by Harry Curzon | Jun 30, 2018 | News
Olli Kangas. Picture credit: What.Happens.Now?
Olli Kangas, one of the masterminds behind Finland’s Universal basic income (UBI) research experiment, has spoken in detail about the process of implementing the UBI experiment and the challenges that have come with it. Finland’s UBI trial, presents the first of its kind in Europe, however different to other examples of UBI, in that it only gives handout to the unemployed. The research study organized and supervised by Kangas involves around 2,000 unemployed participants, with a budget of approximately 20 million euros, where each participant of the study getting around 560 euros a month for two years.
“Although the contribution a person gets is low, it is permanent and secure,” said Olli Kangas, speaking at the 2018 Nordic work life conference. Kangas overarching goal within the project is to uncover what happens when the people being studied no longer must waste time submitting for economic assistance from the state. Would this newfound time be spent looking for jobs or on other activities?
Politically, Kangas has faced multiple problems in trying to get the experiment up and running, which began in 2016. For instance, some politicians in Finland from the Finns party have argued that the UBI will only succeed in turning Finland into a hotspot for welfare scammers and refugees. This has only added further bureaucratic and political resistance to the project.
Opposition to the UBI project has seemingly transcended ideological lines, in terms of Left and Right typical political wings. The most adamant critics of the project argue that UBI simply acts as a tool to give out free state handouts, which acts to kill citizens desires to get jobs and contribute to working society. Kangas replies that the purpose of the study is to shed some light over these questions posed by sceptical politicians and to reveal how people act when they receive unconditional guaranteed payments.
Olli Kangas. Picture credit to: Iltalehti.
The initial planned study was expected to be large in scope and funding, which as stated by Kangas “made us feel like ‘masters of the universe’, planning an experiment with 100,000 participants. But we soon came back down to Earth, since the bureaucrats turned out to be stronger than the politicians”.
A major problem that the political resistance has brought with it is the difficulties in securing funding for the experiment. As remarked by Kangas over the Nordic Work Life Conference 2018, “it has been extremely difficult to secure funding for this. Politicians were willing to provide 20 million euro for the experiment, but just 700,000 euro to evaluate it”. However, the experiment has also received support from each political side too, with some politicians from the Right viewing UBI as a potential method to strip back the welfare system and arguments from the Left which see UBI more as an expansion of the welfare state.
An additional obstacle with the setting up of Kangas research study was the Finish Constitution. It states that there must be no unequal mistreatment of citizens, which impacted the plans to conduct an obligatory study where participants received payments regardless of whether they needed or wanted them. Hence Kangas had to scrap any experiment that implied payments to anyone, regardless of employment status.
Even given the challenges for setting up this experiment, it has been running for almost two years, and is scheduled to finish at the end of 2018, with its findings expected to be published in late 2020. Finish politicians and social researchers alike will have to wait as to whether their differing claims about the UBI experiment come to fruition. Kangas suspects that with the scepticism rising around the expected results of the project, this will be finished a year earlier than first set out and that if any UBI policy is to be implemented in Finland “it would be through the back door – by merging and simplifying some types of benefit”. Due to the great deal of resistance Kangas has faced when trying to implement this experiment on basic income, he is not entirely optimistic about the prospects of implementing UBI in Finland and feels it’s unlikely to happen in the future. However, Kangas admits that “One experiment here or there couldn’t say if basic income is good or not”, which leaves, in a way, the door open to new initiatives regarding basic income from Kela, the Finish Social Security.
More information at:
“Finland’s basic income organisers correct inaccurate media reports of trial’s premature death”. Yle Uutiset, April 25th 2018
Björn Lindahl, “The research project against all odds: Olli Kangas on Finland’s universal basic income”. Nordic Labour Journal, June 22nd 2018
Olli Kangas on YouTube, 2018
Heikki Hiilamo and Olli Kangas, “Universal Basic Income: Does the Carrot Work Better than the Stick?”. Meeting of the Minds, January 27th 2017
Olli Kangas, Sharon Bessell and Martyn Pearce, “Back to basics – Finland’s Universal Basic Income – Policy Forum” (Podcast). Asia & the Pacific Policy Society – Policy Forum, June 1st 2018
by Kate McFarland | Jun 23, 2018 | News
What’s the Buzz from Rheinau?
