by Guest Contributor | Jan 29, 2017 | Opinion
Written by: Craig Rhodes
We are fast entering an era in which there’s going to be a chronic shortage of jobs for millions looking for employment. That trend is only going to accelerate. Everyone’s job is on the line now. If we don’t begin to address this problem, then we will suffer long-term consequences: mass unemployment and political alienation of millions because jobs are fast disappearing mainly due to automation.
My suggestion is strategic not tactical. The details can be worked out in committee negotiations.
Corporations are mining nearly every piece of online data that we as individuals produce and then selling it to the highest bidders including the NSA for hundreds of billions per year. To find out how to protect yourself from this visit websafetyadvice.com.
It’s an unregulated modern day gold rush happening under our very noses without notice. We as individuals should be compensated for our data in the same way that corporations are compensated for their data. Copyright law should protect us in the same way it protects corporations. Terms of Service Agreements should be outlawed. Copyright laws should be amended or rewritten.
There’s a reason Google and Facebook do not bill us. We’re not their consumers — we’re their product. The lion’s share of profits made by Google, Facebook, AT&T, Verizon, and scores of other corporations are from the data we produce. Facebook’s billion plus users are the largest unpaid workforce in history.
If a corporation profits from our data, whether it be browsing history, emails, buying habits, contact lists etc. then they should have to pay us for it just as we must pay for their movies, music, software and more. Such compensation might go a long way toward alleviating our chronic employment problems as well as help the working class who are losing jobs faster than any other demographic. It would not be welfare nor would it involve raising taxes. It would be payment for services rendered in the form of a subsistent guaranteed income similar to the Alaskan model.
Manufacturing jobs are not going to come back. And in time automation will begin to affect the professional class as well. Those who depended on such jobs should be dealt with or our nation is going to suffer catastrophic consequences.
This and many more initiatives should be included in a robust strategy. We must be bold.
About the author: Craig Rhodes is a retired art teacher after 34 yrs. Active in politics since an early age. Rhodes held elective office. Lifelong gardener, musician, environmentalist, avid reader of all subjects both non fiction and fiction, potter, portrait artist, and more. Rhodes is active on any number of social media including Facebook and have been surfing the internet since it first appeared on the scene as the Arpnet under DARPA.
by Kate McFarland | Jan 27, 2017 | News
A cross-party committee of the Scottish Parliament will hold a committee meeting on basic income on March 9, which will be broadcast live on television.
Scotland’s basic income movement has recently enjoyed time in the media spotlight due to the planning of pilot studies in the city of Glasgow and council area of Fife (see, for example, articles in The Guardian by Libby Brooks and Kevin McKenna). While these efforts are being pursued by the respective regional councils, the country’s legislature is also investigating the possibility of a basic income for all of Scotland.
On March 9, 2017, the Social Security Committee of the Scottish Parliament will convene a meeting at which a panel of experts is to present evidence concerning the feasibility of a basic income. The cross-party committee intends to investigate what level of basic income would be sufficient, how the program could be funded, and whether it could be implemented in Scotland given the current devolution of powers in the UK.
Sandra White, MSP from the Scottish National Party (SNP), is the Convener of the Social Security Committee. Explaining the importance of the session on basic income, she says, “We all know the current benefits system is riddled with complexity, and on the face of it the concept of a universal income for everyone is an interesting alternative. However, whilst there is much talk at the moment of the benefits of a citizen’s income, this Committee wants to investigate if the principle can work in practice. Whilst we all want a system that is fairer and looks after those most in need, it’s clear that the implementation of such a concept is far from straightforward.”
The SNP, Scotland’s largest political party, passed a motion endorsing basic income at its conference in March 2016.
The website of the Scottish Parliament notes five experts will address the committee, all of whom have previously written on basic income proposals for Scotland or the UK (see background reading below):
• Donald Hirsch (Professor and Director of the Centre for Research in Social Policy at Loughborough University)
• Siobhan Mathers (Reform Scotland Advisory Board)
• Annie Miller (Chair of Citizen’s Income Trust, co-founder of BIEN and Citizen’s Basic Income Network Scotland)
• Anthony Painter (Director of the Action and Research Centre of the Royal Society for Arts)
• Howard Reed (Director of Landman Economics)
The meeting will be broadcast live on www.scottishparliament.tv.
