by Toru Yamamori | Jul 5, 2018 | News
Scottish Parliament building.
As reported before on Basic Income News, the Scottish Government has committed to help local government advance their Universal Basic Income (UBI) experiments in four local municipalities (Glasgow, Edinburgh, Fife and North Ayrshire).
Here is an update. On the 20th June 2018, the first official meeting of ‘the Cross-Party Group in the Scottish Parliament on Basic Income’ was held in the Parliament. The group has been formed to examine the options for a basic income as a policy for reform of the current social security system in Scotland, including, where appropriate, its potential sources of funding. It will be co-chaired by Ivan McKee MSP (a member of the Scottish Parliament) and Alex Rowley MSP.
A Scottish Government spokesperson informed on the latest general situation as follows.
“Scottish Ministers have awarded funding to four local authorities in Scotland to undertake feasibility studies and to develop pilot models. This funding covers the financial years 2018-19 and 2019-20. The local authorities will submit a final business case, including proposed pilot models, to Scottish Ministers for consideration by March 2020 – this will set out full details of the ethical, legislative, financial and practical implementation of the pilot on the ground. A decision will be made at this stage whether to contribute to funding the proposed pilots.“
For more details, check Basic Income Scotland.
For more information:
Sara Bizarro, “Scotland: Scottish Government provides £250k to support feasibility work on BI pilots”, Basic Income News, December 2nd 2017
Kate McFarland, “Scotland, UK: Nobel-winning economist Joseph Stiglitz cautions again Basic Income during BBC interview”, Basic Income News, November 8th 2017
Claire Bott, “Scotland’s First Minister announces basic income experiments”, September 16th 2017
This article was reviewed by André Coelho.
by Andre Coelho | May 17, 2018 | News
Since the beginning of 2017 that basic income has been on the political agenda in Gironde, a southwestern region in France. At that time, several Administration task groups worked together, from December 2016 up to February 2017 to reflect on the possibility of implementing a basic income policy in Gironde. Those groups included social network representatives, entrepreneurs, social workers and volunteers, and have deliberated (on the 15th of February 2017), as a “citizen jury”, that basic income should be implemented in France, and adapted locally, in this case for the Gironde region.
Jean-Luc Gleyze, the President of Gironde’s Council Department and of its Permanent Commission has been behind this initiative since early 2017, and a strong supporter of launching a basic income experiment in Gironde. Many press references and a video were produced since that moment, motivated by this initiative, which was praised by former French prime-minister Manuel Valls. A motion proposal “for the experimentation with basic income in Gironde” was presented to government after it had already been reflected upon a French Parliament report (with its synthesis document), undersigned by Daniel Percheron, senator and former President of (French region) Nord Pas-de-Calais Regional Council. This report recommended the experimentation with the concept for 3-year periods, in each voluntary department (region), especially targeting young (18-25 years of age) and pre-retirement adults (50-65 years of age).
Jean-Luc Gleyse. Credit to Alban Gilbert.
At the moment, the basic income pilot project in Gironde is being planned for 2019, after President Emmanuel Macron has also shown his will to authorize and support local experiments. In a first step, this could mean co-financing in the order of 100 000 € to support feasibility studies, in preparation for actual experiments. These feasibility studies are thought to last for four to six months, and define the experimental parameters, such as population segments, duration and basic income level.
According to Jean-Luc Gleyse, basic income has the potential to respond positively to poverty and insecurity situations, adequately assist people as instability in the job market deepens due to automation, can provide choices in the present ever-changing lifestyle and also decrease the non-uptake of social benefits, “which reach 34% in Gironde and almost 40% nationally”.
Although the basic income experiment envisioned for Gironde has not been deployed yet, an online basic income simulator has been made available to citizens. This tool allows people to look at the possibilities for a basic income in France, and its consequences as far as financing is concerned.
