Korea: Gyeonggi’s youth basic income report released

Korea: Gyeonggi’s youth basic income report released

The Gyeonggi Research Institute released “Satisfaction survey report on the youth basic income in Gyeonggi Province” at the start of September.

Gyeonggi Province started the youth basic income, a kind of trial project, last April. The age group of 24 is given 1M Korean Won (about $900) a year in local currency under the project. A satisfaction survey was carried out to find out the recipients’ attitudes toward the youth basic income.

As a result of the survey, the overall level of satisfaction of the youth basic income in Gyeonggi Province was 77.10 points, indicating that 80.6% of the entire respondents were satisfied. The main reason for satisfaction was because ‘It was paid out to all youths aged 24 residing in Gyeonggi Province’ (35.2%), ‘It was paid out in Gyeonggi regional currency which could be used like cash’ (31.6%), ‘There are no conditions for receiving youth basic income such as being employed or carrying out job-seeking activities’ (11.3%).

However, the prime reason for dissatisfaction of dissatisfied respondents was because ‘It was only being paid to youths aged 24 out of the youth group’ (33.3%), ‘Gyeonggi regional currency couldn’t be used in supermarkets, department stores, entertainment stores and others’ (11.7%), ‘It was paid out per quarter over 4 times and applications had to be made each time’ (11.7%), indicating that they were dissatisfied with payment subject and application method, and in case of ‘payment method’.

The Institute is carrying out a few other surveys and researches to find out various effects of the youth basic income and they will come out soon.

You can find the report here.

 

Written by: Hyosang Ahn

Executive Director of BIKN

Korea: Interview with pro-UBI provincial governor

Korea: Interview with pro-UBI provincial governor

The Dream of a Just Society Found in Basic Income

[Interview] Meeting with Gyeonggi province governor Jae-myung Lee

Interviewed by Jun-ho Oh

Author of Basic Income Can Change Our World (2017, in Korean)

Translated by Hee Su Jung

“The combination of basic income, local currency, and national land holding tax will make the majority of the people happy.”

“It pains me to see people having no land misunderstand the national land holding tax.”

Governor Jae-myung Lee introduced the “Seongnam Youth Dividend” in 2016 during his term as the mayor of Seongnam city. It was a partial basic income, which provides 1 million won per year to 10,000 24-year-olds residing in Seongnam city. At the time, he faced negative reactions from the former Park Geun-hye government of South Korea and was criticized for being a populist, but gained strong support from local businesspeople and the youth.

After being elected as the governor of Gyeonggi province in the local election of 2018, Lee started to provide the Gyeonggi Youth Basic Income to 175,000 24-year-olds residing in Gyeonggi province since April 2019.

The amount of Gyeonggi Youth Basic Income is 1 million won per year, and it has been paid in local currency. The increasingly positive reactions towards the policy after the implementation of the Seongnam Youth Dividend helped to make this policy a reality throughout the province. Lee wants to go further than Gyeonggi Youth Basic Income and create a universal basic income covering all citizens of South Korea, along with the implementation of “basic income funded by national land holding tax” to fund the proposal.

The interview with Jae-myung Lee was held at Gyeonggi Provincial Government Building, at 11 am, June 20th, 2019.

Unlike other politicians, you are a strong advocate of the basic income movement. What aspects of basic income were you drawn to?

On one hand, basic income resonates with my dream of a just society. Also, I think that it is an unavoidable policy in order to preserve our societal system. The decrease in the importance of labor due to the fourth industrial revolution, and the current situation where a few wealthy individuals hold excess profits makes it nearly impossible to prevent society from collapsing. Historically speaking, when social inequality reached a certain point, the system collapsed. This may be what our society is facing, which is the reason why policies should be revisited. In my opinion, basic income may be our only choice. Another problem caused by the excessive concentration of wealth and exaggerated excess profits is that it decreases resource efficiency. Distributing wealth to the people, who have fewer opportunities to work compared to the past, will aid in sustainable economic growth, regime maintenance, ultimately achieving real freedom and equality.

There were a number of basic income experiments held abroad, but they primarily targeted the poor. In contrast, Gyeonggi Youth Basic Income was implemented where it was given to every single 24-year old. What is the significance of the policy?

