20/20, May 14-2

Rise in Indian billionaires’ wealth over a decade. Their total wealth was more than the Union Budget 2018-19, which was at ₹24,42,200 crore.

Source: Oxfam

UBI is not a new idea. First proposed in Thomas More’s Utopia in 1516, it has been advocated in one form or another by many thinkers and leaders throughout history such as Thomas Paine, Napoleon, and Martin Luther King. Proponents in the present time include Microsoft’s Bill Gates, Facebook founder Mark Zuckerberg, and Tesla’s Elon Musk. A case was made for it in the Economic Survey of 2016-17 when a quasi-UBI was mooted. It suggested targeting about 75% of the population and starting out with specific groups. The survey also suggested phasing out welfare schemes that are ineffective. However, its fiercest critics say free money will make people not want to work.

The conversation has gathered steam around the world now with the number of Covid-19 cases crossing 2.5 million and 178,686 deaths (as of April 24). In fact, in his Easter letter to leaders, Pope Francis made a case for it. “It would ensure and concretely achieve the ideal, at once so human and so Christian, of no worker without rights,” he said. In India, Deepanshu Mohan, associate professor and director, Centre for New Economics Studies, Jindal School of International Affairs, O.P. Jindal Global University, says labourers across the board—daily-wage workers, factory workers, female workers on flexible contracts, the agricultural landless labour class, and “floating migrants” who move seasonally with cattle that is used for ploughing the fields across states, and sex workers—will be severely impacted. “Right now, what you can see is a shock that has affected all of them. It’s a shock that can multiply by three or four times of what demonetisation did.”

HE SAYS SOME OF THESE MIGRANTS are not a part of the Census, while some have been left stranded in cities. While state governments and civil society are trying to provide food and shelter, it is not a sustainable measure. For example, what happens once the lockdown is lifted? Will labourers have to move out of government-provided shelters? Or, will they get their jobs back? Also, in the likelihood of food inflation as the supply gets disrupted and the harvesting of the rabi crop becomes a concern because of labour shortage and logistics snags, the poor will need money to get through the next few months. To be sure, the Indian government has announced a relief package of ₹1.7 lakh crore for those most affected by the Covid-19 lockdown: ₹500 to be paid directly to women with Jan Dhan accounts; raising the daily wage under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to ₹202 from ₹182; transferring ₹2,000 each under the PM-KISAN scheme to 86.9 million farmers; and free ration of rice, pulses, and cooking gas. In a crisis, a combination of cash and essential food items is a good solution. But is it enough?

Economist and activist Jean Dreze says the government has humongous and growing foodgrain stocks, which should be released on a much larger scale for emergency distribution. “Cash transfers should be scaled up, especially for pensioners who are the most vulnerable at this time. The state governments, especially the poorer ones, also need budgetary support for other relief measures such as healthcare. The capacity to raise extra resources quickly lies primarily with the central government. It must do much more to help the states,” he says.

Dreze, however, believes that India should not rush into adopting UBI. An emergency UBI for purposes of disaster relief is not feasible because the system is not in place and cannot be put in place in a hurry. “After the crisis is over, there will certainly be a case for stronger social security measures of a permanent nature. Steps towards UBI could be part of these measures, but I am sceptical of the claim that UBI can be achieved quickly and replace other foundational programmes such as PDS and the employment guarantee Act.”

Graphic by Rajesh Kumar Chawla. Source: The World Inequality Database

TO FIGHT THE PANDEMIC AND its repercussions, countries around the world have taken measures to transfer cash to citizens in need. Canada, for instance, said its citizens who are out of work because of the pandemic will be eligible for up to C$2,000 ($1,399) for four months. The U.S. has approved a stimulus package worth nearly $2 trillion and plans to send direct payments to citizens earning up to $75,000 a year. So, would the effect of an event like this—which can recur as the world faces challenges of climate change, food insecurity, inequitable distribution of wealth, and a rising population—be easier to bear if people have money in their pockets? Or would a stronger PDS do?

