by Yannick Vanderborght | May 18, 2011 | News
In October 2010, the Parliament of the European Union has adopted a non-legislative resolution on the role of minimum income in combating poverty and promoting an inclusive society in Europe, partly thanks to the lobbying by several European Basic Income groups and networks, as well as by the European Anti-Poverty Network (EAPN). The resolution was adopted by 437 votes to 162, with 33 abstentions. The EU Parliament now urges Member States to establish a threshold for minimum income, based on relevant indicators that will guarantee social-economic cohesion, reduce the risk of uneven levels of remuneration for the same activities and lower the risk of having poor populations throughout the EU. Stressing the multifaceted nature of poverty, EU-Parliament considers that minimum income schemes should be embedded in a strategic approach towards social integration, involving both general policies and targeted measures – in terms of housing, health care, education and training, social services – helping people to recover from poverty and themselves to take action towards social inclusion and access to the labor market. Parliament points out that some member States do not have minimum income systems and called on those that do not to provide them. The resolution underlines that introducing minimum income schemes – consisting of specific measures supporting people whose income is insufficient with a funding supply and facilitated access to services – is one of the most effective ways to combat poverty, guarantee an adequate standard of living and foster social integration. According to Parliament, adequate minimum income schemes must set minimum incomes at a level equivalent to at least “60% of average income in the Member State concerned” (average, not median income, whereas the EU official poverty line is at 60% of the median).
https://www.europarl.europa.eu/oeil/file.jsp?id=5845352
by Yannick Vanderborght | May 18, 2011 | Research
ITO, Makoto (2011), ‘Verifying the Basic Income Concept: Its Potency and Extent’ (‘Basic Income-ron wo kensho-suru: sono kanosei to genkai’), in Sekai [The World], Vol. 814, March 2011, published by Iwanami Shoten.
Due to growing financial deterioration of the government and weakened family ties and company welfarism, “new poverty” (such as an increasing number of “working poor”, single mothers and the elderly with low or no pension, etc., unable to respond to with existing social security schemes) is spreading in Japan. Against this situation, the Basic Income (BI) vision is drawing increasing attention. The interest in it, as for now, stays mainly in the academic circles specializing in social security studies. Though, tomes and answer books on BI have been published one after another. Basic Income Japan Network (BIJN) was launched in April 2010.
The definition of BI by Van Parijs is commonly referred to in Japan, and BI variants including proposals of ones at the supranational level have been brought to the knowledge. The background of the rise of the BI vision in the West consists of the blank wall of social welfare schemes developed during the high economic growth after the World-War 2 and employment policies based on the Keynesianism as well as the disappointment and antipathy to socialism of the Soviet-type. Meanwhile, neo-liberalism aspiring revitalization of individual liberty in free market has swept through the society. Under the circumstance, BI with individual payment, no means test and no work condition aspiring liberation of individuals from bureaucratic control attracts even libertarians. On the other hand, thinkers aiming at revitalization of socialism, feminists, ecologists, and so on support BI combining their own ideal with BI. In Japan, however, being introduced to BI about two decades later from the West, it is conceived as only an alternative to existing social security schemes, and few people discuss it in the aspect of social reformation thinking. Marxists have little contribution to the BI discussions.
As for the feasibility of BI in Japan, Shuji Ozawa first estimated in 2002. He conceived of a BI scheme at the level of 80, 000 JPY per person a month taking the levels of existing money grant schemes into account relying on a new revenue from raised income tax rate at the level of 50 % (maximum rate at that time was 37 %). When it is applied to a standard household with two parents and two children, their net income will decrease by 940 thousand JPY per year. But if the household has one more child, the loss will be almost cancelled. He later redesigned his BI scheme (at the level of 50,000 JPY per person a month) maintaining ongoing tax rate and integrating pension schemes with the BI. In the days ahead, design and discussions of BI schemes are expected. In any case, they may be gradual introduction of partial BI schemes. The newly born administration of the Democratic Party of Japan introduced a child benefit scheme without income test alternating the similar scheme at a far lower level with income test in 2010. The monthly amount per child is 13,000 JPY, a half of the amount the party promised in their manifesto for the lower-house election the party won. In the continuing budgetary distress, however, the administration is now giving up doubling the amount for over four-year-old children and is even bringing back income test. Thus, the partial BI scheme at entry level is still halfway in Japan.
BI can be conveniently used by neo-liberalists to further increase irregular employment, restrain wage and alternate company welfarrism with government expenditures. Therefore, one should not be in an autotelic approach toward BI but in unity with worker/citizen campaigns demanding upraise of wage level, employment security and improvement of public care services, and one should emphasize that BI is to complement public functions of a social-democratic welfare state and promote BI pursuance as part of social movement to realize such state.