Earlier in the month, headlines made such proclamations as “Swiss municipality to offer guaranteed income” (SWI), “Swiss village considers a crowdfunded basic income for all inhabitants” (Toronto Star), and “Swiss town set for universal basic income experiment” (The Local Switzerland), referring to Rheinau, a town of about 1300 people in the north of the country.
To preclude misunderstanding about what is happening in Rheinau, it should be stressed that the village is not enacting a basic income, nor is its government deliberating an implementation of the policy, nor is it running a state-sponsored trial. Moreover, to avoid possible confusion, it is specifically worth noting that this latest news from Rheinau is unrelated to previously reported discussions of basic income pilots by Swiss political bodies, such as the investigation of municipal basic income pilots initiated last year in nearby Zurich.
Instead, the news is this: the city council has agreed to permit an independent filmmaker Rebecca Panian to make the village the site of privately funded one-year trial of a program similar to basic income, involving at least half of the town’s population, which would serve as the basis for a documentary. The project’s main purpose is to provoke interest, discussion, and further research into the idea of basic income.
While the village’s council has given the green light to the documentary project, the ultimate execution of the project remains contingent on enrolling the desired number of participants and raising sufficient funds. Moreover, the design and duration of the trial remains liable to change during the course of discussion with the local council and inhabitants of Rheinau.
The Payment Scheme: Unconditional, Subject to Repayment
If the trial does come to fruition as currently planned, it will not, strictly speaking, test a basic income: participants in the trial over the age of 25 will be given a cash payment of 2500 Swiss francs (CHF) (about 2151 EUR) at the start of each month, with reduced amounts given to minors and young adults, irrespective of income, household status, work, or need; however, if participants receive additional income during the month, they will be expected to repay this money in part or full.
Stated otherwise, participants over age 25 will be granted 2500 CHF at the start of each month, but will be permitted to keep only as much as necessary to ensure that their total income for the month is at least 2500 CHF (with lower amounts for younger age groups). If they earn above 2500 CHF, they will repay the entire amount of the grant.
To many, this feature of the design might cause the project to seem not a test of basic income at all; after all, according to the Basic Income Earth Network, a basic income is by definition delivered without means test. For the project’s initiators, however, the repayment requirement is a way to attempt to more accurately simulate what a basic income would feel like if actually implemented in Switzerland, where many individuals, earning high salaries, would presumably “repay” any amount paid out as a basic income in personal income taxes. “[It] is important to us not to spread the illusion that an unconditional basic income simply means more money in your pocket,” Panian tell Basic Income News, “It just means that the basic income is unconditional. Everybody gets it so nobody needs to fear angst (existenzangst) again.”
Since the cash allowance is paid upfront, the plan is distinct from a negative income tax or top-up scheme in which individuals are “reimbursed” if there earned income falls below a certain threshold. One might say it loosely resembles a basic income accompanied by an increase in individual income tax.
That being said, this provisional design has not been set in stone, and documentary team will consult with residents of Rheinau later in the year to produce a finalized design.
Motivation: “Too Many Questions Unanswered”
Like many in both Switzerland and abroad, Panian first heard about basic income when a referendum to enact the policy was put on the ballot in the 2016 Swiss general elections. Although the referendum left open the amount of the basic income — it stated only, “Legislation will determine the funding for the system and the actual amount of the basic income” — a monthly payment of 2500 CHF was often discussed during the campaign.
Celebrating 23% Yes referendum vote, CC BY 2.0 Generation Grundeinkommen
Panian was intrigued by the idea as a possible solution for challenges posed by the future of work. In her view, a society based on the goal of full employment is unsustainable in the face of accelerating automation, and attempting to maintain such a system will result in “mass unemployment and lots of people with no money, no support, and no perspective.”
At the same time, she was not surprised that the referendum failed at the ballot box, telling Basic Income News, “there were too many questions unanswered, and in the mind of many people this idea remained a crazy, non-realistic vision.”
Panian herself does not express certainty that basic income is the new system needed by Switzerland and other nations facing the threat of automation, but she believes that “we better test it as well as we can before we throw it in the bin and do nothing.”
This goal — opening people to the idea of basic income as a serious proposal — provided the motivation that would ultimately lead the filmmaker to Rheinau: “I figured out that in order to become more open to the idea, people need more time, and they need to ‘see’ it happening. That’s how I came up with the idea to start a test it in a village. … Everybody who watches the experiment going on in a village can sympathize with the villagers and with that get more connected with the idea.”
