by Kate McFarland | Apr 21, 2016 | News
April began on a high note for the “Fight for $15” movement in the United States: California passed a law to increase the statewide minimum wage to $15 over the course of the next six years, and New York struck a deal for a $15 minimum in New York City and its suburbs. Meanwhile, in the United Kingdom, the largest minimum wage increase in eight years went into effect on April 1.
However, at the same time as many were celebrating these breakthroughs, Berlin-based author Leonid Bershidsky published an article in which he argues that a minimum wage has some substantial drawbacks — especially when it comes to integrating immigrants into a society — and that a basic income is a much smarter choice for alleviating poverty.
In a country with a high minimum wage, according to Bershidsky, immigrants “are at a disadvantage because of poor language skills and educational backgrounds that are often incompatible with the host countries’ labor market requirements. No one wants to hire them at a high minimum wage, especially when locals are readily available. Instead of working for social justice, high minimum wages create an extra barrier for the integration of the least socially secure people into society. Such barriers can result in ghettos, rioting and the recruitment of disenfranchised immigrant youths by terrorist groups.”
Bershidsky believes that a basic income, in contrast, is likely to allow immigrants to “integrate faster than they are doing now, because labor markets will be livelier and less forbidding.”
Read the full article here:
Leonid Bershidsky, 1 April 2016, “A Basic Income Is Smarter Than a Minimum Wage,” Bloomberg View.
Image credit: The All-Nite Images, NY (via Wikimedia Commons)
by Guest Contributor | Mar 29, 2016 | Opinion
By Clive Lord
Almost everyone I know of who supports the Basic Income (BI) does so on the grounds of social justice. I agree of course, but for me less inequality is only the second most important of three reasons to support the Basic, or as we call it in Britain, the Citizen’s Income.
When I joined the embryonic PEOPLE, now the UK Green Party, in 1973, I listened as an enquirer to a spiel based on the threats to the global environment caused by indiscriminate economic growth, which had been exposed by the Massachusetts Institute of Technology report Limits to Growth in 1972. I agreed with every word, but I had a question:
“What is your social policy? You are proposing a deep recession. I agree it will be necessary, but every recession to date has caused widespread hardship. What will you do when desperate people start looting?”
The answer was: “If we have to, we shall shoot them in the street. Social breakdown is hardly the best way to alleviate poverty.”
It is all very well readers being as appalled as I was, because the basic premise was right. The speaker then challenged me:
“Do you have a better social policy in mind?”
I didn’t. I spent the journey home wrestling with my own question. Guess what I came up with. I discovered later that the Basic Income had already been invented several times, for different reasons, starting with Thomas Paine in 1798. But even now, 43 years later, limiting economic activity to the ability of the ecosphere to cope was not part of the “successful” Paris climate agreement in December 2015. It will fail without that. A Basic Income will allow a steady state economy to be acceptable to whole populations, and so become a policy option, but it will have to be world-wide.
It will be dismissed as “unaffordable” – this would only be true if the economy has collapsed beyond the ability to provide basic necessities for all, but if linked to ecological realities it will entail drastic redistribution. This brings us to the more common justification for a BI of reducing inequality, but if all the Basic Income does is allow the poor to spend money confiscated from the rich, the Paris agreement is doomed.
However, I am continually perplexed by the widespread failure to grasp the malevolence of means testing – taking benefits away as soon as the claimant has any other income.
The next few paragraphs refer to the UK but will apply anywhere means tested benefits are used. For the person losing a means tested benefit, the effect is identical to a massive marginal tax. The clearest demonstration of this can be found in an unexpected source: the 2009 report Dynamic Benefits: towards welfare that works, released by the Centre for Social Justice. The Centre was set up by Iain Duncan Smith, who has been Work and Pensions secretary in the UK Coalition, now Conservative government since 2010 – and has recently resigned in protest against announced cuts to disability benefits. Dynamic Benefits was the foundation for the government’s welfare ‘reform’ policies. Its key recommendation was the Universal Credit (UC), whereby on finding employment a claimant would retain 45% of their former benefits. The former Work and Pensions secretary reduced this to 35% on taking office. This means that the former claimant is faced with a tax rate equivalent of 65%. Bankers on the highest tax rate lose 45% of their income.
