The proposal for European universal basic income & European Social Pillar Action Plan & long-term post-COVID-19 recovery strategy
V. KORO EC, a social policy analyst from Slovenia, suggested that the European Commission examine the idea of a European Universal Basic Income. The UBI would be paid directly from the ECB’s “helicopter money.” The suggestion was made within the debate of the European Social Pillar Action Plan. The proposal stems from the observed shortcomings of the current social security systems related to the COVID-19 crisis, the efforts of the United States, India and many other countries made in this direction and the research done by OECD, IMF, ILO, UNICEF, European and Slovenian experts. This proposal is not the same as the European Citizens’ Initiative “Start Unconditional Basic Incomes (UBI) throughout the EU“, for which signatures were collected starting on 25 September 2020. However, this proposal does take a similar direction as the European Citizens’ Initiative. One day Europeans will receive a local, national, European and global basic income to safeguard and foster democracy and ecological-economic development.
The proposal for European UBI & European Social Pillar Action Plan & long-term post-COVID-19 recovery strategy.
On 7th of September 2020 Mr Nicolas Schmit took part in a videoconference ‘roadshow’ to consult with Slovenian social partners and stakeholders on the upcoming Action Plan to further implement the European Pillar of Social Rights. V. KORO EC, a social policy analyst from Slovenia suggested introduction of a European universal basic income, which would be paid directly from the ECB’s “helicopter money” as proposed by Mencinger (2017), because none of the 20 principles of the European Social Pillar address the COVID-19 crisis adequately.
The current solutions in the European Social pillar, the 13th principle (unemployment benefits) and the 14th principle (minimum income), make the safety net conditional on incentives to reintegrate into the labour market. This is obviously not the right solution in the case of COVID-19, where work is not allowed. When people are not allowed to work (as in the case of COVID-19), it does not matter how educated they are, what the agreement on the minimum wage is, how good the social and economic dialogue is and so forth. In such a case is the most important social security system, a safety net that guarantees the minimum income as a kind of ‘universal insurance system’ that helps everyone, including people on the labour market, to be compensated for loss of earnings and to receive reimbursement for lost investment etc.
On the other hand, the 12th principle (social protection) and 20th principle (access to essential services) are combined with the prerogative to satisfy the conditions “to be in need and not to be able to work”. To prove this is such a demanding administrative task that is obviously not suitable in times of emergency such as COVID-19 when there is no time or resources. We have already seen in 2008 that the current system is not suitable in time of national emergency, but that is only good for ‘normal’ situations – which is exactly the opposite of what people expect from national social security systems. The COVID-19 situation also made it clear – again – that the current national social security system is good for some workers in ‘standard employment’ and not for workers in ‘non-standard’ jobs.
In the policy brief “Supporting livelihoods during the COVID-19 crisis: Closing the gaps in safety nets“, the OECD starts with a similar finding: the COVID-19 crisis has exposed the pre-existing gaps in social protection provisions (2020: p. 2). It continues with the recognition of the effectiveness of universal unconditional cash transfers (2002: pp. 13-17): “In a crisis situation, universal cash payments, made to everyone, can maximise coverage and, depending on the size of the payment, help the entire population to make ends meet. Universal transfers can be rolled out quickly as they do not depend upon the income, assets, or prior contributions of the recipient avoiding costly and time-consuming means tests. The appeal of this simplicity has led a number of OECD countries to announce plans for such schemes during the COVID-19 pandemic.” (OECD 2020: pp. 16-17, Box 4).
The same applies to emerging and developing economies, where the development of universal social protection is supported and guided by several recent key international initiatives: ILO Recommendation 202 on Social Protection Floors, and the “Leave No One Behind” agenda as an integral part of the 2030 Agenda for Sustainable Development. SDG goal 1.3 calls for “implementing nationally appropriate social protection systems and measures for all, including floors, and substantially increasing coverage of the poor and vulnerable”, while goal 3.8 calls for universal health coverage including financial risk protection. Health coverage is an important part of living, people need to know that they are being protected in case they get ill. Covid has shown just how many people are vulnerable to what is out there, that is why there are Final expense insurance policies and policies similar that are available to those who want to be prepared in case they do get ill. Health coverage can only go so far, but life insurance can help after a loved one has died.
In 2018, the High-Level Panel at the European Development Days discussed how to address inequalities and “Leave no one behind” agenda in the EU. As described in the report Addressing inequalities: A seminar of workshops (EC 2019) three experts out of four spoke about income inequality. Two of them, Fratzser (pp. 32-37) and Raitano (pp. 55) suggested that the EU should start thinking about a universal basic income, while the third, Callan, suggested that social policy should be based on facts and results of microsimulations (pp. 75).
