by Malcolm Torry | Jul 2, 2020 | News
Rachel Sandler has written an article for the Forbes website about an increasing number of US cities planning to establish Basic Income pilot projects.
The mayors of Los Angeles; Oakland, California; Atlanta, Georgia; Tacoma, Washington, Newark, New Jersey; Saint Paul, Minnesota; Jackson, Mississippi; Compton, California; Shreveport, Louisiana and Stockton, California, have joined Mayors For A Guaranteed Income, a coalition advocating for UBI policies, or the idea of giving out recurring cash payments to all individuals without any strings attached.
Readers of the article might wish to be aware that some of the terminology used in the article is somewhat indeterminate in its meaning. According to BIEN’s definition, a Basic Income is ‘a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement’. The article sometimes uses the term ‘guaranteed income’, which can mean either a Basic Income or a means-tested benefit: and it is not always clear which is meant. Readers might also wish to be aware that the experiments in Canada and the Netherlands are testing income-tested benefits, and so are not Basic Income pilot projects according to BIEN’s definition of Basic Income.
by Thiago Santos Rocha | Jun 29, 2020 | News
The original article in Portuguese can be found here.
Eduardo Galeano said, mentioning the words of Argentine filmmaker Fernando Birre, that no matter how much a person walks, he or she will never reach utopia. Precisely because of this, its value would be in encouraging the walk towards it.
Following the concept adopted by BIEN’s charter since 2016, a policy that is intended to be a UBI must have five characteristics: periodic, paid in an appropriate medium of exchange (currency), individual, unconditioned and universal. Maricá, a Brazilian municipality in the state of Rio de Janeiro, decided to walk towards the UBI through solid steps.
The first one was taken through Municipal Law n. 2,448/2013, regulated by Decree n. 213/2013, which deals with the implementation of the “Bolsa Mumbuca Social Program”, a policy of cash transfer in monthly payments of 70 units of “Mumbuca”. However, it was still a program aimed only at the poorest families, with monthly family income of up to one minimum wage (R$ 1,045.00; US$ 200.00, in current values), to which it imposed some conditionalities, largely related to the education of children.
It is important to highlight that Mumbuca is a local digital currency whose name is a reference to the main river and to one of the native peoples of the city. A unit of Mumbuca is equivalent to R$ 1.00 (US$ 0.19). It cannot be converted directly into cash but can be used by means of a magnetic card in any of the registered commercial establishments, only in the municipality of Maricá. Currently, there are in Maricá more machines used for transactions with the digital currency than the similar equipment of the large card operators.
In December 2015 the second step was taken. Trough the Municipal Law n. 2,652/2015, regulated by Decree n. 125/2015, the “Bolsa Mumbuca” was replaced by the “Mumbuca Minimum Income” (MMI), which paid 85 Mumbucas per month to families who had monthly income of up to three minimum wages (R$ 3,135.00; US$ 608.00). It followed as a program aimed at the poorest families, but now without the conditionalities imposed until then.
On the same date as the second step, the third was taken. Parallel to the MMI, the Municipal Law n. 2.641/2015, regulated by Decree n. 124/2015, created a program called “Citizen´s Basic Income” (CBI), which monthly destined 10 Mumbucas to all individuals born in Maricá and living there for at least one year, to other Brazilians living in the city for at least two years and to foreigners living there for at least five years. Although the law provided that the CBI would be granted regardless of the socioeconomic condition of the beneficiary, it also provided that such coverage would be achieved in stages, at the discretion of the Municipal Executive, prioritizing the most needy sections of the population. Thus, CBI’s implementation began targeting individuals registered with the Single Registry of the Federal Government (CadÚnico), to which can have access low-income families that have per capita family income of up to half a minimum wage (R$ 522.50; US$ 100.00) or total monthly family income of up to three minimum wages (R$ 3,135.00; US$ 608.00).
