be uniform UBI would be required to coexist with other forms of social security benefits safeguarding those with specific needs. UBI would thus need to be integrated in the existing systems, in order not to leave individuals worse off, the paper states.
The paper also recommends that, in order to ensure adequacy over time, attention should be given to adjustments to changes in purchasing power and overall standards of living, as to ensure the adequacy of benefits over time. For UBI to maintain its effects over time, it would need to be indexed to inflation and wages.
UBI, a cash benefit, would nonetheless need to be complemented by effective access to services (e.g.: health, education). If UBI was to be financed via the reallocation of the budget dedicated to such services, it would have detrimental effects.
Even with universalism being often presented as one of the key features of UBI, some proposals restrict its coverage in two ways: 1) depending on the age of the recipient (children wouldn’t receive benefits in some instances, whilst older persons would be subject to different rules); 2) depending on the requisite of nationality, or that of residency after a minimum duration, in order to prevent migration.
With ILO standards requiring states to provide “all members of society with adequate social protection” and with the principle of universality of protection being “at the core of the social protection floor concept, stipulating that everyone should enjoy at least a basic level of social security throughout their life course”, a UBI restricted to only nationals, or not granting sufficient benefits to meet children’s needs, would be insufficient to provide the required protection.
3) Costs, Affordability and Financing
The paper presents two scenarios for the cost estimates of UBI:
- A basic income transfer at 100 per cent of the national poverty line for all adults and children;
- A basic income transfer at 100 per cent of the national poverty line for adults and 50 per cent to children up to 15 years old.
Under scenario I. the global average cost as a percentage of GDP would be around 39.4%, with a cost of 79.1% of GDP for low income countries, 28% for lower middle-income countries, 22.8% for upper middle-income countries and 29.9% for high income countries.
Under Scenario II. the global average cost as a percentage of GDP would be 32.7%, with a cost of 62.3%of GDP for low income countries, 23.1% for lower middle-income countries, 19.8% for upper middle-income countries and 27.4% for high income countries.
One possible benchmark for adequacy of the benefit level supported by Recommendation No.202 is that of national poverty lines, but many UBI proposal are far below them. Even so, an UBI set at 25% of equivalent disposable income is nonetheless deemed unfeasible under the existing fiscal context. In order to provide benefit levels capable of reducing poverty and inequality, new financing sources need to be explored, among them the paper briefly explores:
- The reallocation of public expenditures
- Increasing tax revenues
- Lobbying for aid and transfers
- Eliminating illicit financial flows
- Using fiscal and central bank foreign exchange reserves
- Restructuring existing debt
A mix of the aforementioned would be needed, with an increase in tax revenues being central in order to assure progressivity to the policy. For low income countries, lobbying for aid and transfers may be a feasible method, as the estimate cost for the introduction of an UBI is just 0.68% of the global GDP, 3% of what has been spent by the G20 to rescue the financial sector in 2009.
Regressive proposals are not in line with ILO standards as they would further inequalities. Budget neutral proposals, which rely on cutting existing social benefits in order to provide a modest UBI coupled with social insurance, result in a social net loss which would exacerbate income and gender inequalities.
4) Who would benefit from UBI? Different implementation scenarios
The paper investigates three different scenarios for the implementation of an UBI, in order to find out which one could be beneficial to society to investigate winners and losers.
Only under scenario 1, which assumes the introduction of a UBI set at the level of the poverty line, the majority of the population is found to be net winner, thus reducing inequality.
Under scenario 2 a UBI is introduced in exchange for cuts in employers’ contributions to social security systems. This setting would reduce the capacity for social insurance to redistribute wealth across society. With net losers being among the lower and middle classes, and the net winners being corporations, this scenario is not in line with ILO standards.