Prior to COVID-19, the OECD, IMF, ILO and UNICEF had already studied the idea of universal basic income (UBI) in detail. There is an important history of research on the sustainability of UBI funding and its implications for income distribution based on microsimulations, e.g. OECD (2017) and IMF (2018). The findings of the above-mentioned papers were also confirmed in a paper based on microsimulations (KORO EC 2019), which was presented in 2019 at the International Conference on Universal Child Grants organised by ILO and UNICEF to explore the conditions and possibilities of introducing UBI for children. The microsimulations proved that in developed countries UBI can be introduced at a level just above the current Guaranteed Minimum Income scheme (GMI) within the same fiscal envelope (i.e. budget-neutral).
Some Europeans mistakenly assume that the idea of universal basic income is not the right solution for the EU. They think that the EU is the part of the most developed world with the best social security systems. They seem to have overlooked the fact that because of automatisation and digitalisation, the most developed countries have the biggest problem with ‘non-standard’ employment. It is no surprise that Japan and Korea were the two countries, besides the United States, that introduced ‘new universal transfers’ (OECD 2020: p. 4). They also seem to overlook the fact that the EU is heterogeneous. The EU Member States have different social security systems. There are also major divergences in the effectiveness of national administrations in the use of ‘EU money’. Different success in using the ‘Covid-19 money’ will only foster additional divergences in Member States, which can easily turn into political divergences.
As stated at the Bled Strategic Forum (31 August 2020) by some Eastern EU countries, they are ready to follow their own path, as they do not wish to be the ‘second tier’ of the EU. These are the political reasons for the proposal that the EU should distribute the ‘ECB helicopter money’ as a European universal unconditional cash transfer directly to EU citizens. There is also an economic reason: to effectively stimulate aggregate demand in Europe (EP 2016). This has been proposed a number of times since 2008. In Slovenia, we have two papers by an eminent economist on this subject (Mencinger 2015 and Mencinger 2017).
This proposal is not the same as the European Citizens’ Initiative “Start Unconditional Basic Incomes (UBI) throughout the EU” although it goes in the same direction.
EU citizens expect the EU Commission to take into consideration the facts about a universal uniform unconditional individual cash transfer that are based on data and microsimulations. It could be called a European UBI. This transfer should be financed by the ECB. The same for all Europeans, to foster social convergence. This is the main difference with the current EU approach in the domain of the European Social Pillar and post-Covid-19 recovery plan with country specific measures that foster further divergence. Hopefully, the new European Citizens’ Initiative for UBI in the EU will be an additional, democratic sign for the European Commission and the European Parliament of what EU citizens want and expect from them in the area of social security: the Universal Basic Income. The European UBI could be the first step towards a world in which all people will eventually receive a local, national, European and global basic income in order to safeguard and foster democracy and ecological-economic development.
EC 2019. Addressing inequalities: A seminar of workshops. Source: https://op.europa.eu/en/publication-detail/-/publication/d10809c5-4478-11e9-a8ed-01aa75ed71a1
EP 2016. Helicopter money: A cure for what ails the euro area? https://www.europarl.europa.eu/RegData/etudes/BRIE/2016/581970/EPRS_BRI(2016)581970_EN.pdf
IMF 2018. Universal Basic Income: Debate and Impact Assessment. WP/18/273. Source: https://www.imf.org/en/Publications/WP/Issues/2018/12/10/Universal-Basic-Income-Debate-and-Impact-Assessment-46441
KORO EC 2019. Unconditional Basic Individual Universal Child Grant for Belgium following the Slovenian approach. Source: https://basicincome.org/wp-content/uploads/2020/01/Paper_SI_UBI_UCG_BE-KORO EC-2019-for-India.pdf
Mencinger 2015. The Revenue Side of a Universal Basic Income in the EU and Euro Area. Source: https://www.eaco.eu/wp-content/uploads/2015/09/mencinger-2.pdf
Mencinger 2017. Universal Basic Income and Helicopter Money. Basic Income Studies, Volume 12, Issue 2, 20160021, eISSN 1932-0183 Source: https://doi.org/10.1515/bis-2016-0021.
OECD 2017. Basic Income Policy Option. Background Technical Notes. Source: https://www.oecd.org/els/soc/Basic-Income-Policy-Option-2017-Brackground-Technical-Note.pdf
OECD 2020. Supporting livelihoods during the COVID-19 crisis: Closing the gaps in safety nets. Source: http://cnt.be/DOSSIERS/Covid-19/OESO-OCDE-2020-05-20-Supporting-livelihoods-EN.pdf
UNICEF 2019. The International Conference on Universal Child Grants organised by ILO and UNICEF. Source: https://www.odi.org/events/4580-international-conference-universal-child-benefits
The Employment Committee of the European Union (EU) has called for all member states to provide a minimum income, or to upgrade existing minimum income schemes.
