A round-up of articles on universal basic income, designed to whip up enthusiasm, get us over the hump of creation and propel us into momentum.
This is our chance to bring in this (in my opinion) eminently-worthwhile change in our economies – last stop before the Reval.
Pandemic strengthens the case for universal basic income
Ishaan Tharoor, The Washington Post, April 10, 2020
Just a year ago, the argument for “universal basic income” (UBI) still seemed a fringe theory. It was the pet project of a coterie of libertarian academics and some left-wing activists, and the subject of an economic experiment among a small group of people in Finland. The idea that governments should cut a monthly check to every citizen was largely scoffed at by mainstream conservatives ideologically opposed to handouts (that is, at least, to average citizens) and rankled left-leaning intellectuals, who were wary of diverting resources from already cash-strapped, means-tested programs for the poor.
In the United States, Democratic presidential candidate Andrew Yang made UBI the cornerstone of his electoral bid, arguing that, in an era of technological disruption and increasingly precarious labor markets, governments needed to provide people more of an immediate cushion. Despite a cult following, Yang remained an outlier in the race and suspended his presidential campaign in mid-February.
Then came the coronavirus. Pandemic-induced lockdowns and stay-at-home orders have sent economies into free-fall. On Wednesday, the World Trade Organization warned that some projections for the ongoing drop in global trade could mean a new Great Depression. More than 17 million Americans have filed jobless claims in the past four weeks — a staggering, unprecedented figure. International humanitarian advocacy group Oxfam warned in a new study that the pandemic may force 500 million people around the world into poverty if urgent government action does not alleviate their plight.
As governments plot stimulus measures, UBI has become a central part of the discussion. “Across the globe, businesses are going to the wall; jobs are being lost; the self-employed are without work; mortgages are being defaulted; savings are being run through; and rent cannot be paid,” noted an open letter signed by more than 500 academics around the world, which called on governments to look beyond “traditional welfare policies” in this time of crisis. “Societies where a large majority of the population works in the informal sector will be hit especially hard – beyond earnings, there is next to no safety net.”
This week, Spain’s center-left government became the first to unveil plans regarding some form of guaranteed income to a large segment of its population. Though details remain unclear, with one report suggesting monthly payments of around $475, Spanish officials believe there’s broad legislative consensus behind the effort. And there also appears to be political will to ensure that payments continue beyond the passing of the pandemic.
“We’re going to do it as soon as possible,” Nadia Calviño, Spain’s minister of economic affairs, said in a radio interview Sunday. “So it can be useful, not just for this extraordinary situation, and that it remains forever.”
In the United States, elements of Yang’s platform have in the space of two months gone from being dismissed out of hand in Washington to winning broad bipartisan agreement. At the heart of the $2 trillion stimulus passed by Congress last month was a commitment to cut checks of around $1,200 to Americans below a certain income bracket, though many Democratic critics, including Yang, argue that a one-off payment is insufficient for the crisis. Though a permanent and universal monthly payment is not yet on the table, the political appetite for it may be building.
“All of a sudden, the cost of a UBI isn’t nearly as big a worry as it was even a month ago,” Matt Zwolinski, director of the Center for Ethics, Economics and Public Policy at the University of San Diego, told NPR’s Marketplace. “Americans across the political spectrum are calling for the government to spend very large sums of money to keep families on their feet, to keep small business afloat, and to keep the economy from collapsing. And there is a growing recognition that cash grants do that in a way that provides maximum flexibility in a time of drastic uncertainty and rapid change.”
For Yang — who has given a flurry of interviews over the past few weeks — it’s an unfortunate, if not unexpected, reckoning. “We are in a generational public health and economic crisis and universal basic income or a version of it is going to become the obvious solution to getting money into the hands of Americans and people around the world,” he said. “What seems to some to be marginal or overambitious is going to become common sense pretty quickly.”
Yang argued that such measures were especially necessary in Washington. “The coronavirus is more lethal and devastating to people who have preexisting conditions and vulnerabilities,” he said in a Thursday phone interview. “And it turns out that the U.S. had a set of preexisting conditions that made us more vulnerable: A dysfunctional government, a polarized media, inaccessible health care and pervasive financial insecurity and need.”
