IPR Blog

Expert analysis, debates and comments on topical policy-relevant issues

Topic: Basic income

Basic Income – Have Austerity’s Chickens Come Home to Roost?

📥  Basic income, Public services, Welfare and social security

Dr Jurgen De Wispelaere is Policy Fellow at the IPR and Political Economy Research Fellow at the Independent Social Research Foundation (ISRF).

In the space of a mere five years, the idea of granting each citizen – or long-term resident in some proposals – an individual, universal and above all unconditional basic income has taken off like a rocket in established policy circles. The phrase “basic income’s time has come” is no longer the hallmark of the quasi-delusional battle cry of the seasoned utopian but can be heard – albeit perhaps with some trepidation – in the corridors of power across Europe and beyond.[1] Of course, talk is often cheap, and political talk is no exception. Expressions of support from stakeholders and decision-makers in previous years mostly took the form of cheap support: political statements not backed by commitments to expending political resources (time, money, political capital) and therefore of little value to furthering basic income policy.[2]

UBIred

 

However, it would appear that “the times are a changin’”, as the famous Dylan song would have it. Surely, the recent policy interest in piloting basic income experiments across the world represents a serious political commitment to exploring the potential of basic income as a key component of the next stage of welfare reform? Finland has already embarked on the basic income train by paying out an unconditional basic income of €560 to 2,000 unemployed test subjects currently receiving basic unemployment benefits for the next two years.[3] Several municipalities in the Netherlands (Utrecht, Tilburg, Wageningen and Groningen, amongst others) and the Canadian province of Ontario are to follow suit in a few months, while local, regional and national governments across Europe are exploring similar options (e.g. Fife and Glasgow in Scotland; Barcelona in Spain).

What to make of this recent interest in basic income? What explains the surge in interest in universal and unconditional cash transfers across the ideological spectrum, including a willingness of some government actors to proceed with pilot schemes? Explanatory variables are no doubt manifold. One fashionable answer is to refer to the “rise of the robots”, where automation is said to irrevocably change labour markets including rendering vast numbers of jobs obsolete.[4] The threat of automation-driven technological unemployment at a scale we haven’t witnessed before is driving much of the tech-industry interest in basic income. However, the automation debate is in its infancy and the predictions of the labour market equivalent to a mass extinction event remain controversial.[5] In addition, as an explanation for the policy interest in basic income, time works against the automation argument. The rise of the robots is predicted to take another couple of decades to fully manifest, and politicians are not exactly famous for considering public policy in the long-term!

It is hard to avoid the observation that the recent “elevation” of basic income coincides with the occurrence of the financial crisis in 2007-2008, especially the European sovereign debt crisis of 2009, and the austerity response that followed suit. In a nutshell, austerity is a mechanism of kick-starting growth and recovery by means of drastically cutting public spending. Mark Blyth calls it “the austerity delusion”, a dangerous idea because it clearly doesn’t work – as evidenced by significantly increased debt-to-GDP ratios across European economies – while the idea itself remains stubbornly immune to rational refutation.[6] The idea is not just dangerous because it stubbornly fails, but in large part because the burden of failure is unequally distributed across the population and its social effects disproportionally felt by those at the bottom of the income distribution. Austerity increases risk of unemployment, poverty, social exclusion – even morbidity and mortality rates[7] – for a growing number of citizens.

The resulting division between insiders and outsiders is affecting both people’s wellbeing and the capability of government to institute policies aimed at protecting the most vulnerable in society.[8] At this point it is worth noting that austerity is nothing new when viewed from the perspective of welfare state development. Paul Pierson, almost two decades ago, referred to the new politics of the welfare state under conditions of “permanent austerity”, arguing that welfare state retrenchment employed a different logic from the expanding welfare state of the post-war decades.[9] From the Pierson perspective, austerity and welfare state retrenchment is mostly about changing political dynamics and finding ways to avoid (or shift) blame for unpopular reforms. Post-crisis austerity politics is partly a continuation of this welfare reform agenda but at the same time constitutes a break with governments having been granted a “license to cut” much deeper across a wider range of social programmes. Recent comparative research shows that while austerity had relatively little effect on social assistance budgets the impact on minimum income schemes is nevertheless serious and the tightening of minimum income schemes is at odds with the goal of “active inclusion” as mandated, for instance, by the 2008 European Commission Recommendation on active inclusion of people excluded from the labour market.[10]

The picture that is emerging after several years of austerity politics is one of European societies becoming increasingly socially, economically and politically divided – enter populism! – and governments apparently unable to turn the tide. The overall result of these recent policy developments has been increased pressure on the most vulnerable in society – the long-term unemployed, young labour market entrants, those operating at the margins of the labour market (the “precariat”), but increasingly as well, many who are poor while in work. Policymakers are becoming aware of the limits of increased conditionality and restrictions imposed on minimum income schemes. In this context, the interest in basic income could be seen as an attempt to square the austerity circle: the need for a policy that combines robust minimum income protection with the modernisation of welfare programme complexity, while retaining a strong focus on labour market activation and human capital-building as per the “social investment” agenda.[11] Instead of focusing on the de-commodifying effect of basic income – separating income from work – policymakers are emphasising its ability to combat poverty, unemployment and bureaucracy traps. In this perspective, basic income is not viewed as a utopian alternative to the welfare state, but to the contrary, a key instrument in its long-term survival by allowing the minimum income floor to be mainstreamed and modernised. Of course, squaring circles is hard work and in the first instance we need to know that basic income can deliver; hence, the focus on piloting and experimenting with basic income schemes in Finland, the Netherlands, Canada, and so on as part of a broader approach to evidence-based policymaking.

It is early days so perhaps making an assessment as to whether the many experiments will generate results that support the basic income policy would be premature. It is moreover impossible to predict whether positive piloting experiences will lead to robust policy implementation. At this point we need serious political science research examining the conditions under which basic income can build up a robust constituency (for more on this, see Luke Martinelli's excellent blog on the subject), as well as long-lasting coalitions amongst decision-makers across the ideological spectrum.[12] However, even if – paradoxically – austerity has caused policymakers to conceive of basic income as a valid instrument in their “activation toolbox”, the resulting programme may still fall short of the more progressive aims, for which most basic income advocates push. This is serious cause for concern among those who insist that basic income is primarily an instrument of freedom and equality.[13] The answer to this worry is twofold, in my view. First, we should appreciate what even a modest basic income may accomplish given the dire prospects of continuing along the road we currently travel. Second, once anchored in our policy environment, political forces can focus on upgrading the modest (almost residual) basic income model to something more progressive, emancipatory and liberating. If successful – and, granted, for now it remains a big “if” – such a political strategy would certainly make sure that austerity’s chickens finally come home to roost!

This blog originally appeared in ISRF Bulletin Issue XIII: Today's Future - Challenges & Opportunities Across the Social Sciences. It builds on research conducted jointly by Dr De Wispeleare and Dr Luke Martinelli on the political economy of basic income in European welfare states. You can find out more about the IPR's work on basic income here.

[1] Jurgen De Wispelaere (2016) “Basic Income in Our Time: Improving Political Prospects Through Policy Learning?” Journal of Social Policy 45(4): 617-634.
[2] Jurgen De Wispelaere (2016) “The Struggle for Strategy: On the Politics of the Basic Income Proposal.” Politics, 36(2): 131-141.
[3] Olli Kangas, Miska Simanainen, and Pertti Honkanen (2017) “Basic Income in the Finnish Context.” Intereconomics 52(2): 87–91; Laura Kalliomaa-Puha, Anna-Kaisa Tuovinen, and Olli E Kangas (2016) “The Basic Income Experiment in Finland.” Journal of Social Security Law 23(2): 75–88.
[4] Martin Ford (2016) Rise of the Robots: Technology and the Threat of a Jobless Future. New York: Basic Books; Erik Brynjolfsson and Andrew McAfee (2016) The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W.W Norton; Jerry Kaplan (2015) Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence. Yale University Press.
[5] Labour economist David Autor, for instance, insists firms and employees will adapt to the anticipated automation by shifting tasks within jobs; this argument offers an important antidote to the most pessimistic forecasts about layoffs. David H. Autor (2015) “Why Are There Still So Many Jobs? The History and Future of Workplace Automation.” The Journal of Economic Perspectives 29(3): 3–30.
[6] Mark Blyth (2013) “The Austerity Delusion: Why a Bad Idea Won Over the West.” Foreign Affairs, May/June 2013.
[7] Aaron Reeves, Martin McKee, and David Stuckler (2014) “Economic Suicides in the Great Recession in Europe and North America.” The British Journal of Psychiatry 205(3): 246–47.
[8] Johannes Lindvall and David Rueda (2013) “The Insider–Outsider Dilemma.” British Journal of Political Science 44(02): 460–75.
[9] Paul Pierson (2001) “Coping with Permanent Austerity: Welfare State Restructuring in Affluent Democracies.” In: P. Pierson (Ed.), The New Politics of the Welfare State. Oxford: Oxford University Press.
[10] Sarah Marchal, Ive Marx, and Natascha van Mechelen (2016) “Minimum Income Protection in the Austerity Tide.” IZA Journal of European Labor Studies: 1–20.
[11] Anton Hemerijck (2015) “The Quiet Paradigm Revolution of Social Investment.” Social Politics 22(2): 242–56.
[12] Joe Chrisp (2017) “Basic Income: Beyond Left and Right?” Juncture, 23: 266–270; Jurgen De Wispelaere (2016) “The Struggle for Strategy: On the Politics of the Basic Income Proposal.” Politics, 36(2): 131-141.
[13] Philippe Van Parijs and Yannick Vanderborght (2017) Basic Income: A Radical Proposal for a Free Society and a Sane Economy. Harvard University Press.

 

Addressing the evidence deficit: how experimentation and microsimulation can inform the basic income debate

📥  Basic income

Dr Luke Martinelli is Research Associate on the IPR's universal basic income project. This post draws in part on material presented in his recent IPR working paper The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK.

New and forthcoming IPR working papers – as well as experimental data from policy trials currently and imminently taking place across the world – address some of the core empirical issues around the feasibility of universal basic income (UBI), and how it can be designed most effectively. However, no amount of evidence can provide an escape from difficult political choices in the face of unavoidable conflicts between policy goals – or eliminate the need for advocates to address longstanding normative objections to UBI.

UBIdg

 

Despite numerous and well-publicised desirable qualities which appeal across the political spectrum, the case in favour of universal basic income (UBI) is far from decisive. There is much we still don’t know about UBI that must be addressed in order for the policy to move beyond superficial, ‘cheap’ support and to gain serious traction in the political sphere.

