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.
by Stanislas Jourdan | Jan 7, 2016 | News
A report written by a government agency dedicated to Digital Affairs for the French Ministry of Labor recommends experimenting with an unconditional basic income to cope with the fundamental transformations of work in the context of the growing digital economy.
How do automation and digitalization of activities impact working conditions? This was one of the key questions the National Digital Council was tasked to address in a report sponsored by the French Ministry of Labor and Social Dialogue. The Digital Council is a public agency created in 2012 to advise the French government on matters related to the digital world.
The report was released earlier this week – see the full report here. It makes an important case for basic income, and calls for a thorough appraisal of “the various proposals and experiments around basic income”. Basic income is part of the twenty main recommendations contained in the report.
Minister of Labour is sceptical but does not reject the proposal
The Minister of Labor Myriam El Khomri was not so enthusiastic but did not close the door on the idea: “I do not want to dismiss it, but at first sight I am not sure about its cost,” she said.
According to the report, the existing social protection model has been pushed to its limits, and the labor market has failed to reward many different forms of activities, and thus provide an income to everyone.
These phenomena are not new, but technology is accelerating the trends. Automation is displacing jobs and killing aggregate demand in the economy. The development of invisible forms of production on the internet – what is commonly referred to as ‘digital labor’ – is leading to new forms of production that do not remunerate people for their work. As a consequence, there is a need for new kinds of redistribution systems, such as a basic income.
The report reviews many common arguments for introducing an unconditional and universal basic income, and quickly sketches different proposals on how to implement it. These include a reform of the tax-benefit system, various forms of money creation (such as quantitative easing for people), and raising corporate taxes to remunerate invisible and unpaid labor.
Although the report does not express a preference for a specific proposal, it calls for two concrete steps:
- A feasibility study on basic income to be conducted by a team of economists, statisticians, fiscal and legal experts. The aim would be to develop a simulation tool of the transition to a basic income, and carry out an impact assessment of each proposal in the public debate.
- Local basic income experiments that complement the feasibility study and consider various scenarios.
“We cannot ignore this movement.”
“This is the first time a report of a public agency discusses a basic income linked to digital transformations” Benoit Thieulin, one of the report authors, said. “Governments need to seize the opportunity and help with the reform of our solidarity and redistribution models. Experiments are conducted in several countries, we cannot ignore this movement.”
Basic income was only the last of 20 recommendations, yet it made most of the headlines in French media.
“For a long time I have also been sceptical about basic income … I wasn’t too convinced,” Thieulin explained in an interview. “But today this idea puts everything into question. Especially now that the welfare system is cracking everywhere. Half of the people don’t claim their benefits! Administration costs are enormous! … At some point one has to ask if it would not be simpler, less expensive and more beneficial for all if we had a universal safety net.”
The French Movement for Basic Income, a BIEN affiliate, was among the organisations consulted during the writing process and welcomed the release of the report. “It is a timely report that opens the debate in the best possible terms,” International Coordinator Nicole Teke said to BIEN.
The French government has commissioned another report to review all social benefits, with special attention to be paid to the existing minimum income scheme. The French Movement for Basic Income announced that it will submit proposals to pave the way for the introduction of a basic income.
by Nicole Teke | Dec 20, 2015 | News
As part of an electoral alliance, the Socialists and the Greens in the French region of Aquitaine committed to carry out a pilot with an unconditional minimum income, as a step in the direction of a basic income. They won the elections, now it is time to deliver.
French regional elections held this month received wide coverage by the international press because of the dramatic rise of the far right party Front National. Meanwhile, an interesting development the basic income movement went largely unnoticed. In the south-western region of Aquitaine, one of thirteen mainland French regions, major strides towards a basic income have been made.
Five months ago, the Aquitaine Regional Council – the elected regional parliament – adopted a motion to conduct pilots to test the implementation of an “unconditional RSA”. The Revenu de Solidarité Active (Active Solidarity Income), or RSA, is the means-tested national minimum income. The unconditional RSA would entail scrapping the work requirement, and would make the grant less discriminatory and less bureaucratic. A recent study shows that the RSA uptake is only slightly over half of the eligible beneficiaries.
While this is not an unconditional basic income, it is a major move in that direction. The motion notes that it is a “first step towards a universal basic income” (read the French text here). At the time, the Council had a left-wing majority, headed by the Socialist Party and including the Greens. The initiator of the motion, Green councilor Martine Alcorta, suggested that the pilots should be based on a proposal drafted last March by the French Movement for Basic Income, an affiliate of BIEN.
