The event will occur on Monday 28th to Wednesday 30th of September 2020, and is entitled “Basic income, the ecological crisis and a new age of automation”. Submission of abstracts can be done until Friday January 31th, 2020, considering the following main themes / questions:
Can basic income play a role in tackling the multifaceted ecological and social crises confronting the world today?
As climate change and the ‘new age’ of automation continue to re-shape the globe, can and should basic income form part our answer to these challenges?
Can basic income be part of a Green New Deal or is a Job Guarantee a better way forward?
Can basic income promote ‘de-growth’ and genuine sustainability?
Should automation and digitisation be used as a justification for basic income?
What is the evidence regarding the impact of these technological processes on the availability of jobs?
Is basic income an adequate replacement for any technological unemployment that may occur (now or in the future)?
Paul Ross is trying to found the Citizen’s Dividend Party (CDP) in Australia, and to take part in the election of May 2019.
The foundational pledge, as found on the website, is:
“To render virtually Every Citizen Directly Better-Off and Australian Society absolutely Better-Off.”
This would be accomplished through the introduction of a Universal Basic Income (UBI), the pillar of the of the would-be party. The specifics can be found on the CDP’s Declaration: the bulk of the Citizen Dividend would be founded through a 20% full-breadth Goods and Services Tax (GST), the Australian Value Added Tax (VAT), and the proposed dividend would amount to around $18,000 for adults and $5,000 for children annually.
In order for the party to start, it needs 500 members who are enlisted to the Australian electoral roll. With the next federal election due by May 2019, and the application to register a new party taking at least twelve weeks, the goal is to reach the required number of members by March 2, 2019.
Jim Chalmers, a Labor Party MP in Australia, claims that basic income, a concept gaining traction in Australia, is a “backward step”. His concerns focus on perceived increases in inequality and affordability issues. Chalmers and Mike Quigley, former chief executive of NBN Co, have laid out these views in their latest book, “Changing Jobs: The Fair Go in the New Machine Age”, released on the 25th September 2017.
According to Chalmers and Quigley, the way forward is to aim for full employment, in the face of technological change. This generally aligns with previous claims by Labor Party shadow treasurer Chris Bowen. They also agree that introducing basic income will also equate to slashing on the welfare state. As for unemployment, Chalmers is blunt: “feared widespread loss of jobs in the coming age of automation will not be fixed by giving everyone a basic income”. He also views basic income as basically unfair, since it would amount to giving the same support to a millionaire and to “a single mom struggling to keep food on the table”. That, however, is given out of tax context, since basic income proposals usually revolve around redistribution of tax money from the relatively richer people towards relatively poorer ones. Within this context, a millionaire will naturally be a net contributor to the basic income scheme.
However critical of basic income, Chalmers and Quigley present their own views of what can work for humanity in the near future, of which the Australian people are a close example. They think it is possible to use Big Data to predict “social problems at the household level before they emerge”. This, of course, comes along with high surveillance over people’s “work patterns, hours and wages”. With that and new ideas such as “income smoothing”, which will arguably complement low-paid workers incomes, or smooth their transition from better paid jobs to less paid ones (admitting that well paid jobs will definitely diminish, on average, in the foreseeable future). They also refer to reinforced unemployment benefits, financed by extra taxes on the general public and/or large corporations. To tackle future unemployment, Chalmers and Quigley recommend compulsory education on programming and robotics, while strengthening existing curricula with computational disciplines in order to elevate technological skills in everyone.
Jon Altman and Eva Cox. Credit to: Alfred Deakin Institute (Deakin University, Melbourne)
The Alfred Deakin Institute at Deakin University in Melbourne, Australia, hosted a forum on the 17th and 18th August discussing the concept of a universal basic income.
Workshop co-convenor Jon Altman (Deakin University and ANU) suggested that part of the impetus for the workshop was the sense that discussion of UBI in Australia was not as advanced as it was in other countries. As evidence of this he cited the comment made by Chris Bowen (Shadow Treasurer for the Labor party), who said that UBI was “a terrible idea”. Tim Hollo – Executive Director of the Green Institute – also highlighted the fact that the Greens were the only major party in Australia currently in support of the concept.
Dr Tim Dunlop – author of Why the Future is Workless – gave context to the discussion by talking about the state of work, technology and automation. He said the “salient point” in labour market analysis is that many problems are current. Evidencing this, he summarized some figures from the International Labour Organization, including; global unemployment exceeding 200 million in 2017; stagnation of real wage growth; decline in proportion of wealth going to wages; 760 million men and women worldwide in “vulnerable work”, defined as work unable to bring them above the the world poverty threshold of AUD $3.10 per day; millions in refugee camps and jails; record levels of over and under-employment; and the creation of “increasingly precarious” work.
