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Category: THE SOCIAL DEBATE

  • Only one-in-five hungry Canadians use food banks — what’s broken?

    By Stefan Labbé

    See original post here.

    They were meant to be temporary, a quick fix for people who had fallen on hard times after the 1981 economic recession. 

    But by Christmas 1986, B.C. was home to upwards of 50 food banks, more than any other province. Even then, the head of the Greater Vancouver Food Bank (GVFB) — the province’s largest — was fighting to avoid becoming a permanent institution. 

    “We never imagined that we’d be doing this much or that it would go on this long,” Sylvia Russell, then executive director of the GVFB, told The Montreal Gazette in 1985. “It was to be a temporary thing. Now we’re headed for our fourth winter.”

    A year later, Russell told The Windsor Star she thought the provincial government “would revise its thinking, with the recession starting, about the need for public assistance.”

    What had started in December 1982 as “an idea and six cans of leftover soup” had already evolved into a moral dilemma — feed desperate people now and risk upholding a broken system, or stand by and do nothing.

    Four decades later, food banks have only grown, proliferating as an estimated 5.8 million Canadians face food shortages.

    “We’ve never seen it like this,” said Cynthia Boulter, the current chief operating officer for the GVFB.

    Figures collected by Food Banks Canada in March 2022 showed the number of visits to B.C.’s food banks had already risen 25 per cent over the previous year, higher than Canada’s national average of 15 per cent.

    Between the summers of 2021 and 2022, the GVFB handed out more than 3.6 million kilograms of food, the most on record for a single year. And since then, things have only been ramping up. 

    In the lead-up to Christmas, Boulter said the number of people visiting food banks for the first time skyrocketed. Data obtained from GVFB shows new client visits climbed to nearly a thousand in November alone. That’s 43 per cent higher than the monthly average from the previous fiscal year and the busiest month on record.

    The demand for food banks comes as grocery prices continue to climb and Canadians face yet another cost-of-living crisis. Even as the cost of gas dipped last month, inflation is driving up the price of food at record levels. Over the past year, edible fats and oils had climbed 26 per cent, while coffee, tea and cereal products had jumped almost 17 per cent, according to the latest numbers from Statistics Canada.

    To reach people, Boulter says the organization will be working with over 140 community groups by early 2023, providing food as well as fridge and freezer capacity so they can serve hungry people across the metro region and beyond.

    But while some people might get temporary relief from such programs, many say the model is failing. 

    Data shows food banks not fixing chronic hunger

    Long-term data on how many people are going hungry in Canada is patchy at best. 

    That’s because Statistics Canada has only been measuring food insecurity since 2005. Before that, food bank usage was the main way the country kept tabs on hunger.

    Research has shown most hungry Canadians never use food banks, even as a last resort. By 2016, roughly 100,000 people accessed food banks in B.C. out of over 500,000 people who lived in food-insecure households. 

    “There’s 100 different reasons” people avoid food banks, says Jennifer Black, a University of British Columbia professor who has spent years investigating the institution’s rise in Canada. 

    “Most people will do almost anything to not have to go. They’ll borrow money from friends. They’ll sacrifice things. They’ll sell things. They’ll go into debt.”

    The data shows some interesting patterns for those who use food banks. 

    Analyzing 25 years of data from the Greater Vancouver Food Bank, Black found that between 1992 and 2017, at least 116,963 individuals made over two million visits to the GVFB. Episodic and chronic users made up only nine per cent of the food bank population, but they accounted for 65 per cent of all food bank visits. 

    Her conclusion: “a substantial proportion of food bank resources are providing ongoing food supports beyond what can be considered an acute or emergency context.”

    “It’s like if you went to the emergency room, and you said, ‘I broke my leg,’  and they’re like, ‘Here’s a Band-aid,” she told Glacier Media. 

    In recent years, food banks like the GVFB have worked hard to reduce the stigma around accessing their services while trying to double as an outlet for food deemed unsellable by grocery stores. Food banks have also been among the leading voices calling for an overhaul of government social safety nets.

    Even though an estimated 80 per cent of hungry Canadians don’t access a food bank, much of the language food banks use to appeal to donors pivots around the idea that donations will tackle hunger, says Valerie Tarasuk, a professor at the University of Toronto’s Department of Nutritional Sciences, and head of PROOF, a research group investigating food insecurity in Canada. 

    “That is a myth,” Tarasuk said. “There isn’t anything that I think anybody can document that says that [food banks] tackle this problem. The fact that we’re 40-plus years in, and the problem is bigger than it’s ever been.”

    Hunger can’t be seen in isolation

    Part of the myth around food banks, says Tarasuk, is seeing hunger as an isolated problem. In reality, families cut back on food to afford to keep the heat on, fill their prescriptions or pay rent.

    In B.C., 70 per cent of people who accessed a food bank last fiscal year were renters, and according to Statistics Canada, the province’s rent prices increased by 7.2 per cent over the past year, the most in the country after Prince Edward Island.

    “We talked about this as if it’s a food problem, and the solution is food,” said Tarasuk. “But food is just part of the household budget. It’s it doesn’t get managed in isolation. And for that very reason, it can’t be resolved in isolation.”

    Not getting enough to eat echoes across every part of life. A healthy brain uses roughly 20 per cent of the body’s energy. A student who can’t feed that brain will starve it, leading to everything from depression and anxiety to withdrawal and behavioural problems, research has shown.

    That’s a problem at places like the University of British Columbia, where a student food bank reported in April a nearly 500 per cent increase in visits between 2020 and 2022. 

    A third of people who accessed food banks in Canada last year were children. For them, hunger can set them up for a lifetime of challenges. One study tracking nearly 15,500 Canadian children over 16 years found hunger was independently predictive of teenagers dropping out of high school. Repeated reports of child hunger over time were predictive of early childbearing.

    People’s physical health can also be put at risk. Not having enough food has been linked to higher rates of emergency room visits due to accidents, self-harm and violence. Falls on stairs, poisoning and overexertion were also found to be more likely among the food insecure, according to a 2021 Canadian study. 

    Pandemic reveals another path

    In upending life as we knew it, the COVID-19 pandemic — and governments’ responses to it — offered a window into how public policy appears to have had some quietly profound effects on hunger in Canada.

    Data from the GVFB shows the distribution of food during the first six months of the pandemic plummeted. Experts say the same thing happened at food banks across the country. Part of it was due to people avoiding crowds. But a bigger reason people stayed away, Boulter and Tarasuk said, was because people received pandemic financial support through programs like the Canada Emergency Response Benefit, or CERB. 

    When government pandemic benefits ended, the demand for food banks came rushing back. And as inflation spiralled, the problem only got worse, said Boulter. Between 2019 and 2022, visits to food banks have climbed by 35 per cent across the country, according to Food Banks Canada. 

    By October 2022, one poll reported that more than half of British Columbians said it’s getting harder to feed themselves.

    “We experienced a dip in attendance before things ramped up again,” Boulter said.

    Many food banks have been leading advocates pushing governments to enact policies that would spell their extinction. But Boulter’s experience through the pandemic left her with first-hand evidence — the problem wasn’t a lack of food, she said, but the failure of a government safety net to protect the country’s most vulnerable. 

    Many economists blame broad public spending as one of the drivers of the current inflation crisis. Still, agreed Boulter and four experts interviewed for this story, providing a permanent basic income would largely eliminate the need for food banks.

    “If that happened, we might all be out of jobs. But we’d be happy,” Boulter said. 

    Small spending boosts shown to reduce hunger

    A universal basic income is not the only tool governments have to reduce hunger in Canada.

    The PROOF research group has found that broad increases in minimum wage, increasing income through welfare programs and lowering income tax rates for their poorest citizens were among the most effective policy levers provincial governments have for reducing hunger.

    At the federal level, public old-age pensions have shown an income floor halves the risk of food insecurity once low-income single adults become eligible at 65 years old. The Canada Child Benefit, meanwhile, has been shown to drop the prevalence of severe food insecurity by a third. Bolster those basic social services, and rising hunger rates could be halted and perhaps reversed, research has shown.

    “We could just start with those on social assistance, those with children and those on senior assistance,” said Will Valley, a UBC associate professor and academic director of the school’s Land, Food, & Community program.

    “In food systems, there are no silver bullets. But this one is pretty close.”

    Despite the data showing food banks are not serving most Canadians facing hunger, governments continue to give money to such organizations. 

    A 2021 charitable tax return from Food Banks British Columbia showed governments provided $3.12 million to the organization, nearly 20 per cent of its revenue. At $36 million, almost 39 per cent of Food Bank Canada’s total revenue came from government sources, tax returns show.

    Breaking the myth

    Five days before Christmas this year, Prime Minister Justin Trudeau visited a food bank in Montreal, writing on social media, “they’re making a real difference.”

    Politicians visiting food banks during the holidays and holding them up as a solution is nothing new. By relying on corporate and individual donations, food banks have come to hold “a lot of power in our collected imaginations,” said Valley.

    Part of that power comes from deep religious and humanitarian imperatives to feed hungry people, something that tends to peak around the holiday season in countries like Canada, says Graham Riches, a professor emeritus of social work at UBC, who has written several books on food banks.

    “Canadians are a compassionate, caring group,” added Tarabuk. “But the problem is that it’s completely misplaced… it doesn’t change the problem, and the problem is big.”

    Riches says events like CBC Vancouver’s annual food bank donation drive, which raised nearly $3 million in 2021 and almost $2.6 million so far this year, have also helped normalize food banks.

    “[CBC] is public media. When it endorses food banks in the way that it does, it actually feeds into this whole argument that if you give to food banks, you’re going to be solving world hunger when there’s no evidence to support this at all,” said Riches.

    “In fact, it just maintains a very unequal system of social welfare.”

    But by putting so much effort into raising money for food banks, critics say they have offered governments political cover to ignore the real problem affecting many long-term clients — persistent poverty.

    “What’s evident and clear is we’ve painted ourselves into a corner,” Valley said. 

    However, Boulter pushed back against claims that food banks are acting as a crutch for government inaction. Until governments can figure out a better solution, she said their clients tell them food banks provide a vital lifeline to get through hard times. 

    The GVFB does not allow the press to interview its clients, but its data suggests many use the food bank as a stop-gap during tough transition periods. Last fiscal year, 29 per cent of GVFB users had relocated internationally, and 18 per cent were experiencing student poverty.

    A breaking point?

    As demand has increased, the GVFB has faced shortages in volunteers and storage space. Boulter says its leadership is starting to discuss how much further it can expand before it reaches a breaking point.

    At the same time, she says the province’s largest food bank is increasingly expanding its footprint across B.C., delivering food to the Interior and up and down the east coast of Vancouver Island. 

    In November 2021, the group distributed over 6,350 kilograms of fresh food and toilet paper by helicopter to the Fraser Valley after floods decimated the region. 

    When asked how she sees the GVFB evolving to confront hunger in the coming decades — when floods and wildfires are expected to worsen — Boulter says the group is so busy with current demand that it hasn’t had time to look beyond a three-year window. 

    But others are worried an increased reliance on food charities comes at a crucial moment, as climate change threatens to destabilize agriculture and the food systems it supports.

    “We’ve been in a period of stability,” said Valley. “2021 gave us a little glimpse of what we can see in the future. Two highways go out, and suddenly we have our transportation networks cut out.” 

    “These sorts of things are going to happen again. Now is the time to plan.” 

    Extreme food measures should be on the table, says expert

    Riches, who is now in talks with the community of Qualicum Beach, where he lives, says governments are only slowly becoming aware of a potential food crisis. 

    “We’ve got food banks; we’ve got this sort of emergency service organization,” he said. “But really, the question is much broader than that.”

    Wheat, for example, is the most-consumed crop in the world and most often eaten in more affluent countries. One recent study found that rising temperatures are responsible for a long-term reduction in crop growth rates in many European countries. Others have found that even a one-degree Celsius increase in temperature could reduce global wheat productivity by up to 6.4 per cent.

    Such downturns in crop production could seriously impact Canada, a major wheat producer, but many Canadians also rely on the import of fresh food for much of the year.

    “We’re at the 11th hour,” Kent Mullinix, director of Kwantlen Polytechnic University’s Institute for Sustainable Food Systems, told Glacier Media earlier this year. “We have been so remiss in curtailing (greenhouse gas) emissions; it is inevitable that many of these major food production areas worldwide, including California, will face significant collapse.

    “California might not even be able to rely on California.”

    Mullinix has been a leading advocate for lowering barriers so a new generation of sustainable farmers can boost B.C.’s ability to feed itself. Boulter says the GVFB, like many across the province, is increasingly working with local farmers to use surplus crops before they go to waste.

    Local production still has a long way to go. Even in places like Vancouver Island, where regional food networks have blossomed in recent years, less than 10 per cent of the region’s food is produced locally compared to 85 per cent 50 years ago, according to the Capital Region Food and Agriculture Initiatives Roundtable.

    Riches says B.C. and federal governments need to start planning for the worst, should food production dry up or costs continue to spiral. One option he says governments need to start planning for is food rationing, similar to what was deployed during the Second World War.

    “It’s not something that you just pull off the shelf; it actually has to be done before,” Riches said.

    Valley cautions some policymakers are already falling for a misguided diagnosis of the problem. By getting too caught up in how climate change will affect food supply, they are missing a crisis already affecting millions of Canadians a year, he said.

    “Predictable rainfall patterns, political stability, transportation networks — climate change is going to disrupt all that,” said Valley. “But it’s not just about growing more food.

    “We have one dominant way of getting food in our society, and that’s buying it. Those who don’t have cash don’t have food.”

    This post was originally published on Basic Income Today.

  • Scottish independence could see Universal Basic Income introduced, Scottish Greens say

    By Chris Jarvis

    See original post here.

    Independence would allow Scotland to ‘reverse Tory cuts and austerity’, and introduce a Universal Basic Income that would ‘offer security and dignity’, the Scottish Green Party has claimed. The Scottish Greens’ social security spokesperson, Maggie Chapman MSP, has said that independence would enable to build a ‘positive vision’ for the welfare system, with ‘care and compassion at its heart’.

    Chapman’s comments came following the launch of the newest paper in the Scottish Government’s Building a New Scotland series – Social Security in an independent Scotland.

    Chapman said: “The cruel attack on what was left of the social security system is one of the most shameful legacies of this Tory government. They have decimated an already fragile system and knowingly and purposely punished some of the most vulnerable people in our society.

    “We have tried to do things differently in Scotland, with the child payment and the mitigation of the cruel benefit cap and the bedroom tax. But we shouldn’t just be offsetting Tory cuts. With independence we can build a far fairer and better country where people are born into better opportunities and can age with security and stability.

    “Independence would allow us to ensure a real living wage for all and introduce a Universal Basic Income. This would allow everyone to live with dignity and remove so much of the stigma and anxiety that comes from poverty and the current benefits system.

    “The cost of living crisis – or cost of greed crisis – that we are living through was not created overnight. It is the result of years of failure and an uncaring approach to politics that puts the needs of a small wealthy few ahead of the wellbeing of millions of people.

    “Labour is offering more of the same, and is barely proposing to do anything different. They would even keep the two child benefit cap. We can do better than more years of brutal austerity and pain delivered with a red rosette.

    “With independence we can build a far more equal society that treats people with respect and humanity.”

    This post was originally published on Basic Income Today.

  • The Shrunken Safety Net Could Help Explain Bad Feelings About Economy

    By Arthur Delaney

    See original post here.

    WASHINGTON ― There’s a raging political debate about why voters hate the economy despite low unemployment, rising wages, slowing inflation and strong consumer spending.

    Are people brainwashed by TikTok? Is it partisan misinformation, or maybe too much gloomy journalism? Did no one notice the plummeting cost of a dozen eggs? These are the questions vexing the White House as President Joe Biden’s poll numbers slump ahead of the 2024 election.

    There’s another possible reason for the bitter views of the economy, a policy explanation hiding in plain sight: Some people’s lives are harder now than they were three years ago because the government is doing less.

    Starting in 2020, the federal government vastly expanded social programs, paused student loan payments and put a moratorium on evictions. But these initiatives were temporary, and as the COVID-19 pandemic subsided, the government pulled those benefits back.

    Median household income saw a substantial decline last year, the Census Bureau reported in September ― partly because of inflation, but also “due in part to the expiration of policies introduced in response to the COVID-19 pandemic.”

