The Secretary-General of the United Nations endorses UBI on 25th September 2018.
António Guterres, the UN Secretary-General, urged world leaders to consider Unconditional Basic Income in his speech at the General Assembly of the UN.
After drawing the audience’s attention to the consequences of current technological innovation for the labour market, Guterres said:
The very nature of work will change. The governments may have to consider stronger social safety nets, and eventually Universal Basic Income.
The UN has dispatched the video of his address here and the above statement can be heard around 15m 25s.
Image by MaxPixel: Trakai Castle Lithuania
On December 6, 2017, Swedbank published a report on the Baltic Sea Region entitled “Heart-warming growth is a poor excuse to postpone reforms.” The report includes a chapter on Universal Basic Income, wherein the bank models the current economic feasibility of UBI in the Baltics.
Swedbank is a bank based in Stolkholm, Sweden. Its research arm publishes annual economic assessments of Baltic Sea region countries, which include Germany, Denmark, Norway, Sweden, Finland, Russia, Estonia, Latvia, Lithuania, and Poland. The December 2017 report and executive summary focus primarily on Swedbank’s four main markets: Sweden, Estonia, Latvia, and Lithuania.
The report highlights a time when global economic growth has helped Baltic Sea region countries reach cyclical economic peaks. However, it states that geopolitics, and populism in particular, remain risks to further growth.
Swedbank suggests that rising income inequality, combined with fears about unemployment driven by automation and globalization, contribute to populism and need to be combatted in order to ensure sustainable economic growth. The report proposes that populism can be circumvented by socioeconomic policy that ensures that growth is inclusive (i.e., where prosperity is distributed equitably across all of a country’s economic classes).
As such, Swedbank’s report argues that this period of prosperity in the Baltic Region has created an ideal context for reform and investment in long-term economic wellbeing. The report delivers an in-depth analysis of the economies of Sweden, Estonia, Latvia, and Lithuania, commenting on GDP growth and the potential to create new socioeconomic policies. It also targets specific needs in each country, referencing indicators based partially on the UN’s sustainable development goals.
Sweden scores higher than the Baltics on most of Swedbank’s UN SDG-based indicators. However, the report comments on the need for all identified countries to take the opportunity to enact policy reform.
Swedbank addresses Universal Basic Income as one potential option for reform that will reduce income inequality and encourage sustainable growth. The report concludes that UBI is currently unaffordable for the Baltics, but that elements of a basic or guaranteed income, introduced carefully, could come with numerous social benefits.
Swedbank in Lithuania. Credit to: Delfi
UBI: Current feasibility for the Baltic Region
Swedbank identifies several arguments for UBI, including the idea that it will increase income security and thus reduce fears around unemployment and job loss, along with suggestion that UBI solves or mitigates problems with existing social security systems. The argument that UBI will minimize bureaucratic costs associated with social security systems is less relevant in the Baltics, where only 1.2 to 2.1% of total “social protection” expenditure is administrative.
The report provides a summary overview of some of the questions associated with UBI implementation, such as its impact on employment and the economy, or the concern that it would negatively impact assistance given to the disabled or elderly.
Using 2015 data on government spending on social protections in Estonia, Latvia, and Lithuania, Swedbank evaluates the feasibility of a budget-neutral UBI in these countries. The report tries two different models, one in which old-age pensions are retained by the elderly, and the other in which pensions are included in the money redirected towards UBI. For each of these two scenarios, the report presents two further options: one wherein all residents of a country receive UBI, and another wherein children up to the age of 16 receive only 50% of adult UBI payments. Swedbank does not make any changes to tax revenue in these examples.
The report finds that, given existing budgets, UBI monthly payments to individuals would only reach 48-55% of the at-risk-of-poverty threshold for each Baltic country, less if old-age pensions were retained for the elderly. A UBI at the poverty line, distributed to all residents equally, would require doubling social security budgets in Latvia and Estonia, or an 82% increase in Lithuania, becoming 20-25% of each country’s GDP.
