by Kate McFarland | Sep 29, 2016 | News
The amount of this year’s Alaska Permanent Fund Dividend was announced by the Governor on Friday, September 23: every Alaskan will receive $1,022, less than half the amount of last year’s dividend.
Since 1982, the State of Alaska has distributed annual cash dividends to all of its residents, including children, funded from income from the state’s sovereign wealth fund. Because the payment is universal and unconditional, it has often been discussed as a “real world” example of a basic income. Last year, the Permanent Fund Dividend (PFD) reached its peak amount of $2,072. (The historical average about of the PFD is about $1,150.)
Earlier this year, however, Governor Bill Walker vetoed about half of the allocations to the PFD passed by the state legislature. As a result, this amount of this year’s PFD will drop to $1,022 — according to an official statement issued by the Governor on Friday, September 23.
Walker tasked junior high school student Shania Sommer (who also announced the size of last year’s PFD) with the announcement:
As Walker explains in response to questions from Sommer, he believes that reducing the size of the dividend was necessary in order to preserve the dividend program “for generations to come” in the face of the state’s present budget crisis (Alaska currently faces a $4 billion deficit).
Walker further elaborated upon his decision in an editorial in Alaska Dispatch News, published shortly after the announcement of the size of the 2016 dividend:
In the past few years, revenues have plummeted while Permanent Fund investment earnings have grown. The current dividend formula would have us spending more on dividends than any other state service – including education. It’s not a sustainable path.
If we do nothing, the fund’s earnings reserve will likely be depleted within four years. Then dividends will be zero. I don’t want that to happen.
My commitment to Alaska and Alaskans has never wavered. I believe we must find a balance between the wants of today and the needs of tomorrow. If we don’t make changes, we’re on a course to economic disaster. It’s a 100 percent preventable disaster, and I will do everything I can to prevent it.
The official statement from the Governor’s Office also specified that, were it not for Walker’s veto, the PFD would have been $2,052.
Following Walker’s veto of half of the PFD funding, polls revealed a significant drop in his approval rating and popularity amongst American governors. Recently, a Facebook group called “Alaskans Against Gov. Walker’s PFD Theft“–which is planning its first protest on October 1–has attracted over 12,000 members.
A state senator, Democrat Bill Wielechowski, filed a lawsuit on September 16, demanding that the courts require the corporation that manages the Alaska Permanent Fund to transfer the full original amount of the PFD. Wielechowski claims that Walker’s veto of the funds was not authorized by law. The Alaska Democratic Party has expressed support of Wielechowski’s action. However, the suit is not expected to be resolved before October, when the Alaskans begin to receive their $1,022 checks.
References
Nathaniel Herz, “Gov. Walker’s veto cuts Alaska Permanent Fund dividends to $1,022“, Alaska Dispatch News; Sep 23, 2016.
Cameron Mackintosh, “$1,022: Governor Walker reveals exact amount of 2016 PFD checks“, KTUU; Sep 23, 2016.
Bill Walker, “Dividend cut hurts, but it’s the wise course for Alaska“, Alaska Dispatch News; Sep 23, 2016.
Liz Raines “Walker’s popularity dips after announcing PFD cap, polls show“, KTVA Alaska; Sep 21.
Reviewed by Dawn Rozakis
Image: Shell Oil drilling platform CC BY-NC-ND 2.0 Tom Doyle
Made possible in part by Kate’s supporters on Patreon
by Kate McFarland | Sep 27, 2016 | News
The third US Basic Income Create-a-thon took place in New Orleans, Louisiana from September 9 to 11. The event was organized and hosted by Scott Santens, and attended by two members of BIEN’s Executive Committee: Karl Widerquist (co-chair) and Kate McFarland (news editor).
One project launched at the create-a-thon was “Basic Income MediaBites”–a database of timestamped videos (e.g. the “most quotable” moments of lectures and interviews about basic income) and images based upon quotes from said videos. Basic Income MediaBites is intended to be an ongoing collaborative project. The database is a shared document to which anyone can contribute.
One of the images created at the create-a-thon, featuring a quote from BIEN cofounder Philippe van Parijs’ TEDxGhent talk
Also at the create-a-thon, Karl completed his article “The Third Wave of the Basic Income Movement“–which, as the abstract states, “puts the current wave of support into this historical context to help understand why the movement is taking off now and how to build on it”.