As Malcolm Torry argued in a previous post, as policymakers have begun to pay increasing attention to grassroots enthusiasm for UBI and acknowledge its theoretical strengths (as well as the weaknesses of existing social security provisions), there has been a shift from concerns about whether UBI is desirable per se, to questions of political feasibility and the best way to design and implement the policy. According to Torry, this progression is “evidence for the increasingly serious nature of the current debate”.

What policymakers need to know

Objections to UBI are numerous, but it is perhaps possible to identify three core barriers to feasibility as follows:

  • it would dis-incentivise work and encourage idleness;
  • it would be too costly; and
  • it would be inadequate to meet the diverse and complex needs of the poor.

As a result of these attributes – which are also, of course. inherently undesirable – sceptical observers have claimed that UBI would never generate the political support required for implementation. If labour supply was expected to contract significantly, the tax base would collapse and the policy would be seen as unsustainable. If the cost was seen as too high, voters would not consent to the requisite tax rises. And if disadvantaged people were to become poorer as a result, the policy would be seen as unacceptably unjust.

In response, advocates have claimed on the contrary that UBI would remove poverty and unemployment traps, would only require minor tax increases, and could easily accommodate provisions for those with higher needs (for example due to disability or housing costs).

Of course, the extent to which these attributes pertain – the labour market effects, fiscal costs, and distributional implications – depends wholly upon the specifics of the UBI scheme in question. As I discussed in a previous post, while basic income’s core attributes are a matter of definition, many are variable: most crucially, the level of payments, and the extent to which the UBI is conceived as replacement for or complement to existing benefits.

UBI is often discussed as a monolithic policy, which obscures clear understanding about likely effects; opponents debate at cross purposes, discussing completely different schemes and using them to support their favoured stance. Common ground – and an end to the impasse on these core issues – can only be achieved as a result of greater clarity about the diversity of proposals that exist, and the specific effects of varying core design features.

Policymakers are ultimately concerned about the practicalities of implementation: they need to know which schemes are feasible in the short- to medium-term, in the prevailing socio-political climate. They simply cannot afford to entertain utopian visions of a future in which no-one is compelled to work, or in which people are happy to accept tax rates an order of magnitude greater than those prevailing today. If they are to support UBI, they need to know whether the aforementioned barriers to feasibility can be bypassed – and how.

Fortunately, empirical evidence can help to assess the contradictory claims of advocates and opponents more effectively. There are two main forms of evidence: ex-ante (‘before the event’) models/simulations and ex-post (‘after the fact’) impact evaluations.

Ex-post evidence

Trials and policy experiments are important for several reasons. Most obviously, they give us important information about the effects of implementing basic income that cannot be gleaned from theory (for example and probably most crucially, on disputed labour market behavioural effects, but also on other non-financial outcomes such as health and wellbeing). Trials are also invaluable in uncovering unexpected outcomes and implementation issues, and in fine-tuning the detail of the policy in advance of scaling-up.

Perhaps equally importantly, they serve to foment conversation and political debate which simply would not occur in the absence of the trial. As Jurgen De Wispelaere observed in an IPR seminar, experiments

have important political demonstration effects… advancing the policy agenda by raising awareness amongst key stakeholders/general public, keeping open a window of opportunity, building a broad political coalition “en route”, and overcoming objections by demonstrating impacts

Basic income advocates have long drawn on trials that took place in the US and Canada between 1968 and 1980 (Widerquist, 2005). Observers note that despite some contraction in labour supply, these were far from the employment exodus predicted by UBI’s harshest critics; Forget (2011) has documented the health and wellbeing benefits of the Canadian trials.

There are also two prominent historical examples of universal payment programmes (not trials) in diverse country contexts: the Alaskan Permanent Fund Dividend and Iran’s reform of consumption subsidies (Widerquist and Howard, 2012; De Wispelaere, 2016). These examples demonstrate the administrative and political feasibility of UBI-type schemes. Experiments with basic income have recently taken place in Namibia (Haarmann et al., 2009) and India (Davala et al., 2015) with strong positive findings. Standing (2008) argues that the lessons from the implementation of various forms of (non-UBI) cash transfer in developing countries also provide compelling evidence in favour of UBI, in that negative labour market responses have been minimal and it is likely that the poor use income transfers to invest in productive activities – not for frivolous consumption, as is often portrayed.

Since 1 January this year, 2,000 Finnish individuals have been receiving an unconditional payment of €560 per month as part of a two-year government pilot. A number of city authorities in the Netherlands have been granted permission – under central government legislation allowing policy experimentation – to conduct trials eliminating the imposition of behavioural (labour market) conditions for benefit claimants. Both trials look sure to provide valuable information on how recipients respond to unconditional payments.

There is now a spate of proposals for further pilot schemes to be implemented in the coming years. Some of the interest has come from devolved regional and city-level authorities (Ontario in Canada; Fife and Glasgow in Scotland); some has come from the development assistance community (as in the case of the Give Directly pilot in Kenya); some has come from national administrations (India); and some has come from the private (tech) sector (Y-Combinator in California).

Limits to experimental evidence

However, there are limits to the insights that can be gained from the aforementioned experiments, including the ongoing Finnish and Dutch case studies.

In many cases the experiments fall far short of the evidential requirements of randomised control trials – the so-called ‘gold standard’ of policy evaluation. This is certainly the case in the example of the Namibian Basic Income Grant scheme, which is heavily criticised by Osterkamp (2013) as employing biased outcome indicators and lacking a control group – but methodological problems abound more broadly. For one thing, trials are necessarily of limited duration, and may not easily pick up longer-term effects of policy. In addition, the behavioural response to a trial of limited duration may be very different to the response to a policy that provides income security for a lifetime.

Further, policy outcomes depend heavily on the specific contexts in which they are implemented, limiting the applicability (or ‘external validity’) of trials to other countries, time periods, or groups of recipients. Experiments carried out in developing countries provide limited insight into the potential for basic income to be inserted into comprehensive welfare states such as the UK’s. The US and Canadian experiments are now several decades old. In the case of the experiments in Finland and the Netherlands, researchers are limited in applying the UBI ‘treatment’ on existing benefit claimants. It is not clear how the observed effects would vary to those for other groups in the context of a truly universal payment.

Most of the trials only fairly approximately resemble UBI ‘proper’, or the types of UBI upon which policy interest is most focused today in high-income countries (which aim at least to partially replace existing welfare state policies). The Alaskan and Iranian programmes differ in several crucial respects from the proposals of most basic income advocates, namely in the low and fluctuating value of payments and in their funding mechanisms; being paid from natural resource revenues, they are arguably significantly less likely to face political opposition (De Wispelaere, 2016). The US and Canadian experiments differ in that they involved a tax rebate mechanism based on reported income rather than an upfront payment (these are more usually termed negative income tax schemes rather than UBI). In the Dutch experiments, the implementing authorities were restricted by central government for political reasons, resulting in watered-down research designs. Specifically, claimants in the treatment group can only keep 50% of additional earnings, up to a maximum of €199 (ensuring their total combined income remains less than someone would earn working full-time at minimum wage), completely contradicting the principles of UBI. Even in the Finnish experiment – the first trial that could reasonably be described as a ‘real’ UBI within a high-income, mature welfare state – researchers were unable, for practical and administrative reasons, to implement tax changes alongside the implementation of the UBI (KELA, 2016). Considering that changes to the tax system are almost always a core element of any realistic basic income proposal, this is a significant weakness.

Another crucial limitation is that it seems likely that the effects of upscaling a policy to the national level would result in markedly different effects – with different implementing authorities, and significant macroeconomic effects not captured in the trial. As Widequist (2005) observes, being trials of limited scale, the US and Canadian experiments did not give rise to demand response “and therefore could not estimate the market response” of the policy (p. 50). Moving from an experiment run by a small, dedicated team of researchers to a nation-wide policy administered by a sprawling and perhaps badly-funded bureaucracy is likely to give rise to unforeseen implementation problems. In other words, the effects of a trial may be very different from those of the same policy rolled out across the board.

Finally, even if we are able to observe – reliably – the impacts of a policy, find that the effects are positive, and generalise the findings to another context, experiments such as these do not offer any way of weighing up beneficial impacts (relating to improved income security) against UBI’s fiscal costs (and against the costs and benefits of alternative policies). It is hardly surprising that giving people money would have a number of positive impacts; the question is whether UBI is the best use of the funds.

Ex-ante evidence

Fortunately, these are questions to which ex-ante microsimulation methods can readily be applied.  Microsimulation is a common approach to evaluating the effects of tax and benefit reforms with respect to fiscal implications, distributional effects, and (less commonly) impacts on static work incentives. Advances in computing power combined with the availability of large, representative income surveys makes it possible to compare outcomes of the prevailing ‘base’ policy environment with other hypothetical policy systems. This means that we have much greater capacity to assess and compare large numbers of different permutations of UBI.

Because it models the effects of policy reforms over a representative sample, microsimulation enables researchers to draw an accurate picture of overall impacts on the income distribution at the national level. However, a major shortcoming of this type of analysis is that it assumes no behavioural change (e.g. labour market response). This seems unrealistic in the context of such a wide-ranging reform as the implementation of a universal basic income, especially one paid at a generous level. For these reasons, microsimulation evidence should be complemented with ex-post analysis of observed behavioural responses.

A number of microsimulation studies have already modelled the effects of specific UBI schemes in the UK (e.g. Torry, 2016; Reed and Lansley, 2016). These studies have been instrumental in identifying ‘feasible’ ways of implementing basic income so as to minimise household losses and keep costs within the boundaries of ‘politically acceptable’ tax increases. The downside is that such schemes require the retention of the existing structure of social security alongside the UBI.

With our IPR Working Papers, we add to this burgeoning literature in important ways, with the specific intention of objectively informing policy audiences about the difficult decisions involved in designing UBI schemes. In particular, in The Fiscal and Distributional Implications of Alternative UBI Schemes in the UK, I systematically compare UBI schemes with a range of payment levels and compensatory tax/benefit changes. Unlike previous studies, I start from the presumption that at least part of the appetite for basic income arises from its promise to sweep away the mainstay of complex, intrusive and stigmatising means-tested benefits. In another (forthcoming) paper, Exploring the Distributional and Work Incentive Effects of Plausible UBI Schemes, I look at the distribution of winners and losers in more detail and introduce important indicators of static work incentives.

