by Andre Coelho | Feb 18, 2017 | News
(From left to right: Louise Haagh, Annie Miller, Becca Kirkpatrick, Ben Southwood)
As reported recently, a formal hearing called by the Work and Pensions Committee of the UK Parliament was carried out on the 12th of January 2017, in Birmingham, for a session dedicated to basic income. This hearing was recorded on video, and can be watched here.
From the Work and Pensions Committee, the members present (formally named as witnesses) were Steve McCabe (Chair), Mhari Black, Ms Karen Buck, James Cartlidge, Frank Field and Craig Mackinlay. On the witness bench, supporters and critics of basic income were aligned: Louise Haagh (Reader in Politics from the University of York and co-chair of the Basic Income Earth Network), Annie Miller (Chair of the Citizen’s Income Trust), Becca Kirkpatrick (Chair of the UNISON West Midlands Community Branch), Ben Southwood (Head of Research at the Adam Smith Institute) and Andrew Harrop (General Secretary of the Fabian Society) on the supporting side, along with Declan Gaffney (independent political consultant) and Peter Alcock (Emeritus Professor of Social Polity and Administration at the University of Birmingham) on the critical side.
The purpose of the hearing was one of collecting evidence from experts, specifically on the issue of basic income, on which Chairman Steve McCabe noted there seemed to be a “newfound interest”. He then went on to ask whether the witnesses were for or against the idea of basic income, and why, beginning with Louise Haagh.
Louise is firmly in favor of basic income, which she sees as a very important – crucial even – policy that welfare states need to implement, in order to relieve what she regards as a tendency towards more punitive strategies in present day social security schemes. Basic income can help a lot in providing “a more humane form of social security at the bottom of the welfare state”.
Louise Haagh
Seated next to Louise, Annie Miller starts by undersigning all her previous statements. In addition, she points to some definitional information about basic income, such as individuality, universality and non-conditionality except that of age. Miller also clarifies that basic income is only intended to cover basic needs, not luxurious lifestyles. That implies, given regional cost variations and various personal circumstances, that for instance housing and disability benefits would still need to be kept in place, at least in the United Kingdom (UK). She closes this initial statement by saying that basic income schemes will vary depending on the policy maker’s objectives.
Becca Kirkpatrick also began with her support for basic income, including the UNISON West Midlands labor union in that support. She cites ongoing discussions about basic income within the union she represents, which include a right to a dignified existence, as unconditional cash transfer, or as more widely conceived strategies to eradicate or alleviate poverty. Becca frames the question more generally not on a matter of technical or economic feasibility, but as an issue of political will, on “what the public of this country would like to see and believe they are entitled to”.
Following this, Ben Southwood went on to say that, although he supports basic income, he stands somewhere slightly different in relation to the issue. He defends basic income as a simplification of the welfare state, where he sees great opportunity for reducing or eliminating disincentives to work. Cutting most social benefits and replacing them with the basic income would, in his view, allow people currently on benefits a greater degree of freedom.
Annie Miller
On his part, Peter Alcock, while recognizing basic income’s appeal as a progressive idea for society, feels that it is “too good to be true”. Afraid of the co-option of basic income by neo-liberals – as an excuse for slashing away the welfare state – he looks upon it with as a “distraction from other more pressing issues”. He was followed, and supported by, Declan Gaffney. He was also weary that basic income supporters so often defend BI with promises of unconditionality even when, when practically considered, a basic income would still need to be attached to conditions. However, he does give the idea credit as “a thought experiment”.
Finally, Andrew Harrop said he was “sitting on the fence” with basic income. He thinks basic income should be seen more from a tax reform prism, rather than a change to social security. Harrop ultimately envisions a kind of hybrid system that combines universal unconditional cash transfers with means tested benefits for those “who have earned entitlement”.