A minimum income, unlike universal basic income (UBI), is not distributed to all citizens. In most European countries, a minimum income is already provided conditionally, taking the form of various unemployment benefits, child benefit schemes, disability support, pensions, etc.
Now the Employment Committee has recommended that these schemes be overhauled, or, in any cases where they are not already provided, that they be introduced. This is in response to the fact that 25% of people in the EU – nearly 120 million – are currently deemed to be at risk of poverty and social exclusion.
The Committee’s recommendations include setting the amount provided by consulting official figures such as the Eurostat at-risk-of-poverty rate. They also recommend raising awareness among those eligible for minimum income payments, in order to increase take-up of these schemes.
However, the Committee’s recommendation is not currently binding upon member states. It will now be considered by the full European Parliament, which will decide whether to vote this proposal into law.
Although minimum income differs significantly from basic income, this initiative could potentially pave the way for the development of some form of UBI in the future.
Comments to European Economic and Social Committee (EESC) consultation on the Future of Europe in Dublin, Ireland, June 7, 2017
Social Justice Ireland, an independent Irish think tank and justice advocacy organization, has endorsed proposals for the introduction of an EU-wide basic income system. Speaking at an EESC event held in Dublin on June 7th, Dr Seán Healy, Director of Social Justice Ireland, identified two key areas eroding confidence in the EU:
“1.1. Failure to address the ongoing vulnerability of many EU citizens.
1.2. Failure of the European Commission to protect small countries against its larger, stronger members.”
Addressing the first point, Dr Healy referred to recommendations made in May 2017 by a UN expert group meeting on “Strategies for Eradicating Poverty to Achieve Sustainable Development for All”:
“The social welfare systems in developed countries are no longer fit for purpose. There should be an adjustment of the paradigm including promotion, and openness to study new ideas around a new social contract that is more appropriate for the 21st century. This may entail moving towards a universal basic income system, supporting a living wage rather than a minimum wage, recognizing all work (not just paid employment) as meaningful, and ensuring that all government decisions are subjected to a poverty-proofing process. While the centrality of employment and decent jobs to eradicate poverty is well recognized, employment growth has not been sufficient to absorb the growing labour force, particularly in those countries and regions with large youth populations. Further, there has been a divergence between productivity and wages growth, as well as growing employment insecurity and casualization in all countries.”
In his speaking notes, Dr Healy agreed with the UN expert group’s analysis and recommendations, adding that the EU has consistently ignored these issues. According to Dr Healy, none of the five options provided in the EU White Paper on the Future of Europe address these points, going on to note that:
“An alternative option is required that will protect the vulnerable and move towards a future that effectively addresses poverty, unemployment, inequality and exclusion. The EU needs to become, and be seen to become, a caring Union.”
In the context of Irish politics, universal basic income (UBI) has been endorsed by some of the main political parties. The Green Party has long been in favour of the establishment of a basic income, while Fianna Fáil—the country’s second largest party—has talked about the idea for many years. Fianna Fáil’s spokesperson on social protection, Willie O’Dea, has called for radical reforms of the welfare system. The veteran politician and basic income advocate has said that, if Fianna Fáil were in office, a government-established commission would report on the idea within six months. Writing about UBI in a news article in January of this year, he said:
“While the broad concept of UBI has been around for a while, the challenges facing us today – particularly the changing and often precarious nature of work, not least the threat to jobs posed by automation and short-term contracts – make it a realistic and workable response.
“UBI would replace virtually every non-pension welfare payment except disability and housing benefits. Scrapping the myriad complex and often contradictory welfare codes would mean the end of welfare administration and expensive means-testing, an end to pointless and unproductive Intreo/job-centre interviews and hated sanctions. The biggest long-term saving, however, would stem from ending the poverty trap disincentives built into the current system, where taking a job can leave you financially worse off.”
The current government, which was formed following the appointment of Leo Varadkar as Taoiseach (prime minister) in June 2017, comprises the largest Irish political party, Fine Gael, and several independents, and is propped up by Fianna Fáil – Fine Gael’s historic rival – in a confidence and supply agreement. Fine Gael have been critical of Fianna Fáil’s basic income proposals and they do not currently have any proposals for the introduction of UBI. The Irish budget for 2018 will likely bring about increases to existing social welfare payments without any of the radical reforms proposed by rival parties.