    One example: Congress created a monthly child benefit that paid parents as much as $300 per kid in the second half of 2021, dramatically reducing material hardship for millions of families. When the benefit expired at the beginning of 2022 ― primarily due to opposition from Sen. Joe Manchin (D-W.Va.) ― the child poverty rate shot from 5.2% to 12.4%, the fastest year-over-year increase in modern American history.

    It’s possible the several million families who went through that dramatic change of economic circumstances did not enjoy the experience. In one survey last year, a third of parents said they reduced their spending on food as a result of the lapse in benefits.

    This year, the government pared back a pandemic increase to food assistance, cutting monthly Supplemental Nutrition Assistance Program benefits to 16 million households by $82 per person. More than 11 million Americans have been disenrolled from Medicaid, student borrowers were required to resume paying off their loans, and extra federal funding for child care programs has just lapsed.

    Most of these pandemic policies expired automatically, without much partisan conflict, which might have reduced the amount of attention they received.

    “Classically, we understand the idea that people don’t like it when programs get cut back, but people are somewhat blind to that right now, perhaps because they don’t think of these as programs that were cut back but rather as temporary programs that ran their course,” said Matt Bruenig, director of the People’s Policy Project, a left-wing think tank.

    Bruenig’s research suggests that inflation-adjusted incomes declined for 58% of Americans last year, after having risen for a similar percentage in 2020.

    The White House has touted the success of “Bidenomics,” pointing to overall economic growth, low unemployment and wage increases outpacing inflation.

    Asked to respond to a viral TikTok video from Mackenzie Moan, a working mom who tearfully explained that she and her husband have good jobs but are still living paycheck to paycheck, White House economic adviser Jared Bernstein suggested Moan might not know about some of the administration’s policy accomplishments.

    “If you actually asked somebody like that… what do they think of the fact that we’ve kept insulin prices at $35 a month?” Bernstein said on Fox News Sunday last month. “What about giving Medicare the power to negotiate lower drug prices? What about tax incentives for manufacturing jobs? What about capping out-of-pocket prescription drug costs?”

    Bernstein noted that the recently enacted insulin price cap polls very well, as do the limits on prescription drug costs poll. Those policies, however, targeted older Americans enrolled in Medicare. They were part of the Inflation Reduction Act, the law Democrats passed last year that included green energy subsidies and funding for the IRS, but not an extension of the child tax credit payments that benefited families in 2021. That policy would have greatly expanded the $100 or $200 in disposable income that Moan said she and her husband have left over after bills each month.

    The University of Michigan’s index of consumer sentiment has been stuck at levels not seen since the Great Recession and its aftermath, when unemployment was almost three times higher than it is now. It’s possible that collectively speaking, any good feelings from expanded social welfare programs are offset by bad feelings from consumers who dislike government spending and debt. (Just like good feelings from slowing inflation have been partially offset by bad feelings about high interest rates.)

    “The expansion of fiscal policy probably doesn’t have a huge impact on sentiment,” Joanne Hsu, director of the surveys of consumers at the University of Michigan, told HuffPost.

    Stimulus checks were probably the most popular fiscal policy Congress enacted in response to the pandemic. Lawmakers sent almost everyone in America three rounds of checks in 2020 and 2021, totaling $800 billion, seemingly prompting consumers to give the government higher marks for economic policy in the University of Michigan’s surveys.

    Congress also boosted unemployment insurance, temporarily remaking a rickety federal-state scheme into the wage-replacement program of Democrats’ dreams, at a cost of nearly $700 billion. And Democrats had hoped to make their child benefit permanent, in what was supposed to be a new compact between families and the government on the scale of Social Security retirement insurance. But they fell short of that goal by one Senate vote, the program expired after six months, and voters could be poised to put Republicans back in charge of the upper chamber next year.

    It’s possible the pandemic policy experiments disappointed voters, since they saw how easy it is for Washington to make structural changes to the economy, improving life for Americans, only for lawmakers to abandon the project and revert to the status quo.

    But maybe voters don’t think like that. The way Hsu sees it, people are more nostalgic for the pre-pandemic economy than they are for the government benefits of the pandemic era.

    “We’re all in this collective sense of grief that we’re not going back to 2019,” Hsu said.

    This post was originally published on Basic Income Today.

  • Are young people poised to slam the brake on endless economic growth?

    By Phillip Inman and Jem Bartholomew

    See original post here.

    When Kat Butler made her first post-lockdown trip to the high street in 2021, she found herself staring, disorientated, at the aisles of clothes in the Perth branch of Mountain Warehouse. “There was just rails and rails of stuff,” she says.

    Before the pandemic, Butler, 36, a freelance graphic designer, had enjoyed browsing clothes shops, touching the fabrics and inspecting garments’ construction. But when she returned after the lockdown months, she was “just overwhelmed by the amount of stuff”.

    That sent Butler’s mind spinning into worries about the environmental impact of those unending hangers of garments, and led her to re-evaluate her consumption habits.

    She is not the only person to have started questioning the idea of shopping as a leisure pursuit. Plenty of consumers report remonstrating with themselves and their friends about the state of the planet, and how that collides with their desire to freshen up their wardrobe with fast fashion and £5 dresses.

    With the Christmas shopping season entering its peak, this soul-searching has raised several questions. Is a growing slice of western society finally falling out of love with consumption and growth as an end in itself? And if this phenomenon, described at its most extreme as “degrowth”, is taking hold, how will economies meet their spending needs? Or is it just that surging inflation and a cost of living crisis have placed a speed bump in the way of ever more consumption?

    Make Do and Mend

    Online retailers including Amazon and eBay have reported surging sales of secondhand clothes, and the arts and crafts industry, which boomed during the pandemic, is expected to carry on growing for the rest of the decade as people prefer to make stuff rather than buy it new.

    In a survey by management consultancy McKinsey in 2020, two-thirds of consumers said they wanted to turn their backs on fast fashion, believing that limiting climate change was even more important following Covid. The survey was commissioned to accompany a report on the fashion industry with a focus on the UK, which is Europe’s biggest consumer of fashion.

    Clothing accounts for between 3% and 10% of global carbon emissions, depending on how the industry’s output is measured. As such, it has become totemic among the growing number of experts and consumers who want the capitalist merry-go-round to slow or even stop.

    More broadly, in a YouGov survey in August this year, 46% of respondents said environmental sustainability had affected their general household purchases a “fair amount,” up from 41% of those surveyed in August 2019. Among 18-24s the change was starker, rising from 38% to 46% over the same period. (However, people saying it affected spending to a “large extent” fell from 18% to 15%.)

    Young people are also less likely to drive a car, citing environmental concerns and cost. They are also more likely to have fewer or no children for the same reason, according to a survey carried out in August in Britain, Denmark, France, Germany, Italy, Spain and Sweden.

    Meanwhile, people are still facing severe financial struggles, with 1.8m UK households – almost 3.8 million people – reporting having suffered destitution at some point in 2022, according to the Joseph Rowntree Foundation. A KPMG survey found that two-thirds of UK consumers planned to cut discretionary spending this year.

    Growth at All Costs?

    The terms degrowth and post-growth are used increasingly to popularise the idea that in the 21st century, capitalism is no longer the best allocator of scarce resources.

    Supporters of mixed-economy capitalism – where private and state capital investments allow for higher standards of living and greater consumption – say this provides the money for everything from indoor plumbing to new railways.

    However, critics argue that in rich countries, where most basic needs have already been met, it encourages us to buy all kinds of things we do not need and speeds us towards climate catastrophe.

    We’re trying to convince ourselves we can kickstart growth without a debate about what needs to be done

    Tim Jackson, economist

    The Austrian-French social philosopher André Gorz is widely credited with having coined the term degrowth in 1972, although it did not start to take off as a movement until the early 2000s.

    Prof Tim Jackson, an ecological economist, says that as western governments run out of financial lifelines, they are “stumbling into a post-growth world without having a clue how to manage it”. Jackson has run the Centre for the Understanding of Sustainable Prosperity since 2016. An early adopter of degrowth, he wrote a report for the last Labour government on how to retool the economy for a changing climate. This led to his 2009 book, Prosperity without Growth, which was followed in 2021 by Post Growth – Life After Capitalism.

    “We are trying to convince ourselves that we can kickstart growth again without having a transparent debate about what needs to be done,” he says.

    Two events last month make his point. In Jeremy Hunt’s autumn statement, the UK chancellor glossed over a £20bn shortfall in spending on public services to free up £9bn for corporate tax cuts and £4.5bn of business subsidies, which officials hope will be spent on, among other things, greening the car industry.

    A week earlier the German constitutional court had overruled the government’s plan to use special “off-balance-sheet” vehicles to circumvent strict rules constraining the annual budget. As a result, billions of euros’ worth of green projects are expected to be cancelled.

    Local Not National

    Jackson says the momentum behind climate activism suffered a knock during the pandemic, but is recovering. More recently, a lively debate about whether the standard measure of an economy’s health – gross domestic product (GDP) – needs replacing has surprised him.

    “The critique of GDP has had more traction than I would have expected,” he says. “You can see how people have come to understand that the gains from GDP growth don’t trickle down.”

    Like most post-growth theorists, Jackson says the levels of inequality tolerated in rich countries and the consumption habits of the better-off must be questioned as part of an overhaul of 21st-century capitalism.

    Degrowth theories take a socialistic view, stating that people want to contribute to the betterment of human society and will be better able to do that if governments offer access to a job, a basic income and universal healthcare.

    Doughnut economics create a space for a conversation beyond party politics

    Leonora Grcheva

    Urban planner Leonora Grcheva is one of a small group of experts working for the Doughnut Economics Action Lab. Now adopted by towns and cities across Europe, doughnut economics involves calculating the impact of all policies on the social and physical environment. Aspects of life from income to housing and energy are displayed as sections on a doughnut shape, with its inner and outer edges representing a social minimum and an ecological ceiling. Finding a balance between the two is vital to ensuring wellbeing for both people and the planet.

    Britain is a laggard on doughnut policies compared with many European countries, but Grcheva says a growing number of local authorities are using a dashboard – or in Cornwall council’s case, a doughnut-like decision wheel – to judge the impact of what they do.

    She says the main barrier to action in the UK is the highly centralised state, which can overrule almost all local plans. Nevertheless, several community groups have joined the project to discuss investments they can make to improve the local environment.

    “One of the beautiful things about doughnut economics is that it creates the space for a conversation beyond party politics,” says Grcheva.

    This was the experience of the citizen assemblies commissioned in 2020 by the IPPR thinktank, and established in four corners of the UK. Tees Valley, which is overseen by Tory mayor Ben Houchen, was a participant, as were Thurrock – a Tory heartland in Essex – and the more left-leaning south Wales valleys and Aberdeen. The assemblies came to very similar conclusions about the need for more community-led development.

    The Netherlands, however, is far more advanced. In spring 2020, officials in Amsterdam began to apply doughnut economics to housebuilding for a post-Covid world. Marieke van Doorninck, then the city’s deputy mayor, said the city would pass regulations obliging builders to use recycled and bio-based materials, such as wood.

    Back to the Stone Age?

    Proponents of post-growth policies say they are not a recipe for inaction, or a return to a horse-and-cart, pre-industrial age; rather they are a means of redirecting resources into investments that result in people living happier, more sustainable lives.

    But pro-growth economists argue that carbon emissions can be brought down even while satisfying consumer demands for greater air travel, fancier homes and new cars.

    Paul Krugman, the US Nobel prize-winning economist, is in this camp, telling degrowthers this summer that their arguments are “all wrong”. “There is no necessary relationship between economic growth and the burden we place on the environment,” Krugman wrote in the New York Times. “It’s true that the Industrial Revolution greatly increased pollution of all kinds, and countries like India that are still in the early phases of their own economic development are by and large paying a large environmental price.

    “But at higher levels of development, delinking growth from environmental impact isn’t just possible in principle but something that happens a lot in practice.”

    Shadow chancellor Rachel Reeves also prioritises economic growth, focusing on green jobs and lower emissions, but putting little emphasis on curbing voters’ consumption habits. Rishi Sunak listed growing the economy as one of his five priorities in January.

    But Jason Hickel, whose 2020 book, Less Is More: How Degrowth Will Save the World, has received many plaudits, says there is an observable shift in the academic community towards theories of a post-growth world.

    Academics in favour of degrowth argue that we need to tackle excessive consumption at its root rather than attempting to reduce its environmental impact. They dispute plans put forward by the UK Labour party, Germany’s SPD and the Democrats in the US that growth can be green.

    A survey of 789 climate policy researchers by Nature magazine revealed widespread scepticism in high-income countries about the idea that as national income rises, “environmental goals prevail over economic growth”. A majority believed green growth amounted to greenwashing. However, in a separate survey, scientists in medium- and low-income countries saw green growth as a way out of poverty.

    Surveys in Germany and the US have shown citizens questioning the relentless pursuit of material wealth. Earlier this year the German environment agency found 88% agreed with the statement “we must find ways of living well regardless of economic growth”, with 77% agreeing that “there are natural limits to growth and we went beyond them”. Most tellingly, 73% agreed that “we should be ready to reduce our living standards”.

    Hickel says the term degrowth has negative connotations, so should only be used in academic circles. He suggests focusing on the benefits of community decision making, and the benefits for human health and wellbeing. His answer would be more citizens’ assemblies, which he trusts to arrive at commonly agreed solutions to local issues. On the climate, as was found with the IPPR experiment, most such groups end up agreeing solutions to local energy, education and health needs that minimise private sector involvement.

    Storage Boom

    Yet for all the signs that the consumer bubble may be deflating, other indicators suggest people are as keen as ever on accumulating stuff. Take the self-storage industry, which has grown into a £1bn turnover business after growing by more than 7% a year since 2010.

    Or there’s that totem of rampant consumerism the SUV, which grabbed more than 50% of new car sales in Europe in the first half of 2023, according to Dataforce. Yet they are heavier, less aerodynamic and thirstier than the saloons and hatchbacks they replaced. And though young people say they want to cut car use, they are much less willing to reduce their flying.

    There is also a concern that degrowth suits the times and that things will change if the economic climate improves. In Perth, Butler thinks the change is permanent. She now shops on secondhand sites such as Vinted and eBay, or in charity shops, which is more exciting, she said. “It’s like an Aladdin’s cave: I don’t know what I’m going to find there.”

    She has switched away from products that come in plastic, opting to buy greener soap, toothpaste and hair and facial care products. Her only new items now are underwear.

    Butler has also taken to upcycling, building a house for her cat, Gaia, from cardboard boxes, with rooftop cat-scratchers designed to look like solar panels. “You don’t need to buy all these pet toys and beds and stuff from China that are just made from acrylic,” she says.

    This post was originally published on Basic Income Today.

  • UBI and a four-day week: ‘We should re-order how we work and live’

    By Jack Sargeant

    See original post here.

    At the start of the pandemic, I wrote a piece about a four-day week and a universal basic income (UBI). I highlighted the huge changes that were coming because of AI and the need to go carbon neutral. These are not changes we can debate as they are happening anyway. The point I made is we can manage them in the interests of working people.

    Change must put the needs of working people at its heart

    Our economy and our workplaces are changing at breakneck speed, and we must be ahead of this and make the transition a just one.  We know what happens if we allow change to happen without thinking of the impact on working people. Communities like mine still bear the scars of deindustrialisation in the 1980s.

    I want us to lead the way in Wales and carry out trails to assess how these policies could be part of the solution to protect living standards at a time of huge change.  Of course, since I wrote the piece the Welsh government have launched a basic income trial.  I was proud to have played my part in campaigning to secure that trial.

    Increasing recognition of the importance of a shorter working week

    Recently we saw an intervention from Barack Obama in this debate. He used a speech on economic justice to talk about the way technology could replace “blue and white collar” jobs. He went on to say that we may need to consider a UBI and a shorter working week.

    As I write, workplaces across Wales including the Senedd are discussing how they will utilise powerful new AI tools. We cannot wait to have the conversation about living standards. 

    This is something all levels of government must be acutely aware of. In Wales we have a social partnership approach and trade unions should be involved in every step of these discussions. We have to however listen when senior figures like Obama speak. Let’s be ready.

    We cannot put off this conversation

    I know UK government failings mean we face huge budgetary challenges but the conversation on a four-day week trail just cannot wait. The Senedd Petitions Committee produced a report supporting a trial and the Welsh government have taken the issue to the Workforce Council and we await the outcome of that. 

    We know that change is coming, and workers need support in retraining and the space to do it. A UBI and a four-day week as the former president said could give people the space to do this.

    We need bold solutions

    Too often in the UK we are buffeted by change and are far too slow to react. We suffer because our politics is so adversarial it allows no space to discuss the big changes that our coming and those who do discuss them are dismissed. 

