by Citizens' Income Trust | Nov 4, 2013 | Opinion
The President of Cyprus has announced the establishment of a ‘Guaranteed Minimum Income’. ‘Beneficiaries will be all of our fellow citizens who have an income below that which can assure them a dignified living.’ 4 That is, it will be a means-tested benefit. It will also be work-tested, which of course it will have to be, because means-tested benefits are withdrawn as earned income rises and so fail to provide the employment and enterprise incentives that an economy and a labour market need if they are to recover.
The benefit will do what it says: it will guarantee to all citizens a minimum income; but because it will go to some and not to others, it will not provide the social cohesion that Cyprus needs, and it will come with a substantial administrative price tag attached.
The President says that ‘the troika had accepted the government’s proposal “for a modern conceptualization on the policy of social welfare and prosperity”’. 4 The troika (the European Commission, the European Central Bank, and the International Monetary Fund) will have accepted the scheme because it matches the means-tested systems that other countries involved operate, and particularly those operating in the USA and the UK.
There are two lessons to be drawn here. One is that means-testing is an intuitive default position even though it is inefficient, costly, socially divisive, and entirely unnecessary in the context of a progressive income tax system. This default position means that it will not be easy for a social security system based on universal benefits to rise to the top of governments’ policy agendas, even though universal benefits are efficient, are cheap to administer, incentivize employment, self-employment and enterprise generally, are financially feasible, and are conducive to social cohesion.
The second lesson is that the word ‘guarantee’ is so ambiguous that advocates of universal benefits should stop using it. ‘Basic Income Guarantee’ is generally intended to mean the guarantee of a universal benefit, a concept that is at the opposite end of the spectrum from the means-tested ‘guaranteed minimum income’ proposed in Cyprus. The former means a Citizen’s Income; the latter a minimum net income guaranteed to a household by a means-tested benefits system. The previous Labour Government’s ‘Minimum Income Guarantee’ for pensioners was of the latter variety, and so particularly in the UK context we should be especially careful to reserve ‘guarantee’ language for a minimum net income to be reached by means of means-tested benefits, and never to use the word in the context of a discussion of universal benefits.
We would be content to forgive the President of Cyprus his use of the word ‘guarantee’ if he had meant by it a Citizen’s Income. But he did not.
1 www.labour.org.uk/one-nation-social-security-reform-miliband-speech#
2 www.schoolfoodplan.com/plan/
3 Kate Bell, ‘Investing in childhood’, Fabian Review, vol. 125, no.2, Summer 2013, p.19.
4 https://cyprus-mail.com/2013/07/26/president-announces-guaranteed-minimum-income-for-all-citizens/
by Karl Widerquist | Oct 20, 2013 | News, The Indepentarian
The Occupy Strategy Group has included the Basic Income Guarantee (BIG) on its top 10 list of recommended strategic objectives. The group is an email list of over 100 people who have met to craft strategy for the Occupy Movement. The group reviewed surveys, research, emails, articles, and other sources. After intense deliberations—and with the desire to be as inclusive as possible—the group chose 10 recommendations based on urgency, doability, and degree of impact.
- InterOccupy
BIG is included not once but twice on the list. Item 5 is “Replace all entitlements with a Basic Income Guarantee.” Item 10 is “Institute a carbon and other natural resource use tax based on ‘full resource use accounting’ and allocate the revenue derived from it for a Basic Income Guarantee.” The group quotes the USBIG network for a definition of BIG, “‘The Basic Income Guarantee (BIG) is a government ensured guarantee that no one’s income will fall below the level necessary to meet their most basic needs for any reason.’ – The U.S. Basic Income Guarantee Network, https://www.usbig.net/whatisbig.php”
Other items on the list include the following: Abolish Corporate Personhood. Nationalize health care. Establish a strong “commons” to protect the Earth and nourish community. Enact a sustainable large scale energy, jobs, and environmental recovery program. Stop the Trans-Pacific Partnership. Discontinue the practice of using federal reserve notes to back US currency and replace them with U.S. notes. Dismantle the CIA; end private military forces and prohibit private intelligence agencies. Stop the Patriot Act, NDAA and Drones.