However, the fate of the basic income pilots depended on the results of the regional elections. Basic income supporters feared that if the left-wing coalition lost the region, the whole project might have been compromised. In the second round of elections on December 13, the Greens and the Socialists merged their lists to beat the right-wing coalition led by the Republicans, and the National Front, running separately. Just a few days before, the two left-wing parties agreed to renew their commitment to unconditional RSA pilots.
This was not an easy task, as the Socialist Alain Rousset, top candidate in the electoral roll and outgoing president of the Regional Council, had been strongly opposed to the pilots. The inclusion of the unconditional RSA experiment in the program means that measures that are closer to a basic income are gaining ground among other political parties. The Greens and the young anti-austerity formation New Deal already support a universal basic income.
Now that the left alliance won the elections, they are to go ahead with the pilots. Martine Alcorta was re-elected in the Regional Council, and the Greens are entitled to two vice-presidents as part of the deal with the Socialists.
If the newly elected regional councilors put their words into actions, a feasibility study will be conducted to come up with different designs for local pilots. The French Movement for a Basic Income has already offered its services to help the Aquitaine Regional Council with the project.
French Movement for a Basic Income, “PS et EELV s’entendent sur le revenu de base en Aquitaine-Limousin-Poitou-Charentes [Socialists and Greens in Aquitaine strike a deal on basic income],” December 12, 2015.
Stanislas Jourdan, “French Regional Council of Aquitaine to assess feasibility of basic income pilots,” Basic Income News, July 9, 2015.
by Karl Widerquist | Dec 6, 2015 | News
The 150,000 residents of the Brazilian city of Maricá will receive a monthly basic income of about 2.7 dollars, paid in local currency.
On December 3, Thursday, 2015, at the Faculty of Economics and Administration of the University of São Paulo, FEA-USP, the Mayor Washington Quaquá (PT), of the Municipality of Maricá, State of Rio de Janeiro, announced that from December 2015 on, all 150 thousand inhabitants of Maricá, as long as they have been living there for a year or more, will start to receive an Unconditional Citizens Basic Income of ten Mumbucas per month. Mumbuca is a social money intended to stimulate all kinds of solidarity economy forms that already exist in Maricá, such as the cooperative of the Landless Workers Movement (MST) that sell their goods to a Supermarket that accept payments in mumbucas from their clients. All small stores in Maricá accept payment in mumbucas. One Mumbuca is equivalent to R$ 1.00. Therefore, 10 mumbucas is a modest amount equivalent to US$ 2.70 per month, but it is a courageous start. There is a perspective that this amount might increase gradually with the progress of the city. Maricá has one important source of revenue since it receives part of the oil royalties that are explored in front of its sea coast. Mayor Quaquá also informed that he has introduced a free public system of transportation to the whole population of Maricá.
Eduardo Suplicy
Professor Paul Singer, National Secretary of Solidarity Economy, praised the announcement at this conference meeting. He explained that while the Bolsa Família Program is an efficient tool to eradicate extreme poverty, the Unconditional Citizens Basic Income is a Human Right equal for all that will always be there. Mayor Quaquá explained that 14 thousand families, one fourth of the population of Maricá nowadays receive the Bolsa Mumbuca or 85 mumbucas per month. If a family has six persons, it will receive 60 mumbucas more per month, summing up to 145. Professors David and Sabetai Calderoni explained that a new Factory of Recycled Material will be inaugurated in Maricá. The city produces 15 tons per day of garbage. The mill that will recycle the garbage will be a new source of revenue that may contribute to increase the Basic Income. David Calderoni will be the Rector of the Democratic Inventions University Darcy Ribeiro. It will help to organize next June in Maricá the Festival of Utopia. Professors Leda Paulani and Eduardo Suplicy, Honorary President of BIEN exalted the new initiative that may be followed by other municipalities, such as Santo Antonio do Pinhal and Apiaí that have approved laws to institute gradually the Citizens Basic Income.
Eduardo Matarazzo Suplicy emphasized that the Maricá initiative may encourage President Dilma Rousseff to form a Working Group to study the steps in the direction of a Citizens Basic Income to all 204 million inhabitants of Brazil, including the foreigners living in the country for a year or more, as it is written in the Law 10.835/2004, approved by all parties in the Brazilian Congress and sanctioned by President Luiz Inácio Lula da Silva in February 8, 2004. Suplicy has asked for an audience to the President to talk about this subject. He has proposed a list of 70 names among the best scholars on how to eradicate poverty and how to build a just and civilized society, to be members of this study group. Those economists, philosophers and social scientists that attended the XV International Congress of BIEN in Montreal in June 2014, signed a letter to President Dilma Rousseff saying that they are ready to contribute for this purpose. The President told Suplicy that she will receive him to talk about this as soon as these difficult times have passed away.
Credit picture CC Ana Guzzo