More information: https://www.parliament.scot/newsandmediacentre/103064.aspx
Background Reading
Annie Miller, “Why an independent Scotland would fair better with a Citizen’s Income (CI) or Basic Income (BI) scheme,” Evidence to the Expert Working Group on Welfare, December 13, 2013.
Miller has previously submitted evidence on basic income to the Scottish Government, describing the purported benefits of, philosophical arguments for, and existing empirical research on the idea. (She does not propose any specific basic income scheme here.)
Donald Hirsch, “Could a Citizen’s Income Work?,” Joseph Rowntree Foundation, March 2015.
Hirsch considers major shifts in popular opinion that would be required for the acceptance of a universal basic income. He maintains that UBI is not immediately viable but that reforms in the UK’s Universal Credit system could start to make UBI eventually “more thinkable than it is today.”
Anthony Painter and Chris Thoung, “Creative citizen, creative state: The principled and pragmatic case for a Universal Basic Income,” RSA, December 2015.
Painter and Thoung present multiple arguments for UBI, and develop a proposal for a scheme for the UK, modifying an earlier proposal put forward by the Citizen’s Income Trust. The RSA won a 2016 “Think Tank of the Year” award in part due to this report.
James Mackenzie, Siobhan Mathers, Geoff Mawdsley, and Alison Payne, “The Basic Income Guarantee,” Reform Scotland, February 2016.
The authors critique the UK’s existing welfare system and propose the replacement of many benefits with a universal basic income. They develop a funding model for UBI at the level proposed by the Scottish Greens (£100 per week per adult and £50 per week per child).
Howard Reed and Stewart Lansley, “Universal Basic Income: An idea whose time has come?” Compass, May 2016.
Reed and Lansley simulate and analyze basic income schemes for the UK: three variants of a “full scheme” that replaces most existing means-tested benefits, and two variants of a “modified scheme” that exists alongside existing means-tested benefits in place. They recommend the latter, possibly as transition to the former, and discuss possible funding sources.
Reviewed by Asha Pond
Photo: Scottish Parliament Building, CC BY-NC 2.0 Hamish Irvine
by Guest Contributor | Jan 27, 2017 | Opinion
Written by: Pierre Madden
Basic Income, it is argued, provides an effective and efficient means of conquering poverty. What, exactly, is the problem that we are trying to solve? Mention poverty to someone and they are likely to immediately think of the Third World. Bringing the focus back to poverty in developed countries is fraught with preconceptions. People have predispositions to think about issues in certain ways. They share these predispositions with all other members of society regardless of specific opinions on social questions. Various models are utilized rather than others based upon how we frame the issue.[1] And so we feel that we have an intuitive grasp of the subject.
Courts will accept eyewitness testimony that someone was drunk. If a person were to get in an accident while driving and damage another’s car, then during the time of car accident settlements, the defense lawyer can bring in an eyewitness who can testify to the fact that the driver was intoxicated. The witness is not an expert. No Breathalyzer test was done; no blood sample was taken. They can just tell from a person’s demeanor and the nature of the accident whether or not it could have been a DUI case. It is considered common knowledge. The same can be argued for poverty. Broad definitions of poverty exist, such as: “the condition of a human being who is deprived of the resources, means, choices and power necessary to acquire and maintain economic self-sufficiency or to facilitate integration and participation in society.”[2] “In 1958, John Kenneth Galbraith argued, ‘People are poverty-stricken when their income, even if adequate for survival, falls markedly behind that of their community.'”[3]
The problem is translating this qualitative information into numbers so that policies can be implemented and progress tracked.
Some people accept that poverty is undefinable because it is a personal experience. This complexity is highlighted in the expression ‘poverty and social exclusion.’ A concept that you can’t define is difficult to measure. We may be evaluating actions taken to reduce poverty by a method which measures something completely different. Just counting the poor turns out to be a daunting task.
Many approaches are taken to arrive at a threshold value that defines poverty. I will present examples from Canada, Europe in general, the United States and the United Kingdom. Debates surrounding the various metrics are discussed as they come up. Some work incomes and welfare benefit numbers provide context.