Ito Makoto is Emeritus Professor at the University of Tokyo, and a Member of the Japan Academy. The above summary was written by Takeshi Suzuki.
by Citizens' Income Trust | Apr 30, 2011 | News
Kevin Donnelly, who was an active supporter of Basic (Citizen’s) Income from its early days in the 1980s, has died at his home in Manchester aged 82. In an article by Kevin in the BIRG Bulletin in 1989 he described himself as ‘currently supply teaching, writing articles and leaflets, after a career as high-school dropout, toolmaker, clerk, sales manager, then teacher’.
Kevin was passionate about doing something to better the lives of ordinary working men and women. He expressed this through his religious belief, as well as actively promoting a Citizen’s Income in any arena available to him. In 1989 he was a founder trustee of the Basic Income Research Group, which became the Citizen’s Income Trust in 1994.
The standard definition of a Citizen’s Income is that it should be paid for by levying tax on the incomes of workers. It was unease with this aspect of Basic or Citizen’s Income that led Kevin (and me) to become involved in monetary reform. If the state reclaimed the money-creating power from commercial banks, then the proceeds could be used to fund a small Basic Income. Monetary reform used to be the preserve of cranks (and sometimes bigots as well), but it has now become urgent and mainstream following the banking crash of 2008. An important forum for the monetary reform debate is the Christian Council for Monetary Justice, of which Kevin was a long term supporter.
Kevin, always inspirational, argued with infectious good humour. His great joy was in pricking the pomposities of the hide-bound and conventional. His do-it-yourself Christmas cards with their poems and pictures were a delight. Game to the end, his wife Shirley tells me he had several recently delivered books yet to read.
by Citizens' Income Trust | Apr 30, 2011 | Opinion
Vladimir Rys, Reinventing Social Security Worldwide, Policy Press, 2010, x + 126 pp, hbk 1 847 42643, £60, pbk 1 847 426406, £19.99
This book is the fruit of a lifetime of academic research and administrative experience in international social security policy. Rys worked for thirty years for the International Social Security Association (ISSA) and for half of that time as its General Secretary, and there can be few people with such a broad geographical and historical overview of the evolution of social security (here understood as financial benefits and also state insurance-funded health provision) and of the challenges facing it.
The first part of the book offers an international history of social security, a discussion of the economic and ideological context of the current debate, and some current trends:
‘… a series of shifts in emphasis on different elements in the existing structures and different roles assigned to specific actors. Thus, the state, while reducing its direct involvement in running social security schemes and providing social welfare benefits, is at the same time greatly increasing its powers when it comes to regulating occupational or private arrangements. Simultaneously, … there is an obvious shift of responsibility back to employers and different forms of occupational welfare, back to families and their supporting role, and also back to the individual and their personal capacity to save for rainy days’ (p.55)
The second part of the book builds on Rys’s previous publications on the sociological study of social security policy, and in particular discusses the ISSA’s contribution to the development of a method which goes ‘beyond the descriptive accounts of the institution as contained in legislative texts and [explains] why it is organised the way it is and why it functions the way it does’ (p.77). Such a method contributes to policy debate by suggesting which proposals might be feasible and which not. The different components of the method are discussed: the demographic, the economic, the sociological, and the political, the study of ideas, ideologies, laws, institutions and administrative techniques, and the study of the ways in which ideas are disseminated. The method is then applied to a variety of contexts, and particularly to eastern Europe ( – Rys is Czech).
The third section of the book is entitled ‘Reinventing social security in time of economic crisis: foundations of a new political consensus’ and argues for transparency about expenditures and present and future benefit levels and that only a renewed emphasis on social insurance can halt the privatisation of social security:
‘The principle of social insurance appeals partly to the rational self-interest of the individual, assuring them of access to benefits not normally attainable through private means, but also partly to their natural sentiment of solidarity and respect for other human beings’ (p.116)
As Rys suggests in his introduction, ‘it would be irresponsible, in the light of recent experience, to entrust [social insurance] to private arrangements’ (p.2).
Whilst rather too much of this book is of the ‘We did this at the ISSA’ variety, there is plenty of useful material here, and, above all, a sustained and rational argument for the importance of social insurance. However, Rys’s own career investment in the development of today’s systems leads him to neglect developments in which he has been rather less involved. It simply isn’t true that ‘no new social protection mechanism has been invented to deal with new risks and socially precarious situations’ (p.1). ‘Basic income’, ‘citizen’s income’ and ‘Child Benefit’ don’t appear in the index, and neither do ‘universal’ or ‘universalism’. Recent experience in Namibia suggests that universal provision might be precisely the new mechanism which the current crisis needs.
by Karl Widerquist | May 30, 2010 | Opinion, The Indepentarian
[This article was originally published as part of ‘the Basic Income Guarantee Blog on USBIG.net. I reprint it here exactly as it was published then.]
