Editor’s note: The use of the term ‘basic income’ or ‘universal income’ here does not correspond to BIEN’s definition of basic income, since the payments each month will fluctuate with income. ‘Socle citoyen’ corresponds more closely to a Negative Income Tax, adjusted on a monthly basis.
On November 26 2020, the National Assembly voted on the resolution tabled by the group Agir Ensemble launching a public debate on the creation of a universal income called “Socle citoyen.” Why do you welcome this vote?
Marc de Basquiat: This vote is historic for three reasons. First of all, it was very broad, bringing together the votes of deputies belonging to five political groups close to the centre of the political spectrum: LREM, Agir Ensemble, MoDem, Libertés et Territoires, Socialists and related parties. Credit for this result goes to Valérie Petit, a northern representative, who launched and led an informal working group on the Socle citoyen project based on the platform we published in the Observateur on May 4 with the support of 80 co-signatories, including 50 parliamentarians. In-depth work was carried out, with a series of remote (because of Covid) meetings. The 48 deputies who tabled the resolution voted on November 26th really know the stakes and the key principles of the technical solution that we propose to study.
The second reason to applaud is the strong support of the La République En Marche deputies. Seventy of them voted in favour of the Agir Ensemble group’s resolution. At a time when many people have doubts about representative democracy, we can salute here the joint search for consensual solutions for our country by representatives from diverse groups, including the governing party. Let us recall that at its creation in 1988 the Revenu Minimum d’Insertion in 1988 received the deputies almost unanimous support. Yes, a reform as ambitious as the one proposed by this resolution aims to achieve consensus from all parties of the National Assembly. This is the process that Brigitte Bourguignon, Minister Delegate for Autonomy, supported with her speech.
The third reason to celebrate this advance is the fiscal nature of the Socle citoyen proposal that it is to be studied. Let us quote from the enacted text:
“The Socle citoyen is unprecedented in that it combines tax reform and improvements in social benefits. First of all, we propose to establish the universality of income tax: every French person, from the first euro of income, is taxed proportionally. This very fact constitutes being a part of and being responsible to the national community. It links one to the collective destiny and at the same time ensures assistance and solidarity.
With the mechanism of the Socle citoyen, the universal income becomes an individual tax credit, negative or positive. Thanks to tax withholding at the source, calculation and payment are now possible in almost real time. This is one of the great social benefits of this major tax reform: it makes it possible to calculate and automatically pay out the Socle citoyen, based on the universal tax, at the same time the reform achieves universality.
The fact that universal income is approached from a tax perspective revolutionizes the question of its economic feasibility. It is not a question of creating an nth social benefit that is painfully financed, but, first of all, of ensuring that all citizens are involved, in their own way, in the financing of public services. The same “right for all” is possible because, beforehand, we ensure the same “fiscal duty for all.”
Is this a sign that something is changing, at the parliamentary level and elsewhere, with regard to universal basic income?
Despite the trauma of the 2017 presidential campaign and the failure of Benoît Hamon’s project for a Universal Existence Income, many—of all political stripes, I can attest to that—grasped the importance of a transfer mechanism that would automatically guarantee a minimum of resources to everyone, regardless of the vagaries of life. But until recently, we hesitated to talk about it for fear of being suspected of providing a caution for the Hamonist party, Generation-S.
I believe that with the Covid-19 crisis, we all understand that the issues we are facing go far beyond political posturing and partisan arrangements. I am happy that the only Hamonist deputy in the Assembly, Régis Juanico, has lent his voice to the resolution drafted by Liberal deputy Valérie Petit. It is by working together that our elected officials will be able to re-inspire politics!
On the other hand, I am disappointed that no Les Républicains representatives dared to break with a conservative voting directive. The speech of LR deputy Stéphane Viry started well, but its conclusion is saddening:
“The group Les Républicains salutes the willingness of the National Assembly, the most essential forum for public debate, to address this major issue, since it touches on the fight against poverty, for work, and social cohesion. These are all foundations on which to build a social project, national cohesion, dynamism for our country. As part of our efforts, we must constantly, all together, open up new horizons. (…) You are right to put this debate on the table, and our group is very much in favour of a frank reflection on work, on activity for all, on social protection, on the fight against poverty. However, as it stands, as formulated, we will not follow your proposal.”