References and further reading
Dr Seán Healy, Comments to the EESC Consultation on the Future of Europe, Social Justice Ireland, June 2017, <https://www.socialjustice.ie/sites/default/files/attach/publication/4855/2017-06-07-jointeventforeesc-seanhealyspeakingnotes.pdf>
Expert Group Meeting, “Strategies for Eradicating Poverty to Achieve Sustainable Development for All”, United Nations Headquarters, 8-11 May 2017, <https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2017/04/report-egm-poverty2017.pdf>
Willie O’Dea, “Basic incomes for all would end the welfare poverty trap and give people greater control of their lives”, Independent.ie, 19 January 2017, <https://www.independent.ie/opinion/comment/basic-incomes-for-all-would-end-the-welfare-poverty-trap-and-give-people-greater-control-of-their-lives-35379503.html>
European Commission, “White Paper on the Future of Europe”, European Commission, March 2017, <https://ec.europa.eu/commission/sites/beta-political/files/white_paper_on_the_future_of_europe_en.pdf>
Reviewed by Genevieve Shanahan
Photo: Irish flag, CC BY-SA 2.0 by jcdcv
On Monday, May 22, 2017, the European Business Summit will hold a discussion of the European basic income debate as part of its annual event in Brussels, Belgium.
The hour-long session will feature two cofounders of BIEN–Philippe Van Parijs (Université catholique de Louvain) and Guy Standing (SOAS, University of London)–in addition to Olli Kangas (Kela), who is leading the research team behind Finland’s basic income experiment, and Mark Smith (Grenoble Ecole de Management). It will center on the question “The basic income debate is coming to a head in Europe, but is it really feasible?”
The discussion will be moderated by the Belgian freelance journalist Chris Burns, who has previously interviewed Standing about universal basic income and the precariat.
Now in its 17th year, the European Business Summit draws more than 2000 participants annually– business leaders, policymakers, researchers and academics, and others–to debate economic, social, and political issues facing Europe. This year, the conference will host 150 speakers over the course of two days. A full schedule is available here.
Photo: “European Business Summit” CC BY-NC-ND 2.0 European Wind Energy Association
The results of a new survey polling 11,000 individuals shows unprecedentedly high support for basic income across the European Union.
Dalia Research, a Berlin-based market research company, conducted its first survey of Europeans’ attitudes on basic income in March 2016, which yielded the widely publicized result that 64% of Europeans would vote for a basic income referendum if one were immediately held in their country. The company now plans to conduct such a survey annually, and has lately released the results of its second survey, conducted in March 2017.
For its most recent basic income survey, Dalia Research interviewed 11,021 people between the ages of 14 and 65, selected from all 28 EU members states (a slightly larger sample than was used in its 2016 study, which sampled 10,000 from the same age group and geographical regions). The survey was designed to be census representative, meaning that the sample was selected and data weighted to reflect the overall demographic characteristics of the EU as closely as possible, with respect to region, age, gender, education level, and rural/urban status.
The survey has a margin of error of plus or minus 1.1% at a 95% confidence level (that is, the survey was designed such that, if it were conducted repeatedly, then on 95% of occasions the estimated level of popular support for basic income, for example, would lie within 1.1 percentage points of the actual level support among all Europeans).
Survey respondents were first posed the question “How familiar are you with the concept known as basic income?” This question was asked prior to presenting any definition of the term.
In response, 24% claimed to “understand it fully,” with another 39% claiming to “know something about it.” Another 25% of respondents stated that they “have heard just a little about basic income,” and 13% claimed to “know nothing about it.” Comparing these data to the 2016 survey, the percentage of respondents indicated that they know “something about” the idea increased significantly (up from 35%), while the percentage who had “never heard of it” decreased significantly (down from 17%).
Following this preliminary question, survey respondents were presented with a definition of ‘basic income’ to be assumed for the remained of the survey: “A basic income is an income unconditionally paid by the government to every individual regardless of whether they work and irrespective of any other sources of income. It replaces other social security payments and is high enough to cover all basic needs (food, housing etc.).” This is, verbatim, the same definition adopted by Dalia Research for its 2016 survey.
It should be noted that Dalia’s definition differs from BIEN’s and, indeed, is more strict. Unlike the definition used by Dalia, BIEN’s definition does not stipulate that the basic income must be “high enough to cover all basic needs” nor that the basic income must “replace other social security payments.” Thus, any policy that meets the survey’s definition of ‘basic income’ is a policy that BIEN would also count as such; however, the survey does not encompass every policy that BIEN would consider a basic income.