The first two Basic Income Create-a-thons were held in San Francisco and Los Angeles in November 2015 and April 2016, respectively. The Universal Income Project promotes and assists the convocation of create-a-thons throughout the United States.
For more details about the projects pursued at the New Orleans create-a-thon–and a variety of quote and slogan images–see the official Tumblr page of the event.
Special thanks to Kate’s supporters on Patreon (for helping her to both write news like this and attend events like this).
by Kate McFarland | Sep 25, 2016 | News
In a blog post dated September 22, the charity GiveDirectly announced that it will begin an initial pilot study of a basic income guarantee in a village in Kenya in late October.
According to GiveDirectly’s announcement, the pilot will “test the operational details of the model and also generate qualitative insights which we will then feed back into the ultimate quantitative evaluation.”
In the same post, the research team laid out some further details concerning its full study (the start date of which remains unspecified). In the full study, experiments will be conducted in two counties in rural Kenya — one in which GiveDirectly has acted previously (with few issues and near 100% participation rates), and one new county.
Villages in these counties will be divided into three treatment groups: one in which all adult residents receive a guaranteed basic income for 12 years, one in which all adult residents receive a guaranteed basic income for two years, and one in which all adult residents receive a lump sum equivalent to the two-year basic income. The amount of the basic income will be approximately $0.75 per day, which will be held fixed across villages in all three treatment groups. Data will also be collected on a control group of villages in which no cash transfers are given to residents.
In the blog post, the researchers mention a particular interest in the question of how a long-term income guarantee impacts risk-taking, such as in starting a business. They go on to add that, given the scale of the experiment, “we have reasonably good odds of detecting impacts not only on individuals, but also on village-level markets.”
GiveDirectly aims to include 40 villages in the first treatment group and 80 in each of the latter two. This would result in roughly 26,000 individuals receiving cash transfers.
There are some minor complications. For instance, according to a blog post published on September 5, lower-than-usual participation rates are being witnessed in some parts of Kenya — which the researchers attribute largely to misgivings and skepticism about the nature of the charitable organization:
We’ve found that people typically refuse out of skepticism. Potential recipients find it hard to believe that a new organization like GiveDirectly would give roughly a year’s salary in cash, unconditionally. As a result, many people have created their own narratives to explain the cash, including rumors that the money is associated with cults or devil worship.
However, the charity is working to improve its outreach to communities and stresses that, contrary to some press, relatively high rates of nonparticipation do not bespeak a “fatal problem” with the experiment.
GiveDirectly has raised over $11 million since April, when the organization announced its plan to fund a major study of basic income. It has also assembled a team of distinguished advisors, including Alan Krueger (former Chairman of President Obama’s Council of Economic Advisers) and MIT economists Abhijit Banerjee and Tavneet Suri (MIT). In July, an article about the work of GiveDirectly appeared in the prestigious Quarterly Journal of Economics.
Reference
GiveDirectly team (September 22, 2016) “New details on our basic income pilot”
Reviewed by Dawn Howard
Photo CC BY-NC 2.0 Evandro Sudré
Special thanks to Kate’s supporters on Patreon
by Kate McFarland | Sep 22, 2016 | News
On Friday, September 16, Alaska senator Bill Wielechowski filed a lawsuit contesting Governor Bill Walker’s veto of half of the funding for the Permanent Fund Dividend.
Governor Bill Walker
CC BY 2.0 James Brooks
Last June, Alaska Governor Bill Walker vetoed half of the funds that the state legislature had approved for the annual payout of the Permanent Fund Dividend (PFD). This unprecedented decision caps the size of the dividend at $1000 per resident. The amount vetoed–over $666 million–is to remain in the Permanent Fund, where it may be used for future payouts.
Created in 1982, the PFD is an annual dividend paid to all Alaskan residents–both adults and children–who have resided in the state for at least one calendar year. The dividend fund is financed from the investment earnings of the Alaska Permanent Fund, a sovereign wealth fund established from the state’s oil revenue. As a universal and unconditional cash payment, the PFD has often been cited as an example of a small basic income.
Last year, the dividend reached its all-time peak amount, at $2072 per resident. The Alaskan media station KTUU has estimated that the dividend checks would have been about $2084 this year, had it not been for Walker’s veto.
However, the state has been facing a massive budget crisis–with a current deficit of about $3.2 billion–and the PFD has come under increasing threat within the past year. Governor Walker’s veto of the dividend funds was part of a total $1.29 billion in spending cuts, aimed at addressing the fiscal crisis.