He also insisted that UBI, or at least programs that guarantee income to those in particular need, shouldn’t be seen as a panacea, but a baseline government effort that “improves Americans’ day-to-day lives.” In the long run, he believes issues of health care, housing and climate change will require more sweeping political solutions.
“Much of northern Europe has been ahead of the U.S. on providing health care for their citizens, on having a strong, robust safety net, on having people feel if their job is eliminated that they’re not going to be left high and dry,” he said. “We should be moving toward having a much more solid safety net here in the U.S. beyond universal basic income.”
The pandemic is not a great leveler. What links Yang with a growing body of commentators and politicians elsewhere is a shared understanding that the ravages of the virus have only intensified the pain felt by those already at a disadvantage in societies where inequality is rife.
In a widely circulated Wednesday evening segment, BBC presenter Emily Maitlis gestured at the need for some form of UBI or other ambitious social spending amid the pandemic.
“This is a health issue with huge ramifications for social welfare, and it’s a welfare issue with huge ramifications for public health,” she said, before asking: “What kind of social settlement might need to be put in place to stop the inequality becoming even more stark?”
Yang’s answer, or modified versions of it, could be what many governments elect to pursue. On Thursday, Yang said he doesn’t have any regrets about suspending his campaign, but added that, “certainly, it seems that the energy around the ideas of my campaign has just shot up dramatically.”
Ishaan Tharoor wrote this piece for The Washington Post.
What better time to try universal basic income in Canada?
Dale Boyd, Oliver Chronicle, April 9, 2020
https://www.oliverchronicle.com/what-better-time-to-try-universal-basic-income-in-canada/
The old ways are over. Accept it.
Our world and economy will not be the same when the pandemic ends.
Considering the increased debate over democratic socialism surrounding presidential nominee Bernie Sanders, who suspended his campaign Wednesday, the current situation comes with a dollop of dramatic irony.
To all of you who have been laid off and are accepting the Canada Emergency Response Benefit, this is the democratic socialism everyone has been talking about. Sure comes in handy when circumstances beyond your control put you in a situation where you are unable to earn income.
The federal New Democrats are pushing for $2,000 a month for every adult Canadian until the crisis ends, and when tax time comes around (September, I think?) those who didn’t need it will pay the sum back.
Now is likely the best time to run the experiment and put an end to years of rhetoric around the values of a universal basic income with concrete data.
The discussion draws a lot of heated opinion, most pulled ignorantly out of old ideas of what constitutes “hard work.”
The “basic” idea is every citizen of Canada receives a monthly payment from the government, just enough to live on. Not live anywhere, but live.
Silicon Valley presidential candidate Andrew Yang launched his Freedom Dividend Pilot Program, giving $1,000 a month for a year to 14 Americans, who quickly reported they were able to make better quality of life purchases and that the stress of paying bills or debt almost vanished.
Over half, 53 per cent, of Canadians are living paycheque to paycheque, myself included. That is a failure of all levels of government, current and former, and reveals the deep weaknesses and deficiencies of our economies — all rooted in the time before the COVID-19 pandemic.
Multiple studies point to about 50 per cent of the workforce of the future being replaced by automation. According to a study led by a U.S. government task force, there’s an 83 per cent chance that automation will take a job with an hourly wage below $20, a 31 per cent chance automation will take a job with an hourly wage between $20 and $40, and a 4 per cent chance automation will take a job with an hourly wage above $40.
Older generations did not face these “circumstances beyond our control” — at least not quite so abruptly. Those working jobs earning below $20 hourly are currently saving our butts, so obviously economic realities are subject to change on a dime. However, within those stats lies the problem.
It seems many imprinted with old value systems assume a universal basic income would promote immediate and irreversible laziness, rather than provide a reprieve from relentless stress. This thought process requires believing that human beings are inherently lazy, which we are not. We want to do things, create, contribute and progress — and we did so before economics as we know them today even existed. As well, living on a universal basic income would not discourage capitalist innovation — simply put, if you have the ability to make more money, you likely would. Humans might not be inherently lazy, but we do seem to be inherently greedy.
Even if we were lazy as a species, universal basic income already exists, with extra bureaucratic and often humiliating steps.
The government hypothetically supports those who are unable to support themselves, but usually through mounds of red tape, application processes and triaging who gets how much support when. Some programs like supporting those suffering from substance misuse and addiction are specialized, with specific requirements and red tape, and much like governments already do today, we would adjust and roll with the punches as the program was enacted and issues arose. Unfortunately, these supports are not as robust as one would be led to believe by those who disparage the people who benefit from them.