The Village: A “Mini-Switzerland”
Other privately financed and administered “basic income” projects, including Germany’s lottery-style Mein Grundeinkommen and the in-progress US documentary Bootstraps, have focused on individual-level effects of unconditional monthly cash grants.
Like the directors of Bootstraps, Panian hopes to document the lives of individual participants in the Rheinau project. But Panian is also interested in the community-level impact of a basic income, and for this reason decided to situation her study in small village in which the majority of residents would be able to take part.
Rheinau Abbey, CC BY SA 3.0 Hansueli Krapf
Panian first announced her plans in January of this year, putting forth a call for Swiss municipalities to serve as the site of the documentary. In some cases, city councils placed bids to be the site of the basic income test. In others, individual residents wrote to Panian to nominate their own communities.
Panian ultimately selected Rheinau out of more than 100 applicants, in part on the basis that its demographic structure reflects Switzerland as whole. As she describes it to Basic Income News, the community is “small but like a mini-country.”
According to Panian, Rheinau was also a favorite due “fantastic communication with the local council” and the council’s “real interest in the experiment.” Neue Zürcher Zeitung reports that the village rejected the country’s basic income referendum with 72% no vote in July 2016, but that its mayor and councilors have been receptive to involving the community in a small-scale test of a similar program. In a statement quoted on the official website of the planned documentary, the council declares that basic income “deserves to be tested” and “encourage[s] the population to participate” in the trial and film project.
The Research Team
In addition to Panian, a team of social scientists — including an economist (Jens Martignoni), organizational psychologist (Theo Wehner), linguist (Aleksandra Gnach), and sociologist (Sascha Liebermann) — is fronting the basic income project in Rheinau.
The four scientists are currently designing a study about of the effects of the program on the community. However, as Martignoni stressed in correspondence with Basic Income News, the research project is in an early stage of development, and it is too early to tell what can be learned from the trial.
In addition to assessing the effects of the program on the well-being of participants and the community, the researchers hope to examine its effects on their opinions on basic income itself. Liebermann tells Basic Income News, “I am curious to find out how the people in Rheinau think about the basic income and how their thinking about it might change during the trial and in what direction,” which he plans to investigate through in-depth interviews.
Like Panian, both Martignoni and Liebermann emphasize that cooperation with the local community is an important aspect of the Rheinau experiment, in contrast to other past and ongoing trials of basic income and negative income tax, with the people of Rheinau to themselves be included in the development of a final model. The researchers also emphasize that the Rheinau project is unique in that its goal is not to fight unemployment or poverty.
Basic Income in a “Rich Country”
In regions where governments are currently sponsoring or overseeing trials of basic income or other income guarantees — including Finland, the Netherlands, Ontario, Barcelona, and Stockton — the main objective is to address unemployment or poverty.
Generation Grundeinkommen demonstration, CC BY-NC 2.0
While Switzerland is not without poverty, it is known as a relatively wealthy nation. The median salary was reported in 2015 as 6189 CHF per month, and the average household income was reported in 2017 at 6957 CHF per month. According to the Federal Statistical Office, only 10% of people living in Switzerland have a monthly disposable income below 2243 CHF — suggesting that relatively few might stand to benefit from a monthly 2500 CHF grant subject to repayment.
Panian herself believes that, for this reason, a Swiss experiment would have the potential shed a fresh perspective on the basic income debate, “Switzerland is famous as a ‘rich’ country. If we test it, we don’t do it primarily to fight unemployment or poverty.” Martignoni also points out that the trial planned in Rheinau would be unique among basic income experiments as one that is “not restricted to a poor part of the population but to all in a developed (‘rich’) country.”
That said, if the filmmaker believes that main reason to implement basic income in rich nation like Switzerland would be as a sort of insurance against future automation and digitization, then one might wonder what impact she hopes or expects to observe during a one-year trial in 2019. Indeed, if it most Swiss workers are already earning well above 2500 CHF per month, one might wonder if the trial will have any effect on participants (except, perhaps, the minor inconvenience of the required monthly repayments). Asked about this concern, Panian noted that, while very few Swiss men have monthly salaries below 2500 CHF, a significant proportion of women still lack their own income. Since the benefit will be paid on individual rather than household basis, women without a personal income will be able to keep the entire monthly payment. Thus, Panian predicts that families with children and stay-at-home mothers will be prime beneficiaries.