Combined, these microsimulation studies provide a great deal of important information required by policymakers in assessing competing UBI proposals, particularly bearing in mind the need to restrict net costs and the motivation to reduce poverty and unemployment traps that arise in means-tested systems. ‘Transitional’ forms of UBI – for example, one replacing the personal income tax allowance with a payment of equivalent value, and others covering subsets of the population – are suggestive of possible pathways to more generous and comprehensive forms of UBI. In consideration of the likely political imperatives, we model a number of (broadly) revenue-neutral schemes as well.

The inescapable conclusion of my research is that there are no easy answers to the questions facing UBI advocates; no ‘optimal’ basic income scheme. Rather, policymakers are faced with a series of trade-offs between competing goals of a) meeting need, b) controlling cost and c) retaining administrative simplicity and enhancing work incentives (through the elimination of means-testing). The analysis thus draws our attention to the difficulty involved in designing basic income schemes that satisfactorily compensate existing beneficiaries of the system while retaining the principle of universalism.

Complementary forms of evidence

This blog post has summarised the potential of two forms of evidence to inform debate and bring the current impasse around the feasibility of UBI to a close. I hope to have shown that ex-ante and ex-post studies are complementary; ex-ante simulations can say much about the fiscal and distributional effects of basic income, but nothing about behavioural responses or implementation challenges – and ex-post evaluations can provide insights into these outcomes, but have a number of shortcomings that limit their applicability to wider contexts and their utility in assessing different policy design features against alternatives.

While much public attention has been devoted to the upcoming trials, therefore – and while such trials certainly have their place – they cannot give us the full picture on UBI, particularly in relation to the fiscal feasibility of schemes. This is the value of the microsimulation approach I've presented in the IPR’s work; the evidence generated, I hope, will tell policymakers the other half of the story.

The full working paper The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK can be read and downloaded here.

 

References

Davala, S., Jhabvala, R., Standing, G. and Mehta, S. K. (2015). Basic income: A transformative policy for India. London: Bloomsbury Publishing.

De Wispelaere, J. (2016). “Basic Income in Our Time: Improving Political Prospects Through Policy Learning?” Journal of Social Policy, 45(4): 617-634.

Forget, E. (2011). “The Town with No Poverty: The Health Effects of a Canadian Guaranteed Annual Income Field Experiment.” Canadian Public Policy / Analyse de Politiques, 37(3): 283-305.

Haarmann, C., Haarmann, D., Jauch, H., Shindondola-Mote, H., Nattrass, N., van Niekerk, I. and Samson, M. (2009). Making the difference! – The basic income grant in Namibia. Assessment Report. Windhoek: BIG Coalition.

KELA (2016). From Idea to Experiment: Report on universal basic income experiment in Finland. KELA Working Paper 106/2016. Helsinki: KELA.

Osterkamp, R. “The Basic Income Grant Pilot Project in Namibia: A Critical Assessment.” Basic Income Studies, 8(1): 71-91.

Standing, G. (2008). “How Cash Transfers Promote the Case for Basic Income.” Basic Income Studies, 3(1).

Widerquist, K. (2005). “A failure to communicate: what (if anything) can we learn from the negative income tax experiments?” The Journal of Socio-Economics, 34(2005): 49-81.

Widerquist, K. and Howard, M. (eds.) (2012). Alaska’s Permanent Fund Dividend: Examining Its Suitability as a Model. New York: Palgrave.

 

Basic income: beyond left and right?

📥  Basic income

Joe Chrisp is a PhD student at the IPR. His doctoral research is on the feasibility of a universal basic income

How has basic income – an issue at the margins of social policy and politics for decades – suddenly become such a hot topic? And why has it captured the attention of so many political actors, in a number of different countries, in recent months?

UBIdarkblue

 

One of the most common explanations of this surge of interest in basic income is that it transcends the political divide: that it is “beyond left and right”. In the UK, the Adam Smith Institute – a libertarian think-tank – sits alongside the left-leaning Compass in backing basic income proposals. In Finland, the country where basic income has had perhaps the most consistent political support in recent decades, the Left Alliance and Green League have historically been keen supporters of the idea – together with the Centre Party, which currently leads a right-wing coalition government. This kind of broad political interest can be found in France, Canada and other countries around the world. Although it is tempting to accept this eclectic mix as a given, there are at least three reasons why the reality is more complex than ‘anyone can support basic income’.

Is it basic income?

The first explanation for the diversity of support is simply that basic income is being misrepresented. If we define basic income as ‘an income paid by a political community to all its members on an individual basis, without means test or work requirement’ (Van Parijs, 2004), many of its so-called ‘advocates’ are actually proposing schemes that do not meet the criteria. For example, Italy’s 5 Star Movement has adopted the term to designate a policy that is better described as means-tested unemployment benefit or social assistance for the uninsured. The Fabian Society’s proposal for an ‘individual credit’ has often been touted as a basic income, yet is more closely related to a ‘participation income’ (A.B. Atkinson, 1996), as it includes work- or education-related conditionality.

The vast majority of those on the political right who are said to support basic income, from Milton Friedman to the Canadian Conservative MP Hugh Segal to the Adam Smith Institute, actually advocate a negative income tax. Although negative income tax is capable of producing identical distributional outcomes to basic income, the payment mechanisms and underlying logic differ substantially, particularly in relation to the role of the state. Even the basic income experiments in Finland and the Netherlands fall short of Van Parijs’ definition because they are not universal; they are currently limited to unemployed individuals. While the focus in the Finnish case is on testing the impact on labour market participation, in the Netherlands the drive seems to be related to municipalities’ concern about the cost of enforcing work conditionality on the unemployed. All of these deviations lend themselves to the argument made by Declan Gaffney that basic income is most useful as a thought experiment for the sort of reforms we want to implement within the welfare state, as there will be adjustments made to the ‘pure’ version that reflect the different political positions held by advocates in constrained political and fiscal environments.

How do we fund a basic income?

Another reason why basic income appears to find support across the political spectrum is that its advocates don’t cohere around a specific set of proposals for funding its introduction. Were they to do so, they would confront significant ideological or normative choices that would divide them. Luke Martinelli lays out many of these fiscal trade-offs in his recent IPR blog and in a forthcoming working paper, but it is worth reiterating some of his arguments in light of Malcolm Torry’s response. The first crucial point to make is that choosing to abolish the tax threshold to fund a basic income is not, as Torry comes close to implying, an apolitical decision. Putting national insurance aside, if the tax-free allowance of £11,000 was abolished, the UK government budget would increase by roughly £72 billion. That would amount to a 10% increase in government revenue and, if all of it was used to fund a basic income without offsetting cuts, government spending would shift from 43% of GDP to roughly 47%.

Given that attitudes to the size of the state are one of the most fundamental expressions of one’s ideological position, it is unsurprising that this way of funding a basic income does not elicit support from all parts of the political spectrum. Regardless of whether the revenue is earmarked for basic income in the short-term, such a reform empowers the state with resources that could be used for different ends. This fact explains the preference for negative income tax over basic income among libertarian advocates, as it would not necessarily increase the size of the state. If accompanied with cuts to social security, a negative income tax could reduce government expenditure. Indeed, precisely the opposite logic to the Torry and Compass basic income models has defined recent Conservative and Coalition tax and welfare reforms. The policy of increasing the tax free allowance – and, to a lesser extent, the minimum wage – while cutting tax credits has been at the core of Conservative plans to reduce the proportion of income provided by the government to low-income households.

This is not to say that the basic income models laid out by Torry or Compass are flawed, but simply that they are inherently political. Attempts to coalesce around a single “feasible” proposal may be tactically sound, but these cannot be abstracted from their ideological assumptions. There is no ‘common sense’ or technocratic basic income proposal. It is also worth adding that these models are all very UK-centric. The apparent simplicity of reducing means-tested social assistance and abolishing the tax threshold to fund a basic income cannot be applied so readily to countries that have entrenched contributory systems of social insurance and comparatively low tax-free allowances. Existing welfare state architectures will affect both the political and administrative complexities that basic income will have to negotiate in different countries.

All of these models of funding also rely on income tax, but alternative taxes on consumption, land, natural resources or wealth are possible. Torry cites the fact that “the proceeds of production will continue to accrue to capital rather than to labour” as one of the reasons why a basic income is a necessity. Yet, a basic income funded by income tax, by its very nature, cannot address this disparity. It redistributes income from labour without touching capital income, explaining why advocates such as Yanis Varoufakis insist on basic income being linked to capital rather than (labour) income taxes. If the purpose of basic income is to valorise unpaid work and allow workers to drop out of the labour market or move towards a post-work economy, then income tax cannot be the sole source of funding. Here again, the choice of tax relates to a basic income package that reveals a wider ideological position. It is telling that the basic income experiments currently avoid most of these thorny issues because they do not involve the question of funding on a wider scale.

Does basic income highlight a new distributional conflict?

The previous two reasons why we find support from both left and right relate to different visions of basic income. However, it is also becoming increasingly difficult to reduce the politics of the welfare state more widely to a left-right axis. Since at least the 1950s, it has been argued that cultural or post-materialist issues influence voters and parties as much as distributional issues (Inglehart, 1977), and it has become relatively common to understand politics as (at least) two-dimensional, with a libertarian-authoritarian axis as well as a left-right axis (Kitschelt, 1994). This manifests itself in questions related to law and order, immigration, the environment, the emancipation of women and national identity. These questions are perceived as distinct from economic issues that represent the left-right axis such as government intervention or redistribution.

However, the boundaries between distributional and cultural issues are becoming increasingly blurred, as distributive deservingness has become a central theme of political debate (Hausermann & Kriesi, 2015). Particularly in an era of austerity, the restriction of social security to “deserving” as opposed to “undeserving” groups such as immigrants, unemployed people or disabled people has come to the fore in welfare state politics (van Oorschot, 2000, 2006). In many countries in continental Europe, where pronounced differences in entitlement to social security based on levels of contribution are an important component of insider-outsider politics, the size of government spending again masks a more nuanced picture of unequal distribution (Palier & Thelen, 2010). So the politics of welfare entitlement, whether welfare chauvinism, deservingness, misuse or contribution, does not sit easily on a left-right axis of more or less state intervention. Beramendi et al. (2015) propose a universalist-particularist dimension that indicates corresponding attitudes and policy positions on these issues, largely mirroring the libertarian-authoritarian axis, with restrictive immigration attitudes correlating with narrow conceptions of welfare deservingness.