For staunch capitalists who believe in money more than anything else, universal basic income has a capitalist purpose too. It keeps the dollars in the economy from people who are unemployed. We have heard the myth of trickle-down economics for years, and yet nothing has changed financially for the better for those at the bottom, why not try some trickle-up for once?
More importantly, as Canadians it would put our money where our mouth is. If you truly care about your fellow human beings you would not subject them to a system that can crush and destroy a person’s life because of circumstances beyond their control in the name of healthy competition, and simply write people’s lives off as a symptom of our economic system.
One could argue we are already playing out this experiment as requirements continue to loosen on federal income supports. Instead of pretending the economic system pre-COVID-19 was perfect and balanced, why not simply take the lead and fully embrace universal basic income until the crisis ends.
Easier said than done, to be sure, but at the same time it seems the Canadian government is already engaging in near-universal basic income strategies during this crisis. Why not go all the way? If it turns out to be the financial disaster penny-pinching conservatives say it is, then we tried (and were likely going to pay out that income support anyway), and if it helps Canadians get by, then we have data to point to integrate into our future economic planning.
Our world and economy will not be the same when the pandemic ends. We may be able to create a system that is more humane, and more resistant to future “circumstances outside our control,” which are inevitable. The old ways are over. Accept it, fully.
Cash-for-Corona in Spain
Leire Rincon, Basicincome.org, April 9, 2020
https://basicincome.org/news/2020/04/spain/
Cash-for-corona: why the current policy proposal being discussed in Spain has nothing to do with a universal basic income
Since the outbreak of coronavirus and the subsequent social and economic lockdown, there have been numerous appeals from economists, journalists, public figures and policy makers, that the time was ripe for the implementation of a universal basic income. However, the media and public discussion of the imminent need for a universal basic income does not resonate with the measures which are currently being discussed for implementation to tackle the economic crisis derived from the coronavirus pandemic.
In Spain, there has been recent discussion to implement a minimum living income (ingreso minimo vital, IMV, in spanish) as a means of alleviating the economic downturn that is approaching. Some media outlets (see for instance the posts in Bloomberg, the independent, Business Insider, The Local, or Forbes) have used the concept of a universal basic income, instead of a minimum income, to repot the current policy proposals being discussed in Spain. The term basic income was even used by a Spanish journalist in an interview with the third Vice-president of the Spanish government, Nadia Calviño, when she asked her about the minimum income policy that is currently being discussed.
Despite the media’s insistence in using the label of a basic income, the current policy in question is far from a universal and unconditional policy as such. Although the Spanish government is still considering the implementation details, Minister of Social Security and Migration, José Luis Escrivà confirmed in a recent interview that this policy is a minimum income to be targeted to vulnerable households, and the generosity will be dependent on the the family typology (mono-marental households will receive more generous quantities) and upon the number of number of children. In a recent article by La Vanguardia, the quantity has been stipulated as for 500 euros for individuals living by themselves, and up to 1000 euros for families with children. Currently, the ministry is working in the elaboration of household typologies and calculating how many households would be eligible for such benefit. However, although the generosity has not been defined still, it is known that this measure will not be temporary but permanent, as a last resort safety net that is more durable than other types of benefits.
This is a non-contributory cash payment, which adds to current policies in different ways: those who have exhausted their unemployment benefits can have access to it, and those who are not eligible for unemployment benefits will have access to it if they comply with other criteria. Very importantly, in principle this is a permanent measure, so it is not exhausted until the recipient is employed. Such a design is convenient to target particular vulnerable groups of people like domestic workers without contracts, or self-employed people who have seen their activity come to a halt. According to calculus made by the minister of employment, Yolanda Diaz, this measure could benefit a total of 5 million people, which is close to 10% of the Spanish population.
