by Peter Vandevanter | Oct 13, 2017 | News, Research
Congressional Quarterly (CQ) has published a research paper on basic income (BI) that explains its universal popularity due to automation growth estimates worldwide. The CQ Researcher covers everything from Scott Santens’ crowdfunded self-financing mechanism to U.S. ex-President Obama’s belief that the debate may last 10 to 20 years.
The 21-page research paper, written by London freelancer Sara Glazer, includes an explanation of the Alaska Permanent Fund Dividend (PFD) – a basic income like payment to all residents – and revels in the prediction of automation worldwide. Predicted percentage of job losses are shown in charts for 8 countries, as well as for the Organization for Economic Co-operation and Development (OECD) (made up of 21 countries).
BI appeal to the political Left is explained as the continuation of a welfare state. Its appeal to the political Right is explained as a libertarian limit on government intrusion and cost. However, the research warns that many people believe the poor may be worse off: “Some anti-poverty advocates say a UBI would increase both poverty and inequality by using welfare funds now spent on the poorest two-fifths of the population to provide cash to people of all income levels“.
The report also mentions the current endorsement of Facebook co-founder Mark Zuckerberg, as well as other Silicon Valley entrepreneurs like Chris Hughes. Moreover, references are made to the 1960s precedent of U.S. President Lyndon Johnson’s instituted War on Poverty as well as U.S. President Richard Nixon un-instituted 1970s negative income tax credit. This latter issue has been today resurrected by Congressman Ro Khanna, by his proposed bill for extending the earned income tax credit for the poor.
The Canadian 1970s experiment, called Mincome, is described as a positive pilot project, acting as a precedent for current basic income pilot projects in Finland, the U.S. (California ), Canada (Ontario ), Spain (Barcelona), Africa (Give Directly) and the Netherlands. In this report Karl Widerquist says that, with a BI, people will be allowed without fear to work the way they feel best. In an opposite viewpoint, Pavlina Tcherneva argues that a Job Guarantee program would be a better, less costly, way to make sure everyone had work they cared for.
More information at:
David Wheeler, “What if everybody didn’t have to work to get paid?”, The Atlantic, May 18th 2015
Chris Weller, “President Obama: We’ll be debating unconditional free money over the next 10 or 20 years” Business Insider, October 12th 2016
Kate McFarland, “SPAIN: Barcelona prepares study of Guaranteed Minimum Income”, Basic Income News, February 26th 2017
Peter Vandevanter, “United States: Ro Khanna introduces EITC bill, garners comparison to BI”, Basic Income News, October 2nd 2017
Kate McFarland , “THE NETHERLANDS: Government authorizes social assistance experiments in first five municipalities”, Basic Income News, July 11th 2017
Ashley Blackwell, “KENYA: GiveDirectly’s Guaranteed Monthly Income Expands to 200 Villages Fall 2017”, Basic Income News, September 10th 2017
Kate McFarland, “FINLAND: First Basic Income payments sent to experiment participants”, Basic Income News, January 12th 2017
Peter Vandevanter, “United States: Ro Khanna introduces EITC bill, garners comparison to BI”, Basic Income News, October 2nd 2017
Ashley Blackwell, “KENYA: GiveDirectly’s Guaranteed Monthly Income Expands to 200 Villages Fall 2017”, Basic Income News, September 10th 2017
Kate McFarland, “FINLAND: First Basic Income payments sent to experiment participants”, Basic Income News, January 12th 2017
by Kate McFarland | Oct 8, 2017 | News
Silicon Valley’s Y Combinator has concluded its pilot in Oakland and released a draft proposal for a large-scale randomized control trial of basic income in the United States.
In January 2016, Silicon Valley entrepreneur Sam Altman announced his intention to spearhead a privately funded trial of unconditional basic income in the United States, hiring social work and political science PhD Elizabeth Rhodes as Research Director later in the year, and eventually assembling a team of expert advisors.
Since this time, Y Combinator has conducted a feasibility study in Oakland, California, and is now working to finalize the design of its full scale experiment. (Contrary to some misconceptions, the Oakland project was not itself an experiment. Its purpose was merely to test and fine-tune the mechanisms for conducting the experiment–such as the selection of participants, disbursement of funds, and collection of data–not to analyze the effects of unconditional cash transfers on recipients. The latter will be the goal of the project described in the new research proposal, which has yet to be launched.)