    We take the view that because things are as they are now, they will always be. This of course is not the case. We just must be bold enough to seek solutions rather than using every issue as a way of criticising our opponents.

    The future is coming whether we like it or not so let’s be ready and use technology to improve our living standards, not undermine them. 

    This post was originally published on Basic Income Today.

  • The success of the expanded child tax credit shows why anti-poverty programs should be unconditional

    By Oshan Jarow

    See original post here.

    Since 1975, politicians have built huge portions of the American safety net — like the child tax credit (CTC) — around the idea that excluding the poorest Americans from government assistance will motivate them to climb out of deep poverty on their own and get a job.

    This long-standing bipartisan consensus is manifest in the twin ideas of work and income requirements. Work requirements are simple: You either have a job or you don’t, and that binary is what determines whether you’re eligible for a handful of welfare programs.

    Income requirements are a little wonkier. They stipulate that anyone without any income will receive no benefits. Only after earned income surpasses a specified level do benefits begin kicking in — which is where we get another dry name: “phase-ins.”

    In practice, benefitting from programs with income requirements is conditional on already having a job. If you’re unemployed and have no other income, you’re out of luck. In the CTC, phase-ins exclude some 19 million children whose parents don’t have enough income to meet the requirement for receiving the full benefit, while the US retains some of the highest child poverty and mortality rates among peer countries.

    The consensus excluding the poorest Americans from some forms of government assistance through phase-ins held until President Joe Biden’s 2021 American Rescue Plan. Its anti-poverty centerpiece was to cut phase-ins from the existing CTC and crank up the payment, creating what’s known as the expanded CTC.

    The results were historic. Over the course of 2021, child poverty was cut nearly in half, and the long-running fear at the heart of the American welfare system — that unconditional aid would discourage work — never came to pass.

    Then, to the dismay of advocates and recipients alike, Sen. Joe Manchin (D-WV) blocked the Democratic Party’s effort to make the expansion permanent, fearing, among other familiar concerns like the cost, that recipients would just buy drugs (the data shows that recipients spent the money on food, clothes, utilities, rent, and education). Come 2022, phase-ins returned to the CTC, approximately 3.7 million children were immediately thrust back into poverty in January, and the rest of the year saw the sharpest rise in the history of recorded child poverty rates.

    Phase-ins have long had critics across the political aisle, but their arguments have generally been grounded in small-scale pilot experiments, appeals to morality, or even philosophizing about human nature. Now that we have real-world evidence from a nationwide, year-long experiment, the expanded CTC’s success should ignite efforts to roll back phase-ins across the board. That also means cutting them from the CTC’s sister program, the earned income tax credit (EITC), which phases in as a supplement to wages for low-income Americans and helps about 31 million Americans.

    The expanded CTC is estimated to have reduced child poverty rates anywhere from 29 percent to 43 percent, with the vast majority of that drop attributable to removing phase-ins. Extending that success to include the EITC would cut child poverty by an estimated 64 percent.

    Child poverty rates in the US rarely budge more than 1 or 2 percent per year, making any of these approaches a pretty big deal. And even so, they still fall well short of eliminating child poverty outright, which should be the policy objective. Poverty, as the Atlantic’s Derek Thompson wrote in 2018, is a “slow-motion trauma” presently being inflicted on 9 million American children. But cutting phase-ins across both programs would establish a powerful channel for dialing down an avoidable source of trauma, should this new evidence shift the political winds.

    “I’ve been grappling with the long arc of the work,” said Aisha Nyandoro, creator of America’s longest-running guaranteed income program, the Magnolia Mother’s Trust. “The time that it actually takes to shift narratives and perspectives. How do you couple that with the immediate urgency for change, when you know individuals are the ones suffering? How do you hold the urgency of now, while also pushing for the long arc of the work?”

    We could start by eliminating phase-ins for good.

    A brief history of phase-ins

    Through the 1960s and early ’70s, just about everyone agreed that the welfare system wasn’t working as it should. The number of recipients tripled within a decade as racial segregation began to ease, stoking a racist backlash against welfare dollars that could, opponents argued, deter Black mothers from the kind of labor — maids, nannies, agricultural work — that was expected of them.

    At the same time, left-wing organizers — particularly from the “welfare rights movement” — thought too many people were still left out. They sought to expand eligibility by flooding the system with new recipients until deep reform was necessary. Though that appetite for reform was widely shared, the vision for what would come next forked sharply in two different directions.

    Left-wing organizers and President Richard Nixon alike wanted guaranteed income-style programs, where anyone in poverty would receive full benefits, no matter their employment status or income.

    Critics like Sen. Russell Long, a Democrat from Louisiana and chairman of the Senate Finance Committee, feared that giving full benefits to people without a job or other income would reward idleness instead of work. Instead, he proposed a “work bonus” plan that passed as the EITC in 1975, the first program to exclude the poorest Americans from government assistance by phasing in benefits alongside earned income. In other words, phase-ins were born.

    Since their inception, the purpose of phase-ins was never to directly reduce poverty. Instead, as a 1975 Finance Committee report stated, their “most significant objective” was “encouraging people to obtain employment, reducing the unemployment rate and reducing the welfare rolls.”

    The following year, Ronald Reagan’s presidential campaign swept this anti-welfare logic into the political mainstream. Through campaign rhetoric that focused on now-debunked ideas like “welfare queens” and baseless claims of widespread welfare fraud, he burned the fear of welfare dependency into the national consciousness.

    Despite the lack of evidence of fraud, the sentiment took root, to the point that Democratic President Bill Clinton enacted welfare reforms in 1996 that sought to “end welfare as we know it” by introducing a series of work requirements to receive benefits. The American safety net, in other words, had been remade around the logic of phase-ins.

    Phase-ins, explained

    So how do phase-ins work, exactly? Phase-ins adjust benefit levels based on income, which is determined through tax filing. Accordingly, the benefits are disbursed as an annual tax credit (with the exception of a portion of the expanded CTC benefit).

    While work requirements apply to government programs like SNAP and Medicaid, phase-ins apply to tax credits like the CTC and EITC, which together comprised over $160 billion in federal anti-poverty spending in 2020.

    If you’re a visual person, think of phase-ins as the left-hand slope of a trapezoid. (“Trapezoidal programs” are what policy wonks call programs that both phase in as income rises and phase out as income surpasses an upper threshold.) For example, here’s the trapezoid for a household with one child receiving the federal EITC:

    At zero dollars of income, there are zero dollars in benefits. Then, as earned income rises, benefits phase in on an upward slope, until reaching a maximum amount. Then, after a plateau, the benefits begin phasing out to avoid giving money to people who don’t need it.

    Getting rid of phase-ins would mean starting the maximum benefit right at zero dollars of earned income. Since the expiration of the federal expanded CTC, 11 states have passed smaller versions of the program without phase-ins, like Vermont.

    See the difference? If you’re a parent making $0 in income in Vermont, you get the full state CTC ($1,000 per child under 6) — as opposed to the $0 you would get from the phased-in federal CTC.

    By design, phase-ins are very good at reducing the welfare rolls by excluding millions in deep poverty from receiving benefits. The logic of phase-ins assumes that kicking someone off welfare will lead them back to work. That isn’t always the case, nor should it be. The majority of non-workers who benefit from welfare are “people who cannot or should not be working,” writes Matt Bruenig, founder of the People’s Policy Project think tank. They include children, students, caregivers, the elderly, and those with disabilities, who together made up roughly 86 percent of non-workers in 2017. Forcing these groups into the labor market often looks like a policy failure, not success.

    Even if we grant, for the sake of argument, that using phase-ins to incentivize work is a good idea, the evidence that it actually raises employment is shaky, and growing more so. The strongest argument in favor rested on a rise in employment following the 1993 EITC expansion. But a recent paper by Princeton economist Henrik Kleven argues that, actually, the EITC isn’t what increased employment at all.

    “The evidence [supporting phase-ins] is really based on this one expansion of the EITC that coincided with a very hot economy, welfare reform, skyrocketing incarceration rates, and changing cultural attitudes about women’s work,” said Jack Landry, a research associate at the Jain Family Institute (JFI), a nonpartisan applied research organization that focuses on guaranteed income. “There isn’t another piece of evidence to go to for this.”

    The matter remains unsettled among economists, who are still trading blows, trying to hone in on exactly how many — if any — single mothers the EITC might’ve pushed into work in 1993. This debate occurs against the backdrop of the literature on unconditional transfers at large, which finds no significant employment effects.

    What is not contested is the huge anti-poverty effect of dropping phase-ins, at least in the short term. Maybe an extra $300 per month empowers a few mothers on the margin to work an hour or two less per week, and maybe 10 years down the line, we’d see behavioral responses that don’t show up in the program’s first year — is that “risk” worth rejecting a policy design that can cut child poverty by up to 64 percent today?

    Dropping phase-ins was almost solely responsible for the expanded CTC’s dramatic success

    When Congress passed the expanded CTC in 2021, it made a number of tweaks in addition to dropping phase-ins, like including 17-year-olds and making half of the benefit available as monthly payments. And it made one other big change: raising the max annual benefit from $2,000 per child to between $3,000 and $3,600, depending on the child’s age.

    You might suspect that increasing the payment by at least 50 percent played a significant role in the extra poverty reduction. But as it turns out, it didn’t. Independent reports from both JFI and the Center on Budget and Policy Priorities (CBPP) have found that the boosted impact of the expanded CTC was almost entirely driven by the absence of phase-ins.

    The CBPP report estimated that if the temporary expansion were made permanent, it would lift 4.1 million children above the poverty line in one go. Of those 4.1 million, raising the payment level would account for 543,000 children; the remaining 3.6 million children lifted from poverty would come thanks to the absence of phase-ins.

    JFI’s report goes into more detail about the relative contributions of each possible tweak to the CTC. It compares not only the anti-poverty implications of eliminating phase-ins and raising benefit levels relative to the original CTC, but also the costs of each.

    The JFI report found that if you were to keep the bigger check and bring back the phase-ins, child poverty would only drop by 7 percent, and deep child poverty by just 2 percent — all for an extra cost of $45 billion per year.

    If you flip it, though — if you get rid of the phase-ins but let the max benefit drop back to $2,000 — you still get a 19 percent drop in overall child poverty and a 32 percent drop in deep child poverty, all for a comparatively modest $17 billion.

    In other words, cutting phase-ins is more than twice as effective at reducing poverty compared to increasing the benefit amount, and costs less than half as much.

    Another 2021 JFI report estimated that if you were to keep the benefit at $3,600 but let the phase-ins return, child poverty would increase by 53 percent, driven by all the recipients who would no longer be eligible because they don’t earn enough to qualify. When the Census Bureau released its poverty statistics for 2022, the first full year without the expanded CTC, the JFI estimate looked, if anything, modest. After policymakers let the expanded CTC expire, bringing back phase-ins and lowering the max payment, child poverty rose by 139 percent, the sharpest increase ever recorded.

    Landry, a co-author on both JFI reports, explained that cutting phase-ins is so much more effective because the poverty rate is held down by precisely those who phase-ins exclude.

    “And it’s not just about parents who aren’t in the workforce. It’s also about parents who have some earnings, but don’t have enough earnings to qualify for that full CTC,” he said. “Increasing the benefit amount doesn’t help them because they’re still on the phase-in.”

    So why do some analysts still argue for phase-ins?

    In late 2021, when the extended CTC was up for renewal, 448 economists signed an open letter supporting the program. But a small, vocal group of experts is still concerned that an expanded CTC and similar programs could discourage work, a narrative that continues to have significant influence in Washington.

    A few weeks before the expanded CTC was set to expire, amid calls to make the program permanent, Scott Winship, director of poverty studies at the American Enterprise Institute, made the case against removing phase-ins in the New York Times. The crux: that short-term benefits would be overshadowed by long-term consequences. “Giving the same amount to parents regardless of whether they work will cause some parents to stop working,” Winship argued, resulting in a long-term drop in employment that would ultimately counteract the short-term poverty reduction.

    Winship was unsurprised that his fears of parents choosing to work less didn’t show up during the expanded CTC. It only lasted for one year and was recognized all the while as a temporary program. “These kinds of behavioral effects take time to set in,” he writes. In the long-term, after a decade or a generation of the program being in place, that’s when he would expect to see, as Oren Cass, executive director of the conservative think-tank American Compass, put it, “communities in which labor-force dropout is widespread and widely accepted.”

    Advocates tend to neglect this point: Some behavioral changes that might not show up in response to a temporary program would arise in response to a permanent one. An extra $300 a month for one year may be nothing to quit your job over, but over a decade, or a generation, we might see hidden effects arise. This is part of the challenge guaranteed income pilots currently face: There is a limit to what small-scale, finite experiments can tell us about a permanent national policy.

    Long-term speculation, however, can go both ways. The generational impacts of unconditional transfers could just as well lead to long-term investments in education and skills training, support entrepreneurship, and actually raise productivity and economic activity in the long run, all of which would boost, instead of wipe out, poverty reduction.

    In 2018, researchers from Washington University in St. Louis estimated that childhood poverty costs the US $1.03 trillion per year, or 5.4 percent of the GDP. They found that every dollar spent on reducing child poverty would save the public 7 dollars from the economic costs of poverty.

    Results from basic income pilots across the US also stand in contrast to Winship’s concern. “Our moms get the guaranteed income and not only do they continue to work, they level up their work,” Nyandoro, who runs the nation’s longest-running guaranteed income program, told me. “They’re able to move from jobs to careers. They’re able to go back to school. They’re able to get out of debt.”

    The most recent evidence in favor of phase-ins Winship cites is a 2021 paper by a group of economists from the University of Chicago, led by Kevin Corinth and Bruce Meyer. It predicted that making the CTC expansion permanent would spark a 1.5-million-person exodus from the labor force. As analysts were quick to point out, however, the paper is based on a model that already assumes unconditional cash reduces work. Predicting work disincentives using a model that already assumes them tells us nothing about whether the assumption itself is tethered to reality.

    Corinth and Meyer have since responded to criticism of their work disincentive assumptions, arguing that they fall well within the range used in other studies. These academic debates will continue, but in the meantime, where should the burden of proof lie?

    Eliminating phase-ins from the CTC was a massive anti-poverty success and had no short-term negative employment effects. Recipients spent the extra few hundred bucks on necessities, from food and clothing to shelter and utilities. Even small businesses voiced their support on the grounds that it would boost spending and entrepreneurship.

    On the other hand, a minority of skeptics retain speculative concerns that a few generations down the line, newfound consequences might overshadow these benefits.

    According to Halah Ahmad, JFI’s former lead researcher for policy, these policy debates won’t resolve on the basis of evidence alone. “That’s something that a lot of research organizations are engaging with now,” Ahmad told me, “this question of how much further we can get with evidence, when we know that narrative eats evidence for lunch.”

    She also raised the idea of policy feedback loops, where the assumptions baked into existing government programs shape our expectations, like self-fulfilling prophecies. Phase-ins convey that only parents with jobs deserve to receive the benefit for their children. “But in Europe, where [unconditional] child allowances have been around for a lot longer,” she said, “there’s a different assumption. Why would you put children in a worse-off position because of the labor market outcomes of their parents?”

    The CTC worked better without phase-ins; the EITC would too

    The expanded CTC’s failure to generate sufficient political momentum has left advocates wondering what’s next. “There was this incomparable policy moment when you had this abundance of evidence but somehow no political will,” Ahmad said.

    One option is to go bigger. Policy feedback theory suggests that the more people who benefit from a government program, the larger the base of support it generates. Eliminating phase-ins from the CTC expanded the base of recipients, but evidently not enough to build sufficient political support. So why stop there? Every social policy that uses a phase-in is an opportunity to lift more Americans from poverty by removing it. Which brings us back to the EITC, the low-income wage supplement, where phase-ins began, and where their elimination could do a lot of good.

    “Many Democrats spoke eloquently about the injustices of phasing in the CTC, but then decided to go ahead and continue phasing in the EITC, despite the fact that EITC and CTC are basically the exact same benefit,” wrote Bruenig, founder of the People’s Policy Project.

    In April, Rep. Rashida Tlaib (D-MI) reintroduced a bill that extends the success of the expanded CTC to the EITC: the End Child Poverty Act (ECPA), which replaces the entire CTC and the child provisions of the EITC with a universal child benefit of $393 per month. No phase-ins. People’s Policy Project estimates that ECPA would cut child poverty by 64 percent and deep child poverty by 70 percent if signed into law.