At a news conference in June, following the veto, Walker said the state can no longer afford high annual dividends like the 2015 payout. Walker believes that limiting annual payouts is necessary to extend the lifespan of the Permanent Fund, as he has explained by analogy with the popular Alaskan delicacy of sourdough pancakes:
I’m a big fan of sourdough pancakes. And if we treat our Permanent Fund like we treat sourdough starter, we’ll be fine. No one would ever use up all the sourdough starter. The first thing you do is you take it out and leave it for the next batch [1].
Unsurprisingly, Walker’s veto has generated significant controversy–with some questioning its legality from the start. In the latest move, present and past state senators have attempted legal action to effectively overturn the Governor’s decision.
Senator Bill Wielechowski
CC BY-SA 4.0 Peter Stein
On Friday, September 16, senator Bill Wielechowski (Democrat), along with former senators Rick Halford and Clem Tillion (Republicans), filed a lawsuit requesting the court to demand the Permanent Fund Corporation transfer the full $1.4 billion that the legislature had originally allocated for the dividend.
According to Wielechowski, Walker’s action violates a law (Alaska Statute 37.13.145) that requires that the Permanent Fund Corporation “shall” transfer half of its available income to the Dividend Fund. Wielechowski has maintained that law demands the transfer of funds from the Permanent Fund Earnings Reserve to be automatic and not subject to decisions made in the state’s annual budget.
He previously expressed his position in a letter to Angel Rodell (dated August 10), the executive director of the Permanent Fund Corporation, in which he requested that the Permanent Fund Corporation “follow the law and immediately make [the] full transfer” of funds from the Earnings Reserve to Dividend Fund. Rodell did not respond, however, prompting Wielechowski to proceed to legal action.
The Alaska Democratic Party expressed support of Wielechowski’s lawsuit in a press released issued on September 20.
Journalist Cameron Mackintosh reports that Wielechowski has recently issued a public letter in which he reiterates his belief that Governor Walker lacked the authority to cut the PFD:
Hundreds of hours of research leads me [Wielechowski] to conclude that the Governor does not have the authority to cut Dividends in the way he proposes. The Governor cannot veto existing law. No governor can. His veto power extends only to appropriations and bills [2].
Walker promptly issued an official statement responding to the lawsuit. In the statement, Walker expresses his intent to stand by the “difficult but necessary decision–prompted by the legislature’s failure to pass a fiscal plan–to veto part of this year’s dividend appropriation”. He goes on emphasize that the decision was driven in part by the desire to preserve the PFD for future generations:
This year’s PFD is close to the historical average paid to every eligible Alaskan since 1982. It was set at a level that could be sustained as part of a larger fiscal solution–to ensure a PFD program continues for generations to come.
Walker also uses the letter to reprimand Wielechowski for failing to work towards a solution to the state’s financial crisis, contending that the lawsuit detracts from this larger issue [3].
The Governor has similarly defended his veto in a Facebook post dated September 13:
My decision to veto half of the money for this year’s dividend was a difficult one, made with painstaking forethought and consideration. Without my veto, the money that funds PFDs would be gone in just four years. Ultimately, I want Alaskans to be able to receive a PFD for years into the future, and $1,000 this year means our kids and grandkids can look forward to a similar dividend in the years to come.
It is Walker’s belief that, due to the state’s worsening fiscal crisis, it may eventually be necessary to draw money from the Permanent Fund Earnings Reserve to cover deficits–and that, thus, lower annual payouts are needed to extend the fund’s life.
Co-plaintiff Clem Tillion, in contrast, has recently written an editorial in which he contends that the best way to preserve the future of Permanent Fund (and, thus, the dividend) is to “just leave it alone” [4].
On Friday, September 23, Governor Walker will make an official announcement on the amount of the 2016 Permanent Fund Dividend. His office will also disclose the amount that the dividend would have been without the veto [5].
The first payouts will begin on October 6. The lawsuit is unlikely to be settled by this time.
Sources and Further Information:
Complaint for Declaratory and Injunctive Relief (Court document filed by Wielechowski, Halford and Tillion)
Governor Walker’s Statement on PFD Lawsuit
“Democrats Support Getting an Answer” (Press Release from Alaska Democratic Party)
Nathaniel Herz (September 16, 2016) “Alaska lawmaker sues to restore full PFD after Gov. Walker’s veto,” Alaska Dispatch News.