In Dynamic Benefits, there are several graphs showing benefit withdrawal rates as though they were taxes. In fact, the first part of the report, outlining the problem, is an excellent statement of the case for a Basic income. The UC is an emaciated BI which attempts to remove the work disincentive of means testing, but still penalises beneficiaries disproportionately vis-à-vis high-income earners.
While Iain Duncan Smith’s stated reason for resigning was cuts to disability benefits, I believe the real reason is the imminent scrapping of the UC. In four years since being announced, the UC has only reached 5% of the 4.5 million who should be eligible. The Department of Work and Pensions is claiming that the UC will be fully rolled out by May 2021. The track record of slippage to date makes that improbable. That the initiator of benefit sanctions, the bedroom tax, and Work Capability Assessments presents himself as the defender of the weak and vulnerable is sickening, but Dynamic Benefits remains a useful document for basic income debates.
But my third reason is much more fundamental. A Basic income can begin a shift to a totally new culture. Instead of haves vs have nots, or bosses vs workers , the new fault line will be those who want to preserve natural systems versus those who believe there will always be a technological answer. This will enable a low growth economy to protect the ecosphere.
Milton Friedman, an archetypal neo-liberal, was in favour of the Basic income. Market forces are a basic pillar of neo-liberalism, but instead of the current system whereby the strong can exploit the weak, persuasion will replace work compulsion. The would-be employee will have equal bargaining power with the boss. Needless to say, Employee Benefits such as healthcare cover will also need to be negotiable. Experiences in India and Namibia show that far from encouraging idleness, a BI facilitates entrepreneurship. But it will also allow people generally to heed eco-constraints, notably climate change, where competitive capitalism does not.
Anyone curious to know more, my Book, Citizens’ Income and Green Economics (2011) is available from the Green Economic Institute. My blog www.clivelord.wordpress.com which is more up to date, but 
inevitably less coherent, discusses the Tragedy of the Commons, population, the Greek crisis, migration and fracking.
We may yet save “Paris” (and the planet), and feed everyone. There is even something in it for the capitalists.
Clive Lord is a founding member of the British Green Party, a major contributor to the party’s first “Manifesto for a Sustainable Society” and a basic income advocate.
by Jonny West | Mar 21, 2016 | News
On 30 January 2016, BasisInkomen, the Dutch association for a basic income, hosted the International Congress on Basic Income Experiments in Maastricht, Netherlands, to celebrate its 25th anniversary. This was an opportunity for those interested in the idea of a basic income to come together to reflect on recent developments – particularly in the Netherlands, Finland and France – and look towards the future. Keynote speakers included Julia Backhaus, Sjir Hoeijmakers, Stanislas Jourdan, Markus Kanerva, Otto Lehto, Philippe van Parijs, Bono Pel, Guy Standing and Nicole Teke. This article is a summary of the key points from the congress.
Guy Standing opened the congress by reflecting on the journey that the basic income idea has made over the previous 30 years: from the impossible to the ridiculous to the absurd and now perhaps even to the cusp of the inevitable. Two key themes ran through Guy Standing’s presentation: the necessity for further experimentation in order to gain political legitimation and, moreover, the importance of designing these experiments based on normative principles of social justice, such as wealth redistribution and social emancipation. If political legitimation can be won, based on principles of social justice, then a basic income will provide a pathway toward a dignified life for individuals within a good society — a society in which the collective wealth of the community is shared equally within and across generations, and in which each individual makes a moral commitment to actively participate in society. The idea of a basic income represents a rejection of the opportunistic politics of today in favour of a positive vision for tomorrow’s good society.
Guy Standing
After Guy Standing’s expansive introductory speech, discussion turned to the details of social experiments currently being planned in the Netherlands, Finland and France. In each case, recent developments demonstrate broad support for some type of basic income across the political spectrum.
In the Netherlands, nineteen municipalities are currently developing some form of social security experiment, which will remove the condition that beneficiaries must participate in workfare schemes, and tackle the poverty trap that beneficiaries experience when transitioning between the social security system and work. While many of these municipalities initially proposed introducing a basic income as part of the experiment, current legislative restrictions have limited this number to three. Four municipalities have lobbied the Dutch Ministry for Social Security and Employment to revise these legal restrictions, though the government has yet to respond. Despite this legal scuffle, the proposed Dutch experiments reveal widespread support for a basic income experiment across the political spectrum, with each major political party represented among the nineteen municipalities.