The obvious question then is to ask where basic income fits on this axis. In the sense that it is the antithesis of restricting social security to deserving groups or linking benefits to a history of contribution, basic income would seem to represent a fundamentally universalist policy. Libertarians on the right that advocate negative income tax are as likely as the New Left to subscribe to notions of equal treatment, understood in this sense. Green parties across Europe that often support a basic income tend to siphon off votes from social democratic parties by emphasising issues on this cultural or post-materialist axis. A leading contender for the French Socialist Party’s presidential candidacy who won the first round of voting, Benoît Hamon, has made basic income his flagship policy alongside calls to legalise cannabis and maintain an open immigration policy. In the current political climate, with Brexit, Trump and far-right gains across Europe, it appears that culture matters as much, if not more, than economics – even if culture is still related to social class. Perhaps, then, interest in basic income is an expression of this trend.

One interesting complication could be the extent to which basic income, if tied to restrictive notions of citizenship, may turn this on its head and act as an instrument of welfare chauvinism. With the rise of the Far Right, the question of entitlement – particularly in reference to immigration – may come to dominate the basic income debate if it develops beyond the recent flurry of interest. Another contentious point relates to Beramendi et al.’s (2015) assertion that the universalist-particularist axis can be applied to government spending trade-offs between social investment and more traditional consumption-based policies of social security. Understood as a passive form of income transfer, basic income would appear to be a policy of consumption, lending itself to particularism rather than investment-centred universalism. Yet, as with employment-conditional earnings subsidies such as Working Tax Credits in the UK, it may be that under the banner of activation (as basic income is understood in the Finnish experiments, for example) basic income could be conceived of as a form of social investment.

Is it too simplistic to imply that the underlying cause of political interest in basic income is competition on a universalist-particularist axis? Undoubtedly. Yet, it is also clear that essential components of basic income – such as its universality and unconditionality, as well as the fact it is a flat-rate, non-contributory benefit – relate to questions of distribution that deviate from a simple question of more or less state. At the same time, attitudes to these principles are fundamentally ideological and perhaps likely to cluster around other ‘universalist’ policy positions. All in all, it is important not to downplay the fact that, in the midst of talk about automation, economic necessity or just bureaucratic simplicity, any process that led to the implementation of basic income would require agreement on its contested features, as well as an accompanying package of cuts and taxes. This means that even if we accept that it is beyond left and right in the sense that it draws support (as well as opposition) from both, it is not beyond ideological or distributional conflict.

 

References

Atkinson, A. B. (1995). Public economics in action : the basic income/flat tax proposal. Oxford University Press.

Atkinson, A. B. (1996). The case for a participation income. Political Quarterly, 67(1), 67.

Beramendi, P., Hausermann, S., Kitschelt, H., & Kriesi, H., Eds. (2015). The Politics of Advanced Capitalism. Cambridge University Press.

Hausermann, S., & Kriesi, H. (2015). What Do Voters Want? Dimensions and Configurations in Individual-Level Preferences and Party Choice. In P. Beramendi, S. Hausermann, H. Kitschelt, & H. Kriesi (Eds.), The Politics of Advanced Capitalism (pp. 202–230). Cambridge University Press.

Inglehart, R. (1977). The silent revolution : changing values and political styles among Western publics. Princeton; Guildford: Princeton University Press.

Kitschelt, H. (1994). The transformation of European social democracy. Cambridge; New York: Cambridge University Press.

Palier, B., & Thelen, K. (2010). Institutionalizing Dualism: Complementarities and Change in France and Germany. Politics & Society, 38(1), 119–148.

Parker, H. (1989). Instead of the dole : an enquiry into integration of the tax and benefit systems. London; New York: Routledge.

Van Oorschot, W. (2000). Who should get what, and why? On deservingness criteria and the conditionality of. Policy & Politics, 28(1), 33–48.

Van Oorschot, W. (2006). Making the difference in social Europe: deservingness perceptions among citizens of European welfare states. Journal of European Social Policy, 16(1), 23–42.

Van Parijs, P. (2004). Basic Income: A Simple and Powerful Idea for the Twenty-First Century. Politics & Society, 32(1), 7–39.

 

From Foucault to Valls: experiments with basic income in France

📥  Basic income

Dr Susan Milner is Reader in European Politics at the University of Bath.

In line with changes discussed in the British context, it is startling to observe how much has shifted in French policy debates since the last presidential and legislative elections in 2012. For over two decades now, as in other OECD countries, the twin discourses of welfare dependency and ‘making work pay’ have dominated public debates. In the US presidential elections, the rhetoric of ‘decent jobs for decent pay’ was powerfully articulated across the political spectrum. It has not (yet?) made its way across the Atlantic. Instead, amidst the tumult of primaries as the political parties gear up for next year’s executive elections, the idea of a universal basic income has been making its way across the political landscape in France.

ubiorange

 

The idea has a long pedigree in France where it is associated with radical thinkers such as Michel Foucault who argued that an unconditional basic income would free citizens from the intrusion of state power and the stigmatisation of means testing and conditionality. Philosopher André Gorz also advocated a ‘revenue of autonomy’ back in 1983, first linking it to the need for recipients to engage in work as a precondition for active citizenship, then later - in 2002 - abandoning this link to employment in the face of mass unemployment, and as a reaction against the spread of ‘workfare’ conditionality. Gorz’s ‘farewell to the proletariat’ (physically productive paid work as opposed to brain work) was in line with this new left utopia, and it chimes with the current mood of political debates which have been sparked by concerns and hopes about the consequences for human employment of developments in artificial intelligence.

Equally startling is the observation that the idea has gathered new converts across the political spectrum. The ruling French Socialist Party has been relatively slow to welcome it, and the mainstream right has, up until now, been mostly hostile. The conversion of key politicians on both wings has reopened debates. In the Socialist Party, universal basic income has gathered support recently from would-be leaders on both the left and right wings. On the centre-right, François Fillon - its most notable proponent - made a surprise breakthrough in the first round of the primaries on Sunday.

However, as Luke Martinelli pointed out in his IPR blog, behind the apparent consensus lie some fundamental differences which need to be acknowledged and explored if the debate is to develop meaningfully. A report by the Fondation Jean Jaurès, a think tank with close ties to the ruling French Socialist Party, identified at least three approaches to universal incomes, with a fundamental divide between libertarian-right and ecologist-left versions based on whether a universal income should be residual subsistence-level or generous enough to allow individuals to live decently without any need for paid work.

Most proponents among the contenders on the centre-right propose pegging the rate at €450 per month, which is far from the conditions of autonomy espoused by Gorz or Foucault. Some of the (less prominent) politicians in the Les Républicains party have suggested a rate almost double that, at €800 per month, which is the rate around which support in the Socialist Party seems to be gathering. However, among the more likely winners of the forthcoming primary on the right, support for basic income has been at best lukewarm - and has been based on the assumption of rates lower than current benefit levels. Mr Fillon, tagged as an economic liberal and social conservative, espouses a low-level basic income as part of a general push to lower welfare spending.

A recent Senate report modelled three levels: €500 per month (the level of the current minimum income, revenu de solidarité active (RSA)), which could potentially be topped up by existing state pensions but no other benefits; €750 (the absolute poverty threshold); and €1000. Whilst the first two would save money for the state, the third would require further funding to the tune of €153 billion. The rate of €750 per month, with an additional €250 for pensioners and €250 per child to families, is the most widely advocated option - the ‘most realistic utopia’ for the authors of the Fondation Jean Jaurès report.

This specific difference concerning income levels raises a wider question about the motives for adopting a basic income. Several politicians on the French right have been explicit in advocating its adoption as a way of saving money for the state by reducing benefit levels. The result would almost certainly be a rise in levels of poverty risk, which France has so far been relatively successful in containing, at 12.1% of the total population in 2014 compared to 16% in the UK.

Existing social transfers significantly attenuate poverty in France: before social transfers the at-risk-of-poverty rate is around 22%. However this does not mean that it is efficient: as well as the stigmatising effect, the social safety net has several large gaps, particularly around young people (who are not eligible for the RSA and who have a poverty rate of 18%) and single people, as the transfers are skewed towards families with children. The RSA is a particularly unloved benefit, as it falls short of a universal basic income and, with its plethora of conditionality rules, has become complex to administer and to claim, with little impact on employability.

A final area of uncertainty, and therefore of political debate, concerns the impact of universal income on low-paid work. The late sociologist Robert Castel, a leading scholar of social exclusion who was one of the first to theorise the ‘precariate’, excoriated the RSA for providing insufficient resources to the poor whilst at the same time encouraging low-paid, low-quality jobs. Poverty concerns, he argued, have to be raised in the context of a wider discussion about the quality of work. In the current French political debates, the universal income proposals assume that they will be widely topped up with low-paid work. Moreover, contradictions with the post-work utopia are simply sidestepped.

Almost entirely absent from the current debates is any sense of the material needs of individuals claiming universal benefits, apart from low-income pensioners. There is no discussion of how universal benefit would affect families, or people with physical or mental disabilities, who may be cumulatively disadvantaged if a universal benefit is used to shrink the state in terms of its services as well as its cash transfers. There is no modelling of how benefits interact with consumption needs, particularly housing. Unless these fundamental questions are posed and answered, the current debates could end up instrumentalising the concept of a universal basic income without resolving the problems which sparked them in the first place.

To help answer some of these questions, the new interest in universal incomes has at least had the effect of stimulating investment in local experiments. In the Gironde department, a universal income will be administered by amalgamating existing benefits for the poorest. This French experiment will be much closer to a universal citizens’ income model than the Finnish and Dutch initiatives which will take place at the same time, and which are explicitly aimed at integrating recipients into the labour market. It also has the novel addition of a citizens’ panel which will form part of the evaluation process. The Gironde experiment has already caught the attention of the Prime Minister Manuel Valls and served to re-ignite the interest of presidential hopefuls. It will yield useful results for ongoing debates on a universal basic income.

 

 

Comparing Basic Income Experiments: Lessons and Challenges

📥  Basic income

Dr Jurgen De Wispelaere is a Policy Fellow at the IPR, as well as Visiting Research Fellow at the University of Tampere. As part of the latter role, he plays a part in the Kela-led research team preparing the upcoming national basic income experiment in Finland.

Experimenting with basic income: a unique situation

In Europe we are faced with a unique situation: in 2015/2016 not one but two countries started down the road of piloting a basic income experiment. There are important similarities between the experiments planned in Finland and the Netherlands. All going well, both countries hope to get started in early 2017 and run the experiment for two years - and in both cases, for a variety of reasons, the plan is to pilot an experiment limited to social assistance recipients. In short, Finland and the Netherlands will be simultaneously conducting an experiment on a broadly similar target population.

helsinki

 

There are of course also important differences. First and foremost, the experimental design in both countries is very different. For example, Finland will pilot a national randomised controlled trial with a single basic income model, while in the Netherlands different municipalities will experiment with a variety of models. There are also very interesting differences in terms of the political process associated with the basic income experiments: where Finland’s experiment was initiated by the Finnish government and is therefore highly centralised, the Dutch experiments were pushed onto the policy agenda by local NGOs or municipal decision-makers against considerable resistance from the central government. Finally, Finland and the Netherlands are very different types of welfare states, and we can expect variation in welfare institutions and processes to affect both the political decision-making process and the actual design of the proposed experiments.