In June of last year, through the Municipal Law n. 2.869/2019, Maricá took the fourth and most ambitious step until now, increasing the value of the CBI from 10 to 130 Mumbucas (US$ 25,00) per individual and absorbing, among other social programs, the MMI, which until then paid 85 Mumbucas per household. With this change, the benefits that until then reached 14,000 families began to serve more than 42,000 people out of a total population of 161,000 individuals, with the short-term goal of reaching the 50,000 people in the city registered in the CadÚnico. Additionally, the same law changed the minimum period of residence of national citizens in the Municipality, requiring three years regardless of where in the country they were born, keeping unchanged the period of five years for foreigners.
As an exceptional measure to contain the impacts of the COVID-19 pandemic, the value of the CBI was transitionally changed from 130 to 300 Mumbucas (US$ 60.00), as of April 2020 and for a period of 3 months, according to Municipal Law n. 2,921/2020. Additionally, the year-end bonuses in the amount of 130 Mumbucas were advanced to make the April payment an amount of 430 Mumbucas per person.
Thus, the CBI of Maricá is not a temporary experiment, but a regular policy, paid in an appropriate medium of exchange, individual and unconditional. The Program has been closely monitored by the Brazilian Basic Income Network and the municipality is preparing to take the final step by 2022, which will abolish means testing and make the CBI a universal measure for all those who meet the minimum period of residence in the city.
As the character Raphael Hythloday said to the incredulous Peter Giles in Thomas More’s book, “if you had been in Utopia with me, and had seen their laws and rules (…) you would then confess that you had never seen a people so well constituted as they.” Would Maricá be near to contradicting Eduardo Galeano? Or would the Brazilian municipality be close to demonstrating, through laws and rules, that UBI is not an unreachable utopia, but a perfectly feasible social construction?
by Thiago Santos Rocha | Jun 29, 2020 | Portuguese
Eduardo Galeano dizia, lembrando as palavras do cineasta argentino Fernando Birre, que por mais que uma pessoa caminhe, jamais alcançará a utopia. Justamente por isto, o seu valor estaria em incentivar a caminhada em direção a ela.
Seguindo o conceito adotado pelo estatuto da BIEN desde 2016, uma política que se pretende RBU deve ter cinco características: periódica, paga por meio de um apropriado meio de troca (moeda), individual, incondicionada e universal. Maricá, um município brasileiro do Estado do Rio de Janeiro, decidiu caminhar em direção à RBU por meio de sólidos passos.
O primeiro foi dado por meio da Lei Municipal n. 2.448/2013, regulamentada pelo Decreto n. 213/2013, que trata da implementação do “Programa Social Bolsa Mumbuca”, uma política de transferência de renda em pagamentos mensais de 70 unidades da moeda social “Mumbuca”. No entanto, ainda se tratava de um programa destinado apenas às famílias mais pobres, com renda familiar mensal de até um salário mínimo (R$ 1.045,00; US$ 200,00, em valores atuais), às quais impunha algumas condições para o seu recebimento, em grande parte relacionadas à educação das crianças.
Importante destacar que a Mumbuca é uma moeda social cujo nome é uma referência ao principal rio e a um dos povos originários da cidade. Uma Mumbuca equivale a R$ 1,00 (US$ 0,19), mas não pode ser convertida diretamente em dinheiro, e sim utilizada por meio de cartão magnético em qualquer dos estabelecimentos comerciais cadastrados, apenas no município de Maricá. Atualmente, já existem em Maricá mais máquinas utilizadas para transações com a moeda social do que os equipamentos similares das grandes operadoras de cartões.
Em dezembro 2015 foi dado o segundo passo. Com a Lei Municipal n. 2.652/2015, regulamentada pelo Decreto n. 125/2015, o “Bolsa Mumbuca” foi substituído pela “Renda Mínima Mumbuca” (RMM), que destinava 85 Mumbucas mensais às famílias com renda mensal de até três salários mínimos (R$ 3.135,00; US$ 608,00). Seguia como um programa destinado às famílias mais pobres, mas agora sem as condicionalidades até então impostas.