In a period of about eight months, I managed to save and invest enough money to get myself a small personal basic income. It was easy-if you get the kind of lucky breaks I got. Of course, you could use the best trading app there is with the hope of making some great returns as I did! I’m telling you this story only because it illustrates how much our economic fortunes are determined by luck, how favorably our laws treat people who own stuff (people who have obtained control of natural resources) and how much unearned income is available for redistribution.
According to my job title, I’m a philosopher. My field is not known as a big money-maker. But at least since Aristotle, philosophers have occasionally made good money by teaching the children of the rich. Aristotle went to Macedon to teach the son of the king. I went to the Middle East the children of the oil-rich. The history that made parts of the Middle East rich began more than 90 years, as the Ottoman Empire was breaking up. Britain and France decided to arbitrarily draw lines on the map of the Middle East to create dependencies that eventually became states. Nobody knew at the time how much oil was there or where most of it was. So, they had no idea those lines would make eventually some of those countries very rich and others very poor.
Thanks to those decisions, the small Persian Gulf state of Qatar is now the wealthiest country in the world. A few years ago the Emir of Qatar (who basically owns the country) offered huge amounts of money to get big-name Western universities, including Georgetown, to open campuses there. Last year Georgetown hired me at a salary about three or four times what I made on my previous job.
What did I do to “earn” this salary? My teaching load is lighter and my skills are no higher than they were last year. The work I do now is no more important than the work I did last year. The children of the oil-rich can afford to pay more for their education, but it’s hard to argue that it’s more important to educate them than anyone else.
Partly I’m being paid for my flexibility. Most people can’t pick up and move to the Middle East. Partly I’m being paid because everybody knows the Emir of Qatar has a lot of money, and nobody with any other options is going to work there unless they get a piece of it. Just a lucky break for whoever happens to be in position to take advantage of it.
So, suddenly, I had money to invest.
Meanwhile, in South Bend, Indiana, the most depressed real estate market in the United States, my brother was a public school teacher. He had bought a couple houses, fixed them up, and was making good money renting them out. He had time and skills to invest but not money. I had money but no time. We trust each other. The arrangement was obvious-a lucky coincidence.
Because real estate prices are so low in South Bend, we already have three houses, a lien on another, and we’ll soon be shopping for another. We have long-term leases signed on the first three houses, so that, beginning August 1, my share of the rental income from those houses will be about $700 per month, or $8,400 this year, next year, and every year.
The laws of the state entitle me to keep that stream of income from now until the end of time. I could leave it to my children or set up a trust fund that to direct that flow of income toward whatever purpose satisfies the whim I have in my head when I write my will. That is a lot of money that can be put aside for something useful. Whether it will be used for my children’s tuition fees or for medical costs, that money can go a long way.
As we’re thinking about shopping for another real estate property, maybe we should consider out of state real estate investing instead? This could offer us more choice in the type of property that we invest in, as well as having the possibility to use it as a vacation home. I would just like something that could help to contribute to our income.
Above all, investing in real estate is a fantastic way to diversify your investment portfolio. However that being said, it is no secret that managing several properties at once can be confusing, particularly if you intend on leasing out your properties to tenants. For this reason, if you are considering investing in real estate, it might be a good idea to research some of the amazing property management companies out there that can take care of the day to day responsibilities that come with being a property owner. I know that a friend of mine managed to find a jacksonville property management company to safeguard his investments by doing some research online so it might be worth researching some different property management companies in your area.
Anyway, what I am trying to say is that thanks to my property investments I have a basic income, not just for life, but forever.
I pay about $15 a month in property tax on each home. But because we can deduct funds spent on improvements to the homes and claim “depreciation,” I can expect to pay no income taxes out of my share of the returns. If it looks like our profit will be so strong that it will force us to pay taxes we can put a new roof on a house, deduct the cost from our earnings, see the value of our home increase (thought property taxes will not), and earn more rent. People who actually have to work for their money can expect a quarter or a third of it to go to income taxes. This is not some brilliant shelter that our accountant devised. This is how people who own stuff are treated by the tax rules from Key West, Florida to North Slope, Alaska.