Although it adds to current policies in several ways, this is far from a basic income in various ways as it is not individual, unconditional or universal, which are three of the key characteristics of the so called universal basic income policy that some media outlets are are using to label the future policy that will be implemented in Spain. Quite on the contrary, the type of policy being discussed is a non-contributory last resort benefit that will go to the most vulnerable households, and precisely, will be given to households and not individuals, closer to current non-contributory pensions than a basic income, as summarised in the table below:-
Characteristics | IMV (current proposal being discussed in Spain) | Basic Income |
Universal | No | Yes |
Unconditional | No: the aid is conditional on the number of children, previous income, household typology | Yes |
Cash payment | Yes | Yes |
Individual | No: households; currently elaborating a household typology and calculating the number of households that will be covered | Yes |
Non-contributory | Yes | Yes |
Not only a cash-for-corona policy
The minimum living income currently on the political agenda in Spain is not a unique response to coronavirus. The implementation of such a policy was part of the governmental agreement signed between the two coalition parties PSOE and Podemos, already in 2019. In this scenario, there was an estimation of 600 euros per person, with some households reaching to a top 1,200 euros and with an approximate cost of 10.000 million euros. In her recent interview to La Sexta channel, the third Vice-president, Nadia Calviño announced that the introduction of the IMV that is currently being discussed was intended as a pilot of the policy that was agreed upon in the governmental agreement in 2019. In this sense, regardless of the shape that this policy takes now, its implementation is intended to be structural and with a permanent character.
Yet another re-appropriation of the UBI label
Once more however, the media response has been to appropriate the name of universal basic income to label policies that are far from it. In fact, the whole package of policies that comprise the government’s emergency response to the coronavirus resonate with the same targeted and means-tested logic of welfare state comprised of a patchwork of benefits to cover different needs, with many individuals falling through the cracks. The government has already implemented the ERTEs (temporary regulation expedients of employment), in order to prevent mass unemployment, a moratorium on mortgages, a fiscal moratorium for self-employed workers, with benefits for those who have seen their activity massively reduced, and, which belong to the same rhetoric of a patchwork of programs rather than an effective safety net without any cracks, like universal basic income. due to the complexity of the different conditions’ individuals face and are not captured by the all the series of programs and administrative processes.
Coming steps
The current political debate is revolving around the technical details of the minimum income -especially, its generosity and target groups- and how it will be funded. On Tuesday, Alberto Garzon declared in an interview that Spain is calling to Europe for a “shared exit”, with adequate funds that are not loans. Escrivà had previously made a calculus for a policy of such type, when he was the president of Airef (independent authority for fiscal responsibility). With a coverage of 1,8 million people, the cost would come to about 5,500 million. This calculus is based on a quantity of 430 euros which is 80% of the IPREM indicator (Indicador Público de Renta de Efectos Múltiples or Public Indicator of Multiple effects income ) to go to households, whose income should be below 263 or 497 euros month, depending on the number of individuals per household. The cost could be lower if similar benefits could be removed, descending to 3,500 million euros. However, the calculus will be very different now.
Emergeny minimum living income – latest update 10th April 2020
Given that the implementation of the proposed IMV would take around three months, the government has been working to implement a ‘bridge’ minimum living income (IMVP given its acronym in Spanish), which would be a temporal and emergency measure to be implemented as soon as possible. This however, will still take some days, as it will not be approved in today’s extraordinary congress meeting, and neither in the ordinary meeting in the coming Tuesday, according to some of the latest news on the matter.
This emergency IMVP will consist of 500 euros per households, for those with lower incomes than 200 euros if they live by themselves, and lower than 450 if living with one person or more. The benefit generosity will be higher for those with children under their charge. The government has announced that while this measure is temporary it will remain in place until the approval of the permanent IMV, hich has been estimated to last for about 3 months. It has been estimated that this guarantee should benefit approximately around half a million people, significantly lower than the number provided by the permanent measure.
Political process
This emergency policy took speed yesterday, in ameeting between Pablo Iglesias, Yolanda Diaz -Minister of Employment-, Jose Luis Escrivà -Ministerof Inclusion, Socil security and Mogration- and key interest group representatives in Spain, including NGOs like Oxfam, Cáritas, Facua or Cermi, trade unions like CCOO and UGT, although key business organisations like the CEOE did not participate. There is another meeting which has been scheduled for today (10th April 2020) with the Minister of Emploment, in which the CEOE has refused to participate. However, Pablo Iglesias had been in contact telephonically with key business and banking sector figures who spoke positively of this measure, and had also been in contact with Antonio Garamendi, CEOE’s president, with whom he had exchange some documentation.