The group invites individuals to join their ongoing conversation about current and future studies of strategic objectives by going to the following website: https://lists.mayfirst.org/mailman/listinfo/occupy-strategy
For more information see the following web page: “Occupy Strategy Group’s Top 10 Recommended Strategic Objectives,” InterOccupy, first published October 11, 2013: https://interoccupy.net/occupystrategy/2013/10/occupy-strategy-groups-top-10-recommended-strategic-objectives/
Or contact the Occupy Strategy Group at: OccupyStrategy@interoccupy.net
by Yannick Vanderborght | Aug 19, 2013 | News
Several NGOs in India have conducted a pilot project on basic income over the last two years. At a conference this May, the researchers released an impressive list of findings below. (Acronyms used below: IES, Interim Evaluation Survey; FES, Final Evaluation Survey; MPUCT, Madhya Pradesh Unconditional Cash Transfer pilot; TVUCT, Tribal Village Unconditional Cash Transfer pilot)
Implementation and Financial Inclusion
- Take-up of the basic income grants was rapid, with 93% receiving them in the first month in cash form.
- Bank account opening was challenging work for SEWA officials, but within a few months almost everybody had had bank or cooperative accounts.
- However, a majority of the villagers reported in the IES and FES that they had experienced no major problems opening bank accounts.
- Women found it easier to access and operate SEWA Co-operative accounts than the Nationalised Bank Accounts.
- The project has led to financial inclusion: Savings increased and households began using their accounts for saving, rather than keeping money at home.
Housing and sanitation
- Recipients of basic income grants were significantly more likely to make improvements to their dwellings.
- The main improvements were to walls and roofs, although improvement to latrines was also widespread.
- The basic income grants led to a switch to more preferred sources of energy for cooking.
- In the tribal village, cash grants were used by the recipients to construct new dwellings (10%), repair old houses, switch to better drinking water sources, such as getting own tube-well, and shift to better lighting.
Nutrition and Diet
- Using the WHO’s z-score index, income grants were associated with an improvement in children’s weight-for-age, with the main effect being among young girls.
- Cash grant recipients were significantly more likely than others to have enough income for their daily food needs.
- Cash grants led to more varied diets, with greater relative consumption of fruit and vegetables, rather than simple reliance on subsidised staples.
- In the tribal villages, cash grant recipients reported a sharp rise in food sufficiency. In the cash transfer village, households that reported that their income was sufficient for their food needs increased from about 50% in the baseline to 78% in the IES, and further to 82% in the FES. Correspondingly, the incidence of having insufficient food fell.
- In the MPUCT, an increase in food sufficiency was most pronounced for scheduled caste households.
- Those receiving cash grants were not more likely than others to increase spending on “private bads”, such as alcohol or tobacco. Reasons for that will be presented in the conference.
Health and healthcare
- During the course of the pilots, cash grant households reported a lower incidence of common illnesses.
- Cash grants led to more regular medical treatment and more regular taking of medicines. This was particularly observable in the TVUCT.
- Cash grants were associated with increased spending on medical treatment.
- Improved health was attributed most to an increased ability to afford medicines, although many families also mentioned it was due to more or better food and reduced anxiety. Scheduled Tribe households were relatively likely to attribute better health to the acquisition of more or better food.
- The public health system has achieved impressively high levels of immunization.
- Cash grants were associated with more resort to private healthcare, and in particular a shift from government hospitals to private hospitals.
- Although the number acquiring health insurance was small, significantly more cash grant households did so during the course of the experiments.
Impact on the Disabled
- Cash grants benefited those with disabilities even more than others, by enabling them to have more access to food and to medical assistance.
- Individualised cash grants gave household members with disabilities greater voice in how money was spent.
- Case studies showed that the cash grants enabled some disabled to become economically active, overcoming constraints to their full membership in village society.