In Finland, the government has proposed a number of social experiments, including a basic income experiment. The government’s aim is to better align social policy with societal demands, as well as to reduce disincentives to work and decrease the role of bureaucratic processes in social security. A research consortium led by Kela, a government agency responsible for social security payments, is responsible for designing and implementing the basic income experiment. A first hearing for the basic income experiment was held on 5 December 2015, while a preliminary report will be released on 30 March 2016 and a final hearing will be held on 15 November 2016. A budget of €20 million has been allocated to the basic income experiment, which is expected to begin in 2017 and last two years. Different variations of a basic income are currently being considered, including a ‘full’ basic income, a ‘partial’ basic income, a negative income tax and a participation income. The models propose a basic income of between €400 and €1,200 per participant per month, with many models retaining supplementary allowances. One major challenge is the constitutional requirement to treat all citizens equally. To meet this requirement, participation in the experiment will be voluntary. A basic income experiment enjoys broad public support across voters of all major political parties in Finland, and recent public opinion polling indicates that more than 50% of the public supports the idea.
Nicole Teke (Credit to: MFRB)
In France, parliamentary support for a basic income has been increasing. Current proponents include Jean Desessard MP (Green Party), Frédéric Lefebvre MP (Les Républicains), and Gaetan Gorce MP and Delphine Batho MP (Parti Socialiste). Furthermore, the Minister of Economy, Industry and Digital Affairs Emmanuel Macron expressed support for the idea of a basic income and a government agency on digital affairs recommended introducing a basic income experiment. In addition, the Sirugue Commission, a parliamentary working group led by Christophe Sirugue MP (Parti Socialiste), is under increasing pressure to examine the case for a basic income experiment as part of its comprehensive review into the existing social security system. Meanwhile, the regional coalition government in Aquitaine is developing its own proposal for a basic income experiment. However, social security policy is a departmental rather than regional competency, and the regional governmental tier is currently being restructured with welfare allowances likely to become a central government competency, which might pose difficulties for regional experimentation.
All such experiments, however, will be limited in what they are able to prove. In his presentation, Philippe van Parijs challenged the audience to reflect on three such limitations. First, an individual is likely to make different labour market decisions depending on whether the basic income is temporary or permanent, which will distort the effect on labour supply. Second, participants receiving a basic income within an experiment will only account for a small fraction of the total labour force rather than the whole labour force, which will distort the effect on labour demand. Third, voluntary participation in the experiments will likely attract net beneficiaries rather than net contributors, which will distort the effect on financing. Philippe van Parijs then articulated the social justice case for a basic income: a basic income is an intergenerational redistribution of the currently unfair and uneven allocation of the efforts of previous generations as well as accessible natural resources. Furthermore, a basic income is a gift, which deserves a counter gift. If this counter gift were a commitment to actively participate in society, it could nurture a renewed ethics of responsibility. This is a strong case for a basic income, which exceeds the scope of the experiments planned in the Netherlands, Finland, France and elsewhere.
In all, the congress was one of optimism buoyed by a sense that the basic income movement is on the cusp of something momentous. The various developments in the Netherlands, Finland and France were also a reminder that if we truly want change, we can find a form for that change that fits our unique circumstances. We are not restricted by whether our political systems are centralised or decentralised, majoritarian or multi-party, left or right, a republic or a constitutional monarchy – we our restricted only by our imaginations and our tenacity.
More information at:
Basisinkomen.org, “Interviews and Lectures about #basicincome from Maastricht 2016”
by Guest Contributor | Mar 8, 2016 | Opinion
By Liane Gale and Ann Withorn
for the Basic Income Woman Action Group (BIWAG)
Since 1909, International Women’s Day has been a day for recognizing women’s economic, political and social achievements. Yet over the past century, March 8 Women’s Day celebrations have revealed tensions between feminists, socialists and anarchists about the meaning of women’s roles in society. Feminists saw full equality through equal participation in the polity as the major way women would gain power. Socialists argued that full inclusion of women as workers within a self-aware proletariat was the way for women to achieve solidarity, and therefore power. Anarchists envisioned women’s liberation as based on learning new ways of living and loving, so that a new way organizing society would become possible.