In 2016, the Senate had carried out a mission of information on basic income, in which all the political movements, from the right to the communists, took part, leading to the formulation of a consensual report that illuminated the way forward. Let us hope that the 11 deputies who voted against the resolution on November 26 will discover, moving forward, that the Socle citoyen has no other ambition than to strengthen cohesion, economic dynamism and fraternity in our country.
What are the liberal arguments to defend the proposal of a universal basic income and what form does it take in this framework?
What seems to me to be common to all liberals—whether one feels on the right or on the left for that matter—is the importance one places on individual choice. A Socle citoyen can be formulated as follows: everyone pools the same share of their income (around 30%) and benefits from the same individual transfer (around 500 euros per month). With this single rule, which is easy to implement using the mechanism of withholding tax, everyone is in the same boat and knows exactly how the income tax they pay or the assistance they receive will evolve according to the events in their lives: change of job or loss of work, marriage or divorce, etc. the impact is always easy to calculate.
Such a proposal is not really a revolution. In fact, for tax households that are subject to the 30% marginal rate, my proposal is just a reformulation of the current tax calculation, with an identical result. For 2020 income, taxpayers in this bracket pay a tax whose monthly calculation is 30% of the taxable income of the previous month, minus €498.52 per tax share (let’s say €500 for a single person and €1,000 for a couple). This would not change much.
The Socle citoyen amounts to applying the tax calculation formula for wealthy taxpayers to everyone! A single person without income who currently lives with an RSA of €497.01 plus a housing allowance would receive €500 and still receive the same housing allowance. No change in his or her case. On the other hand, all other cases of poor and low-income households would be winners, to what extent, depending on what they have today.
You have been defending universal basic income for several years, as president of the Association pour l’Instauration d’un Revenu d’Existence (AIRE) and as a Free Generation expert. Do you think that the coronavirus crisis can bring about a change in opinion?
In March, with the crisis, millions of people discovered unemployment. In restaurants, transport, household services, construction, shops… All these jobs where you work hard, where you get up early. The State has multiplied measures, first by taking over from employers to pay more than half of the wages! We can see that a hazard can bring the bravest of workers to their knees, making them dependent on the community to ensure their subsistence.
This invites everyone to question the solidity of their inclusion in society. Am I in this position only because I deserve it? Do I owe nothing to anyone? How could the country have endured a “laissez-faire” logic, where everyone was left to fend for themselves in order to make a living despite the fear of catching a virus—whose danger was not really understood at the time?
Today, everyone knows they are vulnerable. Everyone has also experienced their own docility! During the first confinement, we were happy to cheer from the windows, it gave us a recreation and a semblance of social interaction. But deep down, we really understood that we are vulnerable and that we have a vital need of others. This is why the ” Socle citoyen ” project speaks to everyone: we contribute as citizens—through taxes—to ensuring a vital base for everyone. In these circumstances, no one is spreading foolish rhetoric about handouts?
Is the Socle citoyen universel an effective response to the economic crisis that is looming with the coronavirus?
No one knows how the crisis will evolve. In the second quarter of 2020, China is the only G20 country whose GDP has grown. Germany posted -12%, France -18%, India -24%. The second wave caused us to fall back, less sharply, but global economic balances will take time to readjust. Public debt is exploding. Even if it is relatively painless in the short term, no one can predict what interest rates will be in 10 years. Our accumulated debts may weigh very heavily, preventing governments from playing their role as buffers against social shocks. At that time, we will be happy to have established a Socle citoyen, the universal distribution of part of the income among all, so that no one will be in total destitution.
We can also venture the hypothesis that our country will regain the growth necessary to adapt and face the planetary challenges. Here again, the egalitarian sharing of a portion of the fruits of growth will be a tremendous driving force for national unity, a multiplier of energies.
A new film is hoping to answer the question of whether life itself should be subsidized. Directors Sean Blacknell and Wayne Walsh have produced a new documentary “The Cost of Living” which discusses the mental and physical burden placed on those with unstable incomes and whether basic income is the right remedy.