Looking at future technology, Dr Dunlop said that the consistent finding was that “around 40 to 50% of jobs are at high risk of automation in the next twenty years” (Oxford Martins School Report, 2015) under “currently existing technologies” (McKinzie Report) and that it would be “close to a form of denialism”, therefore, to state, as many do, that “concerns about technological unemployment are overstated”. Associate Professor Karl Widerquist agreed with this point, stating that “people are not interchangeable parts” and often find that their “learn[t] skills” are “not needed any more”. In this regard, he said a UBI could compensate for the continual disruption of technology, and the inherent inability of workers to adapt and provide themselves with income. Phillip Ablett (USC), summarising work by Mullally, added that neo-liberalism’s emphasis “on ‘individual responsibility’ for poverty” contributed to this persecution of workers, where we tend “to blame individuals for their ‘failure’ to succeed in the market economy rather than consider the structural impediments to achievement”.
Professor Widerquist said a shift away from labour prosperity to capital prosperity has led to an “incentive problem” where employers don’t have an incentive to treat their employees appropriately since employees don’t have any power to refuse their conditions. The universal nature of a UBI, as such, would allow for a “voluntary participation economy instead of a mandatory participation economy”. Dr Frances Flanagan agreed that “capital accumulation” was central to the problem of “acute inequality”, however she expressed concerns that discussions around UBI focused too heavily on wage leverage and monetary incentive. Citing “care work” as an example “utterly antithetical” to the taylorisms of tasking and efficiency, Dr Flanagan said we need a more positive definition of ‘work’ since there are always ‘jobs’ that “require empathy, judgement and relationships”. UBI, consequently, needs to be “supportive of the fight for better jobs” and “[be] supportive of the fight against marketisation”. Professor John Quiggin (UQ) echoed Dr Flanagan’s concerns that UBI risks the possibility of replacing social services with a single payment, though he did point out that an unconditional stipend could destigmatise the concept of welfare payments to individuals, undermining the concept of the “deserving and undeserving poor”. Professor Eva Cox (AO) was also critical of UBI as a means to empowering a “protestant, male, Anglo” market system, where humans are economically judged as being good or bad “consumers”. She reiterated the need to revisit the concept of ‘work’ through a lense where humans were considered “social”, “dependent” and “interdependent”, advocating a UBI that was used to redefine “the social contract between the nation state and the individual”, with “reciprocity built into it”.
On the subject of evidence to support a UBI’s practical plausibility, both Professor Widerquist and Professor Greg Marston (University of Queensland) said that trials investigating the effects could be strategically dangerous since the trial conditions are often neither unconditional nor universal. Marston pointed to climate change as an example of where the accumulation of data has brought about, in many cases, confirmation bias in support of inactivity rather than impetus to instigate change. It was generally agreed that the issues of design and implementation were not, therefore, easily separated. Professor Quiggin, Troy Henderson and Dr Ben Spies-Butcher advanced the idea of a staged introduction, a “stepping-stone” approach which would retain the “big idea” excitement for voters and simultaneously satisfy technocrats. Quiggin’s preferred model was to favour the “basic” over the “universal” through various mechanisms and adjustments to tax regimes, introducing a full UBI payment to selected, vulnerable populations, and then gradually increase the number of people covered. The cost of everyone in Australia receiving a full UBI was estimated to be around 5-10% of GDP. Henderson and Spies-Butcher offered modelling that began by universalising the age pension, and by also introducing an “unconditional Youth Basic Income paid to those aged 20-24 based on a negative income tax model.”
In conclusion, the consistent theme of the two days was that UBI cannot be offered as a silver-bullet solution to issues around inequality, welfare, social security and the potential growing precarity of work. So while there is a tendency amongst advocates (worldwide) to present UBI as a single policy response for addressing many of the problems societies have with these issues, the very strong feeling of the workshop was that this could be a dangerous over-reach.
You can view some of the contributors speaking here.
In 1970, conservative Republican US President Richard Nixon introduced a health bill into the American Congress. It passed but was defeated in the Senate. He did not realize it was a health bill, nor did many of his fellow politicians. It was called the Family Assistance Plan, a guaranteed income for families with children, not adequate to bring the income up to the poverty line, but substantially more than was previously on offer.
It required the breadwinner to accept work if available. Thus it was targeted, conditional, and inadequate by itself to eliminate poverty, but it was a huge change in thinking from a conservative leader in the United States. It came with this impressive rhetoric
“Initially this new system will cost more than welfare, but unlike welfare this is designed to correct the condition it deals with and thus lessen the long range burden and cost.”
The health-income gradient and the failure of ‘welfare’
We know that health and poverty are inextricably linked, that health outcomes follow the income gradient, and that the basis for this association in wealthy countries with good health systems is not simply access to care, but poverty and its own associations. Thus the Nixon proposal was a health bill.
The famous Whitehall study of British public servants who all had similar access to the National Health Service demonstrated a clear association of income with health outcomes. Those most in control of their own lives lived longer and suffered less.
Because of concern about wasting taxes on welfare and about the so called ‘welfare trap’, we have developed a highly targeted welfare system in Australia, with a strong emphasis on mutual responsibility. Our efforts to identify any welfare ‘fraud’, accidental or intentional, have become increasingly intense.
We continue to force people to chase jobs which do not exist or which they could not do. We hound them with letters generated by computers and then make it difficult for them to question any charges against them. We demean them. We dis-empower them even further than their poverty, unemployment, mental illness, or physical illness already does.