Today, we view the Basic Income Guarantee (BIG) as a means to transcend such historic differences. BIG offers a way for women to achieve basic economic security outside of the labor market. It firmly denies that only certain activities done outside the home and community should be rewarded, much less be the chief source of one’s respect and social value in society. With a meaningful basic income as a secure base for living, women everywhere should be more able to live a life without fear, and of their own design.
If basic income could fundamentally change the lives and fates of women and girls, and with it the fate of humanity, then why is this not widely discussed in the community? One case in point is the appeal by Martha Beéry to the national media agency in Switzerland to invoke bias towards male views in a panel on basic income on national television in 2012 that only included men. The decision was in her favor, but the inclusion of women’s points of view in regards to basic income has been slow both in mainstream and social media. Despite this, recently we have seen a welcome surge of contributions about the economic and social realities of women, that often offer basic income as a solution to some of the disadvantages women face.
These analyses include calls to elevate the value of care work and other contributions to society (such as community work), which are underpaid or not paid at all, and as a result do not elicit much respect by a society which largely equates money-making abilities with importance and status. Organizations, such as the Care Revolution Netzwerk, that is active in German-speaking countries, Mothers at Home Matter from the UK, and initiators and supporters of the “Leap Manifesto: A Call For a Canada Based on Caring for the Earth and One Another” are all grassroots efforts to change the current narrative. With the Basic Income Woman Action Group (BIWAG), we strive to contribute to this international effort. To that end, we are facilitating national and international conference calls with interested members and maintain a BIWAG Facebook Group.
The program of the 15th Annual North American Basic Income Congress in Winnipeg, Canada (May 12-15) is especially attentive to women’s concerns and to enhancing women’s roles in the movement. More than half of the planning committee members are women. Dr. Felicia Kornbluh, professor of Gender Studies, writer, welfare rights advocate and member of the Vermont Commission on Women, will give a keynote on “Two, Three, Many Precariats: Basic Income and the Fight for Gender, Class and Disability Justice”. Two other keynotes will also be given by women. At least sixteen panel presentations and speakers will be directly addressing links between basic income and women. In addition, three BIWAG sponsored roundtables will allow serious time for discussion of “Women’s Roles within the Basic Income Movement”, “Basic Income and the Care-Centered Economy”, and “Basic Income’s Role in Ending Violence Against Women.” A panel on the Color of Poverty and speakers from the Aboriginal Council of Winnipeg will also bring much immediacy to the event.
The 2016 theme of International Women’s Day includes the goals of ending all forms of discrimination and violence against all women and girls everywhere, and we believe that a basic income would be a firm step into the direction of a more humane world for all.
To learn more about BIWAG or to get involved, please join our Facebook group or contact us at withorn.ann@gmail.com or liane.gale@gmail.com.
Recent contributions on women and basic income, and closely related issues and causes:
Nicole M. Aschoff, “Feminism Against Capitalism,” Jacobin, February 29, 2016.
Allissa Battistoni, “Why Women’s Work is Key to a Just and Sustainable Future,” Feministing, August 6, 2015.
Alyssa Battistoni, “Why Establishing a Guaranteed Income for All Can Help Prevent Environmental Catastrophe,”, Alternet (reprinted from Jacobin), February 19, 2014.
Madeleine Bunting, “Who Will Care for Us in the Future? Watch Out for the Rise of the Robots,” The Guardian, March 6, 2016.
Petra Buskins, “‘Flexibility’ Won’t Stop Women Retiring In Poverty,” New Matilda, October 30, 2015.
Liane Gale and Ann Withorn, “Basic Income Women Action Group”, Google Hangout, hosted by Marlen Vargas Del Razo, Living Income Guaranteed, Streamed Live, August 23, 2013.
Claire Cain Miller, “How Society Pays When Women’s Work is Unpaid,” New York Times, February 22, 2016.
Helen Ninnies, “As Rental Prices Rise, Women Stay in Bad Relationships to Survive,” Broadly, February 20, 2016.
Vanessa Olorenshaw, “Mothers at Home Matter and the Politics of Mothering – When Maternal Care is Taboo and Politicians Have No Clue,” Huffington Post U.K., March 17, 2015.
Meera Lee Patel: “Idea: All Work Deserves Pay,” Fast Company, January 20, 2016.