The film interviews many prominent basic income scholars, such as Guy Standing and Barb Jacobson. It is focused on the issues specifically facing the United Kingdom, where there are “3.5 million people in ‘in-work poverty.’” With the arrival of COVID-19, the film-makers argue the discussion about basic income is even more pertinent than ever.
The filmmakers expressed that many of the current programs in the UK are failing to rise to the moment with extreme distress around the country, such as the universal credit which they called “dehumanizing.”
“You have to prove you are deserving,” Blacknell said.
Steve Botrill, the deputy chief executive of Urban Outreach Bolton, is interviewed in the documentary. He said that much of the current stress on the poor in the UK is due to reductions in benefits and more stringent conditions placed on social services.
As a result, Botrill said that this is a cause for the “astronomical” growth of food banks in the UK in recent years.
In the documentary, it is argued that much of a person’s wealth is dependent on luck, such as where a person is born.
Initially, the film was going to take a broad look at social programs, but narrowed to basic income as they moved forward. In the long-run, the filmmakers noted that this discussion around basic income will continue to be important because of the changing economic and technology trends around the world.
However, the filmmakers emphasized that after interviewing many scholars they do not believe basic income is a “panacea” on its own. By interviewing a wide range of viewpoints, they hoped to create a “more nuanced take” on basic income.
With new spikes of COVID-19 around the world, Wayne and Blacknell hope the film can reach a wider audience to facilitate this debate. It is now available on Amazon Prime for streaming.
Taiwan held its first-ever basic income march on Sunday, attracting over 100 participants to rally in front of Taiwan’s Legislative Yuan. Current and former legislators joined the march led by UBI Taiwan, calling for greater discussion of a youth dividend and guaranteeing the right to a basic livelihood for all Taiwanese.
A prominent national legislator in Taiwan People’s Party, Tsai Pi-ru, gave a speech at the opening of the march in front of the Legislative Yuan. She said she attended because she wanted to show her support for Taiwan’s young people who are “bravely” speaking out. Tsai discussed the possibility of using a carbon tax and dividend as a step toward basic income.
“While participating in the basic income parade today, I saw young friends stand up. They are courageous to stand up for a new idea that is easily misunderstood,” she said.
National legislator from Taiwan People’s Party Tsai Pi-ru addresses the rally outside of the Legislative Yuan in Taipei, Taiwan. Photo: Lin Yen Ting / UBI Taiwan 攝影：林彥廷 / 台灣無條件基本收入協會
UBI Taiwan informally began in 2016 and was formally established in 2018. In that time, the group has held three international conferences and produced multiple white papers analyzing methods for implementing basic income. Most recently, UBI Taiwan released a white paper advocating for an emergency basic income, meeting with legislators in early 2020 to discuss the possibility of including cash transfers in Taiwan’s stimulus measures.
The organizers said there were three main demands of the march: guarantee the right to basic subsistence, protect a sense of economic security, and prevent working families from being trapped in low-paying jobs.
As the global pandemic continues to rage on, Taiwan has not experienced a local transmission for over 200 days which allowed the rally to take place without restrictions. Nonetheless, march organizers said the economic uncertainty caused by the pandemic created a new urgency for the basic income discussion in Taiwan. Despite expecting modest growth overall this year, Taiwan has experienced uneven effects from the global downturn which disproportionately harmed low-income families.
Marchers walk near Taipei Main Station in Taipei, Taiwan. Photo: Lin Yen Ting / UBI Taiwan 攝影：林彥廷 / 台灣無條件基本收入協會
Former national legislator and magistrate of Tainan county Su Huan-chih said at the march that promoting the basic income system will help young people increase their flexibility and opportunities in choosing jobs, and will also help the unemployed maintain their dignity.
The General-Secretary of Taiwan’s Green Party Rita Jhang said basic income “provides universal protection for every person, alleviating the plight of exploitation and overwork.” Jhang said Taiwan’s current social welfare system with strict conditions and qualifications is not well suited for the rapidly changing modern era.
“When people no longer have to worry about their basic necessities, they can make longer-term plans for their lives and they can engage in more creative and public welfare work,” Jhang said.