Schooling
- Cash grants were associated with improvement in school enrolment. Although initially there was no significant difference in enrolment, by the FES the enrolment rates of children from 4 to 18 years was 12% higher in the cash transfer villages.
- Transfers led to increased spending on essentials for school, including stationery, shoes, uniforms and basic equipment.
- Cash grants were associated with more regular school attendance, with 29% of cash transfer households reporting an improvement, compared with 13% in control villages.
- Income Grants were associated with improved school performance. Grades over time taken from actual registers of schools showed that more children from cash transfer families were doing better than children of non-grant families. Scheduled-tribe households were the most likely to show an improvement in performance in terms of grades.
- By the end of the pilots, households in cash grant villages were more likely to be sending their children to private schools. Almost half of all cash-grant village children were enrolled in private school, compared with 30% in control villages.
- Cash transfers were associated with families spending more on transport to school. Grant-receiving households were more likely to send their children to schools located at a greater distance from their homes, and so spent more on transport.
- In the period covered, cash transfers were associated with an increase in private tuition. Most social categories in cash transfer villages spent more on private tuition than in other villages, except scheduled-caste families.
- Cash grants helped families to ensure that their children did non-school work that was less disruptive to their schooling. This was particularly observed in the tribal village.
Economic activity, work and production
- Contrary to a common criticism of cash transfers, cash grants were associated with an increase in labour and work.
- Cash grant households were twice as likely to have increased their production work as non-transfer households.
- Cash grants led to an increase in own-account work, and a relative switch from wage labour to own-account farming and small-scale business. This was especially true for scheduled caste households and for women workers.
- The shift from labour to own farm work was especially marked in the tribal villages.
- Many families used cash grants to buy small items for production, such as sewing machines and seeds and fertiliser.
- Cash grants were associated with the purchase of more livestock to increase production. Households in the cash-grant tribal village increased their livestock by 70%.
- Cash grant households more likely to increase their income from work, in spite of it being a difficult year due to weather conditions in the area.
- Cash grant households were three times as likely to start a new business or production activity (be it with help from firms like https://www.yourcompanyformations.co.uk/ or otherwise) as others, with a majority attributing that to the cash grants.
- In tribal village, farmers have increased their spending in good quality seeds, fertilisers and pesticides.
Debt and Savings
- Severe indebtedness was found in over three-quarters of all households.
- Cash grants were associated with a significant reduction in indebtedness, both because recipients used the money to reduce existing debt and because they used the money to avoid going into further debt. Those receiving cash grants were more than twice as likely to reduce debt.
- Cash grants led to a significant increase in savings, even in households with debt. Households often used the money to give themselves vital liquidity.
- People who looked to things like Equity Experts Debt Collector plans found that they got out of debt quicker and more effciently.
Policy Implications
- Only a minority of low-income households in all 20 of the villages had a BPL (Below Poverty Line) or Antyodaya Card. Some of the poorest households had no poverty card at all.
- Only a minority (14%) of households in the 20 villages had ever participated in MGNREGS, the government scheme supposedly guaranteeing every rural household 100 days of employment.
For more on the India Pilot projects see the following articles:
Seetha, “Bite this: Survey proves cash transfer critics wrong,” FirstPost: Economy, May 31, 2013
Standing, Guy, “The poor are responsible too,” the Financial Express, June 6, 2013
Fernandez, Benjamin, “Rupees in your pocket,” The Morung Express, 2013
Guy Standing, “Can Basic Income Cash Transfers Transform India?” BI News, May 28, 2013
by Citizens' Income Trust | Aug 2, 2013 | Opinion
Alberto Brugnoli and Alessandro Colombo (eds), Government, Governance and Welfare Reform: Structural Changes and Subsidiarity in Italy and Britain, Edward Elgar, 2012, 1 84844 477 5, hbk, xii + 183 pp, £65
Fundamental to the argument of this book are two different varieties of subsidiarity: what the authors call ‘vertical subsidiarity’: the idea that authority should be exercised at the lowest possible level in a hierarchy of authorities; and ‘horizontal subsidiarity’: the requirement that higher authorities should resource lower-level authorities to pursue the activity over which they have authority, including the resourcing of individuals and households to pursue their own chosen goals. ‘Network accountability and resourcing’, whilst being more of a mouthful, might be a more accurate expression of what the authors intend by ‘horizontal subsidiarity’: a multi-directional distribution of competences and resources across individuals, households, local communities, private sector companies, voluntary organisations, and public authorities.