    That would leave the non-child provisions of the EITC (a modest $600 or so per year, at maximum) in place, and still subject to phase-ins. But something interesting happens if you remove phase-ins from the whole EITC: It becomes a guaranteed income. Then, you could adjust the payout to set the income floor across the entire economy, with the universal child benefit layered on top for the extra expenses of having children.

    Unconditional anti-poverty policies would mark a significant shift from the safety net of the past few decades. But the year-long experiment with eliminating phase-ins was the largest signal yet that they work, at least in the short term. And in the long term, tenuous concerns over what might happen generations down the line do not justify leaving millions of children in avoidable poverty today.

    This post was originally published on Basic Income Today.

  • Opinion: Basic income is less radical than you think

    By Oshan Jerow

    See original post here.

    I’ve been following debates on guaranteed income for almost a decade, and one thing that’s stood out is that universal basic income (UBI), a regular cash payment to all citizens with no strings attached, is like a Rorschach test.

    Some people see UBI as a “capitalist road to communism” or a world free of work. Others see everything from a means of unleashing the population’s creative potential to a policy that would undermine human agency and erode “psychological capital.” Some see it as a way to shore up the welfare state. Others, a way to bulldoze it.

    In part, that’s because unless you pin down the details, basic income is too vague to mean anything politically concrete. Like the Rorschach inkblot, you can interpret and design UBI in an endless variety of ways. A program that provides $250 per month is a different ballgame than one providing $1,200 per month. The same goes for one that replaces all other welfare, like food aid (sometimes referred to as a “pure UBI,” which would actually leave the most disadvantaged worse off, and is a bad idea), compared with one that complements existing programs.

    Ultimately, the effects of any income guarantee hinge on the details. How much does it pay? Who gets it? How’s it financed? How does it relate to the rest of the welfare state? But most of the real proposals that have made their way through the policy world share a noteworthy trait: When the dust settles, they just wouldn’t be that radical, in either direction.

    Generally, most people at the bottom of the income ladder would be better off, those in the middle would break even as they pay about as much in higher taxes as they’d receive from the basic income, and those at the top would be a little worse off. Society would neither ascend into utopian communism nor collapse into bleak idleness. There would just be less poverty and higher taxes.

    I see this as good news. If basic income won’t be the silver bullet that changes — or destroys — society, it becomes something far more politically tractable: a moderately effective policy, albeit one with trade-offs, that is well worth considering.

    The many faces of basic income

    Among actual basic income proposals, some definitely have more of a radical edge than others. But not in terms of their economic effects. What’s radical about imagining a $1,000 per month UBI isn’t so much how it’d affect the economy — again, some would be better off, others would break even, others would be worse off. It’s how to get a program with a $3 trillion price tag through a Congress that couldn’t even solidify an incredibly successful basic income for children — the temporarily expanded child tax credit — that only cost about $100 billion.

    Even if the $3 trillion version were to pass, perhaps by effectively communicating how taxing some of the benefits back would lower the program’s net cost, the result would land US federal spending as a percentage of GDP right around where France and Scandinavian countries already sit. Which is to say, from the perspective of other social democracies, that level of spending would be normal.

    One way to blunt the more radical politics of UBI is to style the income guarantee as a negative income tax (NIT) instead. The main difference is that NIT’s are means-tested, phasing out their benefit levels as earned income rises. Doing so could lower the sticker price while achieving basically the same economic effects as a UBI considered together with higher taxes, which claw back the benefits to achieve a similar effect as the NIT means-test phasing them out.

    For example, one 2021 proposal outlined an NIT-style basic income that guaranteed $12,500 to all adults (plus an additional $4,500 per child). The benefit would begin phasing out when household income (calculated for two-adult households) reaches $15,000, and would zero out at a household income of $70,000. It was estimated to cost $876 billion per year. Compare that to the $3-or-so trillion of high-end UBI proposals that guarantee a similar amount.

    Since NIT can be made equivalent in distribution to UBI, but the politics lean in favor of the former, there’s an argument to be made that NIT is the realistic path forward. “A leading task for the left is to legitimize the notion of a new NIT,” writes the economist Max Sawicky in an excellent overview piece. “There are genuine ways to attenuate the power of Capital … The naïve version of UBI isn’t one of them.”

    There are, of course, other trade-offs to consider. NIT imposes a hefty administrative burden, where monthly payments would have to be tuned to fluctuating incomes. There may also be a psychological difference between phasing out benefits and paying higher taxes.

    But if you put that whole debate aside and keep poking at the economic effects of UBI, its radical mystique continues to dissipate.

    The general pattern of basic income’s economic impact

    As my colleague Dylan Matthews wrote, “whether or not basic income is a good idea depends entirely on how you pay for it.” In addition, when you look at UBI together with however you propose to pay for it, you begin to see through the radical veil.

    Consider one of the most common pairings: paying for UBI with a value-added tax (VAT — sorry, another acronym), a type of consumption tax used across 170 countries worldwide, including all of Europe, leveled on all purchases, including goods and services.

    The economist William Gale ran the numbers on coupling a 10 percent VAT with a UBI payout that would range from $2,500 for individuals to about $5,200 for a family of four. The results look like this:

    A breakdown of how universal basic income would affect different income groups in the US. The lowest quintile would see the most gain, the middle quintile would break even, and the upper groups would pay more in higher taxes than they’d receive from the UBI.

    The poorest 20 percent of Americans would see their after-tax income rise about 17 percent — a significant anti-poverty gain. The next 20 percent of Americans would see only a modest gain, roughly 5 percent. The middle 20 percent would experience basically no change. The gains from their UBI would almost perfectly cancel out the higher tax rates they’d pay. And the remaining upper classes would see modest decreases in income, with the tax costs outstripping their UBI benefits.

    While the numbers will vary based on the details of the proposal, the trend is general: broad-based taxation coupled with a universal payout, the basic formula of most realistic UBI proposals, tends to leave those at the bottom better off, those in the middle about even, and those at the top a little worse off. It’s not incredibly radical — it’s just an effective anti-poverty policy.

    Turning to the macroeconometric models that economists use to predict how various policy changes might affect the economy, you’ll find a similar story. Whether predicting the effects of a tax-funded UBI with the progressive-leaning Levy Institute model or the more centered Penn Wharton Budget Model, GDP and employment rates neither balloon nor crater. Neither model foretells an upheaval in the economic order of things, just a few percentage points in one direction or the other.

    We also have suggestive empirical evidence from 2021, the year we had that UBI for kids. The results were as follows: struggling families found it easier to feed their children, pay their utility bills, invest in education, and pay the rent. Employment rates hardly budged, moving us no closer — or farther away, depending on your tastes — to a world without work. (Though, to be fair, a program everyone knows is temporary likely has less impact on employment than if it were permanent.)

    Radical ideas have their place. They can stretch our collective imagination, and keep us from falling victim to the belief that there are no fundamental alternatives to the present arrangement of our world. But basic income doesn’t have to be one of them, and shedding that association offers at least two payoffs.

    It could bring basic income further into the realm of pragmatic policy analysis, where wonks of all stripes present their views on whether or not the programs’ tradeoffs are worth it. Second, for those who want to elevate their sights on radical possibilities that might exceed political realities, why not dream bigger?

    This post was originally published on Basic Income Today.

  • A basic income scheme for the developing world

    By Monica de Bolle

    See original post here.

    Covid-19 is forcing a reconsideration of social welfare every­where but especially in Latin America, the world’s most unequal continent. In a region where more than half of all workers are in the informal economy, some countries are perforce wondering if they can implement a basic income scheme, whereby citizens receive direct payments from the state. Such schemes
    are most often discussed in advanced economies. But other nations in the emerging world may find useful lessons from the Latin American experience — as they have in the recent past from
    Brazil’s famous bolsa familia scheme.

    Brazil is not new to the idea of a basic income scheme. In 2004, it passed ground-breaking legislation that was never put into effect as the political focus went to enlarging other social programmes. The emergency of the coronavirus crisis has changed the dynamic.

    It has exposed the size of Latin America’s vulnerable population, some 300m people. It has also shown up the inability of existing social programmes to help the poor. Chile is now considering a temporary basic income scheme; Brazil and Ecuador have already done so on an emergency basis. Bolivia has run such a scheme for the elderly since 1997. The main question is: can the region afford it? Fiscal accounts are under pressure and exports have collapsed. The answer is to limit eligibility.

    Brazil’s programme could be a path-breaker. It began in April, following an initiative from civil society working with Congress that was later supported by President Jair Bolsonaro’s government. While the administration initially did not support the scheme, Mr Bolsonaro eventually recognised that it could help him politically.

    It currently benefits more than 50m people, a quarter of Brazil’s population. Monthly cash worth $110 is paid for three months, with the possibility of extension. Payments are distributed by a state bank, with eligibility criteria based on worker status and income.

    Brazil has already helped pioneer one social welfare system: the bolsa familia conditional cash-transfer scheme. Half a billion people worldwide, a quarter of them Latin American, are now enrolled in a CCT programme, whereby families receive state payments subject to conditions, such as getting their children vaccinated or sending them to school. CCTs worldwide have helped lift people out of poverty, improved health outcomes and not proved a disincentive to work as some critics feared. In Brazil, the scheme covers 13m families, around 40m people, with each household paid about $20 a month. It costs only 1 per cent of gross domestic product a year. The problem is that it does not fully cover the millions who work in the informal sector. Nor does it fully reach the third of the population without bank accounts.

    The new basic income scheme, which provides unconditional payments, reaches those who fall through the cracks. But it is expensive. The cost for three months is about 2 per cent of gross domestic product, or 8 per cent of GDP if extended to a whole year. However, some of this could be funded through taxed corporate dividend income (about $30bn a year, currently untaxed). The programme itself would also, in part, pay for itself. My own calculations show it could potentially raise tax revenues by 20 per cent, via increased consumption. Take that into account and the annual net cost would be about 5 per cent of GDP.

    The benefits of making the scheme permanent are the sustained help for the vulnerable that it would provide, and a broad pay-off to the wider economy. Still, it is a long shot this will happen. Brazil’s public accounts face massive pressure. Taxes already account for 35 per cent of GDP. Public debt is at dangerous levels. There have also been technical issues, such as a reported lack of physical hard cash to pay recipients.

    Still, if the programme were to become permanent, it would set a global example — just as bolsa familia did in the 2000s. Building on the success of CCTs has clear political appeal. It is also economically sound, in that it provides essential support for a very significant portion of the population.

    As much of the developing world grapples with the economic and social costs of the pandemic, this measure helps address both current challenges and those of the post-pandemic world.

    This post was originally published on Basic Income Today.

  • South Africa’s Minister of Social Development confirms Basic Income Grant is on the cards

    By Siyabonga Mkhwanazi

    See original post here.

    Minister of Social Development Lindiwe Zulu says she will approach Cabinet to approve the draft policy on the Basic Income Grant before it is fully implemented.

    Zulu said moves are already afoot to extend the Social Relief of Distress grant of R350 to the unemployed until 2026.

    This would give government time to work on the basic income grant.

    Unions and civil society have proposed the basic income grant of more than R350 and said it would be able to sustain many people who are not in the labour market.

    The SRD grant was introduced in 2020 when Covid-19 hit the country and the government said at the time it was meant to cushion the poor and vulnerable.

    The government has extended it several times after that.

    Zulu, who was replying to a written parliamentary question from Good Party MP Brett Herron, said they now wanted to introduce the basic income grant.

    The department of social development was still working on the draft policy that will be sent to Cabinet for approval.

    “Given the ongoing vulnerability of the beneficiaries to hunger and poverty because of continuing high unemployment and the escalating food prices, the department is proposing the extension of the SRD until end of 2025/26 financial year, this will allow the department to finalise the Basic Income Support policy on a more permanent and sustainable intervention.

    “The department of social development is intending to approach Cabinet to seek approval to publish the draft BIS policy for public comments in the current financial year,” said Zulu.

    Minister of Finance Enoch Godongwana is expected to announce, during the Medium Term Budget Policy Statement in November, the extension of the SRD grant pending the finalisation of the basic income grant policy.

    This post was originally published on Basic Income Today.

  • Basic income is being considered in Canada’s Senate

    By Roshan Abraham

    See original post here.

    The Senate is studying a bill that would introduce a framework for a policy that would guarantee access to a livable income to everyone over 17.

    Canada is taking a step toward making universal basic income a reality. 

    The Senate’s national finance committee will study a bill on October 17 which would create a national framework for—but not actually implement—UBI, according to a press release from the office of Ontario Senator Kim Pate. An identical bill exists in the House of Commons and is sponsored by Member of Parliament Leah Gazan.

    The bill in the Senate, which received a first and second reading in 2021 and last April, respectively, would require provincial ministers and Indigenous governing bodies across the country to convene and determine how a UBI plan could work. This would include ensuring that “participation in education, training or the labour market” is not required to receive UBI, and that funding for other social services are not cut. If the bill passes both the Senate and House of Commons, a report would have to be made public a year after the study begins.

    “We’ve heard so much about how Canadians are struggling with inflation and higher interest rates, but we seem to have lost track of the fact that the people who struggle most are those who have the least,” Evelyn Forget, a professor of economics and community health sciences at the University of Manitoba, told Motherboard in an email. “Frontline workers are burning out trying to cope with the growing poverty in our cities. We need to talk seriously about Basic Income rather than closing our eyes and imagining that another patch on a dysfunctional system will suffice.”

    Canada has a long and disjointed history with the idea of a UBI. An experiment with a guaranteed “mincome” in the 1970s in Dauphin, Manitoba is still discussed today because of the positive effects it had: better mental health, more high school completion, fewer doctor’s visits, and so on. A basic income experiment kicked off in Hamilton, Ontario in 2017 and was supposed to run for three years before being canceled in 2018 by Premier Doug Ford. Before that, though, residents who spoke to Motherboard at the time indicated it was improving their lives in numerous ways. Discussion of universal basic income in Canada was renewed during the pandemic when the “Canadian Economic Recovery Benefit” (CERB) was introduced. The payments of $600 or $1,000 over a two-week period went to Canadians who lost work due to COVID-19 before the program ended in September 2020.

    A report on Universal Basic Income from the Atlantic Economic Council found that while UBI would relieve poverty, it could only be funded by cutting other services and might lead to a decrease in labor market participation. A 2018 report that looked at several basic income programs around the world, however, found no substantial decrease in labor market participation. 

    The implementation of CERB also led to fears of decreased labor market participation. Yet a report submitted to Senator Nancy Hartling said previous fears that labor market participation decreased during the implementation of CERB were unfounded. “No, CERB and other benefits did not cause a labour shortage,” the report’s author, researcher Wil Robertson wrote. “In the lack of compelling evidence for a CERB impact on labour supply, we should be focusing on other systemic issues facing the Canadian labour market.”

    In addition to pushback based on the total cost—Canada’s parliament predicted it would cost $88 billion a year—the UBI bill led to the proliferation of conspiracy theories. Senators received a barrage of emails last year on the senate bill from people convinced that it would lead to cuts to social services and pensions for unvaccinated people, the CBC reported. (The bill, which would not on its own implement UBI even if it was passed, does not mention vaccination status and explicitly states other social supports should not be curtailed in the framework.)

    While the bill would still need to be studied in the House of Commons and faces pushback, the framework would bring Canada far closer than the United States to a serious attempt at basic income after years of starts and stops.

    This post was originally published on Basic Income Today.

  • Opinion: Universal Basic Income (UBI): An Islamic perspective

    By Dr. Abdulazeem Abozaid

    See original post here.

    Interest is growing, particularly among Western commentators, in arguments that governments should distribute a universal basic income (UBI) to citizens. The practice entails providing anyone who has reached a certain age with a fixed monthly amount for the rest of their life without being asked to work in return and regardless of their financial situation. Calls for UBI became particularly intense during the COVID-19 pandemic, when some governments started to distribute periodic sums to citizens who met certain criteria.

    Advocates make a powerful case for UBI, often starting with the point that meeting the basic needs of all citizens is a fundamental human right. Some highlight studies suggesting that unemployment will continue to increase as a result of technological and artificial intelligence applications taking jobs from humans. This feeds into arguments that if UBI is sufficient to survive on then it could provide individuals with the motivation and time to train for a career that genuinely interests and rewards them rather than accepting a job purely for financial reasons. It is also thought that UBI will help parents find more time to take care of their children and prepare them to become more productive citizens in the future.