Na mesma data do segundo passo, foi dado o terceiro. Paralelamente ao RMM, a Lei Municipal n. 2.641/2015, regulamentada pelo Decreto n. 124/2015, criou um programa denominado “Renda Básica de Cidadania” (RBC), que destinava mensalmente 10 Mumbucas a todos os indivíduos nascidos no município e nele residentes a no mínimo um ano, aos demais brasileiros residentes no mínimo dois anos na cidade e aos estrangeiros residentes há pelo menos cinco anos em Maricá. Embora a lei previsse que a RBC seria concedida independentemente da condição socioeconômica do beneficiário, também dispunha que tal abrangência seria alcançada em etapas, a critério do Poder Executivo Municipal, priorizando-se as camadas mais necessitadas da população. Assim, a RBC iniciou-se destinada a indivíduos cadastrados no Cadastro Único do Governo Federal (CadÚnico), ao qual podem aceder a famílias de baixa renda que ganham até meio salário mínimo (R$ 522,50; US$ 100,00) por pessoa ou até 3 salários mínimos (R$ 3,135.00; US$ 608.00).
Em Junho do ano passado, por meio da Lei Municipal n. 2.869/2019, Maricá deu o quarto e mais ambicioso passo, aumentando o valor da RBC de 10 para 130 Mumbucas (US$ 25,00) por indivíduo e absorvendo, entre outros programas sociais, o RMM, que até então pagava 85 Mumbucas por família. Com esta alteração, os benefícios que alcançavam 14 mil famílias passaram a atender mais de 42 mil pessoas, de uma população total de 161 mil indivíduos, com o objetivo imediato de chegar às 50 mil pessoas da cidade inscritas no CadÚnico. Adicionalmente, a mesma lei alterou o prazo mínimo de residência de cidadãos nacionais no Município, passando a exigir três anos independente de em qual ponto do país tenha nascido, mantendo inalterado o prazo de cinco anos para estrangeiros.
Como excepcional medida de contenção dos impactos da pandemia de COVID-19, o valor da RBC foi transitoriamente alterado de 130 para 300 Mumbucas (US$ 60,00), a partir de abril de 2020 e pelo período de 3 meses, conforme a Lei Municipal n. 2.921/2020. Adicionalmente, os bônus de final de ano no valor de 130 Mumbucas foram adiantados para fazer o pagamento de abril um valor 430 Mumbucas por pessoa.
Deste modo, a RBC de Maricá não se trata de um experimento temporário, mas sim uma política regular, paga em um adequado meio de troca, individual e incondicionada. O Programa vem sido acompanhado de perto pela Rede Brasileira de Renda Básica e o Município se prepara para, até 2022, dar o último passo, que abolirá os testes de meios e fará da RBC uma medida universal a todos que atendam o prazo mínimo de residência na cidade.
Como disse o personagem Raphael Hythloday ao incrédulo Peter Giles na obra de Thomas More, “se tivesses estado comigo em Utopia, terias visto suas leis e regras por ti mesmo, (…) admitirias livremente que nunca viste em lugar algum um povo de tão reto ordenamento quanto o deles”. Estaria Maricá próximo de contrariar Eduardo Galeano? Ou estaria o município brasileiro prestes a demonstrar, por meio de leis e regras, que a RBU não é uma utopia inalcançável, mas sim uma construção social perfeitamente factível?
Este artigo em inglês pode ser encontrado aqui.
by Karl Widerquist | Jun 28, 2020 | Opinion, The Indepentarian
This Review was originally published in the Review of Political Economy, December 6, 2009. It’s reproduced here as originally published.
In Our Hands: A Plan to Replace the Welfare State, by Charles Murray, Washington, DC, AEI Press, 2006, 230 pp., $20.00 hardcover ISBN 0-8447-4223-6
Charles Murray is not known as a friend of the poor. His 1984 book, Losing Ground argued that the government should ‘zero-out’ all programs designed to help the poor. His 1994 book, The Bell Curve (co-authored with Richard Herrnstein) used questionable methodology purporting to show that people are poor because they are less intelligent than average and that blacks are disproportionately poor because they are genetically less intelligent than whites. If racism is the belief that your race is mentally or physically superior to others, The Bell Curve is a racist book. Yet, his new book, In Our Hands: A Plan to Replace the Welfare State, Murray puts forth a plan to provide more healthcare, more retirement security and more actual income to the poor with no supervision or conditions attached.
