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Universal Basic Income: urgency or emergency?

This article is a follow up to EYE online and is inspired by the activity "Universal Basic Income: urgency or emergency?". EYE online aimed to compensate for the postponement of European Youth Event 2020 by proposing online activities to young Europeans in the framework of the EuropeansAgainstCovid19 EU campaign. All the activities of EYE online can be watched here.

 

Universal Basic Income (UBI) has been ‘an idea whose time has come’ for longer than most. It isn’t a new concept, by any means: Thomas Paine suggested it in a pamphlet in 1797, and versions of it have been put forward as visions of the future since then. In the midst of a generational crisis, however, it is of suddenly heightened interest.

An EYE discussion of UBI, hosted live on Facebook and at the time of writing (10/06/20) watched fifteen thousand times, gathered a panel of four thinkers keenly interested in its possibilities. They were Leire Rincon, president of Unconditional Basic Income Europe (UBIE); Caroline Teti, Africa Director for Recipients Advocacy at GiveDirectly; and Hilde Latour, board member of the Dutch branch of the Basic Income Earth Network. The discussion was moderated by Antonis Triantafyllakis, the coordinator of the UBIE Youth Delegation to EYE 2020.

 

What is Universal Basic Income?

 

Most social support is given with a number of strings attached: a jobseeker’s allowance, for example, naturally requires that the recipient is looking for a job at the time, and normally stops being given once they succeed in finding one; a child support grant requires the recipient to have a child. The key characteristic of UBI is that it is universal: everybody, without any disqualifying factors, receives it. Secondly, it’s individual: each person is given their own grant, rather than it being distributed on, for instance, a per-household basis. UBIE, who contributed two panellists to the EYE conversation, suggest another aspect: that it’s ‘high enough’, able to cover all basic necessities and guarantee a life of dignity. There are many versions of UBI proposed, with varying cut-off points and varying suggested sources of money, but at its most simple it is a direct cash grant given to everybody, high enough to cover the basic necessities.

 

Person buying pastries
Freedom of choice: one of the great gifts of universal basic income.

 

Why Universal Basic Income?

 

UBI, Hilde Latour argued during the discussion, can ‘completely eradicate poverty, when you introduce it, today.’ Unconditional grants, it is argued, liberate people to turn down exploitative jobs; they can take the time to set up their own businesses; they feel valued and part of their society, and so will invest themselves more in their area, with positive secondary effects for the environment, democracy, crime rates, healthcare, and the economy- a list that is incomplete but still long and impressive. This makes it a ‘horizontal’, pan-societal intervention which drives forward all of the 2030 Sustainable Development Goals at the same time. If the SDGs are going to be achieved, Latour argued, ‘you need a basic income, yesterday.’

On a more philosophical level, a basic income equals freedom of choice. When the basic necessities are guaranteed, everybody will be able to decide more carefully how they would like to spend their time and energy. It will also, Latour suggests, trigger a fundamental re-questioning of the nature of work. When those currently working exploitative jobs are given the ability to walk away from them, the jobs will either become better paid, or will be mechanised in a rapid new period of useful automation. Government will also be dramatically altered. In a contrast with current practices, universal basic income would give people the ability to decide for themselves what they need, and to act directly upon this. Caroline Teti, Africa Director at the non-profit organisation GiveDirectly, approves of this. She argues that this will reduce the paternalistic tendencies of policy-makers and empower those currently excluded from the decision-making process.

 

Has it been tried out? What happened?

 

Teti’s organisation is three years into a twelve-year project running in Kenya. GiveDirectly has been giving regular direct cash transfers to 20,000 people; her conclusion so far is that ‘we should have done it years ago’. Government social support, she notes, is very helpful for recipients, but for a number of reasons not everybody who needs it receives it: in Kenya, only around 20% are able to access state social support. The universal income has had a large impact and should, she says, be rolled out more widely.