More information at:
(in French)
Daniel Percheron, “Le revenue de base en France: de l’utopie à l’expérimentation [Basic Income in France: from utopia to experimentation]”, Sénat Francais, October 13th 201
Pierre Cheminade, “Vers un revenue universel en Gironde dés 2019 [Towards an universal basic income for Gironde in 2019]”, La Tribune Bordeaux, November 27th 2017
by Quentin Mathys | May 10, 2018 | News, Research
District of columbia Lincoln memorial Washington monument. Credit to: History Channel.
The district of Columbia has released on the 27th February 2018 a policy analysis that examines different approaches and strategies for providing a locally-funded guaranteed minimum income or universal basic income for its residents.
The study, named “Economic and policy impact statement: Approaches and strategies for providing a Minimum Income in the district of Columbia”, starts by evaluating the cost of living in absence of public social safety net assistance for three types of low-income households, 1) single adults without children, 2) single adults with one child, and 3) single adults with two children. The results show that a single adult without children would approximatively need an annual income of US$ 36 988 to meet their basic needs. For a single parent with one child, the annual income need is roughly US$ 66 113, while a single parent with two children would need about US$ 96 885 a year.
The paper then discusses the existing monetary and in-kind entitlements benefits, supports, and maintenance provided by the federal and District governments to low and moderate-income residents. According to the authors, the existing social safety net is strong enough to allow households who have full access to the public benefit programs to meet their basic needs. However, as Ryan Harrison underlines in his article about the report, households most in need for assistance do not qualify for the cash grants available, due to the work requirements of these means-tested policies.
In the next section of the study, the economic feasibility of implementing a basic income in the District is discussed. The authors explore three amounts for basic income where the first one is set at 100% of the Federal Poverty Line (FPL), the second one at 300% and the third one at 450% of the FPL. The associated gross cost of the three policies is estimated at 7, 21.5, and 32.2 billion US$ per year, respectively. According to the authors, the implementations of a basic income set at 450% of the FPL is the only approach that would allow all the households to meet their basic needs. This is debatable, since being above the FPL would, in principle, mean that basic needs were covered. However, the authors fear that such amount would lead to many households deciding to drop out of the workforce and making this implementation expensive and inefficient. This is also questionable, considering existing results from performed basic income pilots. Based on these issues, the report does not simulate the impact of providing a universal basic income in the Columbia district.
Furthermore, the authors only discuss the gross cost of implementing a basic income. Mentioning the net cost would have been relevant, as cost reductions can be expected in existing social assistance programs, and a restructuring of income taxes and /or other forms of taxes to finance the reform. The report, nevertheless, introduces an important discussion about the feasibility of a basic income implementation of in the district of Columbia.
More information at:
Susana Groves and John MacNeil, “Economic and policy impact statement: Approaches and strategies for providing a Minimum Income in the district of Columbia”, Office of the Budget Director of the Council of the District of Columbia, January 27th 2018
Ryan Harrison, “District of Columbia releases policy analysis for basic income”, Medium, April 8th 2018
“Council Budget Office releases Economic and Policy Impact Statement: Approaches and Strategies for Providing a Minimum Income in the District of Columbia”, David Grosso DC Council at-large, February 28th 2018
by Andre Coelho | Apr 28, 2018 | News
“There will always be hope”. Picture credit: Alex Gi.
On the 11th and 12th of October 2018, the University of Freiburg, in Germany, holds an interdisciplinary Conference titled “Basic Income and the Euro-Dividend as Sociopolitical Pillars of the EU and its Member Countries”. It will be organized by the Department of Economic Policy and Constitutional Economic Theory and the aim is to gather relevant leading researchers and thinkers in Europe to discuss an EU wide approach of a basic income.
In Europe, the public debate about a universal basic income (UBI) is usually a national one. In recent years a European version of a UBI has attracted more and more attention – primarily pushed by the suggestion of Philippe Van Parijs titled a “Euro-Dividend”. This conference aims to shed some light at pros and cons of a EU wide UBI regulation and its relation to national approaches from an interdisciplinary perspective. Both UBI approaches shall be analyzed and discussed with respect to justice, economic and migration effects, legal aspects, creation of solidarity in the EU, and political viability. On the first day, the conference will address general issues about UBI, while the schedule of the second day contains EU-related concepts just like the Euro-Dividend.