In Canada, no official definition of poverty exists. Statistics Canada has been making this point for almost 45 years[4]. What is measured is low-income. Some countries like the United States have an official definition of poverty even if ‘there is still no internationally accepted definition of poverty-unlike measures such as employment, unemployment, gross domestic product, consumer prices, international trade and so on.’[5]
Statistics Canada tracks three low income statistics.
- The Low Income Measure (LIM) is 50% of the adjusted mean income of Canadians[6]
- The Low Income Cut-Off (LICO) starts with the spending of the average Canadian family on shelter, food and clothing (43% of after tax income).[7] The threshold is set at 20% more.[8] Any family earning less is below this Low Income Line.[9]
- The Market Basket Measure (MBM) ‘is a measure of low income based on the cost of a specific basket of goods and services representing a modest, basic standard of living.’[10] It takes into account the ability to reasonably participate in community activities as well as physical health. It varies by geographical location.
This last metric developed in the late 1990s by Human Resource and Skill Development Canada is different from the other two, introduced by Statistics Canada. The first two statistics are unambiguously relative. Strictly speaking they measure income inequality. While the Conference Board of Canada does not hesitate to refer to the MBM as absolute[11], the specialist I spoke to at Statistics Canada was not so sure.[12] However, he felt that the basic-needs poverty line (BNPL) proposed by Professor Chris Sarlo of the Fraser Institute might qualify as absolute. Sarlo himself nuances this view:
This basic-needs approach to poverty is often referred to as an ‘absolute’ measure. This label is misleading insofar as it suggests that the list can never change and is therefore completely out of place in our rapidly changing society. While the basic needs line does propose a broad list of necessities that remains in place over time, the nature, standard of quality, and the quantity of each of the components will vary across societies and will vary over time in a given society. In other words, the basic-needs approach is partly absolute (the list is limited to items required for long-term physical well-being) and partly relative, reflecting the standards that apply in the individual’s own society at the present time.[13]
Stepping back a bit, you can often use absolute poverty as a synonym for extreme poverty, a term applicable to deprivation in very poor countries. Even so, relative elements remain: you can’t compare the situation of someone with no heating in the Arctic to that of someone with no heating in the Tropics. Moreover, Sarlo’s BNPL is approximately 30% lower than the MBM using a similar approach. Clearly, relative and absolute measures overlap and both involve a degree of judgment and arbitrariness.
There are many other variations on these themes. I will cover just a few.
In Europe, they use a measure called the at-risk-of-poverty threshold to define poverty. It represents a ‘percentage of the median or mean value of the Equivalised disposable Income after social transfers.’[14] ‘A threshold of 60% is the most commonly used.’[15] EU countries simply referred to the 60% level as ‘generally accepted.’ [16] Tables sometimes show statistics calculated at 40%, 50%, 60% and 70%, without comment.
The official United States poverty threshold has a fascinating history.[17] Based on the work the Social Security Administration economist Mollie Orshansky, it is often referred to as absolute. However its creator labelled it ‘arbitrary but not unreasonable.’[18] As early as 1959, Orshansky was aware of the pitfalls and limitations of the standard budget (usually called market basket today) approach to defining poverty. At the time, and even today, only with food, because of its nutritional value, can we reach some consensus about what minimal requirements are. Orshansky used the two lowest budgets devised by the Department of Agriculture: the low-cost food plan and the even less expensive economy plan. For the non-food portion, she used Engel’s Law (named for the statistician Ernst Engel not Marx’s collaborator Friedrich Engels), a normative principle establishing that a family spends one third of its total income on food. Using a multiplier of three for food costs under both plans, with adjustments for childless couples and single people, 124 thresholds were developed for farm and non-farm families of various compositions. With a few minor modifications and yearly inflation updates, this measure, based on the economy plan, is still in use today to count the poor in the United States.