For those familiar with universal basic income, Murray’s proposal sounds very familiar. Murray calls it ‘the Plan,’ saying, ‘I have not been able to contrive a better name,’ but it is essentially a version of the program known as ‘basic income,’ which
has been widely discussed by political philosophers in the last twenty years. Basic income is a regular government-ensured grant provided to every citizen on an individual basis without a means test or work requirement. People with middle or higher incomes pay more in taxes than they receive in the grant, but everyone receives the grant in cash every month. A great deal of literature has appeared on basic income in the last twenty-five years. Basic income is similar to, but not quite the same as, the negative income tax, which was widely discussed in the United States in the 1960s and ‘70s. The major difference between the two is that the negative income tax is given only to net recipients and phased out for people who earn above a certain amount, so that no one both receives a grant and pays income taxes. Both programs are ‘guaranteed incomes’ in the sense that they are designed to ensure that everyone has a small but reliable income, and both programs eliminate ‘the poverty trap’ in which some people find that they can attain a higher income by not working than by working.
Murray cites some of the literature on the negative income tax, but he appears completely unaware of the basic income literature, giving the impression that he reinvented the idea independently. When he discusses people who might drop out of the labor market, his example of what they might do is surf. This example is well-known in the basic income literature from an exchange between John Rawls and Philippe Van Parijs, neither of whom is cited by Murray. Is it a coincidence or is he merely neglecting to connect himself with that movement?
The Plan is most similar to a little-known basic income proposal by Leonard Greene, and elaborated by Irwin Garfinkel, although this connection is probably coincidental. Both Murray and Greene propose canceling everything the US government is currently doing to support individual incomes and use all of that money to finance a basic income for every citizen. The Plan is not quite a universal basic income. Only people age 21 and over are eligible, but it is a basic income in the sense that it has no means test and it is given to everyone who reaches the age of eligibility regardless of income.
Murray promoted the book and the Plan with several lectures in 2006. When questioned whether a guaranteed income is an affront to the work ethic, he responded, ‘You’re a conservative. I’m a libertarian.’ But make no mistake, Murray is profoundly conservative. His books have blamed the welfare state for everything that a conservative might find wrong with modern society, from welfare dependency though unwed motherhood to a decline in ‘man’s’ ability to craft a meaningful life. Many of the benefits he expects from the Plan align with conservative goals. He believes it will lead more people to attend church, more people to support private charities, and more of the poor to adopt the superior values of middle- and upper-class people.
Many people were shocked that a man who wrote a book arguing to zero-out the welfare state would put forward a plan for a basic income and universal health care. But it should not be completely surprising. Murray was sympathetic to the negative income tax in his contribution to Lessons from the Income Maintenance Experiments; and in What it Means to Be a Libertarian, he wrote that some form of income guarantee was the next best thing to the complete elimination of redistribution.
There is in fact a long history of free-market conservatives who have seen an income guarantee as a streamlined, conservative alternative to the complex, conditional welfare system. F. A. Hayek and Milton Friedman promoted the negative income tax on those grounds, and it seems to have been part of the motivation behind Richard Nixon’s watered-down negative income tax proposal in 1970. Most recently, Governor Sarah Palin pushed through a bill for a one-time increase in Alaska’s regular basic income (the Alaska Permanent Fund) from $2000 to $3200 per person per year. The free market appeal of an income guarantee is twofold. From the point of view of taxpayers, conditional welfare programs waste a large percentage of their budgets in overhead cost that could be saved under an income guarantee. From the point of view of the recipients, the rules and constant oversight of a conditional welfare system can be humiliating and oppressive.
Murray’s earlier books give the impression he believes that the poor are unproductive, genetically unintelligent people with bad values who have babies just to get welfare checks. One might therefore wonder why he cares about freeing the poor from oppressive government supervision. The answer is that while Murray seems to believe capitalism is a near-perfect meritocracy and that the poor are genetically inferior, he honestly believes that the poor should be free and that humiliating supervision by government bureaucrats cannot make the lives of the poor better. This kind of thinking led Murray to reinvent basic income.