Ms Karen Buck then raised the question of work and basic income: in an increasingly unstable labor market, with lower and less certain incomes accruing from work – how serious should these tendencies be regarded, and how might basic income address them? Declan Gaffney, in reply, doubted that, given the previous economic instability, we were witnessing permanent job loss due to technological change. In this he adhered to the views of others like Alan Manning. This was followed by a short discussion between Ms Karen Buck and Becca Kirkpatrick, over if the problem was the existence of conditions within the system, or the absence of the system. According to Becca, the system does not exist, not in a way as to “prioritize guaranteeing for everyone”, and went on to state the premises and broad results of UNISON internal debate on the issue of basic income. That survey, she says, has exceeded expectations as to the level of support for the idea, in general terms.
At that point, James Cartlidge joins the conversation, asking what he thinks is “the most important question”: how generous will this basic income be? Ben Southwood then introduces the issue of basic income versus the negative income tax issue. After clarification of the differences between these two systems of cash transfer, Annie Miller points out that the “housing benefit is not a problem of the basic income, it is a problem of the housing policy”. However, James, and to a certain extent, Peter Alcock state their opposition to basic income on a more fundamental basis: that people will not work if given a sufficiently generous basic income. James Cartlidge is also not convinced (about basic income), as some models, according to him, result in greater poverty with basic income.
Mhairi Black then raises the question of effects on the labor market, which she fears will be one without pay raises, if basic income is implemented. Louise doesn’t agree, arguing that people, with increased bargaining power, will only do difficult, unpleasant tasks if paid more to do them. On the other hand, going back to the quantitative value of basic income, Annie Miller reminds that 60% of the median equivalized household income is a good benchmark for quantifying the basic income in any given region, and elucidates about ways to finance it within the UK tax context. She goes on to state that this should actually be inscribed into a national constitution, if only the UK had one. On that point, Andrew Harrop states his preference for a hybrid tiered system, with both conditional and unconditional elements in it, plus some contributory part (for pensions and/or unemployment benefits).
Becca Kirkpatrick then introduced the issue of working conditions – on a general basis but also based on her own experience – which she thinks need to be addressed urgently, and strongly believes basic income is the way to do it. Louise then weights in by underlining that a basic income does not need to be a substitute for work regulations, nor to contributory benefit regimes. The two can go along in the same direction, one of reducing conditionality, complexity and punitive actions.
Craig Mackinlay from the Work and Pensions Committee was himself generally against the idea of a basic income, especially on the grounds that it will discourage work, plus it could increase poverty. Declan Gaffney, although also an opponent, recalls a study for the USA in which a 55% tax rate is applied to fund a basic income. Ben Southwood, on work changes due to basic income, sees a mixed effect which might somewhat reduce working hours – especially for single women with children – but at the same time increase income for extra hours worked. At this point, Louise introduces the calculations done by Malcom Torry, of the Citizen’s Income Trust, to fund a basic income in the UK, which predicts a 60£ a week for everybody, financed by progressive tax rates of 23% for incomes up to 42000£ per year, 43% up to 150000£ per year and 48% above that.
Peter Alcock
As final remarks, Andrew Harrop re-stated his vision of a hybrid social security scheme incorporating conditional and unconditional parcels. Declan declared himself reluctant to accept conditionality in the social security system, as well as some backstop sanctions regime. However, because he thinks basic income will discourage people from working, he favors a more traditional employment framework, with “permanent contracts, with proper in-work benefits with entitlements to holiday pay, sick pay and so on”. Peter Alcock firmly set his case against basic income, as something unachievable or that “isn’t worth pursuing”. Ben also concluded in support of basic income, although from a different point of view from other supporters. According to him, there is no principle distinction between a basic income and a negative income tax.