With this definition in place, Dalia Research asked five further questions:
1. “If there would be a referendum on introducing basic income today, how would you vote?”
2. “At what point do you think your country should introduce basic income?”
3. “Which of the arguments FOR basic income do you find convincing?”
4. “Which of the following arguments AGAINST the basic income do you find convincing?”
5. “What could be the most likely effect of basic income on your work choices?”
Support for a Basic Income Referendum
In response to the first question, 68% of respondents said that if a referendum on basic income was introduced now, they would vote for it. In 2016, this number stood at 64%. Thus, taking into account the margin of error, support for basic income appears to have increased slightly across the EU in the past year. Meanwhile, the proportion who said that they would oppose the referendum remained stable, at 24%.
Comparing responses between the six largest European countries, Dalia Research found that support was highest in Italy, where the proportion of respondents willing to vote for a basic income referendum increased by six percentage points since 2016, overtaking the level of support in Spain (which had showed the highest level of support in 2016).
The UK (which saw an increase in support of seven percentage points), Spain, and Germany all stand at around 68-69% support.
When Do Europeans Want Basic Income?
Although 24% of respondents said that they would vote against a basic income referendum held at present, only 8% stated that they think that their country should never introduce a basic income, with an additional 13% not favoring the policy for “anytime in the near future.”
At the same time, 33% supported a basic income “as soon as possible” in their respective countries, with others preferring to wait for successful experiments in their own country (32%) or in other countries (16%).
Arguments For and Against
In the next two questions, respondents were supplied with lists of six reasons that might be given for or against a basic income (respectively) and permitted to select as many as they believed to be “convincing.”
Out of the listed arguments for basic income, the three that were judged convincing by the greatest proportion of survey respondents were: “It reduces anxiety about financing basic needs” (52%), “It creates more equality of opportunity” (42%), and “It encourages financial independence and self-responsibility” (32%).
These were also found to be the three most popular “for” arguments in the 2016 survey, which examined the same list of arguments (both pro and con). However, the proportion of respondents who judged them convincing increased from 40%, 31%, and 23%, respectively. The level of support for the remaining three arguments also increased (from 21%, 21%, and 16%, respectively).
When considering the opposing views, 52% of respondents “found convincing” the argument that a basic income “might encourage people to stop working” . This was also the argument against basic income that appears to have seen the greatest increase in its attraction since the 2016 poll, when 43% of respondents considered it convincing.
The next most persuasive arguments against basic income, out of those tested, were “Foreigners might come to my country and take advantage of the benefit” (39% found convincing, versus 34% in 2016), “Only the people who need it most should get something from the state” (34%, vs 32% in 2016), and “It is impossible to finance” (34%, vs 32% in 2016).
Out of those surveyed, 16% found none of the six given “for” arguments to be convincing (in comparison to 22% in 2016), and 12% found none of the provided “against” arguments to be so (in comparison to 15%).
“What Would You Do…?”
For the final question (“What could be the most likely effect of basic income on your work choices?”), respondents were required to select only one option from a list of responses. Here, 37% of respondents claimed that basic income would not affect their work choices, while 17% claimed that they would spend more time with family. The third most common response was “None of the above.”
One complication to interpreting these data lies in fact that, although selection was exclusive (respondents could choose only one answer), many of the answers describe behaviors that are compatible. To give just one example, a person who choses to “spend more time with family” or “do more volunteering work” would presumably also be likely to “work less” as means of securing this end; however, “work less” was presented a distinct option. It would thus be misleading, for example, to present the results of the question by claiming that “only 11% would stop working or work less,” since other response options are compatible with these choices (and might even presuppose that respondents plan to spend less time in paid work).
Thanks to Anisa Holmes at Dalia Research for providing information and graphics for use in this article, as well as the linked pdf presentation of the results.
 We don’t know exactly how respondents interpreted the word ‘convincing’ or its translation in their language. Given that a sizable majority of respondents claimed to be prepared in favor of a basic income, we might assume, based on the responses above, that many did not interpret it to mean ‘decisive’.
That said, however, we might note that Dalia Research did not perform a “post-assessment” of attitudes to determine if respondents’ views on basic income changed after the presentation of the arguments for and against the policy. Indeed, we should not assume that being alerted to these arguments would not cause respondents to change their assessment of the policy proposal through the course of a survey. (In this vein, we might mention that a survey of likely San Francisco voters conducted in April 2016 found that respondents changed their opinion on basic income after more policy specifics were stated, becoming overall less supportive.)
Cover photo CC BY-NC-ND 2.0 myri_bonnie