Under scenario 3 UBI is introduced in exchange for the complete abolition of public social insurance:
“In this scenario virtually everybody is a net loser; the poorest will not receive anymore social assistance at the poverty line level; the low and middle classes, before covered by a better social protection system, now they will lose their accumulated social protection benefits. Eliminating public social insurance systems by a modest UBI, and promoting individual savings and private provision for those who can afford it, would reduce the potential for both vertical and horizontal redistribution, thereby exacerbating income inequality.”
5) Conclusion: Universal Basic Income in light of ILO standards
While UBI cannot be considered as a solution to all the problems of society, it can potentially act as a useful tool for closing coverage gaps and provide basic income security.
The benefit level should be set at a level sufficient to provide income security to everybody, particularly to those without other sources of income. The benefit should avoid discrimination towards those in special needs.
UBI by itself wouldn’t be enough to provide access to basic services, and it should be coupled with policies granting universal education, health care and social services. At the same time, contributory mechanism will have to remain in place, with public social insurance continuing to provide a level of social protection.
Progressive means of financing are essential in guaranteeing equity, sustainability and that UBI satisfies ILO standards. UBI implementation will need to follow a progressive realization, by setting standards and time frames: this calls for the creation of an ad hoc legal framework and effective governance and administration.
Moreover, “systematically assessing implications for the broader policy context is essential for a UBI to positively contribute to social justice and inclusive development”. UBI cannot be a stand-alone policy, but needs to work in concert with labour market institutions, and the potential interactions that could arise call for further studies.
“The momentum gathering behind the idea of a UBI can help to spur a discussion on how to respond to existing economic and social changes in a more effective and empowering way based on social solidarity and while ensuring social justice outcomes for all.”
Final remarks
The paper is clear in defining Basic Income and in discussing its potential advantages, clarifying that different UBI designs would bring very different end results.
The paper also provides a comprehensive list of experiments, proposals, and pilots, and does a service by calculating the proportions of national poverty lines that their Basic Incomes represent. This is done calculating the gross cost of UBI, which however says little about its net costs.
Much attention is devoted to proposals that eliminate current benefits, a practice that, as the authors of the paper themselves suggest, is not in line with ILO standards.
Rather than investigating a particular mean of financing and its potential effects, the paper follows a more general approach, and highlights that further studies are needed in order the understand the practical implications of UBI, nonetheless being clear about its potential to be a powerful instrument for the enhancement of social security and the reduction of poverty and inequality.
More information at:
Isabel Ortiz, Christina Behrendt, Andrés Acuña-Ulate, and Quynh Anh Nguyen, “Universal Basic Income proposals in light of ILO standards: Key issues and global costing“, Social Protection Department, International Labour Organization, Geneva, 2018
Citizens Basic Income Trust, “ILO paper on Citizen’s Basic Income and ILO social protection floors” 7th December 2018
by Jason Burke Murphy | Jan 30, 2019 | News
The Taoiseach (Prime Minister) of Ireland, Leo Varadkar, has just endorsed a carbon tax in which all funds go to a direct cash dividend. This came in a letter to the Green Party of Ireland and has been confirmed by the press. Varadkar was responding to questions posed by Eamon Ryan during a session of the Dáil (Parliament). Ryan calls for “an increase in [the] carbon tax in which every single cent would go back to the Irish people—a dividend.” Eamon Ryan is the Green Party’s leader in the Dáil (Parliament).
Ryan considers Varadkar’s response to be an endorsement of the Green proposal. The Green Party has issued a press release. In it, they express pleasure to hear that the government likes combining a carbon tax with a cash dividend but stress that they consider alternative energy and transportation to be their highest priority in addressing climate change.
In his address to the Dáil and in an interview on the Irish Times’ “Inside Politics” podcast, Ryan calls for an increase of €20 per ton in the carbon tax, with an increase of €5 per ton each year until it reaches €90 per ton. The tax revenue would be entirely returned to the public as a dividend. (If you consult the podcast, discussion of the carbon tax and dividend begins at 20 minutes and forty seconds).
Illustration posted by Eamon Ryan on his Twitter feed.