    History suggests that Islam is at least familiar with the principles of UBI, a point reinforced by the fact that the distribution of money to the general public has been commonplace for centuries. As sources of heritage indicate, the Islamic state used to retain various expenditures for the year and then distributed the surplus among people, although the financial resources were limited before the expansion of the conquests. Then the Islamic state expanded during the period of the Rightly Guided Caliphate and resources increased, so the nascent state became more capable of supporting people financially.

    The distribution of surplus among the people was on equal basis during the time of Abu Bakr Al-Siddiq, before meeting certain criteria during the reign of Umar bin Al-Khattab, Othman bin Al-Affan, and Ali bin Abi Tali. It is also known that Umar bin al-Khattab, the second caliph in Islam, established the so-called Diwan al-Ata’, a register for recipients of the state treasury surplus, and used to distribute money annually among all people according to specific criteria. In Diwan al-Ata’, people’s names and entitlements were recorded, and no one was excluded. Money was distributed to the old and the young and every newborn, and to the free and the slave, and to the near and the far, and even to the needy among the people of the non-Muslims (Kitabis) living in the Muslim state. Differentiation was nevertheless according to the time one embraced Islam, participation in wars, proximity, and distance from the enemy, since those close to the enemy would bear the burden of protecting the frontiers.

    Umar also considered the size of the wealth of each individual, as he was keen not to concentrate the wealth in the hands of a limited group of people. This consideration was in fact the primary reason why he did not divide the lands of Iraq and the Levant conquered during his reign. After the Rightly Guided Caliphate, the caliphs then began to limit giving unconditionally from Diwan al-Ata’ to the public, with money instead given to those who worked for the Islamic state, defenders of the frontiers, and deserving common people.

    History therefore shows that while securing the needs of the poor and needy is a basic responsibility of the Islamic state, giving money indiscriminately is an extra favor that the state provided at early stages without being an obligation. Hence, this act falls under Shariah policy (al-Siyasa al-Shari’yya) which implies that it is subject to Maqasid considerations (realization of the public interest and avoidance of harms). This means that the government must consider both the expected harms and benefits (Maslaha) of such an act before performing it.

    Significantly, Maslaha considerations can be adapted to reflect the types of controls and conditions associated with the distribution of money to citizens under UBI schemes. First, if UBI affects the state’s ability to carry out its responsibilities, for example covering defense expenditures, it should not be implemented. Likewise, if UBI affects the ability of the state to secure the basics for its poorest and vulnerable, then it is unacceptable. Neither should the state cover the cost of providing UBI by increasing taxes on workers and businesses, thereby nullifying the originally intended benefit of this act.

    The state should also ensure that UBI encourages active and meaningful employment. This is particularly relevant if the amount distributed periodically is enough to discourage people from working. Additionally, Islamic states cannot distribute UBI through an obligatory zakat fund. This is because zakat has specific channels in Islam, and it is impermissible to spend it in anything other than these channels. To this end, the most important channels of zakat are for the poor and the needy, while UBI is based on spending money on people regardless of their financial positions.  This renders covering the cost of UBI in full or in part from zakat unacceptable to Shariah even if it practically results in covering the needs of the poor and needy.

    Finally, Islamic law stipulates that “avoidance of harm must prevail over bringing of benefit.” Accordingly, if the state has incurred debts, then it must not spend any amount above its basic expenditures and the surplus should be spent on repaying the debt. This is to honor the creditors’ rights and to ward off the various political and economic harms that are normally caused by debts. The state should consider the retention of reserved sums of money in the treasury to cover unpredictable emergency expenses and to preserve its financial and economic position at times of need.

    It is therefore clear that the concept of UBI is basically legitimate and precedented in Islam. Implementation by the state is nevertheless subject to various conditions and controls, which are ultimately meant to ensure that benefits outweigh any potential harm. This is an application of a core and fundamental principle of the Islamic legal economic theory: ‘whatever may involve benefits and potential harms should be judged based on what of the two outweigh the other’. Hence the acceptability of UBI to Islam may differ from time to time and place to place, based on the conditions surrounding its application.

    This post was originally published on Basic Income Today.

  • Basic Income Grant (BIG) Coalition of Namibia host a Concert to celebrate the 16th anniversary of International Basic Income Week

    By Unwrap

    See original post here.

    The aim of the event is to mobilise Namibian artists and the public to unite in observing the day.

    BIG spokesperson Nafimane Hamukoshi said the hashtag is to remind president Hage Geingob of the promise he made to the Namibian people in 2015 to “eradicate poverty” and that “nobody in the Namibian house should be left out in the effort to eradicate poverty”.

    The concert will feature well known artists like Ras Sheehama, Tapz, Don Kamati, ZYX, Ori, Longman Wally, Karishma, Sad Boyz International, Mareo, Dope Dance Boys, Maggy the Dancer, TF, Mr Poet, with DJs Youth Vibez and Nyanyulized, who will perform music and poetry throughout the night.

    “The coalition urges the Namibian youth to rally behind the BIG Coalition in the fight against poverty and to demand unconditional BIG as an economic right.

    With a 50% youth unemployment rate (the highest in the SADC region), it is mainly the youth who are affected by poverty and hence, should be the ones demanding humanitarian relief from the state,” she said.

    Hamukoshi said poverty levels in Namibia have become a humanitarian crisis with a shocking 1,6 million of Namibians living in poverty.

    The event starts at 18h00 at Muso’s Bar & Café in Windhoek and entrance is free.

    Singer and composer Tapz said they are joining voices together to spread a call to action in the context of music to leave no one behind and to create a poverty free Namibia.

    “When we work together, poverty and social exclusion can be overcome, which builds peace,”

    he said.

    This post was originally published on Basic Income Today.

  • Opinion: Basic Income is a liberal idea and we must reclaim it

    By Jane Dodds

    See original post here.

    As a long-standing advocate of Basic Income I was incredibly excited that my native Wales was the first part of the UK to pilot this policy idea. I have supported the Labour Government in this process and am following developments with optimism.

    The pilot is centred around young people leaving the care system. This is a particularly disadvantaged group of youngsters who ordinarily would be more or less left to their own devices when they reach their 18th birthday and are no longer considered children by the system.

    There is already evidence that the generous £400 per week package is being used by these young people to go on courses, or to put down a deposit on a flat. One young person has used it to pay for driving lessons.

    Even though the scheme has been criticised constantly by Conservatives in Wales, who say among other things that these young people will be taken advantage of, there is no evidence so far of that happening.

    The scheme has been in place for a year and there is another year to go. The trial is being evaluated independently by Cardiff University and I am convinced that it will show that a Basic Income is good for people, for communities and for the economy.

    Which is also why I am disappointed that our own party, which led the way in the UK by making Basic Income official party policy back in 2020, now appears to be backsliding in its commitment to this very liberal idea.

    For those unfamiliar with the concept, a Basic Income is a regular and unconditional payment to every individual in society, as a right of citizenship.

    A Basic Income has five core characteristics:

    • It’s paid in cash: it’s money you can spend on whatever you want.
    • It’s paid regularly: so you know the next payment is coming.
    • It’s for individuals: Each person gets their own basic income, paid to the individual not the household.
    • It’s unconditional: You don’t have to work or make any promises to get your basic income, there are no strings attached
    • It’s universal: everyone gets it.

    Basic Income is, at its core, about financial stability and dignity for all.

    Basic Income trials like the one in Wales (and others currently being proposed in England) are a good idea, although there is already plenty of evidence that these sorts of unconditional cash transfer programmes have incredibly positive impacts on the wellbeing of communities and individuals.

    A four-year experiment in Canada in the 1970s found that giving people a basic income made everyone nearly 10% less likely to end up in hospital. It also concluded, contrary to most popular beliefs, that giving people a bit of money does not have a measurable impact on their willingness to work.

    More recently, a smaller basic income study among a cohort of unemployed people in Finland also concluded that their health outcomes were better and their inclination to work unaffected.

    Modelling of Basic Income schemes shows that they reduce child poverty and health inequalities.

    The Liberal Democrats made support for Basic Income official party policy at our 2020 party conference. With millions facing economic uncertainty because of the Covid-19 pandemic, we recognised that financial stability had to be for everyone and that we had a vested interest in looking out for each other in society.

    Our policy people went to work and produced a sensible policy proposal for giving everyone in the country a Basic Income.

    And yet, just three years later, that clarity of vision appears to have been lost. The Basic Income proposal was buried inside yet another consultation and essentially discarded at this year’s spring conference. Even the original proposal document has been removed from the party’s website (They published it here https://www.libdems.org.uk/a21-universal-basic-income but have now removed that page.)

    I want our party to reclaim this liberal idea. Basic Income was proposed by Paddy Ashdown as a fundamental component of his “Radical Agenda for the 1990s”, a book published in the late 1980s. It is liberal because it recognises the agency of the individual and their contribution to society. A Basic Income, he said, “gives security to each individual”, and will also “liberate power in the hands of the citizen.”

    We need to be a party that is not afraid to articulate bold ideas that strengthen our citizens, reduce inequality and make for stronger communities. Basic Income is one such idea. A Basic Income does not solve every problem, but it makes every problem easier to solve.

    I will be at our autumn conference making the case for a Basic Income and I hope you will join me. Our session is on Sunday, September 24th 19.45 to 21.00 in the Meyrick Suite and the BIC.

    This post was originally published on Basic Income Today.

  • Is South Africa poised to become a global leader in universal basic income?

    By Kelle Howson and Neil Coleman

    See original post here.

    Social protection in the post-pandemic period

    The early months of the pandemic witnessed a wave of emergency social protection measures, put in place by governments around the world to protect vulnerable populations from income insecurity resulting from lockdowns and labour market disruptions. Of the approximately 1,400 such programmes, a large proportion comprised both ‘one-off’ or ‘ongoing’ cash transfers to individuals or households, to assist with meeting basic needs, and to stimulate the economy. 

    This led many observers to hope that the pandemic may usher in a new and lasting paradigm in social protection—that temporary measures would demonstrate the importance and benefits of expanded social protection and strengthen the case for permanent comprehensive social protection floors (as set out in International Labour Organization Recommendation No. 202, 2012). 

    However, more than three years on from the onset of the pandemic, these hopes have been mostly dashed, as very few COVID-19 emergency cash transfers have been institutionalised. Many governments—especially those of low and middle-income countries with particularly burdensome debt obligations—have cut social spending and reverted to austerity frameworks.

    Background to basic income debates in South Africa

    One notable exception to this trend is South Africa’s COVID-19 Social Relief of Distress (SRD) grant. Although austerity remains in place in South Africa, the SRD grant (aside from being temporarily withdrawn in 2021) has endured through the pandemic, and looks set to be transformed into a permanent form of basic income. 

    This is in large part the result of sustained campaigns from civil society to secure a universal basic income in South Africa, which date back to South Africa’s 1998 Jobs Summit, but have gained renewed momentum in the wake of COVID, and the introduction of the SRD grant. 

    Importantly, whilst many countries are piloting basic income schemes to better understand their suitability in distinct contexts, South Africa has moved beyond the evidence-gathering phase. Drawing on the existing body of international evidence, as well as recent experience with the SRD grant, the policy focus is now on interventions at the national scale. 

    This is commensurate with the depth of South Africa’s crisis. Despite being classified as an upper-middle-income country, South Africa is gripped by structural poverty and economic exclusion which threatens social stability. The unemployment rate (including discouraged work seekers) stood at 42.1% in the second quarter of 2023. Of those still actively seeking work, 77.2% are long-term unemployed, underscoring the structural nature of labour market exclusion. Over 32% of people of working age have no income (including from government grants) and rely on cash or in-kind support from friends and relatives. 20.6% of households are food insecure, and 20.9% send a family member to beg for food on a regular basis. According to the World Bank Gini Index, South Africa is the most unequal country in the world. 

    South Africa is often said to have a well-developed social assistance framework compared to other middle-income countries. Its Child Support Grant (CSG) and Older Persons Grant (OPG) are considered to have low rates of exclusion, and have been shown to contribute significantly to mitigating poverty. However, able-bodied adults between 18 and 60 have no access to permanent, non-contributory social assistance. This leaves a gap in the country’s social protection system which renders millions vulnerable to starvation. 

    With the 2024 national election coming into view, South Africa is in a moment of political possibility with respect to social protection. Basic income is already becoming a key election issue, with two parties so far pledging to introduce a basic income grant if elected. Senior figures in the governing African National Congress including President Cyril Ramaphosa have indicated that plans are already underway to develop a system of basic income, with Department of Social Development and ANC policy referencing the need to set the grant at a level which provides dignity, as well as the need for universal eligibility, though details and timelines have not been forthcoming. 

    This could set South Africa on a pioneering path, not only with respect to realising socio economic rights, but also in terms of alternative approaches to development which centre redistribution and economic inclusion.

    However, basic income remains hotly contested in policy circles, with opponents (most notably policy makers within the National Treasury) questioning its feasibility and affordability. Although it is highly possible that some form of basic income will be in place in South Africa within the next two years or so, the great risk of this moment of contestation is the introduction of a severely compromised version of basic income, with limited coverage, inadequate benefits, and/or the imposition of tight conditionalities on beneficiaries. 

    Moreover, if basic income is introduced while austerity remains in place, it threatens to displace other social spending, or utilise regressive financing measures which would undermine its benefits in terms of poverty alleviation and inclusive development. Even worse, the drums of hyper austerity are currently beating, and there is a real threat that the Minister of Finance and Treasury will attempt to terminate the SRD grant in 2024.

    Many basic income proponents in South Africa are all too aware that basic income is not necessarily an inherently radical demand, and that its radical potential is contingent on specific features of design and financing. However, in a context of widespread hunger and economic stagnation, many on the left are uniting behind the proposal as a realisable strategy for meeting immediate basic needs, as well as a foundation for a progressive developmental agenda.

    Civil society and major trade union confederations, largely under the banner of the Universal Basic Income Coalition (UBIC), continues to push for the progressive realisation of a universal basic income for those aged from 18 to 59, indexed to the value of the national poverty lines, and free of behavioural conditionalities. This is in line with provisions in South Africa’s Constitution, which obligates the government to progressively realise the right to social assistance. The Constitution has formed a basis for advocacy and litigation to secure expanded social assistance. 

    Notably, the Congress of South African Trade Unions and the South African Federation of Trade Unions have staunchly supported the basic income grant campaign. The trade union movement internationally has had a complicated relationship with UBI, as it is sometimes feared that it could undermine workers’ interests by subsidising labour costs for employers, or that it diverts progressive energies away from a focus on decent work for all. However, in South Africa, due to the extreme rates of working poverty, precarity and unemployment, there is a broad acceptance among the trade union movement that basic income is in the interests of the working class. In addition, low income workers as well as unpaid carers (predominantly women) are put in the position of filling existing gaps in the social safety net. Many adults survive on remittances, or cash or in kind donations from friends and relatives. Many workers would be relieved of some of the burden of financially supporting extended family by a basic income grant, alongside benefiting themselves from a minimum income guarantee.

    Multiple modelling exercises have indicated that progressive realisation of universal basic income is both fiscally feasible in South Africa, and—if funded by additional progressive taxation or other non-regressive financing measures—will have significant impacts on poverty and inequality alleviation, and growth.

    The Social Relief of Distress grant—paving the way for universal basic income?

    The SRD grant provides R350 or around £15 (equal to 46% of the extreme, or ‘food’ poverty line) per month to adults without income. Despite its profound inadequacy, the grant has had documented socio economic benefits. 93% of recipients spend their SRD grant on food, and it is estimated to have prevented 2-2.8 million people entering into food poverty as a result of pandemic measures. It has also been shown to have had a stimulus effect on employment, and local economies. In the first year of receipt, it increased the likelihood of employment by 3 percentage points. 

    However, the grant has not been adjusted for inflation (let alone food inflation) since its introduction. In contrast to other social grants in South Africa, the administration of the grant has resulted in astronomical levels of unfair exclusion. Estimates of those theoretically eligible for the grant start at 16 million people. This corresponds almost exactly with the peak number of applications for the grant, in March 2022. However, in that month, only 10.9 million applications were approved. Research suggested that almost all exclusions were erroneous. Since then, further exclusionary procedures and provisions have been introduced. In May 2023 8.4 million people were approved for the grant, with 7.1 million actually receiving payment. 

    Barriers to access to the grant for rightful beneficiaries exist within systems of application, verification, payment and appeal. Applications can only be completed online—disadvantaging those without internet access. The grant imposes an extremely low means test of R624 per month—which is below the food poverty line. This is policed through monthly checks on applicants’ bank accounts which cannot distinguish between funds which constitute regular income and ad-hoc payments, donations, or funds held on behalf of others. Applicants are also screened against woefully inaccurate and out-of-date income tax and unemployment insurance databases. Payment systems are dysfunctional, effectively excluding unbanked people or those who opt to be paid in cash. 