Cameron Mackintosh (September 16, 2016) “Sen. Wielechowski files lawsuit challenging governor’s PFD cuts,” KTUU.
Liz Raines (September 16, 2016) “Past, present lawmakers file joint lawsuit to overturn governor’s PFD cut,” KTVA Alaska.
[1] Alex DeMarban and Yereth Rosen (June 30, 2016) “ ‘Day of reckoning’: Gov. Walker vetoes hundreds of millions in spending, caps Permanent Fund dividend at $1,000,” Alaska Dispatch News.
[2] Cameron Mackintosh (September 16, 2016) “Sen. Wielechowski files lawsuit challenging governor’s PFD cuts,” KTUU.
[3] Bill Walker (September 16, 2016) “Statement on PFD Lawsuit”
[4] Clem Tillion (September 15, 2016) “Want to save the Permanent Fund and Dividend? Leave them alone,” Alaska Dispatch News.
[5] Ben Anderson (September 21, 2016) “On Friday, Alaskans will find out this year’s PFD amount — and what it could have been,” Alaska Dispatch News.
Reviewed by Asha Pond
Alaska Pipeline photo CC BY 2.0 Ryan McFarland (no relation to author)
Article originally written on September 16; edited on September 22 to include reference to the Democratic Party’s press release and the Governor’s forthcoming announcement on the PFD.
by Kate McFarland | Sep 17, 2016 | News
Reinvent has produced a video series called the “This Future of Sharing”. Several guests in the series — including Andy Stern, Robin Chase, and Natalie Foster — speak about the benefits of a universal basic income in light of the flourishing of the “sharing economy” in the United States.
In the US, one of the striking economic changes over the past decade has been the rise of the so-called “sharing economy” — also known as (or closely related to what’s known as) the ‘collaborative economy’, ‘on-demand economy’, ‘access economy’, ‘peer economy’, and many other terms — exemplified by such services as Uber and AirBnb.
The YouTube channel Reinvent has recently produced a series called the “This Future of Sharing“, consisting of extensive one-on-one video interviews with a variety of noted individuals who have thought in-depth about the implications of the sharing economy.
According to the description of the video series:
This Future of Sharing project sets out to answer the key question: How can we make the sharing economy work better for everyone? We’re going to spend 2016 in conversation with thought leaders who deeply understand the sharing economy and its potential, as well as the people who run and understand cities, including those wary of any excesses and rough edges.
While it also encompasses many other topics, the series includes several interviews that directly engage with the idea of universal basic income, including the following three.
• Andrew Stern, “A Proposal for Universal Basic Income from the Former President of SEIU” (published July 20, 2016):
Andrew Stern, former president of the Service Employees International Union (SEIU) and author of Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream, believes a universal basic income is the best way for the United States to deal with massive changes in our economy—changes that will only be exacerbated by increasing automation.
• Robin Chase, “Speeding the Pace of Evolution to Avoid Revolution” (published June 9, 2016):
Zipcar Co-Founder Robin Chase believes the status quo is broken, and that sharing economy platforms—which she refers to as “peers inc”—are part of the solution. Chase chose this terminology because of the mutual importance of what she sees as two halves of the equation: the platform and the peers.
Chase brings up UBI around 35 minutes into the interview, stating that it’s part of the solution, but cautioning that it should not be considered as a stand-alone policy. (She adds that we would still need universal health care and universal child care.)
Beginning at around 37 minutes, Chase describes her reasons to support UBI in some detail: in brief, a guaranteed basic income would provide one with the ability to refuse bad jobs, pursue one’s passions (including passions that are not readily monetized), and perform multiple jobs if one wishes, exploring new interests and engaging multiple facets of one’s personality.
• Natalie Foster, “Creating New Norms for the Way We Work Today” (published July 27, 2016):
Co-Founder of Peers.org Natalie Foster is a strong proponent of creating a new social safety net outside the bounds of traditional employment. Even if we wanted to bring back the unionized jobs that built the American middle class, Foster says, we can’t. “Work is shifting away from protected jobs, and towards service and retail sectors.”
Foster mentions UBI near the very end of the interview, after being asked about automation. She describes the policy as the “ultimate” portable benefit (portability having been a major theme of the preceding conversation).
Reviewed by Cameron McLeod
Zipcar lot photo CC BY 2.0 Timothy Vollmer
This basic income news made possible in part by Kate’s supporters on Patreon