Why compare?

This combination of two experiments simultaneously taking place in countries that differ in important respects is a unique situation that opens up the possibility of engaging in serious comparative research. Why compare? There are three reasons why both projects should engage in close collaboration and why we should adopt a comparative approach to studying what happens in Finland and the Netherlands.

The first reason is practical. Piloting a basic income scheme is a complex endeavour and those involved in designing and implementing the experiment run into a lot of problems along the way. There is much to learn from experiments carried out in the past in the US and Canada as well as, more recently, Namibia and India. But the lessons to be learned from those experiments are limited by the fact that they took place several decades ago — the world has moved on quite a bit since the 1970s — or that they operated in an environment that is very different from that of an advanced welfare state inside the EU. For this reason it makes sense that the experiments about to take off in Finland and the Netherlands may be able to help each other more than any of those that took place before. Exchanging information about hurdles encountered, as well as proposed solutions, may offer key guidance that could benefit both experiments.

A second reason for thinking comparatively relates to building up cumulative knowledge about basic income design, implementation and effects. Despite a massive increase in media and policy attention, we actually don’t know that much about basic income. Many arguments doing the rounds run the gamut from “reasonable expectation” (when grounded in good theory or analogous reasoning from other policy areas) to wild speculation (in other cases). There is a simple reason for that: basic income has not been implemented in a way that allows for robust insights.

The recent interest in pilots and experiments offers a great opportunity to (partly) rectify this problem, provided we adopt an approach that allows for systematically comparing design, implementation and results, as well as the underlying policy process. There is little to be gained from experiments that make it impossible to compare results in any meaningful way. Streamlining experimental design as much as possible to facilitate valid comparisons during and after the pilot — e.g., by standardising baseline surveys, indicators and measurement instruments where possible — is of immense importance in terms of furthering our global knowledge about basic income policy. Although experiments will always have important variation built into them, given the specific context in which they operate, when carefully coordinated they will tell us how to interpret design differences and their effects on the outcomes. And this, in turn, helps us understand which outcomes are unique to a specific experimental setting, and which can be generalised across and reflect common results of instituting a basic income.

A third important reason pertains to the politics of basic income pilot experiments. The dramatic increase in media and policy attention in the span of a mere three years has taken everyone — advocates and critics alike — by surprise. We know next to nothing about the factors that explain why basic income has suddenly become politique du jour amongst the political elites (Sure, we all have out little pet theories, but without systematic analysis and evidence, that is exactly all they are!). Equally, if not more importantly, we are only beginning to understand the political drivers of basic income policy development more generally. Against this uncertain background, the experiments play a crucial role in uncovering in a systematic manner the policy and political processes that have brought us to where we are now. Understanding these underlying processes, of course, is also critically important in thinking about where to go next, and how to make use of basic income experiments and their results in due course to move policy development along.

Having experiments taking place in two countries as diverse as Finland and the Netherlands offers a unique opportunity to study the political forces at play — an opportunity not to be wasted. Two intriguing aspects of these jurisdictions merit particularly careful examination. First, comparing the top-down approach adopted in Finland with the bottom-up approach that characterises the Dutch context allows us to examine closely the complicated political process by which an idea moves onto the policy agenda and — hopefully — soon enters the implementation phase. Real world policy development of the basic income proposal will have to make sense of the multi-level nature of its design and implementation. Second, there are important lessons to be learned in terms of framing the basic income debate: where Finland has embraced the experiment as a natural continuation of several decades of intense and complicated debate about basic income, in the Netherlands the experiments proceed while strategically avoiding any connotation with the basic income idea. Understanding the framing process will help political strategy in overcoming public and political resistance of the basic income idea.

Challenges to adopting a comparative approach

There are challenges to adopting a comparative approach to basic income experimentation. Some of the challenges are related to each experiment as an individual — e.g., maintaining the political momentum to carry out the experiment in a manner that produces reliable results — while others pertain to the demands of coordination between experimental teams. Examples of the latter include the need to adapt the research design and experimental setting to maximise comparability, the sharing of information and regular communication across jurisdictions — keeping in mind that each project is highly politicised! — and the building of a cross-country collaborative research network dedicated to supporting and evaluating ongoing and future basic income experiments. There is much work to be done, but the opportunity is there for grabbing.

 

This piece draws on information from a workshop entitled “Experimenting with Basic Income: Finland and Netherlands”, which was hosted by Kela with the aim of exchanging views between researchers involved in the planning of the Finnish basic income experiment and researchers from the Netherlands currently preparing the experiments planned for early 2017 in Utrecht, Wageningen, Tilburg and Groningen.

The presentations given at the workshop were recorded and can be viewed here. This piece has also been published on the Kela website.

 

Citizen's Income: the long history of an inevitable idea

📥  Basic income

Dr Malcolm Torry is Director of the Citizen's Income Trust and a prolific author on the subject of Citizen's Income.

On Tuesday 11 October the Institute for Policy Research hosted a seminar on the desirability and feasibility of a Citizen’s or Basic Income: an unconditional and nonwithdrawable income for every individual. An account of the seminar is available on the IPR’s website. I shall not here repeat what was said at that seminar: instead, I shall begin with a different seminar.

ubiblue

 

Following the publication of its report on Citizen’s Income, the Royal Society of Arts hosted a seminar on the history and prospects of the Citizen’s Income debate. In his presentation Karl Widerquist, Co-chair of BIEN, the Citizen’s Income international umbrella group, recounted the history of the idea from the 18th Century onwards, and made suggestions as to the different ways in which the debate might now develop.

The subsequent discussion recognised that the more intense debate of the past two or three years has a variety of causes: think tank engagement with the issue, represented by the RSA’s and Compass’s reports, and interest at the Adam Smith Institute; successful pilot projects in Namibia and India; planned pilot projects in Finland and Holland; a referendum in Switzerland; political party interest in the UK (with the Green Party and the Scottish National Party supporting the idea, and Labour interested) and in other countries too; new trade union interest; and perhaps even the Citizen’s Income Trust’s 30 years of research and publications.

The current debate already has its own history, constituted by three phases: discussion of whether giving everyone a Citizen’s Income would be desirable, interest in whether it would be feasible, and discussion of which would be the best way to implement the policy. There are no firm boundaries between these three phases (if a Citizen’s Income could not be implemented, for example, then it would not be feasible – and if it wasn’t felt to be desirable then it wouldn’t be feasible either), and each new phase has been in addition to a previous phase or phases, rather than being a replacement – but the progression is significant because it is evidence for the increasingly serious nature of the current debate. The think tank reports listed above belong to the ‘feasibility’ phase, as does my own recent Institute for Social and Economic Research Euromod working paper and recent book. A significant contribution to the new focus on implementation will be an Institute for Chartered Accountants consultation on the subject in November.

Where will the debate go now?

Luke Martinelli’s recent Institute for Policy Research blog discusses the diversity of the current debate in terms of, firstly, the diverse political ideologies of some of the players, and secondly the diversity of Citizen’s Income schemes discussed. A Citizen’s or Basic Income is always the same thing. It is always an unconditional and nonwithdrawable income for every individual. But there are of course a wide diversity of different schemes, with each scheme specifying the levels of Citizen’s Income for different age groups, and the changes that will be made to the existing tax and benefits systems when the Citizen’s Income is implemented. Compass called a scheme that retains means-tested benefits a ‘modified’ scheme. It is not. The Citizen’s Income is a genuine Citizen’s Income, so the scheme is a genuine Citizen’s Income scheme.

There is a history to this diversity. As with the three phases of the current debate, so the longer-term debate has evolved by addition rather than by replacement. Thomas Paine’s suggestion, that those who no longer have access to expropriated commons should be paid compensation, has been a continuing theme, represented today by Guy Standing’s campaigning scholarship. Today’s most high-profile representative of the libertarian argument for a Citizen’s Income is Philippe Van Parijs, and Charles Murray represents well the extreme version of this tendency, which would like to scrap all other welfare provision on the implementation of a Citizen’s Income. But this is to suggest – as Martinelli’s blog post does – that arguments for Citizen’s Income, and accompanying preferred Citizen’s Income schemes, can be located in clear ideological categories. I suspect that this is less and less the case. There are no longer clear categories, and there are no reliable spectra on which positions can be located. Our age is increasingly one of radical diversity. My first book on Citizen’s Income, Money for Everyone, discussed political feasibility in terms of identifiable political ideologies. The following book, 101 Reasons for a Citizen’s Income, simply offers 101 different reasons, recognising that for each individual a particular bundle of reasons might be significant. A handful of the reasons offered are framed in terms of political ideologies, because for many people those are still salient – but most of the reasons are simply listed in such broad categories as ‘economy’, ‘society’, ‘administration’, etc. My most recent book, Citizen’s Basic Income: A Christian Social Policy, recognises that we are a community of communities, and that particular communities might have their own distinctive reasons for supporting or rejecting Citizen’s Income. As the Citizen’s Income debate becomes increasingly mainstream, we shall find the same tendency that we find with other current issues: that they will become political footballs – that is, they will be pushed around by political considerations, rather than in relation to their own characteristics. The Shadow Chancellor, John McDonnell, has for a long time recognised that we shall one day need a Citizen’s Income, and that the idea needs to be carefully studied by government. He spoke at the Citizen’s Income Trust’s conference in 2014, invited the Trust to organise one of his People’s Parliament events, and since becoming Shadow Chancellor has reiterated his interest. Jeremy Corbyn, Leader of the Labour Party, has also been clear about his support. During the recent Labour Party leadership campaign, Corbyn’s opponent Owen Smith stated his view that Citizen’s Income wasn’t credible. Whether he had read any of the research I don’t know – but it certainly appeared that the motive for his objection was that his opponent had supported it. It is regrettable when positions are taken for reasons proceeding from a personal political career, or for factional advantage, rather than on the basis of evidenced and reasoned argument – but incidents such as this are useful because they signal the fact that an idea is understood, and that it is understood to be significant. What is then required is a sustained emphasis on the idea’s feasibility.