A novel variant of the market basket approach, the Minimum Income Standard for the United Kingdom (MIS) is maintained by the Centre for Research in Social Policy at Loughborough University in Leicestershire, UK. [19]
MIS is based on detailed research with groups of members of the public specifying what items need to be included in a minimum household budget. The groups are informed by expert knowledge where needed, for example on nutritional standards. The results show how much households need in a weekly budget and how much they need to earn in order to achieve this disposable income.’ [20]
MIS is not an absolute measure like the US poverty line nor is it entirely relative.[21] ‘MIS also seeks to ensure that minimum income is looked at in the context of contemporary society, but does so in an evidenced way.’[22] Rather than make assumptions about societal standards, public input is used. Also, the UK’s Joseph Rowntree Foundation, which created the MIS, does not consider it to be a measure of poverty[23] and uses the 60% of mean measure in reports it publishes such as Monitoring poverty and social exclusion 2016.
To understand how different the figures are and to visualize the impact they have on the number of poor that are counted, I have converted all the metrics discussed into dollar amounts, in the table below. I make no claim that these numbers are comparable, only that they are reasonably accurate and up-to-date. The last three numbers are actual welfare payments rather than poverty statistics. They are strikingly lower than the rest and this fact does not speak for itself. It does, however, tell a story, if I may digress. The usual reaction when seeing these numbers is: how can someone live on such little income? I would ask: how does one get out of poverty under such straitened conditions? 5 In Quebec, a welfare recipient is allowed to earn $200 per month without penalty. Over that amount, for every extra dollar made their benefits are cut by a dollar (a 100% marginal tax rate). In France, every Euro earned is deducted. This is what is known as the poverty trap. The system is structured so as to remove any incentive to get out of poverty.[24] When governments set payment schedules so far below poverty lines and also discourage the poor from improving their situation, what message does that send?[25] And in case you were thinking that the answer is ‘Get back to work’, item 11 shows what those who cannot work receive about 50% more, still nowhere near any threshold, except Sarlo’s BNPL (item 4), which has been ‘criticized as being too stringent and even “mean-spirited”.’13 More on that later.
Items 8 and 9 are incomes for a 40-hour workweek. These numbers indicate that poverty is not an issue confined to the unemployed. For example, in 2014, ‘Walmart’s low-wage workers cost US taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing.’[26]
| |
Annual thresholds for a single person in 2016[27] |
CDN$ |
US$ |
| 1 |
Canadian Low Income Measure (LIM) [28] |
$22,652 |
$16,904 |
| 2 |
Canadian Low Income Cut-off (LICO) [29] |
$20,788 |
$15,513 |
| 3 |
Canadian Market Basket Measure (MBM) for Montreal [30] |
$17,944 |
$13,391 |
| 4 |
Sarlo of the Fraser Institute: Basic-Needs Poverty Line (BNPL) (Canada) 13 [31] |
$12,205 |
$9,108 |
| 5 |
European low-income measure (60% of mean income) applied to Canada. |
$26,941 |
$20,105 |
| 6 |
US poverty threshold [32] |
$16,202 |
$12,091 |
| 7 |
Minimum Income Standard MIS (UK)[33] [34] [35] |
$28,533 |
$21,293 |
| 8 |
Pre-tax full-time earnings at minimum wage in Quebec [36] |
$22,360 |
$16,687 |
| 9 |
Pre-tax full-time earnings at US federal minimum wage [37] |
$20,207 |
$15,080 |
| 10 |
Actual welfare payment in Quebec for those deemed fit for work. [38] |
$7,476 |
$5,579 |
| 11 |
Actual welfare payment in Quebec for those deemed unfit for work. [39] |
$11,340 |
$8,462 |
| 12 |
French Revenu de Solidarité Active (RSA) [40] |
$8,752 |
$6,531 |
As mentioned previously, the most striking pattern in the table is how the last three entries are low, compared to the rest. The others cluster together with the notable exception of item 4 (Sarlo’s Basic-Needs Poverty Line) and Item 10 (the US poverty threshold). Both of these statistics tend towards absolute measures, which are meant to focus on deprivation rather than income inequality. Which measure is appropriate in a developed country? If all you have achieved is to avoid destitution, are you no longer living in poverty? Not if integration and participation in society is beyond your reach. This is why relative measures of poverty are deemed more appropriate choices, especially in developed countries: they account for social inclusion.