Although some details of the experiment remain to be decided, including the precise outcome variables and methods of data collection, Y Combinator has decided to design the experiment as a randomized controlled trial, conducted on a random sample of poor and low-income young adults from two US states (using a stratified sample to ensure adequate representation across race, gender, and income categories).
On the tentative design, the researchers will select a total of 3000 participants, randomly assigning 1000 to the treatment group–who will receive a regular cash payment of 1000 USD per month unconditionally for the duration of the experiment–and the remaining 2000 to the control group. (Individuals in the control group will provide the same type of feedback and data to researchers but receive only a much smaller cash payment, tentatively set at 50 USD per month.) The experiment is planned to continue for three to five years.
Y Combinator expresses an interest in a “holistic approach to understanding the individual-level effects of basic income”, in contrast to past and present experiments which have focused on the labor market impacts of unconditional cash payments, such as Finland’s current basic income experiment and the negative income tax experiments conducted in the United States in the 1970s. Among these individual-level effects, the research group is particularly interested in time use, mental and physical health, subjective well-being, financial health, decision making and attitudes toward risk, as well as political and social attitudes. Furthermore, although individual-level effects will be the focus of the experiment, researchers also hope to examine spillover effects on recipients’ families, friends, and communities.
While the research group has not finalized its choice of data sources and collection methods (see its project proposal for a discussion of possibilities currently under discussion), it plans to combine quantitative analysis with regular surveys and interviews (in contrast, for example, to the Finnish experiment, in which researchers have abjured the use of surveys and interviews during the duration of the experiment). Rhodes has explained, however, that participation in surveys and interviews will be voluntary for participants; that is, the payments will continue for the duration of the experiments even if recipients do not respond to requests for data and information.
The research team acknowledges that the experiment does not, strictly speaking, test a universal basic income. For one, as mentioned, the sample will be limited to young adults (aged 21 to 40) with incomes below the area median. The researchers justify this limitation, however, by noting that “the marginal effect of the additional income on many of the outcomes is expected to be relatively small at higher income levels” and that, under most plans, “the benefit received by higher-income individuals would be paid back in taxes in order to fund the program”.
Additionally, due to the use of a randomized controlled trial, the research will not capture multiplier effects that might result from the implementation of a universal basic income (in contrast, for example, to the saturation study in Dauphin, Manitoba, or GiveDirectly’s recently launched village-level RCT of basic income in Kenya). However, researchers note that “ the intervention is very expensive and our sample size is constrained by the budget. We will not have enough statistical power to detect effects with a geographically saturated study and the increase in sample size required to allow for clustering is financially infeasible.”
To conduct the experiment, Y Combinator has partnered with the Center on Poverty and Inequality (CPI) at Stanford University. The research has been approved by Stanford’s Institutional Review Board for research involving human subjects.
Y Combinator is currently working with state and local governments to coordinate mechanisms for distributing payments without affecting recipients’ future eligibility for existing government benefits, and to obtain the use of registries to collect individual data.
With many details still to be settled, no specific launch date has been set for the experiment (although Rhodes stated at the recent BIEN Congress that the research group hopes to begin the study in “early 2018”), and the states from which subjects will be sampled have not been publicly announced.
The full research proposal can be read on Y Combinator’s blog (see “Basic Income Research Proposal,” published September 20, 2017).
The organization invites comments and feedback on its project proposal.
Reviewed by Dawn Howard
Photo (Martin Luther King Jr. Regional Shoreline, Oakland) CC BY-NC-ND 2.0 MagicMediaProduction
by Patrick Hoare | Oct 5, 2017 | News
A new poll POLITICO/Morning Consult conducted between the 14th and 17th September 2017 surveying 1,994 registered US voters, found that, of those asked whether they would support or oppose ‘a proposal in which the government would provide all Americans a regular, unconditional sum of money, sometimes referred to as universal basic income’, 43% either ‘strongly supported’ or ‘somewhat supported’ the idea.