Assuming no compound interest and no new investments on my part, the rent on the property I have accumulated in eight months of saving and investing will add up to $84,000 over 10 years, $840,000 over the next 100 years. If you would like to invest in some new real estate, you may want to check out The Florence Residences Pricing which is a great money investment. Assuming compound interests and new investments that amount would go up exponentially-possibly increasing by 10 times in a dozen years.
Of course, $8,400 is a very small basic income. It doesn’t tempt me to quit my job and spend the rest of my life surfing off Malibu. Yet, it is nearly as large as what a very optimistic basic income supporter would hope to start out with. It is far larger than anything Congress is likely to approve for people who need it. People are likely to say we “can’t afford it” even though there are many people, who own much more than I do, taking in money just as easily.
Compare my personal basic income to the only regional basic income in the world today. Last year, the Alaska Permanent Fund Dividend paid $1305 to each resident of Alaska. That means that after eight months of saving, I am able to pay myself a dividend more than six times the amount that the oil-rich state of Alaska can pay its citizens after more than thirty years of saving and investing. But Alaska taxes almost nothing else but oil, and they use only a small portion of their oil revenue to support the Permanent Fund. Mostly they used their oil wealth to give people who own other things in Alaska a big tax cut. If they had used all of their oil royalties to support the fund, the dividend would be at least four times what it is now.
What can I possibly have done in eight months of investing to have earned a perpetual stream of income from now until the end of time?
Not much really. Lucked into a situation. As much as people believe that we must keep taxes low to reward people who do stuff and produce stuff, our property laws and tax laws most favor people who own stuff. In part, laws are set up this way because people who own stuff are very powerful. They have an enormously disproportionate control over government policy, and very often choose policies in their own self interest. Owners have successfully pushed most of the tax burden off onto people who make salaries.
But another important reason why the laws so greatly favor people who own stuff is that most people do not understand the difference between rewarding people who produce stuff and rewarding people who own stuff. A lot of what we spend goes to reward production, but it’s a mistake to think all income is earned. What can any investor do in a finite amount of time to “earn” a stream of income that lasts forever?
Supposedly investors are paid for their forbearance and parsimony. Because investors have the discipline to put money away instead of spending it on consumption now, they earn a return on that savings. But I didn’t save money because I was frugal. I saved money because I had money. I have spent money more extravagantly in the past year than at any other time in my life. Because I made so much more than I was used to, I was able to buy pretty much whatever I felt like, and still have a lot left over to invest. This seems to be true of a lot of investors.
Supposedly investors are paid for taking risks, but many of the vest investments are not very risky. There is no chance that this business will go bankrupt, because we don’t owe any money. There is some chance that rental prices in South Bend will fall slightly, but probably not much. If the South Bend real estate market stays depressed I can expect my rental income to rise with inflation. If the market gets better I can expect it to rise more quickly than inflation.
Supposedly investors are paid for providing a valuable service. To some small extent this is true of me. If I hadn’t invested this money, the South Bend real estate market would be just a little more depressed. Rental properties would be just a little less available; purchase prices would be just a little lower; rental prices would be just a little higher, and other landlords would make just a little higher rate of return. That’s something. But it hardly justifies a stream of income from now until the end of time.
Supposedly the stream of income is justified by the continued maintenance and improvements that owners put into their properties. But those all come out of the stream of income. The need for maintenance or improvement might decrease the size of my returns, but there is no necessity for any new investment or even action on my part to maintain them. I can just sit back and collect. Over time, the renters pay for the maintenance themselves.
Investors might have to do something or produce something to obtain ownership of a resource, but once they own it, anyone who wants to do anything with that resource has to pay the owner for the privilege. The owners of the past get a cut of all current production whether they personally contribute anything or not. The existence of so much unearned income reorients our economy away from productive activity so that you can’t be sure that the initial investment was necessarily something productive. Much of what people do, especially in the financial, insurance, and real estate sectors revolves not around the provision of services but around using financial resources as leverage to obtain more financial resources.
Renters pay me because I own stuff that other people don’t. I’m in that position, because I just happened to have a brother who needed an investor just when I happened to have money to invest. I was in that position because I just happened to get a job in Qatar. The Emir of Qatar just happened to be able to give me that job because arbitrary decisions made long ago by the British Empire just happened to have worked out so that he owns stuff that other people don’t.
Lucky break upon lucky break upon lucky break determines who owns resources and who does not. Those who do not own will pay those who do, year after year, from now until the end of time or until we decide to change the rules. We don’t need to eliminate property to change the rules in an important way. How about a little rebate from those who own stuff to those who do not? It would compensate them for all that they have to pay just because others control the resources we all need to use.
-Karl Widerquist, begun in New Orleans, completed in Buenos Aires, May 2010