Becca Kirkpatrick went back to fundamental philosophical grounds justifying basic income, by saying that it “could have an interestingly powerful, new cohesive effect on society that we are yet to really experience”. She also rested her case with a unifying message that, effectively, the human species needs badly to unite, helped by such a policy as basic income, to address all other challenges it is facing in the world today. Annie Miller wrapped up her position by clarifying that, under a basic income scheme, higher earners are net payers of basic income, not receivers. She also added the important aspect of gender inequality, so much in favor of men presently, and that would be made more fair and realistic with basic income, paid individually. She still had time to summarize the current system, which she claimed is “just a regressive system”, and went on to point out that “we have freedom of choice for rich people but not for poor people”. Finally, Louise Haagh presented her closing statement underlying that, although with different views on the subject, the whole witness panel seems to show consensus that the benefits system needs changing. And that change will inevitably go towards basic income, if it is to become less punitive and more humane.
To view the full recording:
House of Commons Committees Youtube Channel, “Session on Citizen’s Income”, Work and Pensions Committee, live streamlined on the 12th January 2017
by Kate McFarland | Feb 16, 2017 | News
A research team consisting of economists, developmental psychologists, and a neuroscientist is developing an experiment to examine the effects of a basic income on the neural development of young children.
A new study of the effects of basic income on young children is being developed by a group of five researchers: Greg Duncan (economist at the University of California, Irvine), Kimberly Noble (neuroscientist at Teachers College, Columbia University), Katherine Magnuson (developmental psychologist at University of Wisconsin, Madison), Hirokazu Yoshikawa (developmental psychologist at New York University), and Lisa Gennetian (economist at New York University).
In a blog post about the proposed study, Duncan writes that “despite hundreds of studies of early childhood preschool and parenting programs, we know surprisingly little about the extent to which income itself is an active ingredient in children’s development very early in life.”
In the proposed experiment, 1000 low-income mothers of newborn children would be randomly assigned to one of two groups: an experimental group in which each mother is given a $333 monthly cash payment for the first 40 months of her child’s life, or a control group in which each mother is given only $20 per month. The mothers and children would be selected from several ethnically diverse communities in different regions of the US, including New York City, St. Paul, Omaha, and New Orleans.
When they reach three years of age, the children would be tested for cognitive and behavioral development, specifically “self-regulation, cognitive, language and memory development, as well as direct measures of brain activity.” Thus, Duncan states, “This study will thus provide the first definitive understanding of the extent to which a basic income plays a causal role in shaping the early socio-emotional, cognitive and brain development of children in low-income families.”
Additionally, the researchers plan to collect information on parental stress, family expenditures, parenting practices, and child care arrangements at several points during the experiment.
The researchers have already completed a pilot study to test the feasibility of their procedures for selecting participants, transferring money to them, and gathering data. In the pilot, which was launched in June 2014 at the New York Presbyterian Hospital, 30 low-income mothers were randomly assigned to either (a) an experimental group receiving $100 per month or (b) a control group receiving $20 per month. The pilot project was carried out for 12 months, after which the mothers completed an interview about their parenting practices and household expenditures.
“While the results should be viewed with caution because of the small sample size,” Duncan says, “we found some evidence that the higher monthly income reduced household chaos and increased mother-child learning activities and child care expenditures.”
The researchers are currently raising funds to launch the full experiment, which they aim to do later in 2017.
Read More:
Greg Duncan, “When a Basic Income Matters Most”, Medium: Economic Security Project, December 19, 2016.
Reviewed by Dawn Howard
Photo: “Toddler” CC BY-ND 2.0 攝影家9號
by Kate McFarland | Feb 11, 2017 | News
Omidyar Network, a “philanthropic investment firm” created by eBay founded Pierre Omidyar, announced on February 7 that it will donate up to $493,000 to the New York based charity organization GiveDirectly. The funds will be used to support GiveDirectly’s major basic income experiment in Kenya.
In the largest and longest-running basic income trial to date, GiveDirectly will provide unconditional cash transfers to the residents of 200 villages in rural Kenya (about 26,000 people in total). The residents of 40 of these villages (about 6,000 people) will receive monthly payments for 12 years. At about $0.75 per day, the amount of the basic income is roughly half of the average income in rural Kenya.