Ghatak says that this is a good time for the government to consider UBI. “You can’t supply everything through PDS. There are more perishable things, which are essential for subsistence. So, I would say that this is a good opportunity for us to realise that there is a core complementarity between cash and in-kind transfers [goods and services which recipients get for free or at lower rates],” he says.

(Read more: https://www.fortuneindia.com/macro/the-covid-19-crisis-and-the-case-for-ubi/104556.)

Last May, New Zealand Prime Minister Jacinda Ardern released a budget to improve the “wellbeing” of its citizens rather than focusing on productivity and GDP growth. And not so coincidentally, New Zealand has one of the best coronavirus outcomes of any democracy in the world. Perhaps this provides a model for the world to make economic health cohere with health for all life.

To improve wellbeing, Ardern emphasized goals that focus on care for people and planet. Goals included community and cultural connection as well as intergenerational equity. Under the policy, new spending had to focus on one of five priorities: improving mental health, reducing child poverty, addressing inequalities of Indigenous peoples, thriving in a digital age, and transitioning to a low-emission economy.

While New Zealand isn’t the only country to float the idea of wellbeing over income, it is the first country to make it a reality. Guided by this philosophy, New Zealand is not in a rush to open its economy even as headlines swirl decrying a “stock market crash,” or a “recession worse than 2008-09.” Is Ardern’s example wise? Can we build upon it to further improve life after COVID?

New Zealand’s Prime Minister, Jacinda Ardern, has deprioritized “growth” as an economic goal in favour of improving wellbeing. Her compatriots seem to like it: her personal approval rating is 65%. Source: Wikimedia Commons.

Health and the economy

In the postwar capitalist framework, economic “health” became equated to income growth, price stability and full employment. There are increasingly serious pitfalls to thinking of “health” as a capitalist metaphor rather than a desirable end goal. Using GDP and stock market values as measures of overall economic health made sense in the postwar era, when growth was necessary to improve human wellbeing by raising material living standards. In much of the Global North, it is now necessary to focus instead on improving wellbeing without growing our material footprint. Ardern gestures at this by focusing on mental health, inequality, and poverty, without emphasizing income.

By the postwar logic, human health and wellbeing can be upheld when there is enough money to purchase and provide care. After all, supplies and infrastructure need to be paid for. But as the American and British pandemic practices have demonstrated, a growing economy in which GDP (or “opening the economy”) is privileged above general wellbeing doesn’t always improve health outcomes. The US has one of the highest COVID death rates in the world, and the US infection rate is rising as states open up. Experts on public health and leadership, like those writing in the Harvard Business Review, suggest that New Zealand’s Ardern provides a model for the world to focus on maintaining and improving public health.

We can also think of health in the broader sense – ie. health for nonhuman life. The economy is a trophic system, which means that economic health requires the consumption (ie. death) of nonhuman life. And presently, growth is occurring on a scale that is unsustainable. Here, too, Ardern doesn’t suggest a transition to degrowth, but she does emphasize the need for a low-emission economy. Her movement away from GDP growth as a metric of economic “health” does provide an opportunity to make economic health cohere with the idea of ecological health: sustaining the power and vitality that supports all life.

One of the other tangible ways in which some have experienced a positive impact to their wellbeing during the pandemic is a temporary reprieve from productivist pressures and work-stress. As I mentioned in a previous article, the term capitalism refers to Weber’s “modern Kultur” centering around a code of values for the 20th-century West. In this new economy, the highest virtue became “the making of money and ever more money, without any limit.” Growth-as-prosperity requires a certain level of constant busy-ness to prop up the outputs for mass consumption and technological improvement rather than human warmth and connection.

As a result of the pandemic, many of us have gained clarity about the things we value most, such as food, health, income security, education, mobility, access to nature, social connection, and public services. An economy designed for wellbeing can prioritize these tangible things rather than assuming that income will deliver them.

How can we build on Arden’s success?

As we seek to cultivate a new normal in which health is prioritized, perhaps New Zealand offers a glimpse of the way forward.  The “Wellbeing Economy Alliance” has published a piece that suggests that the COVID-caused “Great Pause,” as it were, provides an opportunity to improve our focus on wellbeing. They provide an argument in four parts: (1) The stock market is not a reflection of our economic reality; (2) We will enter a recession, and that’s okay; (3) Economic policies for a Great Pause; (4) Building back better.