While Swedbank concludes that a UBI is currently unaffordable in the Baltics, the report comments that some components of a “basic income model” might simplify and improve existing social security programs. The authors suggest that governments could improve their systems’ accessibility by eliminating means testing and other conditions currently in place for those trying to get support. They also propose that a gradual decrease in benefits, rather than a sharp removal once a person becomes employed, might help incentivize recipients to stay in the labour market.
Another alternative discussed is a “partial” guaranteed income delivered only to particular cohorts of people. For example, Lithuania has an existing program that provides lump-sum cash benefits to every child born, with no conditions placed upon family income.
More information at:
“Baltic Sea Report: Heart-warming growth is a poor excuse to postpone reforms,” Swedbank, December 6th 2017
“Sustainable Development Goals,” United Nations
“Swedbank Macro Research: Baltic Archive,” Swedbank, February 2018
Vlada Stankūnienė and Aušra Maslauskaitė, “Family Policies: Lithuania (2015),” Population Europe Resource Finder & Archive, 2015
In a sign of the major progress Universal Basic Income (UBI) has made in Asia, the United Nations Development Program in Beijing hosted a roundtable discussion on basic income last week. Professors from China’s most influential universities spoke at the roundtable about the potential for a basic income pilot program in China.
Patrick Haverman is the UNDP Deputy Country Director for China. Haverman said he wants to work with academia and government to determine if basic income experiments in different areas of China are feasible.
“With the Sustainable Development Goals firmly focused on the need to ‘leave no one behind’, careful consideration of a wide variety of responses will be essential,” Haverman said during his opening remarks. ”It is very important that we can foster collaborative discussions around potential options to address poverty and inequality into the future, and the role of UBI should not be overlooked.”
The roundtable also discussed the benefits and likely challenges of implementing a Universal Basic Income in China. A large topic was how UBI could improve on the dibao system, which is China’s means-tested unconditional cash transfer program. Dibao currently has issues with targeting the subsidies toward people in poverty, which many participants at the roundtable noted UBI’s universality could potentially alleviate.
Shi Li, a professor at Beijing Normal University, said Chinese people in poverty receive the dibao because of poor targeting. In his research, Li and other researchers found that nearly 88 percent of poor residents in China do not receive dibao stipends. Remarkably, administrative costs of means-testing were three times more than the actual transferred amount.
The large size and economic disparities across the mainland mean it may be difficult to implement a national UBI that is not adjusted based on residence, others noted.
The event was co-hosted by the International Labour Organization, which presented on the potential disruption of automation on employment during the roundtable. Haverman said an advantage in China is that smartphone penetration is high and many businesses now accept digital payments. This means it may be most efficient to send basic incomes to digital wallets.
“Almost everyone has a phone, so if we find a pilot zone I think we should take a look at it,” Haverman said.
Furui Cheng an associate professor at China University of Political Science and Law’s Business School, said the China Basic Income/Social Dividend Research Network is working with UNDP to plan the next steps for a pilot program in China.
Cheng said they are looking to work with local governments and raise money from technology companies.
“Basic income is the probable alternative for the future global social security system, which is facing unprecedent challenges now,” Cheng said.
“We shall learn the experiences of global existing basic income experiments as much as possible, and we welcome any suggestions from any supporters,” she said.
Zhiyuan Cui, a professor at Tsinghua University, has written how China could emulate the Alaska Permanent Fund to implement UBI. Cui explained that Jay Hammond, the Alaskan governor who created the Permanent Fund, said he often felt “closer to Beijing than Washington DC.”
Yang Tuan of the Chinese Academy of Social Sciences said the size of China means it would be a good place “to come up with many types of experiments” for basic income.Tuan, who supported the implementation of dibao when she was working for China’s social security system, said the economic dynamics of China have changed since dibao started.
“(In the past) I have been against western mechanisms of social security,” she said. “But today I think the context of China is different.”
According to Haverman, the UNDP is planning to release up to three more working papers, addressing topics such as financing UBI in China, as well as its effect on work hours.