The Feasibility of Citizen’s Income understands feasibility as multifaceted, and recognises that specifically political feasibility is just one aspect of feasibility. In order to be implemented, a Citizen’s Income scheme would need to pass two kinds of financial feasibility test, with regard to both the feasibility of paying for it and the need to avoid imposing losses on low-income households at the point of implementation; it would need to pass psychological, behavioural, and administrative feasibility tests; and it would need to be able to negotiate the complex policy process from idea to implementation. The book concludes that there are Citizen’s Income schemes that could achieve all of that. A conclusion that might have been more explicit is that conformity of the scheme to a political ideology or ideologies might be fairly unimportant. A conclusion that is drawn matches one that Martinelli draws: that deeply embedded convictions, relating to reciprocity, deservedness, and so on, will need to be recognised at the implementation stage, because only those implementation methods that could achieve public approval can be regarded as feasible. The popularity of both the NHS and Child Benefit suggest that unconditional benefits fit the British psyche just as much as ideas of reciprocity and deservedness do; so as long as age groups generally felt to be ‘deserving’ are the first to receive Citizen’s Incomes, psychological feasibility should not be too difficult to achieve. Governments can move ahead of public opinion if they are moving in the same direction – recent examples are the ban on smoking in workplaces and public places, and the legalisation of same-sex marriage – and legislation can sometimes shape public opinion (as equalities legislation has done). This suggests that any government that saw good reason for implementing a Citizen’s Income scheme would be able to do so, as long as it started with age groups generally believed to be deserving – that is, children, retired people, the pre-retired, and the 16+ age group.

Martinelli suggests that the Citizen’s Income debate will exhibit a variety of different Citizen’s Income schemes, with each kind relating to a different set of political convictions. I’m not so sure. It is a reasonable assumption that for the foreseeable future any initial Citizen’s Income scheme in a developed country will need to be revenue neutral, and possibly strictly revenue neutral (in the sense that only tax allowances related to earnings would be reduced to help to pay for the Citizen’s Income). Microsimulation research at the Institute for Social and Economic Research has shown that a revenue-neutral Citizen’s Income scheme can only avoid imposing unacceptable losses on low-income households if current means-tested benefits are left in place and are recalculated to take account of each household’s Citizen’s Income and changes in net earnings. Recently updated figures show that a working-age adult Citizen’s Income of £60 per week could be paid for on this basis. This is not large, but neither is it insignificant. Compass’s recent report takes a similar approach. The RSA report does not – but neither has it tested its proposed scheme for low-income household losses at the point of implementation. We look forward to the results of current IPR microsimulation research. We are now more aware than before that although it is possible to construct a wide variety of Citizen’s Income schemes in theory, in practice only a narrow range of that diversity could ever be financially feasible in both senses of that term. If the debate about Citizen’s Income remains mainstream, and if it becomes increasingly so, then any infeasible scheme will be put under considerable pressure (as the Green Party’s proposed scheme was before the 2015 General Election) – and the result will be convergence on a narrow range of revenue-neutral schemes that would not impose losses on low-income households at the point of implementation.

The increasingly flexible and diverse nature of the employment market, family structures, and society and the economy generally, and the way in which the proceeds of production will continue to accrue to capital rather than to labour, mean that sooner or later we shall need a Citizen’s Income – and that we shall need to find some means of paying for it. But that could still be a very long process. Maybe by this time next year everybody will have lost interest, and the idea will have to await another upsurge in interest in a generation’s time; or maybe there will be both developing and developed countries taking the first steps towards implementation. More likely, we shall experience a situation somewhere between those two. Whatever the debate is like next year, it will have been important for high-quality research to have facilitated it. For this reason it is a pleasure to see the Institute for Policy Research contributing to the research that we shall need, and to the widespread debate that is now required.

This blog post develops on themes discussed by Dr Torry in a recent IPR Seminar. You can view the seminar and slides in full on our online lectures page, or listen to the podcast on our Soundcloud playlist.

Exposing a fragile coalition: The state of the basic income debate

📥  Basic income

Dr Luke Martinelli is Research Associate on the IPR's universal basic income project.

Is it time to move beyond the polarised views that characterise the basic income debate? Universal basic income (UBI) may be an attractive solution to a host of policy problems – but advocates must recognise that moving from abstract concept to reality will involve significant trade-offs and political barriers.

ubismall


Gaining traction, growing support

In recent weeks, there have been a number of developments which appear to demonstrate the movement of UBI towards the political mainstream: in the UK, the influential Trades Union Congress (TUC) has endorsed social security reform that embodies the principles of basic income; in Canada, the Government is moving forward with concrete plans for a basic income pilot, adding to those upcoming in Finland and the Netherlands; the French region of Aquitaine is consulting on the idea; and in Germany, the single issue party Bündnis Grundeinkommen (Basic Income League) has just been established. These trends seem to suggest that UBI is gaining traction that will lead inexorably to widespread implementation.

After all, UBI is not just a good idea; it is an increasingly good idea in a world in which the nature of work, family and society is rapidly changing.  Automation of production processes, both in manufacturing and, increasingly, services; large and growing wage gaps between ‘lousy’ and ‘lovely’ jobs (Goos and Manning, 2007); the growth of zero-hour and temporary contractual arrangements; and long-term unemployment among disadvantaged groups are all problems which urgently need addressing. Nuclear families have given way to the emergence of complex and unstable family structures, and the ‘new social risks’ of lone parenthood and gaps in the provision of care for children and the elderly threaten vulnerable sectors of society.

All of these factors are feeding into the widespread failure of existing social security systems to achieve equitable and efficient settlements for growing numbers of people – exactly what UBI claims to be able to provide.

Yet despite (or perhaps because of) intensified interest in basic income, the debate has become more polarised than ever. It is an elegant balance of justice and liberty; it is the worst of all possible worlds. It is the saviour of the welfare state; it will destroy it. It can be implemented tomorrow; it is a vague and distant utopia.

All things to all people

When considering these polarised views on basic income, it is worth noting that UBI is best considered as a family of proposals, rather than a specific policy per se.

The core characteristics of UBI as an idea are that payments should cover the entire population, and eligibility cannot be conditional on income, work history, or behavioural requirements. Beyond this, there is a great deal of variation between plans in terms of a number of important aspects  – including, crucially, the level at which payments should be made, and how the basic income fits into the wider constellation of welfare and tax policies.

These design features vary in relation to the precise goals that basic income is intended to achieve, which themselves are contested. Although it can be seen as a prosaic way to simplify a complex welfare system, alleviating administrative costs and bureaucratic intrusion while reducing marginal tax rates – and thus eliminating the poverty and unemployment traps that pervade means-tested systems – it has also been touted as having the potential to fundamentally alter how we think about ‘work’. Releasing individuals from the compulsion to enter paid employment – and the exploitation and domination this entails – in order to survive, and liberating them to pursue a variety of socially valuable and creative activities, UBI has been mooted in radical terms as “a capitalist road to communism” (Van Der Veen and Van Parijs, 1986).

Multi-partisan support

The protean nature of basic income helps to ensure that the concept appeals across traditional party lines. One of the striking things about this idea is the wealth of favourable theoretical arguments which appeal across the political spectrum, leading to the popular description of UBI as 'not right or left, but forward'. In isolation, these arguments apply to other ways of organising social security – but few if any such systems so effectively marry the priorities of the social democratic left (equality, solidarity and redistribution) with those of the libertarian right (small government, freedom and efficiency). By both left- and right-wing proponents, UBI is viewed as the saviour of a broken welfare system which is stigmatising and intrusive yet unfit for purpose.

For basic income advocates on the left, the focus is on the failure of the system to provide security for all in an adequate and dignified fashion, as socio-economic conditions have made the Beveridgean system increasingly untenable. Gone are the days – if they ever existed – when male breadwinners provided for their families with stable, well-paid jobs. The Trente Glorieuses, that period of yet unmatched growth and prosperity following WWII, gave way to deindustrialisation, structural unemployment, rising wage inequality, and the increasing prevalence of precarious employment.

For the right, the welfare system is seen as the cause of dependency and societal breakdown, as the complex array of means-tested benefits reduces work incentives and discourages family formation. The bloated government bureaucracy which administers the intrusive work tests and financial conditions creates higher taxes, which act as a drag on the efficiency of the economy as a whole.

Basic income, perhaps miraculously, seeks to balance these competing goals and priorities. But does this congregation of political views mean that it is universally and normatively desirable? Clearly not.

Cross-party opposition

There is an equivalent (and possibly more significant) meeting of minds across the political spectrum that finds basic income a deeply discomfiting notion. Social democrats believe that welfare should be generously available for all, and those on the right that it should be a residual safety net – but both agree that the right to an income comes with a responsibility to work (however this responsibility is actualised). Notwithstanding the claims of political philosophers such as Philippe Van Parijs that “even surfers should be fed”, Bowles and Gintis (2000) demonstrate that people “support the welfare state because it conforms to deeply-held norms of reciprocity and conditional obligations to others”. Of course, this goes beyond the simplistic equality of contributions and receipts – but the belief that everyone has an obligation to contribute to society if they can, and that only those unable to work through incapacity, involuntary unemployment or caring responsibilities are deserving of state support, provides a philosophical foil to the arguments of basic income advocates (Anderson, 1999). Bay and Pedersen (2006) show that support for universal welfare drops when respondents consider the possibility of foreign immigration. Data on attitudes to welfare, which have hardened in recent years, appear to uphold these insights – as analysis of the British Social Attitudes Survey by Eleanor Taylor and IPR Director Professor Nick Pearce serves to demonstrate.

For progressive opponents of UBI, welfare should be restricted to those most in need, since the wealthy do not need it; if you are going to spend more on welfare, why not make payments more generous for the poor? Thus, basic income is likely to be seen as ineffectual by the progressive left, as demonstrated by reactions to Compass’ UBI proposals stating that “a powerful new tax engine will pull along a tiny cart”, and that feasible UBI schemes are “not generous enough to achieve the aim of replacing wages in an increasingly automated world; or they are not funded properly; or both”. The concept of uniform benefits also appears to conflict with the principle that levels of support should correspond to the needs of claimants – which are complex and varied, and therefore might be seen to justify an equally complex range of benefits.

At the same time, conservative opponents argue that UBI would be prohibitively expensive, require huge tax rises, and significantly damage work incentives. Although the unconditional nature of UBI leads to lower marginal effective tax rates (as the benefit is not withdrawn as income rises), if payments were pitched at subsistence level or higher, there would be a significant negative labour market response as individuals opt for more leisure.

Thus, while basic income has supporters across the political landscape, it also has detractors – and the large family of basic income proposals provides a wide target at which to direct criticism.