Ina Praetorius: “The Care-Centered Economy: Rediscovering What Has Been Taken for Granted,” e-book published by Heinrich Böll Stiftung, April 7, 2015.
Judith Shulevitz: “It’s Payback Time for Women,” New York Times, January 8, 2016.
by Marc de Basquiat | Feb 1, 2016 | Opinion
Multiple surveys across many countries show an increasing support for the idea of providing every citizen with a monthly lump-sum allowance to ensure everyone can meet their basic subsistence needs. In France, the IFOP (a leading French national market research institute) has shown that this support goes beyond political orientation divisions. From the question: “Are you in favour of implementing a guaranteed basic income for all citizens which would replace most existing allowances?” came a positive answer, depending on the degree of support for one party or another, from 72% to 79% for left wing sympathizers and from 50% to 54% for right wing sympathizers.
However, what would an unconditional basic income in France look like in concrete terms?
The Finland experiment
Since the election in April of the Finnish pro-basic income coalition, the topic has given rise to renewed international interest. All started when the Prime Minister of Finland Juha Sipilä announced the launch of a series of pilots, the most important being a “universal basic income” [1], in order to reform the social security system in response to the evolution of the labour market. This will also allow the evaluation of how to reinforce autonomy and incentives to work, as well as reducing bureaucracy and the complexity inherent in accessing social assistance.
The lead role in this project has been given to professor Olli Kangas (KELA) who has outlined the following schedule[2]: preparation phase from December 5th, 2015 to November 15th, 2016; two-year experimentation starting in 2017; evaluation in 2019.
Olli Kangas explained that the work group will evaluate at least four options:
- a “full basic income” (~800 €) replacing almost all basic and insurance-based benefits;
- a “partial basic income” (~550 €) replacing all basic benefits but leaving intact almost all insurance-based benefits;
- a negative income tax in which benefits would phase out as people earn more money;
- miscellaneous other approaches including a universal income and additional components.
Everyone who has recognised the need for major reforms of our social protection mechanisms perceives the announcement of the Finish pilot as an opportunity. However, we need to give time to our Finnish friends for their project to mature.
Which options are possible in France?
The Association for the Introduction of an Existence Income (AIRE) has been working on these questions since 1989, gathering studies and proposals from numerous experts, philosophers, economists, sociologists, politicians, etc. The French Movement for a Basic Income (MFRB) created in 2013 involves activists from a wide variety of backgrounds, leading actions through the country and enriching proposals by bringing together citizen experiences from the grass-roots[3].
Despite apparent simplicity, an unconditional basic income would require a series of structural choices. Precise adjustment of the parameters would need to be made in order to ensure it performs optimally in terms of justice and efficiency. Considering the vast number of options, it would be fallacious to believe that there is an ideal solution. Actually several options that must be weighted by parliamentary and experts in order to create a consensus that is adapted to the reality of our country.
Our experience leads us to recommend a universal income that would vary based on the beneficiary’s age. In particular the case for children should be processed separately, which means organizing an in-depth discussion about the French family assistance policy. This means replacing all or part of the actual eight allowances[4] by a lump-sum for each child. A key stake is to eliminate the high variability of the State grants according to the child’s rank within the family, the matrimonial status of the parents or the parent’s income (knowing that a single child of a middle-income level couple currently receives a remarkably low grant). The potential variation of the universal income amount according to child age (3, 14, 18 year old thresholds) must also be further investigated.
Similarly a discussion is needed regarding senior citizens. The question of incentive to work disappears with the elderly, but the dependency issue arises. Do we need to define a higher amount above 65 years old? How should the matrimonial life conditions be integrated? The ASPA[5] level (800 € for a single person, 1242 € for a couple) gives an indication but not a clear answer on the solution to be implemented.
The coordination with housing allowances constitutes a third theme to be carefully analysed. Acknowledging the inflationary effect of housing allowances (APL) on the rental market price, some politicians and economists[6] are investigating the potential effects of merging the APL and the RSA[7]. As the AIRE association is attached to the Tinbergen rule[8], we are highly reluctant to support this proposal, but the underlying issues must nonetheless be addressed. In any case, it is important to revisit conditionality links between several allowances and the housing grant, in particular the existence of a problematic “housing lump-sum” component within the RSA.