As you know, basic income aims to provide all people with a minimum amount of livelihood regularly in cash. What we are doing here is limited to a certain age, so it does not completely correspond with basic income. It may be quite insufficient, but the form and principle are similar. I would like to stress that it was an introductory measure. As to the reason why I chose the youth to be the recipients, the youth these days are in the most disadvantageous position in their overall lifespan, but at the same time, they are least protected by the state. In the past, we used to say “The hardships of youth are invaluable,” “There is always a second chance” to young people who had ample opportunities, but the situation is different for the youth nowadays. I thought young people needed special political consideration. I also considered the ripple effect of the policy. It is not yet a perfect system, but a process of throwing a buzz to society. In terms of necessity, the young needed this most, and, I think, there would be an explosive power of a basic income policy for the young in making basic income a social agenda.

One of the unique elements of Seongnam city Youth Dividend and Gyeonggi Youth Basic Income is that they are paid by local currency. On the other hand, there are criticisms of the dividend not being paid by cash. Why did you choose local currency? (Gyeonggi province local currency can be used either in the form of a certificate or a rechargeable debit card. It can be used similarly as cash at affiliate stores in the region. Businesses with large revenue including big retailers are excluded.)

One reason is to overcome resistance. The notion of giving youth cash met criticisms of being populistic, and I had to admit that. New policies always meet resistance, no matter how ‘correct’ the policy is. But resistance decreases when the effect of the policy and the people who gain from it increases. Since it is a policy project funded by public finance, we have designed it to benefit the self-employed and the local economy as a whole, even though it may raise a few inconveniences caused by the local currency for the youth who use it. Another reason is about gaining the support of traditional market merchants and small businesses. This was an effect proven in the case of Seongnam city Youth Dividend. Sales of traditional markets in Seongnam city increased by 26% in the year 2016, when the policy was implemented.

You insist on giving all citizens universal basic income, going further than Gyeonggi Basic Income. At the Gyeonggi province basic income international conference held at April 29th, you have argued to “distribute profit that comes from the commons”, and are consistently arguing for the implementation of basic income funded by a national land holding tax. What is your specific plan in introducing universal basic income?

Making a new policy is important, as is combining necessary policies. One of the biggest problems in our society is the unearned income issue. People do not make creative efforts in a society with excessive unearned income. In such a society, people are trying to take power and take away power from others.

The problem of unearned income must be solved to build a ‘normal’ society where labor is respected and people are assured their share in accordance with their contributions. The biggest issue is a sharp increase in unearned incomes from lands and real estates. And that has significantly worsened compared to the past. One reason is the low real estate holding tax. The way to recapture unearned income from real estate is to increase the tax on it. Currently, real estate holding tax is about 0.3 percent. This is one-sixth of the automobile tax, which is about 1.8~2 percent despite the fact that it is the same type of tax based on property. Why is a tax on cars, usually owned by ordinary people, so high when the tax on land is so low? After fully understanding the situation, there will not be as much resistance towards raising tax rates to 0.5 percent, which is about half of the tax rates in advanced countries. By collecting 15 trillion won more in addition to this, we can pay each citizen 300 thousand won per year.

Is it to combine basic income and policies that aim to recapture unearned income from real estate?

Let us combine the important policy project of overcoming a ‘republic of unearned income from real estate’, and a basic income policy. It is an aim worth pursuing which will make the majority of the people happy. The combination of basic income, local currency, and national land holding tax make sense. This is how to raise support for my policies. You need to change people’s lives, gain support, and minimize opposition. For this, we had to start off with a partial basic income, small amounts of basic income and find a source of revenue that can be agreed upon among people. Land is the most typical type of common wealth and nobody can completely own land in this country, even though s/he has the ownership of that land. The Constitution states a public concept of land. Also, there is no reason for it to require a massive source of revenue at this moment. A child allowance implemented this year by the government is an example of a partial basic income. We can give out child allowance to children under seven, give basic income to 24-year-olds in Gyeonggi province, give basic pension to all the elderly regardless of income level in the future, and fill the gaps as we proceed. In the end, we will be able to build a basic income system even though it may be a low amount at the beginning. The amount can be increased. Implementing a basic income is not about financing sources, but about the authority’s will.