According to Tsai, many of the criticisms against basic income were made 30 years ago when Taiwan began implementing its early social welfare system. At the time, she said many were worried social welfare would bankrupt the government. But welfare is not the area where Taiwan’s government is wasting money, she said.
“The biggest problem is that the government wastes money to build a lot of large and improper construction projects and unused government buildings. These wasteful projects create debt and harm the natural environment,” Tsai said.
To help educate the public on the issues facing Taiwan, the rally included booths to educate the public on basic income, share real stories related to basic income and the global basic income movement, as well as an open space for the public to discuss questions about basic income and the future tech-driven economy.
Prior to the march, prominent basic income scholars from around the world sent their advice and well wishes to Taiwan including Sarath Davala, the chairman of Basic Income Earth Network. Davala said that he hopes the basic income march in Taiwan becomes an “example” for other countries in the region.
“The march that is being organized in Taiwan is a sign of how strong the UBI Taiwan movement has come to and it has the capacity to provide and influence the government to adopt this innovative system,” Davala said.
University of London Professor Guy Standing said in his video address to Taiwan’s march that the pandemic has shown “the resilience of society and the resilience of all of us as individuals will depend on the resilience of the weakest members of society.”
“Now is the moment for a basic income movement and a basic income system. Brave politicians must take this opportunity and usher in a better society,” Standing said.
A rally outside the Legislative Yuan kicked off Taiwan’s basic income march.Photo: Lin Yen Ting / UBI Taiwan 攝影：林彥廷 / 台灣無條件基本收入協會
For Tsai, Taiwan’s first basic income march was a starting point for a larger conversation about how to reimagine Taiwan’s society for the future. She discussed how basic income could help address the problems of Taipei’s high housing prices and the displacement caused by Artificial Intelligence, while encouraging greater risk-taking and entrepreneurship.
“The great changes in the world start from small places. The world is always changing, and our imagination needs to be liberated,” Tsai said.
UBI Taiwan Chairman Tyler Prochazka took the stage to discuss why he has advocated for basic income in Taiwan. Prochazka moved from the United States to Taiwan in 2016 under a Fulbright proposal of studying the feasibility of basic income in Taiwan.
“I truly believe there is a real possibility to implement basic income in Taiwan and open up the unrealized potential among Taiwan’s young people,” Prochazka said.
By: Carlos Alvarado Mendoza y Jonathan Menkos Zeissig Translation: Julio Linares The Spanish version of the article can be found here.
Recently, the Central American Institute for Fiscal Studies (Icefi) proposed for Central America the implementation of a universal basic income (UBI), seeking that the States of the isthmus have a minimum guarantee of social protection, while contributing to counteract the impact of the Covid-19 pandemic. A UBI, accompanied by other public, social and economic investments, would accelerate the fulfillment of the 2030 Agenda for Sustainable Development and, by proposing a change structural in the welfare and economic growth model, could be the basis for the discussion of new social, political, economic and prosecutors in Central America.
Central American governments have implemented actions in order to contain the spread of the virus and reduce the impacts on people’s health and economic activity. However, these states have faced a complex scenario, although to varying degrees in each country, as the pandemic has exacerbated structural problems mainly related to the lack of equity in access and care of public health systems, the weak health care system and social protection and the low capacity to generate formal employment and productive transformation, which has as a consequence lead to high levels of inequality and poverty. Indeed, prior to the crisis, 45 out of every 100 Central Americans (about 22.5 million people) lives in conditions of poverty; furthermore, 82 out of every 100 poor Central Americans lives in Guatemala, El Salvador, and Honduras.
According to estimates by the Institute, the current crisis could cause the loss of up to 1.9 million jobs, and induce a significant increase in general and extreme poverty. Especially in Guatemala, El Salvador and Honduras, the current crisis could add at least 4.9 million people to poverty, according to data from the Economic Commission for Latin America and the Caribbean (ECLAC), which would further erode the weak social fabric of these countries of the region (Economic Commission for Latin America and the Caribbean (ECLAC), 2020, “Latin America and the Caribbean in the face of the COVID-19 pandemic: economic and social effects”, Special Report COVID-19 No. 3). Among the main measures that have been implemented by most Central American governments to limit the impact on the population, in terms of ensuring income, food security and basic services, particularly for vulnerable groups, are: food delivery; the creation of new monetary transfers; suspension of payment for basic services (particularly water, power and telephone); and, the increase in the amount of previously existing monetary transfers. Likewise, different types of protection programs have been put in place for workers in the formal sector, among which are teleworking, paid absence from work, unemployment insurance, reduction of working hours, among others. Additionally, additional direct support has been provided to individuals and families, consisting of credit payment facilities, support for workers in the informal sector, among others.