To see UNDP China’s press release, go here.
To see the original UNDP China working paper, go here.
To inquire about the UNDP project contact Cheng Furui: firstname.lastname@example.org
A Special Rapporteur of the United Nations will hold a panel discussion on universal basic income and the future of human rights on Thursday, June 8, 2017.
Organized by Professor Philip Alston, the UN’s Special Rapporteur on extreme poverty and human rights, the event will explore the potential for basic income to mitigate global economic insecurity. The panelists include two cofounders of the Basic Income Earth Network — Professor Philippe van Parijs (University of Louvain, Hoover Chair of Economic and Social Ethics) and Guy Standing (School of Oriental and African Studies, University of London) — in addition to Isabelle Doresse (People’s Universities in Northern Pas de Calais, ATD Fourth World) and Alex Praça (Human and Trade Union Rights Officer of the International Trade Union Confederation).
The panel will discuss a report prepared by Alston and submitted to the UN’s Human Rights Council. Alston’s report addresses the concern that “the human rights movement needs to address and respond to the fundamental changes that are taking place in economic and social structures at the national and global levels,” including precarious employment, automation, increasing inequality, and the obsolescence of traditional forms of labor market regulation.
As Alston describes the idea, a basic income “is explicitly designed to challenge most of the key assumptions underpinning existing social security systems”:
Rather than a system where there are partial payments, basic income guarantees a floor; instead of being episodic, payments are regular; rather than being needs-based, they are paid as a flat rate to all; they come in cash, rather than as messy in-kind support; they accrue to every individual, rather than only to needy households; rather than requiring that various conditions be met, they are unconditional; rather than excluding the well off, they are universal; and instead of being based on lifetime contributions, they are funded primarily from taxation.
The 20-page report describes each of these characteristics of a basic income, overviews the history of the idea, and describes various types of basic income and related policies, such as a negative income tax and cash transfers. Alston also lays out some examples of the possible cost of implementing a basic income scheme.
Alston holds that “the basic income concept should not be rejected out of hand on the grounds that it is utopian” and encourages further discussion of the policy as a means to alleviate economic insecurity and promote human rights and social justice. He additionally urges that the debate on basic income be united with that on social protection floors.
Further Viewing and Reading
The June 8 panel discussion will be broadcast live online here.
The full report on universal basic income of the Special Rapporteur on extreme poverty and human rights is available in the UN’s document repository or can be directly downloaded as a PDF here.
Reviewed by Genevieve Shanahan
Photo: Human Rights Council during 15th Session, CC BY-NC-ND 2.0 UN Geneva
Patricia Schulz, a Swiss lawyer and specialist in international human rights and gender equality, offers a short paper advocating for basic income from a feminist and gender equality perspective in the peer-reviewed journal Global Social Policy.
In this article, Schulz argues that strong arguments for basic income “based on social justice, equality, dignity, freedom from want” could be bolstered by more systematic arguments from a gender perspective.
A central point made in this article is that existing social security systems are tied to long-term remunerated work, disproportionately beyond the reach of women:
“as most social security systems are (still) based on contributions linked to remunerated work, independent or salaried, the inferior income of women, their restriction to part-time jobs as well as the interruptions in their careers due to care responsibilities will directly impact the level of social protection they can expect in case of old age, disability, illness and so on, as well as expose them to depend on a partner and/or the (welfare) state.”
Schulz is an expert with the United Nations Committee on the Elimination of Discrimination Against Women (CEDAW), a member of the Board of the United Nations Research Institute for Social Development (UNRISD), and was the director of the Swiss Federal Office for Gender Equality (FOGE) for six years until 2010.
Patricia Schulz, “Universal basic income in a feminist perspective and gender analysis,” Global Social Policy Forum, January 31, 2017.
Reviewed by Cameron McLeod
Photo: Patricia Schulz, member of the Committee on the Elimination of Discrimination against Women addresses during the 5th Edition of Ciné ONU, Palais des Nations. Friday 6 March 2015, CC BY-NC-ND 2.0 UN Geneva