Dr Joe Chrisp is a Research Associate in the Institute for Policy Research (IPR) at the University of Bath. He recently co-authored a rapid evidence review, ‘Basic income experiments in OECD countries’, published by the International Public Policy Observatory (IPPO).
This article is part of a series on universal basic income to coincide with the conference ‘Back to Basics: Income for Everyone?’.
At the heart of the politics of Universal Basic Income (UBI) lies a fundamental paradox. On the one hand, the intuitive appeal of a UBI is its ‘disarming’ simplicity: an unconditional income for every individual. On the other, it is a policy with ‘many faces’, it is ‘multi-dimensional’, ‘Janus-faced’ or ‘all things to all people’.
In part this is because, even within the (simple) definition, the policy can look incredibly different depending on how large the payment is, what taxes or mechanisms are proposed to fund it and how much of the existing social security system would be maintained. As Brian Barry once wrote in his essay ‘UBI and the Work Ethic’: ‘Asking about the pros and cons of basic income as such is rather like asking about the pros and cons of keeping a feline as a pet without distinguishing between a tiger and a tabby’.
One problem is that while the popular imagination tends to conjure up a ‘tiger’ with a payment sufficient to cover basic needs and replace (most of) the existing system, a tiger-level UBI would require unprecedented overnight changes to taxes and benefits. We would be looking at tax rates of well over 50 per cent on all income if funded through income tax, which would be the most likely source for such a large payment, and/or substantial losses for low-income households if accompanied by the removal of other benefits.
Thus, when advocates devise what they consider to be feasible UBI policy proposals they tend to opt for two types of ‘tabby’ UBIs. The first is what is sometimes called a ‘partial basic income’, which typically resembles more of a reform to income tax: abolishing tax allowances (and at most adding a few percentage points to existing tax bands) and providing a modest universal benefit, while maintaining most of the existing benefit system. The second is a modest ‘dividend’ that utilises a new funding source, such as a tax on energy, carbon and data or sovereign money, and pays out the proceeds to all, drawing on the Alaskan example. However, despite analysis pointing to the likely benefits for poverty, inequality and marginal effective tax rates for certain groups, neither scheme on its own will provide an adequate minimum income, get rid of sanctions entirely or simplify the system.
The notion that UBI has many faces, however, also lies in the fact the policy contains many latent dimensions that distinguish it from other types of social security. It is:
- Universal (not restricted to a target group)
- Individualised (so that the size and recipient of the payment is not determined by household structure)
- Unconditional (not tied to job-seeking behavioural requirements)
- Non-contributory (not tied to past earnings or work record)
- Non-withdrawable (not adjusted or withdrawn in relation to current earnings or savings)
The methodical spelling out of these dimensions is valuable because, first, advocates also often include various ‘cognate’ policies that relax one or more of the dimensions above as belonging within the broader family of basic income schemes, such as negative income tax, participation income or universal child benefits. Second, advocates may seek to make ‘steps’ towards a UBI by reforming benefits on one or more of these dimensions.
To illustrate the point, all so-called basic income experiments are in fact testing either a ‘cognate’ policy, such as a basic income for care leavers, or a ‘step’ policy, such as removing job-seeking requirements from existing social assistance benefits.
But both of these extensions (‘cognates’ or ‘steps’) betray a more distinctive feature of political debates about basic income: they are often not about the policy of a UBI at all. Instead, UBI serves as a device for instigating policy reforms relating to more specific dimensions of benefits such as rules on conditionality or means-testing.
While others such as Declan Gaffney have alluded to basic income as a ‘thought experiment’, I label this device a ‘mirror’ because the way in which UBI is viewed reflects the context in which it is advocated or opposed. In past research I found that the most salient dimensions of a UBI were usually those that clashed most plainly with the existing social security system. In other words, UBI is more likely to be contested as an unconditional benefit in highly conditional benefit systems, but non-contributory in countries where social insurance is dominant.
Political debates about basic income also often occur at an even greater level of abstraction, as a ‘metaphor’ for one’s position on the role of paid work in society or the role of cash vis-à-vis the provision of public services. With respect to paid work, advocates often use basic income as a lightning rod to discuss the valorisation of unpaid work or raise the prospect of adapting to permanent technological unemployment, while critics likewise associate UBI with a denigration of the worth of labour. Basic income is also perhaps the most potent symbol of what has been called ‘redistributive market liberalism’: the belief in the power of cash benefits as an instrument of social justice. In both debates, another equally abstract vision is juxtaposed with a UBI: a jobs guarantee or universal basic services.
What is most striking is how participants in UBI debates evade consistent categorisation across the three levels of abstraction (policy, mirror or metaphor). People who consider the idea of a basic income to be a proxy for specific principles in the benefit system do not understand why it conflicts with the provision of public services any more than unemployment or in-work benefits currently do. The notion that a UBI denigrates work will confound many supporters of a basic income who primarily want to reduce marginal effective tax rates by making some benefits non-withdrawable. The criticism of ‘universal’ benefits as regressive in general will be largely irrelevant for those that advocate a partial basic income scheme funded through the removal of income tax allowances, as high earners will be net losers from such a proposal while those on a low income will be net gainers. Indeed, outspoken opponents of a UBI, such as Jon Cruddas, will often state that they are supportive of such poverty-reducing schemes. Equally though, such a partial scheme leaves many supporters of a basic income cold for failing to achieve many of its purported benefits.
Some arguments can be more meaningfully linked, for example those that place a strong importance on the value of paid work usually (but not always) support conditionality. However, unpacking the ways in which these debates operate at cross-purposes and clarifying potential areas of agreement seems a more fruitful avenue for the left in the face of sometimes unnecessarily polarised discussion of the issues surrounding UBI.
This blog was produced in partnership with Bristol Ideas. All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.
Find out more about our research on universal basic income and sign up now to our forthcoming conference, ‘Back to basics: Income for everyone?’, organised in partnership with Bristol Ideas and the Basic Income Forum, taking place 11 October 2022.