Although the measures adopted by the governments of the region are limited and of a temporary nature, they indicate the urgent need to implement permanent actions, from a long-term perspective, that make it possible to guarantee the gradual reduction of poverty in the countries of the region until they are eliminated and the rights of the people by strengthening States through the universal provision of social protection that allows rebuilding the social fabric of those countries.
Faced with the above, the Icefi has urged the Central American States expand and strengthen their social protection systems in a way that protect the population, prioritizing traditionally excluded groups and the most vulnerable, the economic and financial damages derived the crisis and accelerate the process of economic recovery. To achieve these objectives quickly and effectively, the Institute proposes the implementation launch of a universal basic income (UBI) that eliminates extreme poverty and significantly reduces general poverty. In its III Report Central American fiscal policy ―whose first chapters were published in July―, the Institute has calculated the costs and effects of the application of a universal basic income.
For the implementation of a UBI, the Icefi proposes to assign a sum monetary to each member of society, equivalent to the amount associated with the international threshold of extreme poverty (USD 1.90 per day in parity of 2011 purchasing power). From that account, you would also be paying the achievement of the 2030 Agenda of the Sustainable Development Goals (SDGs), in particular goals 1, 2, 3, 5, 8, 10, 12, and 16. The application of a UBI has an operational simplicity that pays to its rapid execution, avoiding creating more bureaucracy, opening paths to corruption and keeping beneficiaries in the trap of poverty. By being assigned unconditionally, it would allow not only to eradicate extreme poverty, decrease overall poverty, reduce inequality in income distribution, increase levels of economic activity and create the conditions for new jobs, but also the measure should provoke the modernization of fiscal policy and rebalancing necessary of responsibilities between citizens, companies and the government. From that account, when proposing a structural change in the welfare and economic growth model, UBI could be the basis for discussion of new social, political, economic and fiscal pacts in Central America.
The initial estimates made by the Institute suggest that the annual investment required for the implementation of a UBI ranges from 1.2% and 7.5% of GDP for the six countries of the region, Honduras being the country that would require more investment due to the size of its GDP and the number of inhabitants of the country. Similarly, Nicaragua would require an investment of approximately 5.8% of GDP; while in Guatemala and El Salvador, investment necessary would reach between 5.0% and 5.3% of GDP, respectively. In contrast, the countries that would face the least fiscal pressure to implement this policy are Costa Rica and Panama, whose investment would be around 2.2% and 1.2% of GDP, respectively.
Figure 1: Central America: necessary increase in public spending by the central administration to implement a UBI from threshold poverty level (2020-2030, figures as percentages of GDP).
At the Institute’s discretion, the implementation of a UBI could be carried out gradually, as shown in Figure 1 ―in a maximum period of ten years and serving the population in the territories with the highest poverty and less development, consistent with the achievement of the Sustainable Development Goals and with the necessary institutional, fiscal and economic restructuring that guarantees the effectiveness and sustainability of this policy over time. This way of gradually achieving the universality of basic income would allow States to advance comprehensively in the universalization of other public goods and services related to education, health, water and environmental sanitation, housing, among others.
According to estimates by the Institute, among the greatest impacts of executing this agenda, in addition to the elimination of extreme poverty, is the generation of 2.0 million direct jobs; the increase average of 20% in the rhythm of economic activity, mainly driven by domestic production; as well as improvements in the indicators of social welfare and equality. For the general fulfillment of the SDG2030 Agenda in the Central American region, the Institute has identified various probable sources of financing, among which the increase in tax collection stands out. As a result of the reduction of illicit capital flows, smuggling, evasion of taxes and fiscal privileges; as well as by the increase of some taxes that, additionally, could improve the global progressiveness of the tax system. In some states, indebtedness can also be considered as a financing mechanism. Additionally, the Institute reiterates that, on the side of public spending, it is possible to generate spaces additional prosecutors through two channels: by eliminating the items that are not oriented towards development goals, so that resources can be reallocated to programs that have such an orientation; as well as by improving efficiency of those that can generate better results in economic and social terms.