I have tried to frame the question of poverty in such a way as to provide a better understanding of the numbers that inevitably come to define it at some point. Many judgments and choices are involved in calculating these numbers. Agreeing on a number requires social consensus. Unfortunately, focusing on the numbers is not conducive to building such a consensus and is even counterproductive, in that it immediately evokes highly emotional questions of cost and fairness. The whole debate sidesteps issues of social exclusion and lack of opportunities, to which people can better identify in their own lives.
Getting back to the original question, we need a definition of poverty to implement Basic Income. However, labeling it with a threshold number is both necessary and self-defeating. It is not possible to implement Basic Income without pinning down the benefit and cost numbers, yet focusing on these numbers distracts from the positive principles that would muster support for them. Framing the question of what poverty is in such a way that principles are explored before we formulate a numerical definition is more important than the number itself. This reframing is thus a prerequisite to Basic Income.
Author biography: Pierre Madden is a zealous dilettante based in Montreal. He has been a linguist, a chemist, a purchasing coordinator, a production planner and a lawyer. His interest in Basic Income, he says, is personal. He sure could use it now!
Sources:
[1] Volmert, A., Gerstein Pineau, M., & Kendall-Taylor, N. (2016). Talking about poverty: How experts and the public understand poverty in the United Kingdom. Washington, DC: FrameWorks Institute.
[2] An Act to Combat Poverty and Social Exclusion, CQLR c L-7 Quebec, Canada, art. 2
[3] Galbraith, J. K. (1958). The Affluent Society. Boston: Houghton Mifflin. Quoted in Wikipedia: Poverty threshold
[4] On poverty and low income by Ivan P. Fellegi, Chief Statistician of Canada September 1997
[5] Ibid.
[6] Statistics Canada Table 206-0091 Low income measures (LIMs) by income source and household size in current dollars and 2014 constant dollars.
[7] Statistics Canada Low-income cut-offs
[8] “Twenty percentage points are used based on the rationale that a family spending 20 percentage points more than the average would be in ‘straitened circumstances.'” Ibid.
[9] LICO for a single person in a metropolitan area in 2012 = $19597
[10] Market Basket Measure (2011 base)
[11] https://www.conferenceboard.ca/hcp/hot-topics/caninequality.aspx#ftn12
[12] Andrew Heisz, assistant director of the Income Statistics Division of Statistics Canada, personal communication, October 19 2016
[13] Sarlo, C. (2006). Poverty in Canada: 2006 Update. The Fraser Institute.
[14] E-mail from Geoffroy Fisher, Eurostat User Support, Eurostat helpdesk December 28, 2016.
[15] Ibid.
[16] Institut national de la statistique et des études économiques (Insee)
[17] All of the information in this paragraph and much more, as well as a wealth of references to primary sources can be found in Gordon M. Fisher, The Development of the Orshansky Poverty Thresholds and Their Subsequent History as the Official US Poverty Measure, May 1992-partially revised September 1997
[18] Orshansky, “Counting the Poor: Another Look at the Poverty Profile,” Social Security Bulletin, Vol. 28, No. 1, January 1965, p.4. Quoted in Fisher (see previous note)
[19] https://www.lboro.ac.uk/research/crsp/mis/
[20] https://www.lboro.ac.uk/research/crsp/mis/whatismis/
[21] “…We would not expect the content of a MIS basket to stand still. But we also don’t think that changes in the average AUTOMATICALLY trigger proportionate changes in the minimum, and in this sense it is not a relative measure.” Donald Hirsch, Director of Centre for Research in Social Policy, personal communication, Nov 1 2016
[22] Donald Hirsch, Director of Centre for Research in Social Policy, personal communication, Nov 1 2016
[23] Joseph Rowntree Fondation Press Office, personal communication, January 11, 2017
[24] John Stapleton Why is it so tough to get ahead? How our tangled social programs pathologize the transition to self- reliance. Metcalf Foundation November 2007
[25] There is no question that low welfare payments are a political choice. In 1969, when Quebec introduced its first welfare legislation, benefits for people under 30 were set at 70% of the amount provided to everyone else. Accounting for inflation, this still represents more than what someone unfit for work receives today.
[26] Forbes April 15 2014
[27] Throughout, $US1 = CDN$1.34
[28] Statistics Canada Table 206-0091 Low income measures (LIMs) by income source and household size in current dollars and 2014 constant dollars.