The subgroup data showed that 23% ‘strongly supported’ the notion, 20% ‘somewhat supported’ it, 14% ‘somewhat opposed’ it, 25% ‘strongly opposed’ it, and 18% ‘didn’t know’ or ‘had no opinion’ on the idea. Males were slightly more in favour than females, with 46% compared to 39% supporting the idea. The breakdown by age showed that younger people were more receptive to the idea of a UBI than older people, with 48% of 18-29 year olds supportive of the idea compared with 32% against, while 52% of 30-44 year olds were supportive of the idea compared with 33% against. Within the 45-54 year old age group, 43% were in favour versus 39% against. Though 55-64 year olds were more opposed to a UBI than were supportive of it, 41% were still in favour of the proposal. Support amongst the over 65s was only at 30%, with 49% of this age group opposing the concept.
Of those who identified as having a ‘liberal ideology’, 32% ‘strongly supported’ and 27% ‘somewhat supported’ the proposal. Only 26% of this group either ‘somewhat opposed’ or ‘strongly opposed’ the idea. Consistent with what might be expected, those who identified as having a ‘moderate ideology’ were marginally more supportive of the proposal than opposed it: 44% against 39%; and those who identified as having a ‘conservative ideology’ were significantly more in opposition of it than they were supportive: 60% against 26%. Slightly surprisingly, given that highly educated adults – particularly those who have attended graduate school – are far more likely than those with less education to take predominantly liberal positions, there was a trend away from support of the proposal the more education the respondents had received. Of those who did not hold qualifications from college or higher, 46% were in general support of a UBI, compared with 38% of those with bachelor’s degrees and 34% of those with postgraduate degrees. A majority of those holding higher-education qualifications: 50% of those with bachelor’s degrees and 53% of those with postgraduate degrees, were in opposition to the proposal.
Those with lower incomes were more supportive of the idea than those with higher incomes. Amongst those with an annual income of $50k or less, 47% were either ‘strongly supportive of’ or ‘somewhat supportive of’ a UBI, compared with 41% of those with an annual income of between $50k and $100k, and only 29% of those with an annual income of more than $100k. Consistent with ethnic wealth distribution in the US, fewer identifying as ethnically white were supportive of the idea than were identifying as Hispanic or African American. Of the latter group, 61% were either ‘strongly supportive of’ or ‘somewhat supportive of’ the idea of a UBI, compared with 51% of those identifying as Hispanic and 39% of those identifying as white. The support, across the different employment sectors – private, government, self-employed, homemaker, student, retired, unemployment, other – was fairly consistent, ranging from 43% to 50% being generally supportive of the concept, with only the retired segment – in line with the results from the breakdown by age demographic – being generally opposed to the idea, where only 33% were ‘strongly’ or ‘somewhat’ supportive.
Geographically – Northeast, Midwest, South, West – there was not a great deal of fluctuation either in support of or in opposition to a UBI, with figures hovering around the overall averages. Urban communities were more receptive than suburban or rural communities, with 52% being generally supportive against 40% and 39% respectively.
For proponents of a UBI, the overall results compare favourably against a poll conducted by YouGov US and the Huffington Post on January 7th and 8th in 2014. When asked whether they would ‘favor or oppose expanding Social Security to every American, regardless of age, to guarantee a basic income to every American’, only 18% said they would ‘strongly favor’ the idea with an additional 17% saying they would ‘somewhat favor’, compared with 16% who said they would ‘somewhat oppose’ and 38% who would ‘strongly oppose’ the notion. The increasing popularity of a UBI in the US was also consistent with a poll conducted toward the end of 2016 by 50+1 Strategies and David Binder Research on behalf of the Economic Security Project, which found that, of the 500 people surveyed, 46% of were in favour of the idea, with 35 percent opposed and 19 percent undecided.
More information at:
Morning Consult and Politico, ‘Morning Consult National Tracking Poll #170911’, September 14th-17th, 2017
Pew Research Center, ‘A Wider Ideological Gap Between More and Less Educated Adults: Political polarization update’, PeoplePress.org, April 26th, 2016
Peter Moore, ‘Poll Results: Guaranteed jobs and basic income’, YouGov.com, January 9th, 2014
Patrick Caughill, ‘Survey Reveals Nearly 50% of Americans Favor a Universal Basic Income’, Futurism.com, December 20th, 2016
by Peter Vandevanter | Oct 2, 2017 | News
Ro Khanna. Credit to: Salon.
Ro Khanna, a Democratic congressman from Silicon Valley, has introduced a bill in the U.S. Congress that would expand the Earned Income Tax Credit (EITC) for all Americans, a step towards a basic income according to at least one Silicon Valley observer.