The book’s first section is more theoretical in nature, and studies concepts relating to governance and subsidiarity; the second section charts the increasing relevance of regions within countries as opposed to nation states; and the third section studies recent changes in welfare state governance – and here UK readers will be particularly interested in Helen Haugh’s study of social enterprise involvement in health service delivery, and Martin Powell’s comparison of sometimes quite radical vertical and horizontal subsidiarity in Lombardy and the increasing involvement of private sector and voluntary sector organisations in welfare provision in the UK.
The fourth section of the book studies ways in which national governments have resourced households and individuals to take responsibility for their own welfare. Of particular interest will be Julian Le Grand’s chapter, in which he discusses the design of quasi-markets in welfare delivery, how to ensure equity of provision in a quasi-market context, and why such asset-based welfare instruments as child trust funds should be universal.
Tax and benefits were not on the agenda of the group of scholars convened by the Institute for Research, Statistics and Training in Lombardy to research and write this volume. If a further volume tackles this subject then a chapter might usefully be given to an impending experiment in the UK. Since the nineteenth century, social security benefits have been a nation state competence ( – as in most countries, although sometimes aspects of schemes will be devolved to the next layer down, as in the US). Policy and regulations are set at national level even when administration is managed locally, as with Housing Benefit. The UK government has now decided to localise Council Tax Benefit policy and regulations at the same time as it combines national in-work and out-of-work means-tested benefits in order to enhance employment incentives. It will be interesting, and perhaps painful, to watch the consequences of the interaction of a nationally regulated Universal Credit and a locally regulated Council Tax Benefit.
If the Institute does publish a volume on tax and benefits, then the editors might conclude that there are some aspects of welfare provision ripe for greater subsidiarity, and some that require policy and regulations to be determined at the highest possible level of authority. We have seen trade rules becoming more continental and global, and we are seeing calls for greater European involvement in such fields as food safety; and it might be that at the same time as the governance of such functions as social care and social housing become more local, taxation and benefits policy and regulation should become increasingly global. The editors might also decide that greater subsidiarity and increasing globalisation might in some circumstances benefit each other, and that in particular the best way to promote the ability of households and individuals to fulfil their own chosen goals might be a European or global universal Citizen’s Income.
by Citizens' Income Trust | Jul 26, 2013 | Opinion
Åsa Lundqvist, Family Policy Paradoxes: Gender equality and labour market regulation in Sweden, 1930-2010, Policy Press, 2011, viii + 155 pp, hbk, 1 847 42455 6, £65
The Nordic countries provide generous gender-neutral parental leave and benefits and also publicly-funded childcare, and the result is an unusual combination of high fertility and high female labour market participation. This book is a detailed study of family policy in Sweden, particularly in relation to two paradoxes: that policy promotes both mothers as carers in the home and as workers in the labour market, and that men and women are regarded as both different and equal.
The book is a study of how Swedish social policy relating to the family has arrived at its present state and of more recent developments which have been driven in different directions by a greater individualisation in society (and thus defamiliarisation) and an understanding of women as disadvantaged within the family. Most recently, a reintroduction of a benefit for carers at home, and the introduction of labour market incentives for women, have exacerbated the paradoxicality of the situation.
As the concluding section of the book suggests, the fundamental paradox is between equality and freedom of choice. We might put it like this: How to preserve radical gender freedom in the face of government policies aimed at equality in the labour market? And how to preserve gender equality in the face of government legislation designed to give to carers freedom over how they organise their households and their labour market participation? These are vital questions for any government, and are thus an essential field of debate for anyone promoting debate on social policy reform.
This is a well-researched and thought-provoking book.