    Finally the appeals process is essentially useless, as appellants are prohibited from submitting any supporting information for their appeal regarded as ‘new’ information, and so the process simply constitutes reviewing the original application again using the same inaccurate verification systems. In the recent months for which we have data, not a single appeal for a rejection on the grounds of failing the means test was upheld (out of 1.2-1.5 million appeals per month).

    These drivers of exclusion are ultimately the result of an arbitrary budget cap imposed by National Treasury, which in 2023/24 only provides for 8.5 million people per month to receive the grant. In other words, they stem directly from austerity. The Department of Social Development has been forced to limit eligibility, and—even more egregious—find ways to prevent eligible people from accessing the grant. 

    This is now the subject of a major litigation brought by two organisations, the Institute for Economic Justice (to which the authors are affiliated) and #Pay The Grants, against the Department of Social Development and the South African Social Security Agency.

    Conclusion

    The President has stated that the “innovation” which has taken place in social grant systems in order to provide the SRD grant will form the basis for introducing the future basic income grant. While the President’s commitment to transition to a permanent system of basic income support is a significant victory, we need to avoid institutionalising the SRD design flaws which have been so exclusionary.

    It is critical that these unjust provisions and processes are not carried through into the new framework. It is further vital that the wider austerity framework is challenged, and that  basic income is not financed through regressive taxes or spending cuts. The IEJ and others have put forward proposals outlining alternative ways in which a UBI could be financed.

    This is where the battle lines are currently drawn, and it is this struggle which will ultimately determine whether we see a redistributive universal basic income within the next decade. Although it is fiercely opposed by conservative forces, who seek to hollow out and undermine the demand, basic income debates in South Africa have finally moved beyond the question of “if”… to arrive at that of “how” and “when”.

    This post was originally published on Basic Income Today.

  • Universal basic income and reproductive labor

    By Sophie Lively

    See original post here.

    June of this year (2023) saw the announcement of two proposed UBI micro-pilot schemes in England, one in Jarrow, North East, and the other in East Finchley, north London. Once deemed ‘radical’, this particular proposal would see an unconditional basic income of £1,600 paid individually to participants for a specified period of time. Important features are that a UBI is an unconditional, regular cash payment paid directly to the individual, as opposed to the household, irrelevant of income status. Whilst criticism remains, across the political spectrum UBI has been touted as a contender for addressing poverty and guarding against problems of the future such as climate breakdown and loss of jobs due to automation and artificial intelligence.

    Whilst the notion of a UBI is not new, with trials having already been implemented in places such as Alaska, North Carolina, California, Canada, Finland, Germany, Spain, and Kenya, there has been increased interest in the UK, particularly post-Covid. In July 2022, Wales introduced a pilot offering more than 500 care leavers £1,600 per month for a period of two years to support their transition to adult life. The ability to have this unconditional payment from state to citizen could have a wealth of benefits – financial, emotional and physical, all which may have positive outcomes not only for the individual but for society as a whole. Whilst the aforementioned benefits are regularly discussed, less so is the transformative potential of a UBI with regards to women and reproductive labour.

    Women and work

    Gendered divisions of labour have long been unequal and reproductive labour disproportionately burdens women and girls. Indeed, an Oxfam report highlighted that globally, women and girls do more than three-quarters of all unpaid care work which, if valued at minimum wage, would ‘represent a contribution to the global economy of at least $10.8trillion a year, more than three times the size of the global tech industry’.

    During the Covid-19 pandemic, attention was drawn to this, with research from UCL revealing that women undertook twice as much home-schooling as men during the lockdown. Additionally, some evidence showed that when it came to household chores responsibility was more equal. However, this was quickly dispelled, with a study  by the World Economic Forum which found that by September 2020 ‘gender divisions had been re-established and women disproportionately held the majority of the domestic burdens’. Whilst such discussions have ceased in mainstream discourse, this wasn’t the first time the relationship between women and unpaid work has been highlighted. 

    Wages for housework

    Founded by Mariarosa Dalla Costa, Selma James, Silvia Federici and Brigitte Galtier, the 1970s Wages for Housework’s (WfH) campaign was a crucial moment in the widespread dialogue around women and labour. Attempting to have reproductive labour gain legitimacy politically, this grassroots campaign provided an intersectional, anti-capitalist and international feminist network across both the global north and global south. Seeking to disrupt power relations and redistribute wealth gained, the WfH campaign challenged an entrenched order in which women’s, mostly unnoticed, essential domestic work goes ‘undervalued, unremunerated or underpaid’. It demanded that ‘caring labour, mostly done by women, is not biological destiny or ‘love’, but – under capitalism – work that should receive a wage.’ Their first campaign was to keep family allowance in women’s hands as the government at the time ‘intended to transfer it to men’s pay packets’.

    However, there have been subsequent concerns around providing a ‘wage’ for women’s unpaid labour. Such concern includes the potential for women to become institutionalised at home and for unpaid work to be commodified, thus further embedding them in the capitalist machine. Despite being 50 years on, the WfH campaign can offer an alternative perspective, reiterating the continued struggle to have women’s reproductive labour adequately recognised. Whilst acknowledging flaws, a UBI could go some way in creating such recognition, subsequently increasing agency and offering immediate relief for many in the current cost of living crisis.

    Reproductive labour today

    Today, women around the world continue to bear the brunt of unpaid domestic work along with child-care and elder-care. In 2016, the ONS reported that in the UK ‘women carry out an overall average of 60% more unpaid work than men’ and a later study by the Women’s Budget Group revealed that on top of this, austerity measures have hit women hardest. It is important to reiterate that this isn’t something new; such gendered divisions are long-standing, and whilst commendable work has been done in order to address gender inequality here in the UK and globally, divisions persist.

    We have seen a number of policies in recent years aimed at women and labour. Despite not explicitly acknowledging the structural inequalities women face due to patriarchal power imbalances, their focus has been specifically on productive labour. But such policies fall far short from the transformative change needed. In 2015, Shared Parental Leave was introduced, but figures from Maternity Action reveal that an estimate of only 3 – 4% of eligible fathers have taken up the opportunity. In this year’s Spring Budget, Prime Minister Rishi Sunak announced that from 2024 we would see a ‘revolution in childcare’, which he claimed, amongst other things, would ‘remove barriers to work for nearly half a million parents with children under 3 in England not working due to caring responsibilities’, with an emphasis on reducing ‘discrimination against women’. However, such a pledge comes with a plethora of its own issues. Indeed, CEO of the Early Years Alliance criticised the plan as he told Sky News, ‘such a policy would do little, if anything, to lower costs for parents’. Further criticisms have included several childcare providers raising concerns around recruitment, alongside risks regarding increasing child-to-adult ratios. Such policies merely tinker around the edge of an already failing system which puts economic growth above all else. They do little, if anything, to address structural inequalities women experience with regards to both paid and unpaid work and go no way to increasing agency.

    Additional benefits for women

    Enhancing women’s autonomy, both individually and as part of a family unit, allows for greater choice for women in both private and public spaces. Whilst the economic benefits of a UBI are regularly touted, such a proposal could also aid in both valuing and rewarding those who want to be full time care givers – either to their own children, disabled people or elderly relatives – echoing the WfH calls of the 1970s.

    Going beyond the idea of wages for housework, there could be additional benefits for women. Assisting in avoiding the ‘unemployment traps’ that recipients of welfare may experience whereby they ‘risk losing their benefits should they increase their labour force participation’, a UBI offers a secure, unconditional minimum floor irrespective of changing circumstances. Such a ‘trap’ is shown to be of particular detriment to single parents, around 90% of which are women, as well as people with disabilities . Jason B. Whiting, writing in The Institute for Family Studies highlights the financial constraints many women experiencing domestic violence face, and the individual recipient stipulation of UBI means that women could ‘be empowered with their own financial independence, and increased access to necessary resources to escape abusive situations’. Helping to reshape entrenched patriarchal gender norms which continue to rest on the assumption of a heteronormative family consisting of a male breadwinner and female caregiver, could have transformative effects at both the individual and wider societal level, allowing women to have greater choice with regards to their own labour.

    It’s no panacea but it may offer a way ahead

    UBI is in no way a utopian dream. Alone, it would be insufficient in challenging the many barriers women experience with regards to both reproductive and productive labour. It is vital that our public services are adequately funded and any implementation of a UBI should go alongside the ongoing struggle for an improvement in workers’ rights and conditions. Of course there are flaws, but in contrast to meagre offerings from the current government, a UBI could provide increased support and agency for all.

    With the exciting potential that the North East could be home to a pilot, perhaps now is the time to renew discussions regarding the gendered capabilities of a UBI. Whilst valid argument remains regarding the risk of entrenching and exploiting women’s unpaid work, the current cost of living crisis, broken education system, crumbling social care system and continued gender pay gap are just some of the reasons that UBI may not only have positive, widespread and impactful outcomes for all, but have the added benefit of contributing to the ongoing struggle towards a more just and gender equal society. 

  • Opinion: Americans are working harder and making less. We need a new social safety net

    This article was written by Gisele Huff & Andy Stern

    See original post here.

    Thousands of auto workers for the three-largest U.S. carmakers walked off the job last week because their pay has only increased fractionally in the wake of the auto companies’ soaring profits. Meanwhile, the advent of streaming content — coupled with AI and its impact on the creative class — has spurred Hollywood writers and actors to remain on strike for months now. This is on top of the recent narrowly averted railroad and UPS strikes, which would have paralyzed crucial sectors of the U.S. economy.

    Workers are right in demanding a greater share of the record wealth that their labor fuels, but in which they have not adequately shared — producing even greater inequality.  Workers — union members, low-wage earners and white-collar professionals — should demand a federally supported universal basic income (UBI) of regular cash payments to all Americans. 

    The technological advances of AI have broadened the discussion about the workers it will affect. Even the creator of ChatGPT has emphasized the need for a UBI to offset labor income losses due to AI (and is also funding one of the country’s largest UBI pilots). Now the replacement of truck drivers, call-center clerks, supermarket cashiers and fast-food workers is coming for white-collar workers who were thought to be protected because of the intellectual content of their contribution. The endangered middle-class could finally bring UBI to reality.

    During the COVID pandemic, Americans acknowledged the contributions of essential workers, but every worker is contributing to American prosperity and deserves fair compensation. Instead, Corporate America increases the gap between the rich and everyone else, through every good and bad economic cycle, and for the past 40 years corporations have nearly quadrupled their share of that gain.

    Simply put: Americans are working harder and making less. Economic insecurity is built into the capitalistic system, maximizing profits for shareholders rather than commit to growing the economy as a whole and reducing unemployment. Meanwhile, workers and unions are disempowered. To make matters worse, since healthcare in America is generally tied to the workplace, it’s difficult to leave a job.

    UBI is not meant as a replacement for anyone’s salary.

    When almost four of every 10 Americans can’t come up with $400 in cash to pay for an unforeseen expense, it’s time for a new social safety net. UBI would help the parent who wants to stay home with their child, the writers on strike, the workers looking for a new job with better wages, the student or older worker trying to improve their skills, the entrepreneur trying to start a business, people trying to save for a new home. A guaranteed income would help Americans to seize opportunities when they present themselves without having to assume unaffordable risks.

    Most proposals for a UBI envision $500 to $1,000 per month, per adult. This is not enough to cover all expenses, but a UBI is not meant as a replacement for anyone’s salary — it’s intended to supplement existing income and bridge the gap between a bad job and a good one. It is distributed to everyone to streamline the process and ensure no one falls through the cracks, but is clawed back through taxes from people who don’t need it.

    There is massive growing and compelling evidence from several pilots, both currently operating and already completed, demonstrating the positive effects cash assistance, unconditionally, has on people’s lives. We can also look to the expanded Child Tax Credit of 2021 for proof of concept, where families received monthly direct cash for each child in their household. In those months, we saw that as little as $300 per month brought 10 times the return on the investment.

    The future economic security for all Americans is not a matter of chance, it’s a matter of choice. There are many choices a prosperous society like ours can make to fund UBI, which is also a solid economic investment given it not only affects the well-being of recipients — but also contributes to the greater good.      

    An investment in Americans through a UBI is a fundamental recognition that we have to structurally change the meaning of work. The U.S. can fund a UBI through federal revenues — be it reforming the tax system so the wealthy and corporations pay their fair share, capturing the added profit of automation, or finding new sources like land-value taxes. 

    The U.S. economy is in the midst of a massive transition as we confront the challenges and opportunities of AI and the inequity created by several decades of worker disempowerment. Workers deserve, and are demanding, better. A UBI is an important step in helping Americans weather the changing nature of labor and puts us on a path toward a future in which we are all valued for our humanity, not our productivity.            

    Gisèle Huff is president of the Gerald Huff Fund for Humanity and the author of “Force of Nature.” Andy Stern is the president emeritus of SEIU, and a senior fellow at the Economic Security Project.

  • Region of Waterloo passes motion to call for guaranteed livable basic income

    By Joe McGinty

    See original post here.

    Council unanimously passed a motion advocating for more supports to help people with lower incomes by calling on provincial and federal governments to work together on a national Guaranteed Livable Basic Income program.

    Council is also advocating for increases to Ontario Works and Ontario Disability Support programs that have not kept pace with inflation.

    “That the Region of Waterloo asks the provincial government to increase Social Assistance rates for both OW and ODSP to reflect the
    costs of living and to tie these rates to inflation,” said Cambridge regional councillor Pam Wolf. 

    Wolf put forth the motion to get the region on board with a basic income program and lobby the necessary levels of government to pull the most vulnerable in society out of poverty. 

    These measures would benefit individuals, families as increasing poverty is putting unsustainable pressure on municipalities’ limited resources, read the motion. 

    Wolf adds that she has had many councillors and members of the community help write the motion and include as many relevant facts as possible. 

    “At the region our staff has had the heartbreaking job of administrating OW payments that they know all too well recipients can’t hope to live on,” said Wolf. 

    She adds that a one-bedroom apartment in Kitchener costs $1,900 a month and OW only pays out $700 monthly. 

    In a presentation given by Beatrice Henry, a resident of Waterloo, she outlined what a guaranteed basic income would look like and how it would benefit society. 

    “Basic income is a direct payment from the government to ensure that everyone has sufficient income to meet basic needs, participate in society and live with dignity regardless of work status,” said Henry. 

    At a time when minimum wage is less than a living wage, homelessness is on the rise and inflation is squeezing families for everything they have, Henry along with Wolf thinks a basic income is needed now more than ever. 

    Another regional councillor from Cambridge, Doug Craig, is supportive of the motion and adds that Wolf is always looking out for the little guy. 

    “This is basically making a request to the upper levels of government to start doing something about what we see everyday on the ground,” said Craig. 

    Regional councillor from Kitchener Colleen James thinks universal basic income will help people better educate themselves when given more financial stability. 

    “The only way to end this is to end parent poverty and stop thinking that people chose to be poor and stop making rules about receiving help and being punitive and judgmental,” added Wolf. “Guaranteed basic income could do this.” 

    The next steps for the region is to send a letter calling on all levels of government to participate and advocate for a livable basic income and ask other municipalities to join them in their fight to lift families out of poverty.

    This post was originally published on Basic Income Today.

  • What Happens When You Give New Parents Cash Aid?

    By Lizzie Tribone

    See original post here.

    A wave of new cash transfer programs that target pregnant and postpartum people is emerging across the United States, offering a lifeline to low-income families and reviving the discussion on the afterlife of pandemic-era expanded earned income and child tax credits.

    Six weeks after giving birth, Priscilla Rivera began receiving cash transfers from the Bridge Project, a New York City–based program launched in 2021 by the Monarch Foundation. The program provides up to $1,000 a month to pregnant people across New York City and Rochester for 36 months. The Washington Heights first-time mom stretches the money across different expenses: rent, food, activities for her son, as well as other baby essentials. “It’s more helpful to use it all around, instead of just one specific thing,” she told The Nation.

    “It just lifts a weight off of your shoulders,” Priscilla said of the cash transfers she has been receiving for about a year. “It was a blessing for me.”

    When she found out she was pregnant, Priscilla stepped back from her job as a nanny because of the physical nature of her work. The cash she then received through the Bridge Project allowed her to spend a year with her son before returning to work part-time.