The last framing issue is to define the scope of beneficiaries for a “universal income”. Despite this designation, it is necessary to limit eligibility to a national community. This needs to be defined in terms of residence and/or nationality, probably through continuity of the rules applying today for the RSA beneficiaries. However, this still creates a variety of fundamental questions, for example the potential right to the universal income for prisoners or asylum seekers (currently receiving the ATA[9]).
Three scenarios for a universal basic income for “active age” adults
Similarly to the Finnish approach, we identify three quite different scenarios to defining a universal basic income that would be paid to any adult in France.
- Baseline: extend the distribution of the “RSA single person allowance” to the whole country population (excluding the housing lump-sum component), being 470 € by month in 2016, financed by a flat tax system replacing several current basic social and family allowances as well as tax mechanisms.
- Maximised: distribute equally to the whole population the entirety of the social protection budget, including pensions and unemployment benefit. This would mean about 800 € per month.
- Dynamic: delete all employment incentives to companies and allowing a massive flexibility improvement in terms of minimum salary, in order to finance a basic income ranging between 500 € and 550 € by month. This would also replace a major part of the social and tax mechanisms but leave intact all insurance-based benefits.
The financial feasibility of scenario A is proven and it does not lead to a large upheaval of the redistribution operating in France. It allows a massive simplification of the social and tax systems, facilitating the daily life of the population and reducing operational costs. This scenario, like the following ones, eliminates many inconsistencies, iniquities, and numerous more-or-less known perverse effects. In terms of microeconomic analysis, it implies a massive evolution neither by an income effect nor by a substitution effect, unlike the other scenarios. However, when it comes to tax in france for non residents, one may have to pay tax on income that comes from French sources. In other words, if you work for a French company, even if you do not reside permanently in France, the income you earn will be taxed.
Scenario B designates the losers: those who contributed all along with their life for pensions and unemployment benefits and who would be left without those related benefits. Neither the AIRE nor the MFRB association support this scenario. Such an approach – if it proves to be meaningful – could be considered only through a very long migration phase from one system to another. This would need to be built cautiously, with the implication of the labor unions. Besides, the high level of the benefit leads to a high income effect, many people being possibly satisfied by this amount without seeking a complementary paid activity. The substitution effect contributes on the same way, due to the high level of contribution necessary to finance it.
Scenario C is probably the most audacious challenge, by lightening massively legal constrains framing the labour market, leaving it up to individual and collective negotiations. Citizens with better secured economic status are then on a better position to decide whether to accept or not professional opportunity offers, or to create their own activity by minimising their personal and family risks. The micro-economic analysis is more ambiguous, the income effect being stronger than in scenario A and on the contrary the substitution effect encouraging the activity thanks to a higher flexibility of the labour market.
Of course, the consensus that will emerge from a parliamentary work gathering representatives of all parties and the support of experts from diverse fields could finally be a combination of those three scenarios with potential integration of others approaches. In any case, no option presented in this note should be excluded without in-depth investigation.
Special thanks to Xuan-Mai Kempf for translating the text from French.
ENDNOTES
[1] https://www.kela.fi/web/en/press-releases/-/asset_publisher/LgL2IQBbkg98/content/universal-basic-income-options-to-be-weighed?_101_INSTANCE_LgL2IQBbkg98_redirect=%2Fweb%2Fen%2Fpress-releases
[2] https://www.vox.com/2015/12/8/9872554/finland-basic-income-experiment
[3] Some discussion papers from the field can be tough however well documented. For instance, in order to rebel against the home control by the family assistance administration: https://www.lesenrages.antifa-net.fr/la-caf-contre-les-femmes/
[4] Family allowances, premium for age, family complement for 3 children, basic allowance for child under three, school yearly allowance, RSA increase for each child, income tax reduction according to the number of children, tax reduction for child schooling.
[5] Solidarity allowance for elderly persons.
[6] Cf. the « Unique social allowance » of François Fillon or the IPP report: https://www.ipp.eu/publication/juin-2015-reformer-les-aides-personnelles-au-logement/
[7] RSA: Revenu de Solidarité Active, is the main French allowance providing a minimum guaranteed revenue.
[8] Based on the name of the first Nobel Prize for Economics winner, Jan Tinbergen, a supporter of an unconditional basic income, who stipulated that for each policy objective, one policy instrument is needed, and one only.
[9] Allocation Temporaire d’Attente.