Distrust against the proper use of tax revenue is common in South Korea.

We need to get people to experience that if they pay tax, it would benefit them. 15 trillion won from national land holding tax might only pay 300,000 won per year to all citizens. But people will think “Did I get what I paid for? Would I get more if I pay more?” South Korea is a “low burden, low welfare” society and we need to increase both taxes and welfare. If we only support the poor, the taxpayers would think “Why do I have to pay taxes to help them?” In order to decrease resistance, we have to make the taxpayers think that paying taxes will benefit them. In the Nordic countries, people do not complain that they pay almost half of the GDP to tax, because the majority of the people benefit more than they pay. I want Koreans to have the same experience. After experiencing first-hand, it wouldn’t be difficult to increase basic income from 30,000 won per month to 50,000 won per month, or even more. This will allow for increasing taxation without resistance. At present, there is no taxation power for local government. One possibility is that the National Assembly makes related laws, based on the public concept of land stated in the Constitution, and local governments then enact the municipal ordinance.

Could you comment on the significance of what you’re doing for basic income supporters abroad?

While there were basic income experiments in other countries, we are actually implementing the policy. To be honest, the amount is not enough to result in experimental effects. 1 million won a year is insufficient as a basic income. But I am trying to spread the idea of basic income through this policy. Anyway, it will benefit over 150 thousand people a year, and hundreds of thousands for some years ahead. Even though we started with a small amount of basic income for a particular age group due to financial reasons, but we should expand the recipients and increase the amount in time. A national decision is necessary, which is ultimately made by the people. In order to do so, people need to know about the basic income idea and have a desire for it. I think this policy would help them with that.

Note. This article is a translation of an interview included in the first issue (link: https://basicincomekorea.org/wp-content/uploads/2019/07/BasicIncomeMagazine_Issue001-Summer2019.pdf) of Basic Income Magazine (quarterly published by the Basic Income Korean Network). The magazine is in Korean, and this article is a summarized version of the original article.

Korea to launch provincial ‘Youth Basic Income’ program

Korea to launch provincial ‘Youth Basic Income’ program

Basic Income Exhibition and Youth Basic Income to be launched

Gyeonggi province, the most populous region in South Korea, will be hosting an exhibition on basic income on April 29th and 30th to coincide with the launching of its Youth Basic Income program. The program will unconditionally give one million Korean Won ($US900) in local currency per year to 24-year-old residents of Gyeonggi province.

The program was first piloted when the now provincial governor of Gyeonggi, Lee Jaemyung, was the mayor of Seongnam City. Lee Jaemyung made the expansion of his Youth Dividend program part of his winning electoral manifesto in last year’s local election, and the program will be expanded to the whole of Gyeonggi province starting this April.

The Basic Income Exhibition will largely be composed of three parts. First, a provincial fair will be held with 31 cities and counties participating where local specialties could be purchased with the local currency. Second, a promotional platform for basic income will be created, introducing its history, meaning, and experiments that have helped make it a reality. Third, a conference will be held under the subject of ‘Basic Income: A New Paradigm in the Age of Cooperation’. The conference will discuss basic income experiments and policies that are proceeding around the world, and go on to consider how basic income relates to the commonwealth, technological changes, the status of women, democracy, and the very definition of social value.

The keynote speakers of the conference are Annie Miller, co-founder of BIEN and the chair of UK Citizens’ Basic Income Trust, and Kang Namhoon, the chair of Basic Income Korea Network (BIKN), and they will give keynote addresses, respectively titled ‘From Vision to Reality: A New Age of Justice, Peace and Welfare’, and ‘Life in the Future driven by Technology Innovation and Basic Income’.

In addition, Governor Lee Jaemyung will present the outlines of Gyeonggi Province’s Youth Dividend program in a session on discussing the various basic income experiments and pilot programs around the world.

Other guest speakers of the conference include Almaz Zelleke (NYU Shanghai), Tomohiro Inoue (Komazawa University, Japan), Sarath Davala (Vice-chair of BIEN, India), Sam Manning (Y Combinator, USA). Leading members of BIKN, such as Min Geum, Nowan Kwack, Junghee Seo, Seungho Baek, Kyoseong Kim, Sophia Seungyoon Lee, Hyosang Ahn, will also attend as speakers at the conference.