Papers are invited from areas such as Philosophy, Sociology, Political Science, Law, and Economics and even Technical Sciences addressing one or more of the following topics:
o UBI and arguments of freedom, solidarity, social and gender justice
o Changing time allocation and shifting time sovereignty, voluntarism and creativity
o Legal aspects of UBI
o Experiments and microsimulations on UBI’s level and impact
o UBI in the digital age / Robots, AI, Labor, and the Welfare State
o The European Pillar of Social Rights, UBI, and Euro-Dividend: Creating European
Solidarity
o Financial feasibility of a UBI and financing concepts of a Euro-Dividend
o EU labor market effects and migration (on international level and within the EU)
More information at:
The “Basic Income and the Euro-Dividend as Sociopolitical Pillars of the EU and its Member Countries” Conference website
by Patrick Hoare | Mar 5, 2018 | News, Research
Credit to: Flickr
In a new paper, published by the Institute of Labour Economics (IZA) in December 2017, James Browne of the Organisation for Economic Co-operation and Development (OECD) and Herwig Immervoll, of both the IZA and the OECD, have discussed what the social and economic consequences might be when replacing some existing social benefits with a comprehensive basic income. The study contributes to the expanding literature (building on the work of Atkinson 1995) that uses the microsimulation technique, a method that builds a computer program based on economic inputs (such as costs, income, expenditure and savings) in order to see what the effect of one variable output (such as poverty or inequality) would be if an input was changed. It was most recently developed by EUROMOD (the only multi-country EU-wide tax-benefit model currently available), and was used in Malcolm Torry’s paper, published in May 2017 by the Institute for Social and Economic Research, which analyzed similar scenarios and outcomes to Browne and Immervoll’s. This article will compare the two papers in an attempt to better understand the growing work in this area.
The Browne-Immervoll paper focused on four countries across Europe that have different population and labour-market structures, as well as very different tax and transfer policies: Finland, France, Italy and the United Kingdom. It looked at a situation where a universal basic income (UBI) would directly replace other working-age cash-payment benefits, including unemployment benefits, social assistance and other generalised minimum-income schemes, in-work benefits, early retirement pensions (i.e. pensions paid to those below retirement age whatever their official label), student maintenance grants and family benefits. In order to ensure that hardship was not ‘built into’ the policy changes, disability allowances and housing benefits would be retained, as well as the funding of other public services, such as the provision of healthcare and education. In line with BIEN’s definition of the UBI, payments would be, in all other ways, universal, paid to the individual, provided at regular intervals in cash, and be unconditional. The funding for the reform would have to take place under budget-neutrality, which would be achieved by taxing the basic income provided and by removing any tax-free allowance from the fiscal model. The marginal rates of tax, thereafter, would remain in accordance to the rates in place prior.
Torry’s paper, dealing specifically with the UK economy, also deemed it permissible to remove tax-free allowances and to tax all earned income in order to contribute toward the funding of the reform whilst maintaining budget-neutrality. Being guided by Hirsch’s recommendations (2015) based on political feasibility, however, Torry allowed for increased Income Tax rates of up to 3 percentage points across the board to help with this funding. Additionally, and significantly, his model maintained – where necessary – the means-tested benefits entirely removed in the Browne-Immervoll version, such that if the introduction of the UBI (which he, alongside others, label a ‘Citizen’s Basic Income’) wouldn’t be sufficient in improving the economic situation of an individual, then the means-tested benefits in place prior to the reform would be available as a form of supplementary benefit.