    While unconditional cash assistance is a common anti-poverty intervention in low- and middle-income countries, such as in Indonesia and Zambia, the United States has largely shied away from this form of support, instead favoring in-kind and conditional assistance. The expanded Child Tax Credit in 2021 was the closest the nation had come to sending a monthly stipend to millions of families with children, but Congress members let the Covid-era program expire after less than a year. For years, economists and policy makers have raised concerns about how cash assistance programs would lead to reduced labor force participation, and be used for “temptation goods” such as alcohol and cigarettes. But in fact, the Bridge Project has found that participants have been able to plan more effectively for emergencies, access child care at higher rates, and attain individual and household stability.

    Unconditional cash assistance programs that target pregnant and postpartum people are redefining the narrative around no-strings-attached cash. With an understanding of income as a determinant of health, these programs hold in common the belief that cash can disrupt intergenerational poverty at a specific juncture that exacerbates inequality: childbirth.

    Megha Agarwal, cofounder and executive director of the Bridge Project, told The Nation that the amount the Bridge Project gives new parents tips the balance, offering new mothers breathing room as they navigate their new financial reality of caring for a new family member.

    The program is designed to give parents full discretion over how their cash is spent, and therefore presents an alternative form of support that bypasses the matrix of rules that can define government programs.

    Take, for example, New York’s Special Supplemental Nutrition Program for Women, Infants, and Children, a program that provides food to pregnant people and new parents. Those with a food card cannot buy 2 percent reduced-fat milk, peanut butter containing palm oil, organic eggs—the list of restrictions goes on. “We’ve created complexity where there doesn’t need to be,” Agarwal said.

    The timing of cash receipt is important, Dr. Margaret McDonnell, associate professor of global health economics at the Harvard T.H. Chan School of Public Health, told The Nation. Yet “conditions often introduce a delay: You have to do something, then receive the money,” she said.

    Aside from doing away with the burden and delay of bureaucracy, the no-questions-asked nature of cash transfers also offers

    “flexibility in a way that really center[s] individual autonomy and trust,”

    said Agarwal.

    The Bridge Project builds on the success of other programs in the United States, including the Mississippi-based Magnolia Mother’s Trust. Springboard to Opportunities, an organization that connects people with affordable housing in Jackson. Mississippi established the trust in 2018, which provides $1,000 a month for a year to Black mothers who are in extreme poverty and live in affordable housing. It is the longest-running guaranteed income pilot program in the United States, and the only one to focus on Black mothers.

    Over the course of the program, a higher percentage of mothers were able to save money, and participants also reported decreased financial stress. The latter is an important consideration in Mississippi. The state has the highest rate in the country of female-headed households, which are more likely to be in poverty than dual-headed households. Financial stress is linked to mental health and well-being, as well as morbidity: A 2019 study found that Black people who faced “moderate to high” financial stress were more likely to develop heart disease than those who did not.

    Qualitative evidence demonstrates how the program has positively affected maternal health outcomes, too. “We’ve had moms tell us they were able to take maternity leave, go on bed rest, and prioritize their health during pregnancy because of the support provided through the Magnolia Mother’s Trust,” Aisha Nyandoro, CEO of Springboard to Opportunities, told The Nation.

    Elsewhere, the San Francisco–based Abundant Birth Project, a pilot program, seeks to reduce reproductive health inequalities among Black and Pacific Islander communities in the region. These communities have a median household income roughly a third that of the general population in the city, and have the first- and second-highest preterm birth rates. As birth workers have long argued, systemic changes are needed to counter both the insufficient perinatal workforce and the lack of quality, patient-centered care, which contributes to a growing maternal health care crisis. By softening the edges of financial insecurity through cash transfers, the pilot program is playing an important role in fighting against these inequities.

    These programs are operating as parents struggle amid a cost-of-living crisis to purchase essential products for their newborns. Nearly half (47 percent) of families reported being in “diaper need” in 2023, with roughly the same number of families (46 percent) resorting to cutting back on other essential services—such as food and utilities—in order to afford diapers, research by the National Diaper Bank Network found. At the same time, child care has surpassed the cost of housing for families across the Midwest, the Northeast, and the South. In New York, for instance, the average cost of care for two children is just over $40,286 annually, while average housing costs are about $27,204 annually.

    Many of those behind these cash transfer programs have their eyes set on the federal government. They hope their programs, which model individual autonomy and consistent assistance, become public policy. As Nyandoro explained, “all of the programs are telling the same story: Cash without restrictions works.”

    Priscilla has started to take her now-1-year-old son to swimming lessons on the East Side of Manhattan, which she’s been able to afford through the cash transfers. It’s about an hour’s journey from her home in Washington Heights, but she’s happy to make it. Her son’s access to the water has become a meaningful ritual, in itself an expression of living outside the churn of basic needs. As long as she has the cash, she’ll continue to head downtown.

    This post was originally published on Basic Income Today.

  • Hugh Segal’s voice will be missed, but not soon forgotten

    By Jamie Swift, and Elaine Power

    See original post here.

    Four years ago, we interviewed Hugh Segal for a book on basic income. He was being treated for the disease that ended his life last week.

    Typical of Hugh’s gracious generosity, the lifelong Conservative praised the medical team that had treated him, adding he was at peace with the prognosis he would likely have five to 10 years left. Like so many who’ve been praising this remarkable Canadian in the past few days, we are so very sorry that he didn’t make it.

    Jamie last heard Hugh argue eloquently for a basic, livable income at a Hamilton public meeting organized by the Hamilton Roundtable for Poverty Reduction. That was in 2020 just as the pandemic hit.

    Elaine’s first encounter with Hugh was when he came to social determinants of health class in 2010. He strolled up and down the aisles, telling over 300 students touching stories about living in poverty. He and fellow senator Art Eggleton had collected dozens of anecdotes while writing a Senate report. But some of the stories sprang from his personal experience growing up in a Montreal working class family.

    His message hinged on the argument that an unconditional, livable basic income could remedy the gross indignities inflicted by poverty. First-year university students are a tough audience, but the power of his words, delivered with characteristic bonhomie, meant Hugh had the young students in the palm of his hand. It was the most powerful pieces of oratory Elaine had ever witnessed. No notes. Eloquent. Articulate. Provocative.

    Years later, he described another big lecture hall, this one at the University of Dublin’s business school. He again came across as a lonely Conservative booster of basic income.

    “My listeners,” he recalled, “looked bemused, sympathetic or curious — the way you might look when you see someone walk absent-mindedly into a telephone pole.”

    In his delightfully self-deprecating manner, Hugh loved skewering the argument that solving poverty is somehow very complicated. Fixing poverty is simple. Just give people money while maintaining other vital social programs. People are poor, he always explained, because they just can’t afford to live a decent life.

    He knew this because we’d already done it for seniors. In the early 1970s, as a young political staffer in the Bill Davis government, Hugh had a front-row seat when Ontario introduced a new program. The Toronto Star was featuring stories of elderly women eating dog food. It was the only protein they could afford. Hugh was instrumental in the implementation of what would become the Guaranteed Income Supplement. It saw the poverty rate for seniors plummet from 35 per cent to three to five per cent, making Canada an international leader in reducing seniors’ poverty.

    The cheerfully stubborn social justice advocate played a pivotal role in the design of Ontario’s basic income pilot, implemented by Kathleen Wynne’s Liberals. It was killed prematurely by the Ford government in 2018. These Progressive Conservatives claimed the pilot project was unaffordable. Hugh described the cruel move by his own party as a reflection of

    “the narrow ideology of fact free analysis.”

    Hugh was a guiding light for the Canada’s basic income movement. He never lost hope that we would eventually do the right thing by implementing an income floor for working age Canadians. It would erase the shameful stain on our social fabric. We are deeply saddened he didn’t live long enough to see his dream come true. But we take heart from his passionate persistence.

    Jamie Swift and Elaine Power are founding members of the Kingston Action Group for a Basic Income Guarantee and authors of “The Case for Basic Income: Freedom, Security, Justice.”

    This post was originally published on Basic Income Today.

  • A Basic Income for Everybody: Why the Musicians’ Union Backs UBI

    By Neil Churchman

    See original post here.

    Imagine there’s no poverty among musicians. It isn’t hard to do – at least not for the growing number of supporters of a universal basic income, or UBI.

    Imagine a fixed monthly sum, paid by the state to all, without means-testing, and guaranteeing dignity and financial independence. Imagine freeing musicians to do what they do best without having to worry about the rent, mortgage or food bills.

    For dreamers? Maybe. But an increasing number of economists, employment experts, sociologists and trades unionists believe UBI is an idea whose time is fast approaching.

    And, in a sign of that gathering momentum, a motion backing UBI was passed last summer by the Musicians’ Union, and was presented to the TUC’s Young Workers’ Conference this spring (2-3 April). The initiative is being led by MU member and clarinettist Sam Murray, who lectures in music business and arts management at Middlesex University. He explained that he was inspired, in part, by looking at the origins of one of the most important recent movements in UK popular music.

    “If you go back to bands in the 80s, particularly The Specials and the 2-Tone scene around Coventry, you were seeing musicians having to go on the dole in between each record they made, because there was nothing to support the creativity process. Then I just connected the dots,” he says.

    Musicians should be able to pay their bills and support themselves through that process. UBI creates that guaranteed safety net.

    Sam Murray

    The resulting motion, he says, was not only important to him, but also marked a key moment for the MU. 

    “It was incredible to have the support of the whole Union behind this idea. It was a proud moment to see that we were willing to back a policy that is going to have a wider impact on society and, although we know the benefits for our own sector, we are also willing to call for a mass societal change.

    Improving musicians’ lives

    The MU is one of the first unions to throw its weight behind UBI – another source of pride, says Sam. “It really makes a statement that the MU is willing to play its role within the trade union movement. And we’re ready to fight for wider impacts on society that are beyond the remit people usually expect the MU to have.”

    The plight of those in the creative industries during the coronavirus pandemic has intensified the calls for UBI. Figures suggest around a third of musicians stepped away from the sector during the lockdowns, taking other jobs to make ends meet. It’s still not clear how many will return, and the effects on the next generation of British musicians are likely to be long-lasting. Sam believes a guaranteed income could have limited the damage.

    “I was working with a lot of young students who were about to graduate, wanting to go into freelance positions, but they couldn’t because there would have been absolutely no support for freelancers in the music industry.

    “They were coming out into a terrible market, that was almost decimated for them. They had no opportunity, whereas, if UBI was there, they would have been able to have that support and safety net to go into those roles and develop them,” he says.

    Visionary dream

    UBI has a long history. Visionary thinkers from Thomas More, five centuries ago in his book Utopia, to Martin Luther King Jr during the US Civil Rights Movement, have been suggesting it as a means of eradicating poverty.

    Experiments have been staged around the world, with varying degrees of success. One of the most ambitious has been underway in Kenya, where 20,000 villagers have been receiving guaranteed payments since 2016. The result is that hunger is down, while mental and physical wellbeing have improved. Research into a scheme adopted in 1974 in Manitoba, suggest it, too, was beneficial. For four years, everyone in the small town of Dauphin was guaranteed a basic income designed to lift them above the poverty line.

    Studies showed that school performance improved, hospitalisations fell by more than eight per cent, domestic violence decreased, mental health improved and workers tended to stay in their jobs. “People in Dauphin had not only become richer, but also smarter and healthier,” according to historian and author of Utopia for Realists Rutger Bregman, who is a keen advocate of UBI.

    He believes that, if implemented fully, it could end poverty forever, and for a lot less money than many experts expect. In a recent TED talk, he highlighted figures that show raising people out of poverty in the United States would cost around $175bn a year, compared with the $500bn estimated annual bill in terms of health care and tackling crime of allowing child poverty to continue unchecked.

    Opposing viewpoints on UBI

    Practical and political obstacles abound, of course. Among the sceptics is Chris Goulden, deputy director of policy and research at the anti-poverty charity, The Joseph Rowntree Foundation. For him, the cons of UBI seriously outweigh the pros. He has argued that the fundamentals – that everyone should get a baseline level of state support, even if they choose not to do anything to try to earn money for themselves, and that taxes would have to increase substantially – would be seen by most politicians as a vote-loser, particularly given the long-standing evidence on public attitudes to welfare.

    It’s an interesting debate, he concludes, but “rather than continuing to be distracted by it, we should focus on improving the social security system that we have already got – God knows it needs it”.

    If a truly universal version of UBI is – for the time being – wishful thinking, closed schemes focused on sectors like music and entertainment appear much more likely to gain traction, particularly in the wake of the pandemic, which hit the industry hard.

    In France, there is the Intermittence du Spectacle system, designed to support freelancers in the creative industries during periods when they are out of work. The Irish government’s universal basic income pilot is open to applications from workers in the arts sector, setting aside €25m for a three-year experiment involving around 2,000 people.

    Targeted schemes like those could be a springboard to more comprehensive UBI in the future, according to MU Campaigns and Social Media Official, Maddy Radcliff.

    “The motion to the TUC Young Workers Conference will highlight that French option as a kind of midway point,” she explains, describing the new interest in UBI in post-pandemic Britain as a “glimmer of hope that came out of a very dark time”.

    “At the beginning of the pandemic there was zero support for freelancers,” she recalls. “So when the MU and other organisations leapt into gear, we started talking about options. One of those was UBI. Instead we got the Self-Employment Income Support Scheme, (SEISS). It helped over two million people who would have got nothing, but 38% of musicians were excluded. It failed too many people. UBI is a potential solution to that.”

    Challenging myths around welfare

    Mention UBI and it’s not long before the accusation emerges that it would become a refuge for scroungers. Sean Healy, director of the thinktank, Social Justice Ireland, suggests this won’t be the case. “It is very likely that the evaluation will show that most artists in the pilot don’t watch TV all day,” he explains. “Rather, they will be seen to engage in more artistic activity – they may even generate more market income.”

    Sam Murray and Maddy Radcliff also believe the idea that UBI is a “licence to loaf” is misguided and based on prejudice. Maddy points to the very low number of people who commit fraud within the current benefit system. “It is used as a tactic to justify cutting the welfare state,” she says. “It’s a myth that needs to be challenged.” 

    And Sam notes: “One of the problems we have is that people are always quick to assume the worst about others. Most people in the world want to work and to be able to contribute to society.”

    Benefit boost

    Looking ahead to future conversations about UBI, Sam Murray expects resistance from some who think the needs of the less well-off would be better met by boosting the current system of benefits.

    However, the model Sam is suggesting would preserve much of what already exists, with UBI payments topped up by supplementary benefits to people with a whole range of additional needs.

    “It’s going to be tricky, some [unions] are not yet fully on board with it, but we are hoping there are strong movements within the larger unions and the Labour party to support UBI,” he says. “Most sectors will listen to our story about how the pandemic has exacerbated the need for UBI, and will recognise it within their own unions.”

    And whatever happens, Sam believes the direction of travel is clear, and the seeds are being sown now for a meaningful conversation around UBI. “There’s nothing to stop us from working out where our support lies and being a stronger network to take it forward,” he says.

    A policy that makes sense

    Toby Lloyd is a co-founder of UBILAB Arts, a creative-industry focused section of the global UBILAB network, through which groups of citizens, researchers and activists around the world discuss and explore the possibilities of universal basic income.

    “It makes sense for all the unions representing creative people to make the case for it,” he says. “I am incredibly keen to see what happens, and really excited that the Musicians’ Union is campaigning for basic income.”

    The music industry is an ideal place to test UBI

    The sheer variety of roles within the sector, from writers and performers to studio technicians and the staff who work in arts and music venues, make the industry an ideal test bed for a UBI scheme, he believes.

    “You would have a very varied and rich data source. Creative people, especially freelancers, are an excellent model as participants. Basic income would enable people who work in the creative industries to do what they do, but to a better degree.”

    How could UBI benefit musicians in the UK?

    Music is a powerful, and often overlooked, driver of the UK economy. But, like any other big industry, it requires a reliable and regular intake of fresh talent and expertise to maintain itself. That’s why the effects of the exodus during the pandemic are worrying so many experts.

    Easing the financial pressure by guaranteeing a basic income could pay dividends – creating a bigger space for creativity and allowing more people to consider a job in music, and not just those who have the means to survive the hard times.

    Some form of Universal Basic Income would ensure that musicians are paid for every stage of the artistic process; ‘starving in a garret’ would no longer have to be part of the job. Basic pay would acknowledge and reward the currently under-recognised ‘research and development’ aspect of the music industry – the creativity, the writing and rehearsing that all lead to the finished product.