She adds, however, that individual monetary benefits are not, in her view, the only “benefit” of basic income: “I talked to many people, and it became obvious that most of them only think about how they could or would not profit on a monetary basis from the basic income. What they seem to forget is that if you live in a society where people don’t have to fear for their basic needs, they might get more content, and this will have a positive effect on the whole community.”
In any case, the discussion of potential benefits to Rheinau itself should not obscure the fact that, for the team behind the trial, the major goal is not to produce measurable results but to reinvigorate discussion of basic income in Switzerland and beyond. According to Panian, the best case scenario is one which the project “inspires others to organize more experiments on their own in their communities and motivates people to think about what future they want.”
Enno Schmidt, the filmmaker behind an earlier basic income documentary and cofounder of the referendum campaign, agrees that the greatest promise of the project is to catalyze further discussion: “it is one first fresh new activity after the referendum; it keeps the topic in Switzerland a little awake. It encourages other communities to think about whether or not they will also introduce a basic income on a trial basis.”
For more information and updates on the Rheinau basic income project, see https://www.dorf-testet-zukunft.ch/page1.html.
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Article reviewed by Patrick Hoare.
Cover image: Rheinau, CC BY-NC 2.0 Wisi Greter
by Sandro Gobetti | Jun 14, 2018 | News
Since the new government led by Movimento 5 Stelle (M5S) and Lega (the Italian extreme right-wing party) was formed, the proposal of a so-called “citizen income” in Italy has had much echo. First proposals go back to 2013, having been reported at the time.
This proposal is among the first programmatic points of the M5S and has been included in the “government contract“, among the goals to be achieved in this legislature. It has reverberated widely, and some confusion has been established. It has been suggested that basic income is in the pipe for Italy’s social policy, an idea inflated by some media reports. To that also contributed the reporting on the Livorno case, a small coastal town in Italy, in which a conditional to work type of basic income experiment has been conducted, having even been listed among the basic income experiments in the world at this time (year 2016).
To be clear, the M5S, even conceding the use of the term “citizen’s income” (a term coined in the 90s, by social movements and precarious workers, signifying “basic income”), is proposing a targeted to the poor minimum income scheme, conditional to work. This kind of policy has already been adopted, for many years, in the majority of European countries. The fact is that Italy is still one of the few European countries which doesn’t have experience with social support for those living below the poverty line. Moreover, European institutions have been asking for the introduction of at least economic support for the poor in Italy, which is one of the countries with the highest poverty rates in Europe.
The only social support for the poor up to this moment, in Italy, was introduced by the previous Gentiloni government, which has introduced a “minimum income for inclusion” intended for poor families. This support, however, is very conditional, and includes obligations for the whole family to accept any proposed work and a benefit that averages 130 € per month per person. In addition, only € 1.8 billion have been assigned to fund this social benefit, which covers only a small fraction of the families in need of assistance. The M5S proposal is similar, only the value is increased to around to 780 € per month per person.
The 5 Star Movement has developed, however, the hability to bring forth, in the Italian political debate, a theme that in many other European countries has already been settled with income support for the unemployed or the poor.
Social support in the shape of minimum income has suffered funding cuts across Europe, given the austerity measures of the past few years, with the introduction of severe restrictions which reduce accessibility and introduce more work conditions. The Hartz IV reforms in Germany and the Universal Credit in the United Kingdom are examples of this. Neverthleless, this is the kind of social support the 5 Star Movement is putting forth at the moment, with the “citizen’s income” proposal.
Luigi Di Maio (Photo credit: Andreas Solaro/AFP/Getty Images)
Luigi Di Maio, the current vice-prime minister and minister of labour, is quick to clarify what he means by “citizen’s income”: “those receiving this income will not stay on the couch doing nothing, but will be called on to accept any kind of work, and will be forced to work for the State for at least eight hours per week in the meanwhile”. This adds to a very common mindset of conditional support, based on the belief that people will remain inactive if they are given that chance. A belief grounded on a firm reciprocity work ethic (workfare), particularly remote from the idea of basic income.
The proposal, which provides an arguable light condition to work (a possibility to refuse work if it doesn’t align with the minimum income recipient expectations), has never been discussed in Parliament, even though it was brought into parliamentary committees.