Table 1: Fiscal Space on the Taxation Side
The gradual implementation of a universal basic income, together with the advancement of public investments that guarantee the fulfillment of development goals, and a comprehensive fiscal reform ―more income, public spending based on results, greater transparency and an effective fight against corruption – are the elements that will allow Central Americans to successfully face this health and economic crisis, expanding rights and rebalancing social responsibilities. For this reason, the Institute urges all of society – peasant movements and promoters of individual human rights, workers, businessmen, academia, political parties and governments in office – to promote an open and sensible national dialogue, with a vision of the future, that has as objective of transforming States through a social, economic and fiscal pact that changes current political and socioeconomic trends and sets Central America on the path of sustainable, inclusive and democratic development to which the great majority aspire.
In particular, the states of the countries of the region must advance in the strengthening of their social protection programs, a central element of policy that allows reducing existing inequalities, not only in terms of income, but also from an inclusive perspective in economic terms and social that promote social cohesion. Furthermore, for Icefi, reducing the exacerbation of the poverty conditions in which more than half of Central Americans live may be possible by universalizing access to social protection programs, since the current context has only accentuated the existing limitations in terms of of the economic and social model. A better Central America is possible to the extent that an inclusive development model is formulated and built in economic, social and environmental terms, so that a universal basic income ensures a minimum base of protection that is accompanied by policies that guarantee for all a quality education; access to timely, effective and efficient health services; have public services of economic and social infrastructure that favor social cohesion; and that all implemented policies are consistent with an environmentally friendly strategy.
In the current turbulent times, there is a fierce debate emerging how cities should adjust to rapidly changing economic and technological trends. Smart City Education Inside invited two experts to discuss the prospect of cash transfers to enhance sustainability and provide equitable educational opportunities for students.
Smart City Online Education Inside is a joint project between the Digital Education Institute, III, and the Talent Circulation Alliance. Under the supervision of the Bureau of Industrial Development Taiwan, the project launched a series of panel and keynote speaking events for those interested in education technology, sustainable learning, and sustainable society.
On Tuesday (8/11), Mr. Ameya Pawar, who had served two terms on the Chicago City Council and was the first Asian and Indian American elected to major office in Illinois, shared his presentation “Dignity, Decency, and Agency: The Case for Universal Basic Income.” Income inequality, wealth inequality, and decades of policies favoring wealthy corporations and big banks over working people, drew him to the idea of Universal Basic Income (UBI).
Pawar believes that every aspect of society is impacted by inattention to poverty, it is necessary to invest in mitigating it at both the national and local level.
“What leads us to believe that people will do something wrong or bad or do less if we help them a little bit?” Pawar asked. “To achieve sustainability, people need to have built-in resilience,” he said.
In response to the idea that giving cash may make people less willing to work, Pawar said that research has shown that is not the case. “Giving people money does not change the fact that people, as human beings, want to be productive; instead, it gives people more choices and breathing room in their lives,” he said.
On Thursday (8/13), we invited Mr. Sean Kline, who is the Systems Entrepreneur in Residence with RSA Future of Work Center, to share his presentation “Child Focused Development in the Digital Era.”
Kline believes, as services and technology become the dominant drivers of the economy, some segments of the population have been left behind. That’s why, a more modern and robust social safety net is needed to help transition and adapt to this rapid technological change is needed. While the government is putting tremendous conditions on how low-income families use public benefits, it is capable of giving people money in the form of large tax deductions. These unequal requirements demonstrate trust for one group and mistrust for the other. In fact, unconditional cash is administratively easier to deliver especially if it is provided universally.
With children being an important focus of Kline’s work, he suggests that lacking investment in children not only shapes their life’s trajectory, but shapes the trajectory of potential economic growth for society as a whole. Sharing examples of universal children’s saving accounts, baby bonds, and basic income and how they have benefited children, he believes that these are the primary methods to support children universally in the digital age.