This book—typical of Murray’s research—seems designed to give laypersons the impression of broad knowledge while having little concern with giving that impression to people who know the field. It is a thin volume with lots of numbers and footnotes but without a deep understanding of the research he cites. His discussion of the negative income tax is a case in point. He is aware that Milton Friedman supported the idea and that experiments were conducted on it, but he misstates what a negative income tax is and what the experimental results were. He gives the impression that a negative income tax has a 100% take-back rate, meaning that for each dollar earned privately recipients lose one dollar of their grant. If so, recipients who make money in the private labor market are no better off financially unless they get a job that pays more than the entire grant (pp. 8–9; 74). Almost no one who supports the negative income tax supports this draconian variant. Friedman supported the negative income tax largely because it could be designed to eliminate the work-incentive problems of conditional welfare programs, and none of the experiments tested a 100% take-back rate. Murray also implies that the experiments found evidence that large number of recipients dropped out the labor market. In fact, none of the experiments found evidence that anyone dropped out of the labor market. The relative decline in hours for the experimental group was 2–9% among primary wage earners and up to 20% for mothers of young children, but none of this relative decline represented anyone ‘dropping out’ of the labor market. It was instead attributable to people who happened to become unemployed taking longer to find their next job. Perhaps most importantly, the relative decline of work hours was not always an absolute decline. The largest predictor of whether recipients worked was not whether they were in the experimental or control group but the health of the economy. The people who conducted the experiments concluded that the work disincentive effects were small and did not put the viability of the program at risk.
Murray has not been careful with the facts, but is his plan a good one? Is the Plan a good workable idea that people who actually have sympathy for the poor could support? The answer is mixed. It is small; $10,000 per year minus $3,000 for mandatory private health insurance minus $2,000 for possibly mandatory retirement savings with no additional provision for children’s healthcare. That is, $5,000 per year ($416.67 per month) if retirement savings is mandatory and $7,000 per year ($583.33 per month) if it is not mandatory—for each adult whether she lives alone or with children. A single parent will be able to sue for child support out of the grant to the noncustodial parent, and so might have access to something in the neighborhood of $833.33 per month for herself and her children. But even an adult with no dependents is well below the official poverty line of $9,359 if she tries to live on $5,000 a year. (Following Murray, I’m using 2002 figures.)
Murray’s typically conservative response is that they can double-up with friends and relatives and they can all go out and get jobs at minimum wage. He calculates that when you add $583.33 to the income from a minimum wage job it would get most people—even single mothers with one dependent—out of poverty. He neglects to mention that this strategy involves mortgaging their retirement savings so that they will be more than $4,000 below the poverty line in retirement if they do this every year. He also neglects to mention that he is an opponent of the minimum wage. Since the whole idea of getting rid of the minimum wage is to enable employers to pay their workers less, we can assume that all of his calculations about how well off the recipients will be after they get these jobs are overestimates. He also neglects the very possibility that unemployment might exist, that the market may not be able to absorb the millions of new entrants to the labor market he hopes to see, and that most single mothers cannot work full time or in many cases even part time.
Consider a single mother with three dependent children at ages that make it difficult if not impossible for the parent to work outside the home. Her poverty threshold is $18,307. If she’s on her own and retirement contributions are mandatory, her income ($5000) is less than a third of the poverty threshold. If she can effectively sue the father for his entire grant (an optimistic assumption), she can increase her income to $10,000. If she and the father both mortgage their retirement savings, she can get up to $14,000. That is probably enough to keep her family off the street, but it is still more than $4000 below the meager US poverty line. Murray suggests combining incomes is as a solution. If she cohabitates with another mother in exactly the same situation, their combined income is $28,000—still $1,600 below the poverty threshold for a two parent family with six children of $29,601.