(Read more: https://www.resilience.org/stories/2020-05-13/new-zealand-deprioritizes-growth-improves-health-and-wellbeing/)

B.C.’s Shane Simpson, minister of Social Development and Poverty Reduction. Nick Procaylo / PNG

B.C. explores universal basic income for post-pandemic world

Rob Shaw, Vancouver Sun, May 13, 2020

(https://theprovince.com/news/b-c-explores-universal-basic-income-for-post-pandemic-world/wcm/ae43f89c-fe01-4a05-ad03-21b6d884df3e)\

Pandemic will be included in basic-income study and add new context to report, Shane Simpson said.

VICTORIA — Mass unemployment and the shutdown of entire sectors of B.C.’s economy due to COVID-19 has put a renewed interest on the idea of a government-supplied basic income, says the province’s social development minister.

Shane Simpson said it’s particularly opportune that a panel of three academics hired by the province in 2018 to study the issue is preparing to deliver its interim report this summer, while B.C. is slowly reopening its economy from the coronavirus. The pandemic experience will be included in the study on basic income and add a new context to the report, said Simpson.

“I think it’s pretty timely to be doing this now,” Simpson said Tuesday. “I spoke to (the panel members) when COVID happened. I did go back and say obviously this changes the look somewhat. And they said they have no problem fitting that in, to say, ‘Let’s look at it based on what we’re learning coming out of COVID.’ So that will be part of the conversation on what they deal with. They’ll reflect on what we’ve learned and are going through right now.”

The idea of a basic income is for government to provide a minimum living stipend — either in the form of a universal payment to everyone or money targeted to specific groups. It’s different than current social-assistance programs, because it doesn’t necessarily require a person to be unemployed or come with rules on how the money should be spent.

Advocates say basic income provides a guaranteed financial stability that would allow governments to reduce costs for social assistance, poverty, policing, health care, child welfare and other services. But critics have argued against the enormous cost of such a program — likely to be billions in B.C. alone — and how it could provide money to some people who don’t need it.

An unprecedented number of people have turned to the provincial and federal governments for financial help to pay their bills since COVID-19 shut down much of the economy almost 10 weeks ago. But they must navigate a maze of programs from Victoria and Ottawa, with differing deadlines, application criteria, eligibility and payment amounts.

For example, the one-time, $1,000 B.C. emergency benefit is tax-free, while the $2,000 monthly federal emergency benefit is taxable — and both pay out at different times. A basic income, co-ordinated between governments, could be a simpler and more efficient program in future crises.

Simpson said the large number of people who need government help due to COVID-19 may change the tone of the conversation on improving the social safety net.

“I think lots of people who said, ‘I just want government to stay out of my hair,’ ” and now all of a sudden it is, ‘I want government to be there because I need help to be able to get by and support my family,’ ” said Simpson. “So, yeah, I think it has elevated the role of what people want from government. When things get tough, we want government to be there.”

The NDP agreed to study basic income as a condition of its power-sharing deal with the Greens after the 2017 election.

“It’s ultimately a public health approach to people in providing economic support, in that it says people need a basic level of security in order to be healthy and well,” said Green MLA Sonia Furstenau.

Furstenau said no one is questioning the cost to governments for financial assistance during the COVID-19 crisis, because society has deemed people’s well-being as worth it no matter the expense. The same should apply to basic income, she said.

“We are in the first major crisis of the 21st century — not including climate change — and it has already opened conversations up in ways that weren’t possible before,” said Furstenau.

Canada already has some types of basic income payments, including old age security and guaranteed income supplements for seniors. You could argue the $2,000 monthly federal emergency payment is also a form of basic income or at least an enhanced EI, said Marc Lee, a senior economist at the Canadian Centre for Policy Alternatives.

The key going forward will be to figure out whether a basic income replaces some existing federal and provincial support programs, or supplements them, and how that changes the landscape of the overall social safety net, said Lee.