The Youth Basic Income program that became the catalyst for the upcoming exhibition/conference is far from ideal, limited as it is in both the age group and amount involved. But it will be one of the biggest pilot programs of basic income so far in the world, involving some 170,000 people, and an excellent opportunity to observe the community effect of a basic income, with the results being analyzed by the Gyeonggi Research Institute.

One of the controversies surrounding Gyeonggi Province’s Youth Basic Income is that it will be given in local currency, which is only usable within the province rather than in cash, quite far from being an ideal basic income.

Despite its limitations, there are some hopes for the program. Given that the local currency can be only be used in small businesses of the province, it could stimulate the local economy and provide the base for a broader coalition in support of the basic income program, and basic income in general. Moreover, basic income can be regarded as part of a broader reimagining of society, and local currencies are a way to reconstruct social economies and could be part of that reimagining. As Thomas Paine once said, time makes more converts than reason, and while the youth basic income is limited, it can certainly be a step forward for basic income into political reality.

 

Hyosang Ahn (Executive Director of BIKN)

NEW ZEALAND: Opportunities Party Proposes UBI Policy for Youth

NEW ZEALAND: Opportunities Party Proposes UBI Policy for Youth

Pictured: Gareth Morgan, leader of New Zealand’s The Opportunities Party; Credit to: Henry Cooke, Stuff

New Zealand’s The Opportunities Party (TOP), founded last year by businessman and economist Gareth Morgan, has launched a three-stage policy proposal to implement UBI for families with young children, the elderly and youth ages 18 to 23. This policy proposes youth receive $10,000 per year for the first 5 years in their transition to adulthood.

In mid-July, TOP proposed a UBI policy for youth aged 18 to 23 to support their transition into adulthood. Under the proposal, each youth would receive $10,000 per year, divided into weekly payments of $200, to support themselves during a critical period of self-development. TOP has endorsed a basic income for families with children under the age of 3 and seniors ages 65 and older. This income would be provided with no strings attached; for example, citizens would not be asked to take drug tests, submit salary information, or undergo any bureaucratic application process. TOP’s commitment to eliminate barriers to accessing UBI by youth is inspired by observations of the current system, as party leader Gareth Morgan argued, stating that “targeted welfare payments were needlessly complex, resulting in greater costs and many not claiming the benefits they were entitled to.”

The impetus for TOP’s proposed UBI policy for youth in particular is related to the fact that New Zealand has the highest rate of suicides among young people in the developing world. Additionally, youth ages 18 to 23 experience high unemployment rates. The party hopes a UBI will help alleviate financial stress and provide more comprehensive support to help youth achieve their dreams as they transition to adulthood. The UBI is meant to encourage youth to use this money in anyway they see fit, from entrepreneurship to pursuing higher education and nontraditional careers. As the economy is increasingly uncertain, the expectation is for the UBI to supplement benefits this age group already receives and provide financial support to those who may not qualify for these government benefits. For example, there are currently 20,000 youth in New Zealand who are not in employment, education or training and therefore are not receiving government benefits.

The cost to implement this policy is estimated to be $2.4 billion. The UBI would replace the first $10,000 of $245 million in benefits already received by each youth aged 18 to 23. Rather than cut existing programs for youth, TOP proposes funding the UBI from the National Party’s $2 billion Family Incomes Package, which focuses on helping low-income families with children and steep housing costs get ahead through four main benefits:

  1. “Increasing the $14,000 income tax threshold to $22,000, and the $48,000 tax threshold to $52,000
  2. Removing the Independent Earner Tax Credit of up to $10 a week.
  3. Lifting the Family Tax Credit rates for young children to those of children aged 16 to 18
  4. Increases Accomodation Supplement rates for a two person household to be $25 and $75 a week, while the maximum rates for larger households will increase between $40 and $80 a week”

The remaining $0.4 billion will come from the nation’s projected budget surplus of $1.6 billion in 2017-2018.