A BIG idea
An alternative is needed. The concept of a Basic Income Guarantee (BIG) is not new. Thomas More wrote about it 400 years ago in his book Utopia. Variations of it have been advocated for centuries. Bismark’s social insurance in Germany has some elements of the concept. Nobel Laureate economist and free marketeer Milton Friedman advocated it in the form of a negative income tax (NIT).
Dr. Tim Woodruff
Four trials in the 1960-70s in the United States used Friedman’s model (p 107-109). If an individual’s tax return indicated a low or no income, a tax rebate was paid as a monthly deposit to a bank. The size of the rebate declined slowly as income was earned, ensuring earned income led to an increase in total income. The largest of these four trials involved 4,800 families, and the amount given varied from 50 to 100 percent of the poverty level. There were no work requirements.
The alternative model to NIT is a cash payment. This was trialed in Canada in 1974, where 60 percent of the Low Income Cutoff (poverty level) was paid. For every dollar earned the payment was reduced by fifty cents. Analysis of results showed that even though only one third of the population ever qualified over the 4 years of the trial, high school completion results increased and hospital admissions decreased during the trial compared to the control group.
An even more simple model is one in which the cash payment goes to every individual adult and is not means tested. This eliminates any negative perception of being needy, because everyone receives it. For those who do not need it, the money can easily be recouped by changes in taxation.
Counting costs, reaping benefits
The Basic Income Earth Network established in 1986, defines a basic income guarantee (BIG) as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement”. This does not specify the level of the cash payment but the simplest and likely the most effective method would be to make the level at or slightly above the poverty line.
Concerns about the basic income guarantee relate both to the benefits and the costs. The Canadian trial mentioned above, demonstrated both health and education benefits. Analysis of the effect of increased household income in the Cherokee Indian community as a result of distribution of profits of a Cherokee owned casino showed less criminality and improved education down the track. None of this is surprising.
But does this mean people will not work as hard? The US trials referred to previously showed a decrease in hours worked particularly among women and young adults. Is that bad? It is not clear from the data what they did instead of working so much. Were women spending more time looking after their families? Were young adults looking more carefully at work options and training?
Men reduced their work hours by about six percent but it did not appear that they were permanently unemployed. Rather, it appears they were spending more time between jobs. The sky did not fall in. Most people who can earn a little more than a poverty level income will do just that.
Is it affordable?
A basic tax free income guarantee of $22,000 (the poverty line at 50% of the median income for a single person) for every adult Australian (18 million people) would cost $400 billion a year. But the idea is not to increase the net income of millionaires by $22,000. It keeps administration simple to give the basic income to everyone and recoup in taxes from the wealthy. So the real cost is much less.
Only about six million Australians currently receive income support. Another one million or so have some funding from the Federal Government. Being generous, for eight million to receive the BIG would cost $176 billion, almost completely offset by replacing the welfare budget of $150 billion. That could be abolished.
Removing the tax free threshold of $18,200 for the 12 million earning more than that would generate $41 billion. But anyone on a low income would still have a total income of more than $22,000.
Tweaking the tax rates on higher incomes would effectively remove the BIG from higher income earners. Provision for children would add to the cost. Reducing BIG for dual income households to a level which would reflect economies of scale, in the same way as pensions do currently, would reduce the cost.
Most Australians would not lose a cent. All Australians would be guaranteed a basic income, whether sacked, disabled, unable to find work, or simply unemployable. The NDIS and Medicare would continue unchanged. This is all possible. Even the Productivity Commission thinks it’s worth investigating (p69):
“While Australia’s tax and transfer system will continue to play a role in redistributing income, in the longer term, governments may need to evaluate the merits of more radical policies, including policies such as a universal basic income.”
A bold move for health
If Australia introduced BIG we would have a system that almost eliminates poverty, thus appealing to those deeply concerned about the plight of the disadvantaged. We would also have a system which gives such people the genuine capacity to make their own decisions about what they do with their lives, which should appeal to those committed to individual responsibility.
Implementing this idea would do away with the current cruel, dis-empowering, wasteful welfare system. It would improve health outcomes. It could improve productivity. It would improve the life prospects of the 13% of Australians who currently live in poverty, the 17.4 percent of kids who are being raised in poverty, and the 40 percent of children in single parent families who live in poverty.
This is a health issue. Medical groups of all types should think about how we might use our knowledge and concern about health to bring this issue to the minds and actions of our politicians.
About the author:
Dr. Tim Woodruff is president of the Doctors Reform Society, an organisation of doctors and medical students promoting measures to improve health for all, in a socially just and equitable way. On twitter @drsreform
The 2020 BIEN Congress was to be held in Brisbane in Australia from the 28th to the 30th September 2020. Due to the coronavirus outbreak, the event has been cancelled. BIEN’s Executive Committee and the Scottish and Australian congress Local Organising Committees have agreed the following statement: ‘The Scottish and Australian Congress Local Organisation Committees have agreed that the current plan is to hold the 2021 BIEN congress in Scotland and the 2022 BIEN congress in Australia.’
A Basic Income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement. Read more
A series of conversations from around the world that explore the relationship between the Covid-19 pandemic and Basic Income. Read more