The grant is too small to give a dignified life to the poor without at least the addition of a child grant, but is it better than the current system? I have to admit that on this point, I am inclined to agree with Murray. As horrible as it sounds, in most states, TANF recipients work for less than they would get unconditionally under the Plan. Many people who aren’t eligible for TANF, SSI, or Unemployment Insurance get far less or nothing at all. Even the small grant of $416.67 a month can help many people get by if it is unconditional and tax free. The Plan would save many people from the utter destitution and homelessness that they experience in the United States today. On top of that, a retirement fund of $2000 a year put into a protected savings system would make for a better retirement than many Social Security recipients experience today, and $3,000 per capita could buy basic universal health coverage, solving one of the most important problems in American society today. If the Plan were put in place now, maybe we could eventually get the benefit increased to a decent level. Therefore, despite all of its faults, the Plan would be an improvement for many people living at or near the margins in the United States.
by Tyler Prochazka | Jun 20, 2020 | Opinion
This past week, Finland released the final results from its two-year “basic income” experiment. The program produced a modest increase in working days among basic income recipients and noticeable improvements in perceived happiness and healthiness.
Is this a surprise? When governments give people cash assistance, of course, their lives will improve. And with financial stress alleviated, these recipients will still find productive uses for their time.
Simply imagine the unearned suffering billions of people could have been spared if governments had implemented basic income prior to the pandemic and global economic depression.
Basic income skeptics should consider which system failed when confronted with the current avalanche of suicide, descent into addiction, and hungry mouth these twin crises have created. But according to the government’s standard, Finland’s basic income experiment still “failed” because recipients only increased their working days by a week or so.
Let that sink in. Despite proof that the program improved basic income recipients’ physical and mental well-being, it was deemed a failure because it did not fix every aspect of the labor market in two years. Recipients worked more, but that apparently still was not enough.
Maybe the standard by which success is judged is, therefore, the true failure.
Our current situation shows us that the government was dead set on keeping us in jobs at all costs. And the natural result of that obsession to “preserve work” is that governments are now bailing out corporations instead of their people.
Of course, well-connected businesses like airlines are bailed out first (and multiple times) as average people languish on the edge of financial ruin. Meanwhile, complicated schemes in the United States like the “Paycheck Protection Program” are designed to create the impression of modest job loss, since employees are kept tacked to their employer by way of payroll. But these “jobs saved” are meaningless insofar as many small businesses will immediately shutter from falling demand whenever the program ends. Many are zombie employers, animated by governments’ obsession with “jobs” over human wellbeing.
Even increasing unemployment benefits with a $600 bonus has been a nightmare, having never gone to many informal workers like caregivers and mothers in the first place. The unemployed will now make every effort possible not to return to work. Unlike with basic income, where the payment is available unconditionally, people will lose their leisure time and $600 unemployment bonus when they accept their next job.
Unemployment payments are also being used to threaten employees to return to work before the pandemic is even under control. In Iowa, the governor said unemployment recipients will be thrown off unemployment assistance if they do not return to work when lockdowns are eased: even if their workplaces are still hotspots for COVID. This means even more lives will be sacrificed on the altar of “increasing work” and “saving jobs.”
In contrast, basic income would empower people to make an informed decision whether it is safe to return to work without the loaded gun of economic self-destruction being held to their head. Governments should pay people directly instead of paying their employers. If they did, employers would have to meet the safety and pay standards of the people they hope to woo back into work
Almost a year ago, I wrote that the era of “experimenting” with basic income to determine whether it causes “laziness” should end. This question is more often than not asked in bad faith by opponents of basic income, who ignore overwhelming evidence that it generally increases the number of hours recipients work: even leaving aside the productivity gains in those work hours, as people are given more freedom to choose how their labor is allocated.
When the article was written, Canada cancelled its basic income experiment and Finland released its first year of results. These experiments were deemed failures at the time. But the absurdity of that belief is clearer than ever before.
We stand at the abyss, with the highest unemployment rates and deepest recession of our lifetimes on the horizon. And yet governments have doubled down on putting “jobs,” narrowly defined as roles serving corporate interests, over our wellbeing. This paradigm, by supercharging the economic fallout of the pandemic and forcing people back to work without safety rails in place, defies all logic.
Basic income never failed us. Our “jobs” did.
By Tyler Prochazka and James Davis