“Every single cent that will be raised will be returned with a check in the post.” In the podcast, journalist Hugh Linehan makes it clear that this would be cash that goes directly to everyone in Ireland. Ryan points out that those with lower incomes would come out with more cash than they have to pay in increased taxes. He sees this as a way to avoid a popular revolt against a carbon tax like the one Emmanuel Macron has seen in France. He hopes that this will retire the debate over the carbon tax and achieve larger changes in energy and agriculture. “[The carbon tax and dividend] will deliver maybe five, ten, fifteen, or twenty percent of the change we need.”
The Irish Times is considered the paper of record in Ireland.
The Green Party (Camhaontas Glas) has two members of the Dáil Éireann. If they gain more seats in the next election, they are considered a likely coalition partner in a future government.
The current government is run by Fine Gael, a party that caucuses with Conservative parties in Europe but seeks to be seen as pragmatically responsive to poverty and ecological issues. Ireland has seen campaigns to prevent increased water charges and to promote public action on housing.
The Irish Times has surveyed government leaders in Ireland who seek to emphasize that carbon tax increases would be “revenue neutral”, returning all funds to citizens as a dividend. The dividend is seen as a way to meet the climate change obligations set by the European Union without harming lower-income people.
In the discussion of the carbon tax and dividend, there is no discussion from the government or the opposition parties of the carbon tax and dividend as a basic income. Green Party Leader Eamon Ryan is very careful to stress that the dividend is just a small part of a plan to make Ireland ecologically responsible.
A year ago, the Irish Times ran an opinion piece in which Ian Goldin presumes a basic income would be financial destructive and would replace existing programs. Basic Income News columns have demonstrated the method Goldin uses to make his calculation is flawed. The mistake here is to calculate gross costs instead of net costs. This means that basic income can be implemented without cuts in other social provisions. Calculations show that the poverty rate could be brought down to zero if three to four percent of a country’s GDP is dedicated to a basic income.
The idea that a carbon dividend is a basic income has not arisen in the Times or in the debate in the Dáil. The term “basic income” has not come up in the discussion of the carbon tax. This reflects a pattern found elsewhere. If a dividend is debated as an answer to poverty, it faces more scrutiny than if it is debated as a repair for the regressive effect of another policy.
Basic Income Ireland and Social Justice Ireland promote the idea that basic income has emancipatory potential. The idea that three to four percent of a country’s GDP could fund a dividend that abolishes poverty is still not being debated by any of the parties currently in the Dáil.
by Daniele Fabbri | Jan 19, 2019 | Research
Picture Credit to: University of Bath
The Institute for Policy Research (IPR), based at the University of Bath, launched a research project on the economics of Basic Income (BI).
The project will “examine the economics of Basic Income, including the interaction between technology, output GDP, consumer income and expenditure.” The project has been set up with the collaboration of Geoff Crocker from Basic Income Forum.
The research will look at the fitness of BI as an element for the management of macroeconomic demand. Through the use of empirical economic data, the research will test the hypothesis that in highly technological economies the increase in productivity causes wages to fall (a phenomenon that together with falling employment rates is known as the great decoupling), requiring the introduction of a source of income disjoined from work: Basic Income.
The research project will also compare the effectiveness of BI in combating the unemployment and poverty traps with other forms of unearned income, and consider its effectiveness in avoiding economic crisis, that is, its stabilizing effect, in comparison with consumer credit and household debt.
The study will also investigate whether public sector deficit is an inescapable reality in high technology economies, and if there is potential for using debt free fiat money as a replacement for it and as a source of funding for BI, an idea already proposed by Crocker.
More information at:
University of Bath website: “The Economics of Basic Income”
André Coelho, “New Link: Basic Income Forum”, Basic Income News, July 12th, 2018
André Coelho, “VIDEO: The economics of basic income (by Geoff Crocker)”, Basic Income News, April 26th, 2018