A fragile coalition

The multifaceted nature of basic income enables detractors to criticise the least desirable type of basic income (from their particular perspective). Thus, basic income’s association with ‘undesirable’ political views permits left-wing opponents of basic income to attack UBI as an alternative to decent public services and a project to dismantle the welfare state, while simultaneously allowing right-wingers to criticise it for inflating the role of government in welfare provision and dampening incentives for self-provision.

Exacerbating the political challenge of UBI is what De Wispelaere (2015) calls the “problem of persistent political division” among supporters. While agreed on the general principle, UBI advocates on each side of the political divide have different ideas about the key parameters. When UBI is operationalised in a specific scheme, divisions appear; as De Wispelaere observes, a residual scheme such as that proposed by Murray (2006) is “entirely unacceptable to anyone supporting basic income on progressive grounds”. At the same time, libertarian UBI advocates would only support basic income schemes that sought to replace the entire welfare system. Thus, support from the ‘opposite’ political side may taint the concept of basic income by association: progressives cannot get behind a policy supported by right-wingers, and vice versa.

Although steps to realise basic income show signs of progress, therefore, this ultimately hinges on the extent to which meaningful coalitions of interests can be built and sustained around concrete proposals. This prospect is a lot more distant than appears at first glance; the apparent unity of the basic income movement masks a multitude of deeply divided actors, and a highly fragile coalition.

To end on a more positive note, these political difficulties are not necessarily intractable – but it may be that advocates have to sacrifice their broad coalition in favour of congregation around specific schemes. This would give lie to the idea that basic income is ‘all things to all people’, but it might garner new and more enthusiastic supporters as well.

 

References

Anderson, Elizabeth S. (1999). "What Is the Point of Equality?" Ethics, 109(2): 287-337.

Bay, Ann-Helén, and Axel West Pedersen. "The limits of social solidarity basic income, immigration and the legitimacy of the universal welfare state." Acta Sociologica 49(4): 419-436.

Bowles, Samuel, and Herbert Gintis (2000). "Reciprocity, self-interest, and the welfare state." Nordic Journal of Political Economy, 26(1): 33-53.

De Wispelaere, Jurgen (2015). "The struggle for strategy: On the politics of the basic income proposal." Politics (2015): 1467-9256.

Goos, Maarten, and Alan Manning (2007). "Lousy and lovely jobs: The rising polarization of work in Britain." The review of economics and statistics, 89(1): 118-133.

Murray, Charles. (2006). In Our Hands: A Plan to Replace the Welfare State. Washington, DC: American Enterprise Institute Press.

Van Der Veen, Robert J. and Philippe Van Parijs (1986). "A capitalist road to communism." Theory and Society, 15(5): 635-655.

Van Parijs, Philippe (1991). "Why surfers should be fed. The liberal case for an unconditional basic income." Philosophy and Public Affairs, 20: 101-131.

Universal income or universal divide

📥  Basic income

Dr Luke Martinelli, Research Associate

Interest in universal basic income has been intensifying lately, with a discernible proliferation of opinion pieces in the mainstream press. While the reasons for the increased awareness are up for debate, it has surely been fuelled by an increasingly precarious global economic outlook, with rising inequality, the growth of in-work poverty alongside worklessness and underemployment, and the impending claimed obsolescence of labour due to automation all posited as problems with which existing welfare state institutions are ill-equipped to cope. The idea, popular among social democrats and libertarian thinkers alike, is simply to provide everyone with an unconditional income, without intrusive means-testing and work requirements: to provide, in the words of basic income’s long-standing advocate Philippe Van Parijs, “a floor on which [people] can stand, because it can be combined with earnings, rather than a net in which they can easily get stuck”.

In any case, basic income – for decades an abstract idea at the margins of the welfare debate – may soon become reality in a number of European countries. Finland and the Netherlands have already opted to trial basic income schemes in the coming years, and this Sunday, Switzerland will hold a national referendum on whether to introduce legislation to pay each of its citizens a proposed 2500 SFr. per month.

At the IPR, as part of a project assessing the case for a universal basic income in the UK context, we are following these developments keenly. This week we were delighted to welcome Jurgen De Wispelaere, a member of the working group advising the Finnish government on the upcoming experiment, to share his considerable expertise in an informal seminar. view Jurgen’s presentation.

hero-livingwage

 

..and justice for all? Basic Income and the Principles of Gender Equity

📥  Basic income, Welfare and social security

Caitlin McLean, of the Center for the Study of Child Care Employment, University of California-Berkeley, writes on basic income and gender equity

Cross-posted from the website of the journal Juncture http://www.ippr.org/juncture

International interest in universal basic income[1] proposals has increased markedly in recent years.[2] In the UK a basic income has been supported by the Green party and the non-partisan Citizen’s Income Trust. In other countries, such as Finland and France, proposals for basic income pilots and experiments are on the agenda.

The arguments for implementing a basic income are many and varied,[3] yet the proposal remains controversial. And nowhere is this controversy more prominent than among feminists, who have hotly debated the merits of a basic income in terms of its potential contributions to gender equality. Feminist advocates for basic income have pointed to its potential to correct the paid-work bias of contemporary social security systems, and to increase women’s economic autonomy and power within the household by providing a source of unconditional income support that is not tied to paid employment.[4] Critics have argued that basic income will do nothing to directly challenge the gendered division of labour – and may well reinforce it, especially to the extent that unconditional cash benefits increase the incentive for women in particular to reduce their labour market participation, given their relatively weaker attachment to the labour force as a group relative to men, and the central role that this plays in broader inequalities such as income gaps and poverty risks.[5] Accordingly, the feminist debate about basic income has reflected wider feminist disputes about how the state can recognise the unpaid work largely done by women, such as the care of children and the elderly, without reinforcing existing inequalities between men and women.

Recently, many of basic income’s advocates have argued that it promotes gender equality precisely because it is able to skirt this long-running debate. Like Nancy Fraser’s famous ‘universal caregiver’ policy model,[6] a basic income has the potential to satisfy the two core principles of gender equity: anti-marginalisation and anti-androcentrism. This twin potential is the keystone of Fraser’s argument in favour of a universal caregiver model over the caregiver parity or universal breadwinner models. She argued that a caregiver parity model (whereby income supports are directed toward caregivers specifically) would lead to marginalisation, secluding women in the private sphere and perpetuating gender essentialism; on the other hand, the universal breadwinner model (whereby income supports are tied to paid employment) would perpetuate androcentrism by emphasising masculine life-patterns and requiring women to conform to men’s standards in order to be considered equal. Fraser argued that avoiding both of these outcomes requires that we follow what she called the universal caregiver model, under which both men and women are encouraged and supported to participate in the labour market as well as the care and work of the household.

Advocates of basic income have pointed out that it represents a move towards this type of policy model, because its lack of conditionality means that it goes down neither the labourist nor the care path of citizenship.[7] A basic income provides a floor of economic security for everyone, and remains neutral regarding what activities they engage in. In this sense a basic income avoids the drawbacks of a universal breadwinner model that perpetuates androcentric assumptions about the nature of work. But at the same time, a basic income provides a means of valuing the care work that cannot be provided via state or market.

Basic income and intersectionality
A key missing component in the discussion thus far is attention to intersectionality. In recent years, feminist thought has increasingly shifted towards understanding and accounting for the heterogeneity of women’s experiences, and the difficulties of effectively including all types of women in the feminist movement. The role that divides among women play in gender inequality between men and women has emerged as a key debate. Intersectionality, or ‘complex inequality’,[8] means that the experience of any given woman is shaped not only by her gender but by other systems of social stratification such as race and class – and that these dimensions are not simply an additional facet of her identity, but affect her gendered experience as well.

For debates about basic income in particular, intersections between gender and class are especially relevant.[9] Basic income proposals are, in essence, an attempt to provide economic security and raise the welfare floor for the least well-off, without encouraging stigmatisation or further increasing the hardships that they face in terms of complex eligibility and administrative requirements. Thus there is a case to be made that, to the extent that a basic income addresses these particular issues, it does not only reduce or alleviate the suffering associated with poverty and income inequality – it also helps further gender equality goals, particularly when taking heterogeneity among women into consideration as well as differences between women and men.

Crucially, such issues are addressed in Fraser’s underlying framework, even if they are not explicit in shorthand references to the universal caregiver model. In their emphasis on the universal caregiver model, feminists debating the merits of a basic income have downplayed two additional principles of gender equity – anti-poverty and anti-exploitation – that a basic income is best-placed to address, especially when compared to other commonly advocated gender equality measures such as childcare provision or parental leave policies.

Anti-poverty AND anti-exploitation
Fraser lists ‘anti-poverty’ as the very first principle of gender equity. She argues that the prevention of poverty is a key aspect of gender equality, given that women in general are at higher risk of it than men. Indeed, the phrase ‘feminisation of poverty’[10] was coined in recognition of the fact that women tend to be economically disadvantaged in the labour market for a variety of reasons, including responsibilities for children and domestic tasks as well as outright discrimination, which leads to lower market income. This economic risk is then further compounded by many aspects of current social security systems that tie income supports to labour market participation.

While poverty may be ‘feminised’, certain groups of women are clearly more vulnerable to poverty than others. This is particularly true of single mothers, although the level of risk to which they are exposed varies by country. Further, ethnic minority women, disabled women, refugees and migrant women also face a higher degree of economic disadvantage, such that they might be especially likely, relative to more privileged women, to benefit from an income floor. The anti-poverty agenda also recognises gender inequalities as a global or international, rather than intra-national, issue. A high proportion of the world’s poor are women, with those in many developing countries facing a greater array of social, political and economic disadvantages that raise their risk of poverty, as well as related problems such as poor health.

Thus the potential for a basic income to reduce poverty is a crucial component of its potential contribution to decreasing gender inequality. Basic incomes can contribute to poverty reduction in the straightforward sense of securing a certain level of financial welfare via cash transfers. This has been one of the key rationales for piloting basic income proposals in countries in the global south such as Namibia and India, where the anti-poverty effects of cash transfers are most stark given their low standards of living.

Furthermore, the universal aspect of a basic income is likely to increase its effectiveness in terms of preventing, rather than simply alleviating, poverty, because it avoids the unemployment traps of targeted cash transfers. Basic income recipients are free to combine paid employment with receipt of the benefit, and do not risk losing a steady income stream by taking on paid employment or increasing their hours at work. This is especially relevant for single and lower-income women, who are particularly likely to be recipients of targeted cash transfers.

The core role of a basic income in providing economic security and stability also contributes to Fraser’s second principle of gender equity: anti-exploitation. She characterises this as the prevention of the exploitation of vulnerable people, including within the household as well as via the market and the state. Crucially, Fraser argues that anti-exploitation as a principle requires that welfare benefits are not linked to dependency relationships (such as benefits through a husband or an employer). This is a key strength of basic income proposals as opposed to other forms of social security: it has the potential to reduce the power of ‘bosses, boyfriends and bureaucrats’[11] over women’s lives.

