Let’s talk: Universal Basic Income

Universal basic income, citizen’s income, basic income guarantee, universal demogrant… Whichever epithet you designate to it, it’s the same thing: a model to provide all citizens of a state or region with a given sum of month, regardless of their income or employment status. With several countries currently trialling the system, is introducing a universal basic income a progressive solution to society’s problems? Or is it a concept which will sell the world’s workforce short? We hear two sides of the debate…
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06.13.18
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For – Dr. Louise Haagh

I think many people say that basic income is a radical idea and a very new idea; it is new in some of its features, if you think that there is a single payment that goes to everyone without conditions. However it’s not so new when you think about the post-war period, where generous welfare states were devised which entailed transfers to various different groups on different terms. You had welfare people who had tax, you had unemployment insurance at some stage which was a bit more generous than basic income assistance is now, and so on. We’ve had these transfer systems for a very long time, it’s just a case of them being poorly designed. In the last 10-15 years we’ve had a development of sanction systems which can be shown to effectively deter people from public registers; people are coming off registers because they can’t cope with these systems. To put it bluntly, people who need assistance are not getting assistance.

UBI is not a magic bullet, and it won’t sort every problem. It can’t wholly change the labour market, but it can change the labour market for some people for whom it is manifest unjust. The effect of having a little bit of income is that people would start generally feeling more secure in their lives, and that could have an impact with how they negotiate with employers, or how they see their work in a more positive way. There are studies around the world that deal with the psychological effects of security – we know that people become a lot more motivated and positive in their activities when they have some security.

In terms of the welfare state, there’s a big misconception that if you introduce UBI then everything else falls away; that’s not the case, but how that works out is different in different countries, depending on what the welfare state looks now. Most people who are in favour of basic income believe that a realistic scenario is a cost neutral transition, maybe even a gradual roll-out over many years. So you could start looking at age categories, and this could be cheaper in many ways, and maybe administratively cheaper. Or, you could do it in a different way where you could introduce it universally in a short time frame and then we’re talking about conversion.

The current systems that we have, the base of those systems would become universal, but the systems would exist in terms of top-ups. There is such a benefits squeeze because of deregulation – the private sector is costing the public quite a lot of money. This is one of the reasons that the UK, when looking at a cost-neutral UBI scheme, would offer what would be deemed quite a low payment; we’d be looking at around £55 per week, or somewhere in that region. It’s not a lot of money, not much more than people get now – it’s just the difference is the terms in which people would get it.

Against – Dan Gregory

While it may not be unaffordable, a universal basic income would certainly be expensive. So, the merits of the idea need to be weighed up against other pressing government spending priorities such as the NHS, social care, and the environment. Or even better, combined with other priorities. What if we invested in thousands of community solar projects, which delivered an income for all but also contributed to the fight against climate change, as well as building community cohesion? Or what if we guaranteed a basic income to anyone who took care of an elderly relative or another citizen in need? Perhaps a conditional basic income could be more affordable and better value than an unconditional one?

Second, why do rich people need it? This assumes the added benefit of security for all outweighs the savings from a more targeted and nuanced model, which seems uncertain. Some advocates even argue that it needs to be universal in order to drum up enough support for the idea, while at the same time suggesting the money would be taxed back from the wealthy in any case. Surely one or two people might notice?

Third, how would a UBI dovetail with our existing benefits system? UBI would be much simpler and clumsier, ignoring complex needs and circumstances, such as disabilities. If you don’t like Universal Credit, wait until you meet Universal Basic Income! If UBI replaces existing welfare models, then citizens with the most complex challenges are in big trouble. While if it doesn’t, then UBI would be a relative sideshow, as current spending on health, social care, pensions and benefits already account for the majority of government expenditure.

Fourth, shifting responsibility onto government as the default provider of our incomes represents a truly fundamental change in the nature of the state from a safety net to first resort. This may not necessarily be a bad thing but it’s a brave move to advocate for such a fundamental philosophical and political reversal because a few Estonian villagers in a UBI trial reported they were a bit less stressed.

Fifth and linked to this, UBI would further relieve business of its responsibility to provide our incomes through wages. Do we really need more corporate welfare, not less? Aren’t many large private businesses already getting away with taking too little responsibility? Britain’s top five co-operatives, for instance, pay more tax than Amazon, Facebook, Apple, Ebay and Starbucks.

Finally, we should be sceptical of UBI simply because of the hype. Advocating UBI has become a sort of wonk badge of cool. Arguing for UBI shows you are smart and modern enough to understand the future, you can grasp the shape of the coming economy, AI, algorithms, robots taking our jobs, and so on. Yet futurists have been arguing robots would take our jobs for decades and we should be humble enough to admit we don’t really have a clue what’s around the corner. UBI is an idea for folk who take Nesta’s annual predictions about edible wearables and playable dirigibles far too seriously. If politics is showbusiness for ugly people, then UBI is sunglasses for wonks. As with other trendy financial solutionism, like Social Impact Bonds, we should maybe all just take a moment, reflect a bit more calmly on the prospect of UBI and cut the hype. Something for everyone to think about.

 

Dr. Louise Haagh is an associate professor at the University of York and chair of the Basic Income Earth Network (BIEN) – a network of academics and activists interested in the idea of a universal basic income based solely on citizenship and not on work requirement or charity.

Dan Gregory is the director of international and sustainable development at Social Enterprise UK; he’s also an independent advisor under the banner of www.commoncapital.org.uk