In the communities where we give basic income, we have seen people report more peace; dignity; better ability to plan; [and] stability in the family’

Caroline Teti

especially for women, who have been empowered to take decisions impossible without basic income. ‘Basic income basically gives people the opportunity to feel that the world actually cares for them.’

There are many questions, however. UBI experiments conducted around the world have elicited mixed reviews. A review conducted by the Aspen Institute in the USA concluded that UBI was ‘a sub-optimal, and possibly harmful, policy response’ to major challenges. A briefing by a major trade union organisation agrees with this assessment, noting further that in fact all but a handful of the UBI experiments conducted thus far have not truly tested UBI: the income given hasn’t been universal, and recipients were selected due to their high level of poverty. Direct cash transfers can clearly work very well in some settings; some experts, though, suggest that those settings are most likely to be found in the developing world. Teti’s account speaks to the effectiveness of the programme in Kenya, where cash is transferred to a large number of poor villagers with significant benefits. In Finland, by contrast, a two-year project gave a monthly transfer of $560 to 2,000 randomly-selected (but all unemployed) people; they became happier as a result, but the effects were not considered remarkable.

 

Helsinki, Finland
Helsinki, Finland

 

What are the chances of it happening now?

 

As Leire Rincon noted during the discussion, a lot of attention has been given recently to the introduction of an emergency new programme in Spain. She stresses, however, that this, as is often the case, is not a true UBI: it is not universal.

Political will for UBI has historically been lacking. In Finland, the two-year programme was discontinued due to unease on the part of the nation’s taxpayers with the idea of giving people money even when they had no intention of working. In Switzerland, a 2016 referendum rejected the initiative by 77% to 23%. Governments are reluctant to commit a large share of their budget -an International Labour Organisation paper suggested UBI would require 20-30% of GDP- to something whose effects may not be predictable.

Nay-sayers suggest these effects are predictable, and would be unwelcome. Trade unions warn that a UBI supported by taxation of continuing exploitative actions risks missing the main problems, which could be addressed by improving legislation rather than so radically reshaping the whole system. Many suggest that giving out money risks eliminating the financial incentive to work, which could crater economies, and argue that existing policy tools work better.

More research is clearly necessary. In a 2018 study, the 2019 winners of the Nobel Prize in Economics suggested that fears of the effects of reduced financial incentives are hugely overstated. In a survey of 10,000 Americans, Esther Duflo and Abhijit Banerjee found that 49% of participants believed ‘many people’ would stop working if UBI was introduced; only 12%, however, said that they themselves would stop. Duflo and Banerjee argue that the driving motivations of ‘status, dignity, [and] social connections’ would ensure that total work did not decrease.

The EYE panellists decried the various arguments ranged against UBI. Far from trade unions having cause for concern, Antonis Triantafyllakis and Leire Rincon suggested, they would in fact be empowered by their members’ increased freedom to say ‘no’. UBI would further be significantly cheaper than other social policies, not at all the ruinous plan feared by Aspen Institute academics, Hilde Latour proposed. Above all, it would represent a radical reevaluation of society, government, and the nature of work. In a time of Covid-19 and the serious economic disruption that will follow it, Caroline Teti declares, the question of UBI amounts to nothing less than asking ‘will developed countries love [their] people again? Will developed countries care about their people?’ She is not alone: Pope Francis suggested considering its introduction in his Easter letter, in similar terms. It’s a tremendously complex issue, but might have a role to play in the future.

This topic was discussed in the EYE Online session 'Universal Basic Income: urgency or emergency?'. Hosted by Antonis Triantafyllakis, the coordinator of the UBIE Youth Delegation to EYE 2020, the session featured three speakers: Leire Rincon, president of Unconditional Basic Income Europe; Caroline Teti, Africa Director for Recipients Advocacy at GiveDirectly; and Hilde Latour, board member of Dutch BIEN.

 

The European Parliament's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Parliament cannot be held responsible for any use which may be made of the information contained therein.

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