With regard to ‘bosses’, a core argument among basic income advocates more generally is that an unconditional source of income will increase the bargaining power of the worker in relation to the employer, as the threat of destitution is removed. This is especially relevant for women given that they tend to be lower paid and in lower authority positions.

With regard to ‘boyfriends’, as an individual-level benefit, basic income helps to redress (or, at the very least, avoids exacerbating) intra-household inequalities between men and women in couple relationships. A core feminist critique of tax-benefit systems has been their use of household rather than individual-level assessments. This system relies on assumptions about the equal sharing and pooling of household income and other resources, which does not always hold in practice – usually to the disadvantage of women and children, who tend to bring lower amounts of independent income into the household. Economic inequalities within the household also underpin and reinforce power differentials between men and women, and between children and adults, more generally. Individual, unconditional payments paid to everyone have the potential to offset some of these inequalities.[12] For women who make less money than their partners, or who would otherwise have no income of their own, a basic income could increase their bargaining power within the household.

A less commonly acknowledged but nevertheless key avenue for exploitative power relationships is the interaction between women and the state. Paternalistic, intrusive and/or coercive interactions between welfare administrators and claimants have become particularly relevant in recent years given the increased use of sanctions in some countries, such as the UK and the US, in order to control the behaviour of those claiming benefits. In contrast to means-tested and/or conditional cash benefits, a basic income’s universal and unconditional nature would remove the need for eligibility enforcement, and so reduce the power and oversight of state officials and caseworkers over benefit claimants’ personal lives – an issue that is especially pertinent for women, who are more likely to be claimants and more likely to be subject to scrutiny of their coupled relationships based on household-level means-testing.

Intersectionality, and a renewed feminist case for basic income
The basic income debate as it currently stands reflects a fundamental feminist disagreement – namely, what to do about the unpaid work of the household: how to value it (and avoid perpetuating androcentric biases) without reinforcing the gendered division of labour and the resultant socioeconomic disadvantaging of women. Nevertheless, the worker-vs-mother dichotomy does not encapsulate the sum total of the female experience, or of gendered disadvantage.

Attention to intersectionality provides an opportunity to widen the feminist debate about basic income beyond care alone, and to better incorporate insights about the diversity of women’s experience. Arguably, this also strengthens the case for a basic income in relation to the goal of gender equality. Not only does it mediate one of the core polarising issues among feminists (whether to prioritise support for labour market participation or care work in the home), but it also addresses issues that are sometimes sidelined within the feminist movement yet which are especially important for the most vulnerable groups of women – issues such as poverty and the exploitation of unequal power relationships between women and their employers, their families and state administrators.

Caitlin McLean is workforce research specialist at the Center for the Study of Child Care Employment, University of California-Berkeley. Previously she was Ailsa McKay postdoctoral fellow at Glasgow Caledonian University, where her research focussed on examining the feminist case for a basic income.

This article appears in edition 22.4 of Juncture, IPPR's quarterly journal of politics and ideas, published by Wiley.
[1] ‘Basic income’ refers to a cash benefit that is: universal – paid to everyone in the population; individual – paid to each adult rather than as a single household payment; and unconditional – paid without means-testing or conditions with regard to family or employment status.
[2] Edition 22.4 of Juncture features two other articles on the basic income, by Anthony Painter and Hillel Steiner.
[3] McLean C (forthcoming 2016) ‘Debating a Citizen’s Basic Income: An International and Cross-Disciplinary Perspective’, in Campbell J and Gillespie M (eds) Feminist Economics and Public Policy: Reflections on the Work and Impact of Ailsa McKay, Routledge.
[4] See McKay A (2001) ‘Rethinking Work and Income Maintenance Policy: Promoting Gender Equality through a Citizens’ Basic Income’, Feminist Economics 7(1): 97–118; McKay A (2005) The Future of Social Security Policy: Women, Work and a Citizens’ Basic Income, Routledge; Pateman C (2004) ‘Democratizing Citizenship: Some Advantages of a Basic Income’, Politics and Society 32(1): 89–105; and Zelleke A (2011) ‘Feminist Political Theory and the Argument for an Unconditional Basic Income’, Policy and Politics 39(1): 27–42.
[5] Gheaus A (2008) ‘Basic Income, Gender Justice and the Costs of Gender-Symmetrical Lifestyles’, Basic Income Studies 3(3): 1–8; Robeyns I (2001) ‘Will a Basic Income do Justice to Women?’, Analyse 23(1): 88–105.
[6] Fraser N (1994) ‘After the Family Wage: Gender Equity and the Welfare State’, Political Theory 22(4): 591–618.
[7] See for example Zelleke A (2008) ‘Institutionalizing the Universal Caretaker through a Basic Income?’, Basic Income Studies 3(3): 1–9.
[8] McCall L (2001) Complex Inequality: Gender, Class, and Race in the New Economy, Routledge.
[9] The importance of intersectionality, especially gender–class divisions, as it pertains to debates about basic income has been recently raised by Camila Vollenweider, who focussed specifically on the role of domestic service in structuring class relations between women. See Vollenweider C (2013) ‘Domestic Service and Gender Equality: An Unavoidable Problem for the Feminist Debate on Basic Income’, Basic Income Studies 8(1): 19–41.
[10] Pearce D (1978) ‘The Feminization of Poverty: Women, Work, and Welfare’, The Urban and Social Change Review 11(1–2): 28–36.
[11] Levine J (2013) Ain’t No Trust: How Bosses, Boyfriends, and Bureaucrats Fail Low-Income Mothers and Why It Matters, University of California Press.
[12] Robeyns 2001.

 

Back to the future: the revival of interest in a Universal Basic Income

📥  Basic income

In recent weeks, the idea of a universal basic or “citizens” income (UBI) has been enjoying a revival of interest and support. Different versions of the proposal that all citizens should be entitled, by virtue of their citizenship, to a minimum income payment have been long been canvassed across the political spectrum, from Tom Paine to Milton Freidman. But a UBI has never made it from the margins to the mainstream.  Experiments have been small scale or time limited, and never gained wider political traction.

Yet in the post-financial crisis era, interest in the idea appears to be taking off. The Finnish government has said it will soon test versions of the proposal, Swiss campaigners have brought a UBI forward to a referendum in 2016, and Dutch cities are reported to be experimenting with basic income plans. At the last UK general election, the Green Party proposed a citizens income, and in Ireland Fianna Fail is considering one for inclusion in the party’s manifesto. Academic interest in the idea is growing and it has been given careful thought by serious social policy research bodies such as the Joseph Rowntree Foundation. This week, commentators reacted enthusiastically to the news that the government in Finland was trialling the idea.

Why this renewed interest for a perennial hardy of social policy? For the “post-capitalist” left, a UBI has come to represent a key building block of human freedom in a technologically advanced, highly automated society. If the robots can do all the work, the argument goes, a citizens’ income would enable humans to enjoy a world of leisure and fulfilment freed from waged labour. It is the 21st century version of long-held humanist ambitions for emancipating workers from alienated labour, made possible by digital technology. The UBI prefigures the world to come.

For enthusiasts closer to the current political mainstream, a UBI appears ready made for a labour market with high levels of self-employment, and precarious or part-time work. For countries like Finland with relatively high unemployment, it offers the prospect of increasing incentives to work, as well as giving greater security to workers with fluctuating incomes. For high employment countries, by contrast, a UBI could enable a reduction in the steep withdrawal rates for in-work benefits and tax credits, incentivising extra hours of work and supporting dual earner households.

This is where technical problems with a UBI start to multiply, however. For a UBI to be revenue neutral at current safety net levels implies significantly higher tax rates on earned income. In the UK, Professor Donald Hirsch has estimated that it would require taking at least 40% of all earned income (i.e. assuming the abolition of existing allowances and national insurance thresholds).  In addition, in the UK support for low income families’ housing costs is met through Housing Benefit. Rolling this into a universal income payment would entail significant expenditure increases, with considerable variation in the welfare different families could enjoy from a single income payment in different parts of the country. Adding housing support to a citizens’ income would push the tax take on earned income required up above 50% (though it should be noted that a UBI could also be funded by wealth and consumption taxes).

Variations in household need, and the necessity of running extra benefits to meet additional costs of raising children, disability or housing, frustrate grand ambitions that a UBI would enable a significant reduction in welfare administration and the associated entanglement of citizens in state means-testing. Libertarians are attracted to a UBI because it would restrict state-citizen interactions to the bare minimum of single income transfers, and abolish the disciplinary architecture of welfare regimes at a stroke. Yet ending means testing in conditions of fiscal constraint is fanciful: the rough justice to households who would lose out would be too great to offset with higher universal payments. Even the administration challenges of a single universal income transfer are greater than commonly supposed. As Jurgen De Wispelaere and Lindsay Stirton have argued, a UBI requires the maintenance of a robust population register, effective administration of payment systems, and substantial regulatory oversight. All of these bring significant practical and potentially costly challenges.

These concerns point to incremental, evolutionary progress towards a UBI, building on existing forms of universalism in welfare systems and those reforms, such as the Universal Credit in the UK, that aim to integrate different benefits. But technocratic reforms do not guarantee popular support. The decline in public commitment to working age social security over the last thirty years is in part due to the sense that welfare benefits have ceased to embody reciprocity: that the principle of contribution, of paying in before taking out, and not free riding on others, has lapsed. An alternative path towards restoring popular support for the welfare state to a UBI might therefore be to strengthen the contributory principle in social security, and instead of creating universal income payments, to shift public expenditure towards services and institutions, like the NHS, children’s centres or social housing developments, that directly meet social needs.  This is where communitarian opponents of a UBI pick up the argument, seeing in the grand design for a state mandated and administered income transfer a further weakening of social bonds, civic institutions and popular control over the welfare state. They prefer to repatriate social security to civil society, in partnership with the state, rather than to create a new universal administrative apparatus.

Real philosophical choices are therefore at stake here, not simply technocratic ones. And here is the rub: is the new experimentation with UBIs evidence of the kind of practical social innovation that can incubate wider and deeper social and political transformation, as envisaged by radical theorists such as Roberto Unger, or just the grandest compensatory amelioration of the inequalities and injustices of contemporary capitalist societies yet conceived, leaving untouched their underlying structures of power? The answer to that question may yet decide the fate of the citizens’ income movement.

Professor Nick Pearce, Professor of Public Policy Research, Director of IPR