[29] Statistics Canada Table 1 Low-income cut-offs (1992 base) after tax. 2014 figures for large metropolitan areas adjusted for inflation.
[30] Statistics Canada Market Basket Measure thresholds (2011-base) for reference family of two adults and two children, by MBM region Data for Montreal converted to single person (see note 1 in table)
[31] $10314 X 129.1/109.1 = $12,205
[32] US Census bureau Poverty Thresholds for 2015 by Size of Family and Number of Related Children Under 18 years $12082 adjusted for US inflation (0.1%), 1 US$ = 1.34 CDN$
[33] https://www.lboro.ac.uk/research/crsp/mis/
[34] Minimum Income Calculator
[35] £1 = US$1,23
[36] Minimum wage in Quebec = CDN$10.75
[37] US$7.25 per hour as of July 2016
[38] Emploi Quebec How benefits are calculated
[39] Ibid.
[40] Le revenu de solidarité active (RSA)
by Kate McFarland | Jan 26, 2017 | News
Videos of two lectures on Finland’s basic income pilot are now available online. The lectures, delivered by Marjukka Turunen and Olli Kangas of Kela, were originally aired as part of a public event on Finland’s “social innovations”.
As previously announced in Basic Income News, Kela, the Social Insurance Institution of Finland, held a series of short lectures called “Socially Innovative Finland” on January 12, 2017. The event, which was open to the public and streamed lived online, highlighted two “social innovations” from Kela: the eight-decade-old maternity package, under which all mothers-to-be receive a package of child necessities, and the two-year basic income experiment launched this year. Two speakers, Marjukka Turunen (Head of Legal Affairs Unit) and Olli Kangas (Director of Government and Community Relations), discussed the basic income experiment and fielded a variety of questions from the live and online audiences.
Olli Kangas: “Basic income – Part of tomorrow’s social security?”
Kangas situates Finland’s basic income experiment in its political and economic context: the center-right government that took office in May 2015 decided to investigate a basic income as a way to remove the disincentives to work and reduce the bureaucracy inherent in Kela’s current programs of unemployment compensation; meanwhile, changes in the labor force underscored the need for a revised system of social security.
Kangas describes the rise of short-term labor contract labor and the threat of automation as general sources of motivation for basic income. Then, focusing specifically on the Finnish context, he discusses the country’s increase in self-employment as well as its high rate of structural unemployment. He goes on to explain how Finland’s current welfare system can creates a disincentive to work. In some cases, as he describes, individuals who leave unemployment benefits to take a job face an effective marginal tax rate of 80-100%. Moreover, the current system creates “bureaucratic traps” whereby individuals are deterred from accepting short-term work (asking, e.g., “If I accept the job for six months or so, do I again qualify for the benefit I used to have?”).
Marjukka Turunen: “How the basic income experiment works in practice”
Turunen provides an introduction to Finland’s basic income experiment, including an overview of the experiment’s design, motivation, and implementation. She explains why the researchers hypothesize that the basic income will provide an incentive for unemployed persons to take on paid employment–the main outcome that the experiment has been designed to test–and describes other potential benefits to individuals. For example, she notes that financial security brings “peace of mind” and allows individuals to plan for the future with less uncertainty. Furthermore, the basic income eliminates the time-consuming task of applying to Kela to maintain unemployment benefits–which, as she mentions, requires the submission of paperwork every four weeks–or to change benefit status due to sickness or childbirth. Recipients of the basic income are not required to inform Kela of their employment status, income, or other life changes.
Turunen also describes Kela’s process of selecting a sample of 2000 individuals for the experiment, contacting them, and distributing the first funds. She points out that researchers will not conduct interviews of the subjects during the course of the experiment, in order to avoid a possible source of influence on their behavior. Moreover, it is the policy of Kela not to disclose information about the basic income recipients to the media. Nonetheless, Turunen notes, some recipients have themselves divulged information about their situations and reactions to the basic income trial; she reviews some of these preliminary reactions near the end of the lecture.
Reviewed by Danny Pearlberg
Photo: Helsinki, CC BY-NC-ND 2.0 Jonathan