Khanna, a 31-year old Philadelphian, the son of Punjabi immigrants, walked districts with the future President Obama as a student at the University of Chicago and beat eight-term incumbent Mike Honda on his second try in 2016. His bill, which gives the bottom 20 percent of workers a 20 percent pay increase is, in his words, intended to offset “income stagnation since 1979”.
Generating a total of nearly 1 trillion dollars for employees, single taxpayers would get up to an annual US$6,000 in tax credits with families receiving US$12,000, approximately doubling the maximum payout for families, and increasing by a factor of 10 that for childless workers. Part of the Grow American Incomes Now (GAIN) Act, the bill is co-sponsored in the senate by Sherrod Brown.
Although not an historic basic income payment – which is for rich and poor, with no requirement to work – the Khanna tax credit increase is designed specifically to help low-paid workers. Khanna goes straight to the point, having told The Atlantic in an interview last April: ”[t]here is this huge income disparity in my own district (…) If you’re a teacher, if you’re a nurse, if you’re a firefighter, it’s very hard to live there, very hard to afford any sort of higher education for your kids. Forget it if you want to go to Stanford.”
The expansion of the earned income credit is similar to the approach of US President Nixon in the 1970s, who recommended a negative income tax (NIT), which would return money to the lowest wage earners. His bill passed the House in congress, but stalled in the Senate. Since in the US bills must pass both bodies to become law of the land, Nixon’s NIT never saw the light of day.
“We’re not divorcing it (EITC payment) from work, but we’re realizing (…) that people are working hard and they’re not earning a middle-class wage”, Khanna said in the Atlantic interview.
Chris Hughes, chairman of the Economic Security Project (ESP) and co-founder of Facebook, said in a ESP press release about the GAIN act: “[w]ith the unprecedented changes to the nature of work thanks to automation and other forces, it’s clear we need game-changer policy proposals like expanding the EITC to help ensure economic security for everyone.”
More information at:
Annie Lowrey, “Ro Khanna wants to give working class households 1 trillion dollars“,The Atlantic, April 28th 2017
Greg Ferenstein, “A step towards basic income: analysis of a proposed congressional bill“, Ferenstein Wire, April 7th 2017
Ro Khanna, The “GAIN act” bill, House of Representatives, September 8th 2017
by Andre Coelho | Sep 23, 2017 | News
Joe Biden. Credit to: GQ.
Joe Biden, Obama’s ex-vice president, is confident that the reinforcement of the job-centered culture is the answer to the challenges already affecting work marketplaces in the US, as written in his blog at the Biden Institute. He supports this vision instead of the idea increasingly put forward by Silicon Valley moguls: unconditional basic income.
Biden, recalling his father’s words, wrote that he considers jobs to not only be a source of income, but also and foremost about “human dignity and self-respect”. Given that starting position, he is campaigning for an American economy that grows and “put(s) work first”. This, of course, is linked with the educational system and professional retraining, both areas in which Biden calls for profound changes, while maintaining “key workplace benefits and protections (…) in an economy where the nature of work has changed”.
Basic income is given little attention in the cited blog post, summarized only briefly as something that is just boiling up in Silicon Valley due to transformations, present and future, introduced by automation. However, automation concerns have only been one issue among several that can justify introducing an unconditional basic income, such as the elimination of poverty, reducing inequality, solving bureaucratic unemployment and poverty traps and creating more gender equality. Also, as extensive data shows, basic income interest is growing all around the world (e.g.: Canada, UK, Finland, Netherlands, Germany), not only among the Silicon Valley milieu.
More information at:
Joe Biden, “Let’s choose a future that puts work first”, Biden Institute Blog, 2017
Hugh Seal, “Finding a better way: a basic income pilot project for Ontario”, Discussion Paper, Massey College, August 31st 2016
Kate McFarland, “”Reducing poverty and inequality through tax-benefit reform and the minimum wage: the UK as a case-study””, Basic Income News, August 30th 2017
Kela, “From idea to experiment: report on universal basic income experiment in Finland”, Working papers 106 | 2016, Helsinki, 2016
Genevieve Shanahan, “Patricia Schulz “Universal basic income in a feminist perspective and gender analysis””, Basic Income News, March 6th 2017