(Read more: https://theprovince.com/news/b-c-explores-universal-basic-income-for-post-pandemic-world/wcm/ae43f89c-fe01-4a05-ad03-21b6d884df3e.)

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Universal basic income the right prescription for Latin America & Caribbean – UN report

UN News Centre, 13.05.2020

(https://www.pressenza.com/2020/05/universal-basic-income-the-right-prescription-for-latin-america-caribbean-un-report/)

A new report by the Economic Commission for Latin America and the Caribbean (ECLAC) unveiled on Tuesday, proposes that governments ensure immediate temporary cash transfers to help millions of people struggling to meet basic needs, as the massive fallout from COVID-19 ripples across the region’s economies.

Executive-Secretary Alecia Bárcena – launching the “The Social Challenge in Times of COVID-19” report, at a virtual press conference in Santiago, Chile – said these transfers should then be made permanent and extend to those who are at risk of being caught in the poverty trap.  Such a step would pave the way towards a universal basic income, guaranteeing the basic right to survival, she said.

To face the #COVID19 crisis, in total 126 social protection measures have been applied in 29 #LAC‘s countries for the population that is currently poor and vulnerable. Among them, cash and food transfers are reaching 90.5 million households. Read more: https://t.co/Jl3n3A0Mzm pic.twitter.com/UWbneeAFFv

— ECLAC (@eclac_un) May 12, 2020

“We must move towards the creation of a welfare State based on a new social compact that takes into account fiscal, social and production-related matters”, she explained, stressing that the pandemic has exposed structural problems in the economic model and the failings of costly social protection and welfare systems.

Immediate cash transfers

ECLAC’s proposal for a basic emergency income should be implemented immediately, Ms. Bárcena said, with a view to keeping it in place over time, depending on each country’s situation.  “This is especially relevant because overcoming the pandemic will take time”, she said.  Societies will have to coexist with the coronavirus, which will hamper reactivation of the economy.

ECLAC proposes that providing basic emergency income, should amount to the per capita cost of acquiring a basic food basket and meeting other basic needs over a six-month period, to the entire population living in poverty, in 2020.

That means reaching 215 million people, or 34.7 per cent of the Latin American and Caribbeanpopulation.  This would entail additional spending of 2.1 per cent of gross domestic product (GDP).

The report takes stock of the anticipated social effects of COVID-19, and in the short-term, foresees an increase in poverty, extreme poverty and inequality in the context of low economic growth.

It is necessary to guarantee income, food security and basic services to a broad group of people – ECLAC chief

Doing the math

With an anticipated 5.3 per cent GDP drop and 3.4 percentage point increase in unemployment, poverty in Latin America is expected to jump by at least 4.4 percentage points – or a further 28.7 million people who will fall through the net – in 2020, versus the previous year, which totalled just under 215 million people.

In this scenario, broad strata of the Latin American and Caribbean population are living in chronic conditions of economic insecurity, the report finds. An estimated 10 per cent of people living in non-extreme poverty in 2019 – 11.8 million people – will likely suffer extreme poverty. A sharp deterioration in the position of people in the middle strata is also expected.

The report finds that women, informal workers, paid domestic workers, indigenous peoples, Afro-descendant people and migrants are among those especially vulnerable to socioeconomic crisis. To date, 126 social protection measures have been applied in 29 countries, with cash and food transfers now reaching 90.5 million households – or 58 per cent of the region’s population.

Amid such strife, “it is necessary to guarantee income, food security and basic services to a broad group of people whose situation has become extremely vulnerable and who were not necessarily included in the social programmes existing prior to the pandemic”, the Executive-Secretary said.

Avoid another ‘lost decade’

In addition, operational challenges relating to people’s use of banks must be met, by completing, updating and connecting social records. In the medium and long-term, ECLAC stresses that the exercise of rights should be guaranteed by strengthening the welfare state, introducing a care system, gradually implementing innovative financing mechanisms.

“Given the sizeable historical gaps that the pandemic has worsened…now is the time to implement universal, redistributive and solidarity-based policies with a rights-based approach”, Ms. Bárcena asserted. “Building the welfare State and universal social protection systems is key to averting another lost decade.”

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