Given the conservative (or non-existent) fiscal expansion allowed across the modelling, which in both cases is argued as being necessary for realistic simulation, the rate of the net BI payments to be provided was significantly below the poverty line in all cases. In the Browne-Immervoll model, the UBI, for adults, would be at just 21% of poverty line level (defined as 50% of median household income) in Italy (€158), at 32% in the UK (£230), at 49% in Finland (€527), and at 50% in France (€456). The tapering of income at this level (or lower for 16 to 18 year olds) had the inevitable result of an increased rate of poverty in each scenario. This effect was especially pronounced in the UK, rising from 10% to 15%, due to the fact that the UK’s pre-UBI system relied heavily on means-testing and would have, in situations of such low income levels, provided additional benefits no longer available in the new model. Though Torry’s calculated UBI for the UK was only marginally higher for both adults (£264 per month) and young adults (£216 per month), the poverty rate under the conditions of his scheme followed the opposite trend and dropped substantially, falling from 14.84% to 11.8%. This difference – the effect of which is relatively even greater given the fact that Torry, in line with De Agostini, 2017, defined the poverty line as 60% of median household income – can largely be explained by the fact that Torry retained the very same means-tested benefits that Browne and Immervoll removed.
The analysis of potential gains and losses to income groups also reflected the difference in the methodologies used by the papers. The unwillingness in the Browne-Immervoll simulation to increase any current marginal rates of tax in order to collect revenue led to the expected result that those on lower incomes, overall, experienced larger relative losses. The very poorest – with little or no income – experienced gains, due to the universal and unconditional features of the new scheme, but the regressive nature of the flat uniform payments was not sufficiently offset by any progressive mechanisms, and thus the model delivered an overall regressive outcome. In contrast, Torry’s desire to avoid regressivity, and his willingness, therefore, to raise all the marginal tax rates, resulted in the top two highest earning deciles experiencing loses in disposable income of up to 5%, the third highest maintaining their level of disposable income, and the fourth decile down experiencing gains.
In order to understand the effect on work incentives of introducing a UBI, both papers focused on whether the reform would increase the effective tax rates on additional income, thus disincentivizing earning extra at the margins. Though this metric fell, on average, in both simulations – thus showing that there would be an increased (or, at least, not decreased) incentive to work – in the Browne-Immervoll model this was the consequence of removing the benefits associated with low-employment or unemployment, whereas in the Torry model this trend occurred in spite of keeping such benefits in place. As such, Torry’s simulation saw people getting wealthier – thus potentially moving up tax-brackets – but still managed to create a system where the financial rewards to work remained, or were even increased.
In conclusion, Browne and Immervoll determined that introducing a UBI in place of most other means-tested benefits would be costly and lead to negative social outcomes. Torry concluded, by contrast, that a UBI of similar level could be financially and politically feasible and would lead to many positive social outcomes. Given, however, that universal and uniform payments in an unequal society will, by definition, always increase regressivity if not offset by sufficiently progressive funding, the data gathered and logical conclusions derived are completely consistent with the papers’ respective methodologies. This comparative analysis shows that by adjusting a model’s predicated constraints, one can collect quantitative evidence to support different desired conclusions. On this basis, a UBI’s potential introduction does not seem to be determined by its feasibility (implementation, political likelihood, or positive economic outcome) but rather, by whether there can be consensus on what its purpose should be. That is, is UBI a mechanism for equalising wealth or a mechanism to simply provide everyone with something, no matter how small or large that payment may be?
More information at:
James Browne and Herwig Immervoll, ‘Mechanics of Replacing Benefit Systems with a Basic Income: Comparative Results from a Microsimulation Approach’, Institute of Labour Economics IZA, December 2017
A Atkinson, ‘Public Economics in Action: The Basic Income/Flat Tax Proposal’, Oxford: Clarendon Press, 1995
‘Why use EUROMOD?’, Euromod.ac.uk
Donald Hirsch, ‘Could ‘citizen’s income’ work?’, Joseph Rowntree Foundation, 2nd March 2015
Paola De Agostini, ‘EUROMOD Country Report: United Kingdom (UK)’, Euromod, February 2017