This UBI is anticipated to fill in the gaps in the existing support structure for youth, while also supplementing existing initiatives to support this population. For example, New Zealand’s Labour Party “plans to give everyone 3 years free tertiary education and NZ First wants to write off student loans.” Implementing TOP’s three-stage UBI for youth, seniors and young families in tandem with these additional initiatives has the potential to provide unprecedented support to these populations.

 

More information at:

Henry Cooke, “Gareth Morgan wants to pay every young person $200 a week with youth UBI,” Stuff, 18 July 2017

Isaac Davison, “The Opportunities Party extends $200 a week basic income to young adults so they can ‘pursue their dreams,’” New Zealand Herald, 18 July 2017

Andreas Illmer, “What’s behind New Zealand’s shocking youth suicide rate?,” BBC News, 15 June 2017

Labour Party, “A fresh approach to education,” August 2017

National Party,”Family Incomes Package- Budget 2017” August 2017

New Zealand First, “Policies: Education,” August 2017

The Opportunities Party, “Youth to Adult UBI,” 17 July 2017

SOUTH KOREA: Seongnam City announced to implement ‘Youth Dividend’

SOUTH KOREA: Seongnam City announced to implement ‘Youth Dividend’

Jaemyoung Lee, Mayor of Seongnam City, announced to implement Youth Dividend at a press conference on the first day of October 2015. He informed the purpose, goal and way of Youth Dividend, and proposed that the national government should implement it as well.

Every person aged 19-24 who has lived at the city at least for three years will receive kw 250,000 (about $ 230) quarterly (total kw 1,000,000 a year) without any means-test or work requirement. In this sense, Youth Dividend aims to realize the basic income idea which is different to the previous selected welfare policy, although its amount is very small.

This scheme will be implemented year by year from 24s, because the city has not sufficient fund. According to the statistics, there are about 70,000 aged 19-24 having lived at least for three years and among them 24s are 11,300. So more than kw 60 bn budget will be required to pay kw 1,000,000 to everyone aged 19-24. The city has a plan to carry it out optimizing the budget.

Youth Dividend has two fold goals. It has aims to “expand the welfare for the young people so that they could have more opportunities for raising their qualification” and to “stimulate the local economy by the way of paying Youth Dividend in electronic money which could be only used within the city.”

This scheme has another effect as well. Criticizing President Park’s ‘Hopeful Fund for the Youth’ which is regarded as a philanthropic disguise, Mayor Lee proposed “the central government should adapt Youth Dividend to resolve the so called youth problem fundamentally.”

Korean government pushes ahead with Hopeful Fund for the Youth to conduct practical education for the young people who want to get a job or run their own business through the citizen’s donation. Mayor Lee sharply criticized it, because it gives up the responsibility of government. “The youth problem cannot be resolved by the philanthropic donation”, he said. And “the central government has responsibility to take care of it for the continuous development of the society.”

Two issues, the limitation of regional government budget and the tax justice, are behind his claim that the national government should take Youth Dividend as its program. Mayor Lee said “we should assure the money on the ground of strict tax justice” for resolving the youth problem. For example, if we raise the current rate of 22 percent of corporate tax to 25 percent, we could have a considerable amount of money. Indeed, Korean government has lowered the rate of corporate tax in past years.

There need to pass through another two processes to implement actually Youth Dividend. On the one hand, Seongnam City has to make “an arrangement” with the Ministry of Health and Welfare and on the other hand, the statute of Youth Dividend should be passed in the city council. Seongnam City applied an arrangement with the Ministry on the 24th September and made pre-announcement of legislation of ‘Youth Dividend Statute’ on the 29th.

The reason that Seongnam City has to have an arrangement with Ministry of Health and Welfare is because Article 26 of Social Security Act in Korea regulates the related process. According to it, any regional government which has a plan to make a new social welfare scheme or to change the current programs has to make an arrangement with the Ministry. But the Ministry has de facto power to permit, although the Act contains the expression, “arrangement.” We have lots of cases in which welfare programs in regional government could not be carried out face with the Ministry’s opposition.

So we are afraid of the arrangement process, because current Korean government is so authoritarian and neoliberal. But if the process will be completed as we wish, we have an opportunity to realize the basic income idea here in Korea, even though not sufficient.

[Written by Seonmi Park in Korean and translated by Hyosang Ahn (Both are members of Basic Income Korean Network)]