With the grant from the Omidyar Network, GiveDirectly is now just over $6 million shy of fully funding the full $30 million experiment, Communications Associate Max Chapnick tells Basic Income News. Chapnick says, “Since we announced our basic income experiment back in April we’ve seen an outpouring of support from thousands of donors across the world. We’re grateful for the latest grant from the Omidyar Network, whose substantial support will help poor families meet daily needs, while providing valuable data on basic income.”
Mike Kubzansky and Tracy Williams of the Omidyar Network explain the firm’s decision to donate in a blog post titled “Why We Invested: GiveDirectly.”
Citing a recent literature review of 15 years of research on direct cash transfers (“Cash transfers: what does the evidence say?”), Kubzansky and Williams extol the benefits of cash transfer programs in “alleviating poverty and empowering people”:
“[C]ash transfer programs can potentially help to address bigger issues facing our society, such as rising income volatility, lack of secure benefits, social instability, and the changing nature of work. Concerns around these themes have recently sparked growing attention to a particular form of cash transfer: the idea of universal basic income (UBI)—a transfer that would be regular, long-term, a meaningful amount, and available to everyone.”
Kubzansky and Williams also discuss the threat of automation and the rise of the “gig economy” as forces driving interest in UBI. They go on to note, however, that “no study to date has been conducted with sufficient size, rigor, timescale, or universality to truly test the impact of a full-fledged UBI program.”
It’s to help counter this latter deficit, the authors explain, that Omidyar Network has chosen to invest in GiveDirectly’s experiment — which they applaud for its scope, ambition, and rigor.
“Partnering with top economists (reviewed by their institutional review boards) at Princeton and MIT, GiveDirectly is ensuring the experiment is carried out with scientific rigor and responsibly, generating evidence to help answer critical questions on the impact of UBI.”
Kubzansky and Williams refrain from an all-out endorsement of UBI. Instead, they adopt a more cautious“wait and see” approach, stating, “While we don’t know what the right answer will be, or whether UBI will prove useful or feasible, this is an important first step on generating data, so that policymakers can make informed decisions.”
At the same time, though, the philanthropists are clearly willing to invest in empirical studies of its feasibility — even beyond the $493,000 donation to GiveDirectly. In concluding their blog post, Kubzansky and Williams state:
“GiveDirectly’s pilot in Kenya is geographically-specific and focuses more on the issues around poverty alleviation than questions about jobs displaced by technological change. As such, Omidyar Network will look to support additional studies on UBI to diversify the growing body of research across markets, conditions, and formats.”
Reviewed by Cameron McLeod and Dawn Howard
Photo: “Mothers with their children in Loiturerei village, Kenya” (CC BY-NC-ND 2.0 DFID)
by Hilde Latour | Feb 9, 2017 | Research
David Piachaud, Emeritus Professor of Social Policy at the London School of Economics and an associate of The Centre for the Analysis of Social Exclusion (CASE), published a discussion paper on Citizens’ Income (CI) in December of last year.
Abstract:
A Citizen’s Income, or a Basic Income, is not a new idea but it has been receiving
increasing attention. There is confusion about the idea and an attempt is made to
distinguish different concepts. Then a full Citizen’s Income is examined in relation to four key criteria: the justice of an unconditional benefit; the possibility and fairness of a simple individual benefit; economic efficiency; and political feasibility. On all four criteria, Citizen’s Income fails. It is concluded that Citizen’s Income is a wasteful distraction from more practical methods of tackling poverty and inequality and ensuring all have a right to an adequate income.
Summary
Piachaud first acknowledges that a CI, or a basic income, is attractive in its simplicity, and he cites article 25 of the UN Declaration of Human Rights of 1948: “Everyone has a right to a standard of living adequate for the health and well-being of himself and his family.”
Piachaud states, “A Citizen’s Income could ensure that right was achieved.”