The Movement of which Luigi Di Maio is a part of has made a legislative proposal for this conditional minimum income, but the actual parliamentary debate has not yet started. Part of this proposal is the financing of the policy with a quick-start of 2 billion € in two years, to setup a system of employment certers for ensuring that receipients are controlled in their way to find employment. Simultaneously, a proposal of an income Flat Tax of 15% has also been made, which has been associated with tax cuts, given the present day tax landscape in Italy.
However, there have been other proposals already delivered for Parliamentary discussion, such as the popular bill for the introduction of a guaranteed minimum income, presented in 2013. This bill was backed by over 170 associations, after a six-month social campaign, 250 public initiatives and more than 50 000 signatures collected.
There is no doubt that all this political activity has awakened the debate about guaranteed income, or a right to an income, and also about unconditional basic income. In fact, a series of political campaigns have begun in Italy, particularly thanks to movements of precarious workers, who demand a “guaranteed income immediately” and who took the streets with demonstrations in front of the institutional offices. They lined up in front of job centers, asking for a guaranteed income to be given to them “now”. Citizens movements concerning the right to proper housing and several labour unions, have also demonstrated their request for a guaranteed basic income in several events, while other groups such as the femininst movement “non una di meno” propose ideas such as the self-determination income, which is similar to an unconditional basic income.
More information at:
Sabrina Del Pico, “Italy: 5 Star Movement and the confusing proposal of a citizen’s income“, Basic Income News, March 14th 2013
Brian Wang, “Italian government talks 780 € per month basic income and tax cuts dispite Greece like debt levels“, Next Big Future, June 2nd 2018
Andrew Kaplan, “Italy: Basic Income Pilot launched in Italian coastal city“, Basic Income News, December 28th 2016
Chris Weller, “8 basic income experiments to watch out for in 2017“, Business Insider, January 24th 2017
Chris Pleasance, “Italy will soon have a flat 15 per cent tax rate and universal income scheme if president agrees coalition deal between anti-establishment and far-right parties“, MailOnline, May 18th 2018
Sandro Gobetti, “The bitter Italian situation: no basic income and false protection for the poor“, Basic Income News, April 24th 2017
[in Italian]
Chiara Brusini, “Reddito di cittadinanza? Prima 50mila assunti. Centri per l’impiego senza risorse e banche dati [Citizens income? Only for the first 50 000 hired. Employment centers with resources or databases]“, Il Fatto Quotidiano, March 27th 2018
Basic Income Network Italy, “50mila firme per proposta di legge sul reddito minimo garantito [50 thousand signatures for a proposed law on guaranteed minimum income]“, February 28th 2018
Sandro Gobetti, “Roma 5 giugno: in assemblea per un reddito subito! [Rome, June 5th: assembly for an income immediately!]“, Basic Income Network Italy, June 4th 2018
Article reviewed by André Coelho
by Claire Bott | Jun 12, 2018 | News
Manitoba, the Canadian province which was the location of one of the most well-known basic income experiments of the last century, may be re-examining the possibility of instituting a basic income guarantee (BIG) following a recommendation from the Winnipeg Chamber of Commerce.
The Winnipeg Chamber, which describes itself as “Winnipeg’s largest business association”, recently contributed to the local Manitoban government’s consultation on poverty reduction strategies. Among the suggestions made by the Chamber was a further study into the viability of what is called minimum income, mincome, or a basic income guarantee.
A mincome differs from BIEN’s own definition of basic income due to being means-tested, and tapered off for higher income groups. However, it also differs from more traditional benefits systems for several reasons: it is not targeted at specific groups such as parents or those with disabilities; there are no requirements to spend it in certain ways; and it is guaranteed to all those below a defined income level. Some regard mincome as a stepping-stone to universal basic income (UBI), while others see it as an end in itself.
A policy paper released by the Winnipeg Chamber stated: “Minimum income supports the concept that all work has value, including non-paid work. Examples of non-paid work would be volunteering in the community or working in the home supporting family members. People have been taking on those roles without pay and some may think their work doesn’t have or create any value. Yet without those volunteers and homemakers, our society would suffer greatly. Earning an income increases an individual’s feeling of personal worth and value, which is invaluable.”
In 1973, one of the most well-known experiments on basic income took place in Manitoba, in a number of areas including the town of Dauphin. All residents of the town were provided with regular income, free of conditions, for a period of several years, and analysis of the data collected has shown that a number of positive effects resulted from this, ranging from improved school results for children to a reduction in several mental illness.