He then describes four different concepts of a Citizen’s Income (CI):
- Bonus CI (a basic income based on a dividend)
- Partial CI (a basic income for particular groups only)
- Supplemental CI (additional income alongside a social security system)
- Full CI (an unconditional basic income adequate to live on to all citizens)
In the rest of his paper, Piachaud examines a full CI (which in his definition is not based on dividend but fully financed out of taxation) in relation to four key criteria. Through his analysis, he concludes that Citizens’ Income fails all four of these tests:
- The justice of an unconditional benefit
Piachaud discusses Philippe Van Parijs’s paper “Why Surfers Should be Fed: The Liberal Case for an Unconditional Basic Income” and argues that it is unfair (and therefore unjust) for healthy people to live off the labor of others.
- The possibility and fairness of a simple individual benefit
A full CI is intended to ensure (in a simple manner) that needs are met, but not everyone has the same needs. Piachaud gives examples related to disability, diversity in housing costs, and diversity in living arrangements (people living alone or with others). Basing a CI on individuals and assuming their needs are identical, is therefore unjust, Piachaud argues. “The social security and in some ways the tax system attempt to take these factors into account, however inadequately.”
- Economic efficiency
Piachaud defines a full CI as an unconditional income fully financed out of taxation. With respect to the economic efficiency, he argues:
“A full CI goes to everyone unconditionally, whereas social security is targeted at certain groups who in the absence of social security would be most likely to be poor. In consequence, a full CI that replaces social security is far more costly than social security, and this has to be paid for from higher taxes on all incomes with far-reaching economic consequences. The inevitable conclusion is, therefore, that a targeted social security system was, is, and will be more efficient and equitable than a full CI.”
- Political feasibility
Piachaud finds it very unlikely any political party will adopt an unconditional CI as a policy proposal either in the full or supplemental forms
After this analysis, David Piachaud concludes, “Citizen’s Income is a wasteful distraction from more practical methods of tackling poverty and inequality and ensuring all have a right to an adequate income.”
Info and links
The full paper can be found here.
Special thanks to Josh Martin and Danny Pearlberg for reviewing this article
Photo: diversity by Nabeelah Is, january 2012, CC-BY-SA 2.0
by Kate McFarland | Jan 28, 2017 | Research
Jurgen De Wispelaere (Visiting Research Fellow at the University of Tampere) and Lindsay Stirton (Professor of Public Law at the University of Sussex) have coauthored a new article in which they argue that basic income advocates must not ignore questions about how the policy is to be administered (“When Basic Income Meets Professor Pangloss: Ignoring Public Administration and Its Perils”).
De Wispelaere and Stirton consider several reasons for which basic income supporters believe that issues of administration are immaterial, such as the assumption that technology will render administration unproblematic and the comparative claim that administering a basic income could not be more difficult than administering conditional benefits. The authors find such justifications insufficient, maintaining that the challenges of administering a basic income are non-trivial, and that their resolution can impact the political feasibility and even ethicality of a basic income proposal.
The article has been published in the British political journal The Political Quarterly.
Jurgen De Wispelaere and Lindsay Stirton, “When Basic Income Meets Professor Pangloss: Ignoring Public Administration and Its Perils,” The Political Quarterly, December 14, 2016.
Abstract:
Basic income advocates propose a model that they believe will dramatically improve on current welfare programmes by alleviating poverty, reducing involuntary unemployment and social exclusion, redistributing care work, achieving a better work–life balance, and so on. Whether these expected social effects materialise in practice critically depends on how the model is implemented, but on this topic the basic income debate remains largely silent. Few advocates explicitly consider questions of implementation, and those that do are typically dismissive of the administrative challenges of implementing a basic income and critical (even overtly hostile) towards bureaucracy. In this contribution we briefly examine (and rebut) several reasons that have led basic income advocates to ignore administration. The main peril of such neglect, we argue, is that it misleads basic income advocates into a form of Panglossian optimism that risks causing basic income advocacy to become self-defeating.
Post reviewed by Danny Pearlberg
Photo: Scene from theatrical production of Candide (Pangloss on viewer’s left), CC BY-NC-ND 2.0 shakespearetheatreco.