    “It’s about musicians being paid for ALL of the work they do, in a way that enables them to live with dignity and financial independence, and not in fear of what will happen during a crisis,” says the MU’s Maddy Radcliff. “We need to be able to create art and a broad range of music that everyone can enjoy, and leave a better industry for the next generation of musicians.”

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  • Towards a European universal basic income

    By Carme Porta

    See original post here.

    Basic income (BI) is one of the most revolutionary and innovative proposals currently available to end poverty, redistribute wealth and build a fairer and more equitable society. It has been much talked about in recent years, especially since the Covid-19 pandemic we suffered in 2020. It is a proposal that has been gaining support and which will be a means to overcome the current framework of conditional aid. The system has created mechanisms to perpetuate the poverty trap, and the BR is there to overcome it. Subsidies conditional on situations of poverty discourage paid work, and individuals and families are immersed in a spiral of lack of resources and no capacity to save. The BR goes beyond subsidies conditional on situations of poverty, which can be contextual, and which stigmatize because their achievement is linked to this situation; subsidies which, moreover, usually have insufficient amounts and must be combined with a series of complementary aids, always linked to a context of poverty and social exclusion. These subsidies also have very high administrative costs, as there is a bureaucratic machinery that decides who should receive them and selects and controls them. BR overcomes all this framework and creates conditions for a freer and more egalitarian society.

    Faced with the growing inequalities in the society in which we live, the Fundació Josep Irla, together with the Coppieters Foundation, has published a study on the possible European funding of BR as an important part of advancing social justice in Europe. The study is based on the need to internationalise the BR: in a globalised world and economy, the obligation to structure redistribution proposals that go beyond current state borders is increasingly evident.

    The study on the possible financing of a European BR has been carried out by economists Daniel Raventós, Lluís Torrens and Jordi Arcarons and aims to answer a key question: can a European Union BR be financed? The response is yes, and different proposals for amounts and sources of funding are put forward. The three economists argue that BR is perfectly fundable at the European level, basically through three taxes: a reform of personal income tax, a wealth tax, and a carbon dioxide tax. The authors stress that they base their proposal on these taxes for reasons of simplification, given that they are a reliable and recurrent source of financing, and are difficult to circumvent. Basing financing on these taxes is a blatant reference to property rights, since by regulating and distributing property differently, another level of taxation can technically be established and distributed. Political will may or may not make this change possible. Large fortunes and huge inequalities are a problem for the freedom of the majority of the population. The European BR is a proposal that would make it possible to guarantee the existence of the entire population of Europe. Thus, the study addresses one of the most important objections to the development of BR: the need to design fair and inequality-reducing financing for the EU as a whole, and argues that a tax on large fortunes is absolutely necessary – and possible.

    The BR model that the study will be proposing is individual, unconditional and universal. BR replaces any other monetary benefit from the state as long as it is lower than the proposed amount. Moreover, the BR is not taxed and a moratorium of three years’ residence is foreseen in order to be able to receive it.

    The study will consider different models for its financing based on the parameters of justice, equity and redistribution. Four different scenarios have been chosen that develop different possibilities. At the methodological level, data from the European Union Statistics on Income and Living Conditions for 2020, provided by Eurostat, have been used. These data were used to analyse the income distribution and the situation of inequality, poverty and social exclusion of EU households in the 26 EU Member States, with the exception of Lithuania, where the data cannot be validated with the rest of the EU.

    The reference poverty line has been defined as 60% of the median net income of each household divided among its members – 40% in the case of severe poverty. This is central to the financing model. The basic income model on which the study is based is universal and therefore individual, which is why it is important to have disaggregated personal data on taxes and social contributions. The four different scenarios designed determine cash transfer proposals: what BR is received and how.

    The first scenario is the one preferred by the authors of the study. The amount is transferred according to the characteristics of the household; as the BR is individual, the amount is divided by all persons in the household. Therefore, it is an individualised income that applies the at-risk-of-poverty threshold of each household when calculating the amount.

    In the second scenario, a purely individual basic income is designed. The cash transfer is given according to household members, and variations are proposed for single-parent and single-person households: 95% of the at-risk-of-poverty threshold is granted to adults in these households, 70% to the rest and 30% to minors.

    A third scenario also applies pure individuality as the previous one; it differs in the fact that it lowers the calculation to 70% for adults in households that are not single-person or single-parent households.

    And the last scenario of the study follows similar criteria, but sets the severe poverty threshold for single-person households and gives 50% to minors.

    As noted above, the financing of these possible scenarios is based on three taxes. The main one would be personal income tax. A large part of the financing of the BR would come from this tax. A wealth tax and a carbon dioxide tax would complement the financing. The wealth tax is necessary to ensure greater equality and benefits for the poor, who make up the majority of the population. On the other hand, the carbon dioxide tax would be fully in line with the idea of environmental taxes and the measures envisaged in the Sustainable Development Goals (SDGs) agenda.

    The ethical-political justification for the proposal presented by the authors lies in the conception of justice and freedom inherent to democratic republicanism. Republican freedom is based on the guarantee of material existence; the BR would allow the majority of the population to escape poverty, and therefore domination, although not all of the population would benefit from it, as the wealth tax demonstrates. A BR would therefore give freedom to the entire population.

    This proposal for a European basic income is innovative and courageous; and it is, above all, a fair proposal that opens up opportunities for the majority of the population, and that points to new ways to end inequalities.

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  • The NHS is 75: could a universal basic income be our next ‘national religion’?

    By Calix Eden

    See original post here.

    Let me begin with the personal. The NHS saved my life. When I was thirteen, I had a burst appendix resulting in critical brain surgery. I was given a 50% chance of survival and a high chance of permanent brain damage. My parents asked the surgeon if there was anything they could do that would help financially. The surgeon replied: ‘money doesn’t come into it – your son will receive the very best treatment possible right here’. It is totally unconditional. Like so many of us, I owe my life to the NHS.

    Thirty years ago, Nigel Lawson said the NHS has become our religion. At the opening of the Olympics nurses bounced on beds, where usually multi-million-pound pop stars croon. Can you imagine singing prison staff or dancing refuse collectors? During Covid we clapped the NHS and banged our pans week in and week out.

    No other country that I know of has anything approaching this level of enthusiasm for their health service. In fact, the NHS has become personified to us. It is our collective mother and father rolled into one. The care is unconditional, just like a parent still loves their child through thick and thin. Perhaps Nigel Lawson understated it – the NHS is far more than a religion.

    After 75 years and – despite serious problems – the NHS is part of the permanent fabric of our society. Many of us may have suffered personal hardship from the NHS – an endlessly delayed operation, a wrong diagnosis, inability to find a dentist or a lengthy wait at A&E – but in our minds that is not the core fault of the NHS as such, but rather lack of funding. The NHS transcends the particular problems of the time. It is there for all of us and has become the national glue that binds us together as a society.

    More universalism: not more austerity

    I believe the key to why we love the NHS is its universalism and unconditionality. Early NHS pioneers realised that in order to build a better society we had to provide for everyone and – crucially – this was a long-term investment beyond the immediate cost. Universalism is the only way to ensure nobody misses out. It is extraordinary to think how radical and daring this thinking was at a time when the country was bankrupt and in ruins.

    The NHS faced widespread establishment opposition from Churchill’s Tories – they voted against it 21 times – and the BMA who likened it to the National Socialism we had just defeated in the war. Now our dire situation as a country shares broad parallels with 1948. Our knee jerk reaction is always more austerity, but this has proven again and again to be a failure. It just shrinks the economy and makes us poorer. Let’s think laterally and consider what has worked in the past. Perhaps the answer is to extend universalism and build something new to protect us all? A universal basic income paid to every one of us fits that bill.

    Security without stigma

    We should remember that universalism is actually progressive because in real terms it means more to those with the least. Think of it this way – if we give £100 to someone wealthy and the same amount to someone on the breadline, it means little to the wealthy person but the world to the person with nothing. There is no stigma or jealousy, and none of the toxic ‘he gets more than me’ syndrome inherent in means testing.

    As far as the NHS is concerned, this could be a game changer. Mental health would surely improve if people had a consistent income – so many mental health problems are caused by financial stress and chronic insecurity – and diet would undoubtedly improve if people were off the breadline. The next government won’t want to take away something that has universal appeal and is our collective right, just like they don’t dare take away the NHS.

    Binding us together again

    The biggest cost to our NHS by a country mile is the pervasive poverty in our society, as Michael Marmot points out. A basic income for all would provide a foundation for everyone, rich or poor, black or white, able and disabled. Undoubtedly, it would cost a lot, but it would be an investment, just like the NHS. We spend untold billions in mopping up poverty, ill health and misery – could we find a way to support people before it happens? Whisper it quietly, but might this actually be cost-effective? Or, put it the other way round, can we afford to go on as we are?

    I know a basic income is not the answer to everything (nothing is)– we still need huge investment to tackle climate change, education, housing and, of course, our NHS – but it would be a vital start and would lift millions out of the poverty trap. Universalism is a net with no holes. Just as significantly a basic income for all could bind us together in a new way and give us renewed hope, just like the NHS in 1948.Now, that’s worth clapping for.

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  • Could a basic income scheme save the NHS tens of billions of pounds?

    See original post here.

    In the tapestry of socio-economic strategies, there is a thread that has started to gain attention – the concept of unconditional or basic income. A basic income scheme, which involves providing all citizens with a set amount of money regardless of their employment status, comes across as an audacious proposal in the face of traditional economic thinking.

    However, it’s worth noting that it has been examined for its potential benefits in various aspects such as poverty alleviation and mental health improvement.

    One arena where this scheme could potentially demonstrate significant impact is healthcare expenditure – particularly within the context of the National Health Service (NHS) in the United Kingdom.

    The argument rests on the hypothesis that guaranteed income can lead to improved overall health and well-being among citizens, thereby reducing dependency on healthcare services and consequently leading to financial savings for NHS. It’s an intriguing proposition that invites closer scrutiny through empirical evidence and theoretical arguments alike.

    Understanding the concept of unconditional payments

    The concept of unconditional payments, often referred to as a basic income scheme, entails regular cash transfers made by the state to all residents, irrespective of their employment status or wealth. This facilitates payment equality by ensuring that every citizen receives a specified amount of money on a regular basis.

    The universal allocation covers both the employed and unemployed, rich, and poor thereby promoting social equity. It is premised on the idea that everyone has a right to basic financial stability which should not be tied solely to employment.

    One of the primary objectives of this system is to provide income security through consistent monetary benefits that can either supplement low wages or act as a safety net for those without any source of income.

    Furthermore, it provides financial freedom by reducing dependence on precarious jobs and exploitative work conditions. With an assured basic income, individuals are afforded more choices in terms of occupation, education, and leisure activities among other things; thereby enhancing their overall quality of life.

    Moreover, this model holds the potential for economic empowerment especially among vulnerable communities. Reduced financial stress means individuals have more time and resources to invest in skills acquisition and entrepreneurial ventures which can catalyse local economic growth.

    Additionally, it has been postulated that such systems could also lead to improved social welfare outcomes including reduced poverty rates, better health indicators, and increased educational attainment levels in communities where they are implemented effectively.

    Thus, unconditional payment schemes embody an innovative approach toward creating more equitable societies with enhanced individual autonomy over personal finances.

    Potential health benefits of guaranteed income

    Guaranteed income programmes have been linked to significant improvements in health outcomes, potentially leading to reduced costs for healthcare systems globally.

    Despite concerns about the potential misuse of funds, research has consistently shown that such programmes often result in improved mental and physical wellbeing among beneficiaries.

    These benefits are largely attributed to the alleviation of financial stress and enhanced capacity for individuals to meet their basic needs, thereby improving overall quality of life.

    Reducing stress is a key factor in this equation. The financial security provided by guaranteed income reduces economic strain, contributing to mental health improvement by reducing anxiety and depression rates.

    Chronic disease reduction is also observed as a consequence of lessened worry over finances; stress-related conditions like hypertension and heart disease see a notable decline under such schemes.

    Additionally, poverty alleviation brought about by a basic income scheme can lead directly to better nutrition enhancement as recipients are able to afford healthier food options rather than resorting to cheaper, less nutritious alternatives commonly associated with low-income households.

    In tandem with these benefits, there is evidence suggesting a decrease in alcoholism when recipients are presented with an assured source of funds. This contradicts common fears that unconditional payments could encourage unhealthy behaviours or dependencies.

    Instead, the data indicates that it provides a platform for stability allowing individuals facing hardship an opportunity not just for survival but for substantial improvement in their health status.

    This ultimately translates into potentially massive savings for healthcare systems like the NHS through decreased demand for services due to improved population health.

    The impact on healthcare expenditure

    Implementing a universal basic income programme may significantly reduce healthcare costs by improving overall population health, thus reducing the demand on healthcare services. This reduction in demand could potentially save the NHS tens of billions of pounds each year.

    The primary mechanism through which this occurs is by reducing the incidence and severity of health problems that require costly interventions, such as hospitalisations and emergency care.

    The impacts on healthcare expenditure can be categorised under three main areas:

    • Reduced hospitalisations: Providing a stable income to individuals irrespective of their employment status can alleviate financial stress, leading to improved mental health. This subsequently reduces the need for hospital admissions due to stress-related illnesses.
    • Spending efficiency: With a basic income scheme in place, individuals are more likely to invest in preventive measures like regular check-ups and healthier lifestyle choices. Such proactive steps can aid in early disease detection or prevention, saving significant costs associated with treating advanced stages of diseases.
    • Public health impact: A guaranteed income can have positive effects at a community level too – improving living conditions and food security, thus fostering better overall public health.

    Amid these potential benefits lies another promising aspect – emergency care savings. With less financial insecurity there is likely to be fewer emergencies arising from untreated or poorly managed chronic conditions.

    Furthermore, improvements in mental health could result in fewer crisis situations requiring emergency intervention.

    In addition to direct savings from reduced use of high-cost services, indirect savings may also materialise from increased productivity and lower social service expenses when people are healthier and less stressed.

    Therefore, it becomes evident that incorporating a basic income scheme could positively influence not only individual lives but also transform public spending dynamics towards more efficient pathways while simultaneously promoting optimal health outcomes across communities.

    Case studies supporting the potential of a basic income scheme

    Examining real-world models sheds light on the potential of a basic income scheme; for instance, an interesting case comes from the city of Stockton in California.

    In 2019, a select group of residents started receiving $500 per month with no strings attached – a move akin to planting seeds in infertile land.

    After one year, preliminary data revealed significant improvements in recipients’ wellbeing: fewer instances of depression and anxiety, better performance at work or school, and improved health outcomes – painting a vivid picture of how financial stability can serve as fertile ground fostering healthier societies.

    Analysing this initiative’s behavioural effects provides further insight into its potential benefits.

    Recipients reported less stress about meeting basic needs such as food and housing, which directly corresponds with higher rates of mental well-being.

    Notably, this programme also had positive implications for income inequality and poverty reduction – critical elements in improving overall social welfare. The alleviation of financial strain allowed individuals more freedom to invest in their health, echoing similar findings from Finland’s universal basic income experiment where recipients were found to have fewer health problems compared to those not receiving the benefit.

    The case study also illuminates intriguing employment dynamics under a universal basic income scheme. Contrary to concerns about reduced motivation for work, many recipients utilised the funds as a safety net allowing them to take risks towards better job opportunities or pursue further education – contributing to economic stimulation through enhanced productivity and upward mobility.

    This evidence provides compelling support for the argument that universal basic income could lead not only to improved individual well-being but also substantial savings on healthcare costs by reducing demand for NHS services due to preventable illnesses related to financial stress.

    What are the challenges and controversies of a basic income scheme?

    Despite the promising outcomes illustrated in these case studies, universal basic income programmes are not without their share of controversies and challenges.

    The issue of scheme sustainability is a primary concern, as the long-term viability of such programmes depends on consistent funding sources and robust economic conditions. Uncertainty regarding consistent and sustainable funding sources for universal basic income initiatives can pose significant difficulties in their implementation and continuity.

    Furthermore, economic implications cannot be ignored; some critics argue that providing an unconditional income might disincentivise work, potentially leading to a decline in productivity levels.

    Political opposition also presents a considerable challenge to the adoption of basic income schemes.

    Political attitudes towards welfare policies differ drastically across various political ideologies, and this variance could impede consensus-building efforts required for implementing such reforms.

    Moreover, integrating a universal basic income scheme into the existing welfare system integration poses additional complexities as it necessitates restructuring current social security systems, which might be met with resistance from various societal sectors that favour maintaining established structures.

    Addressing income inequality is another contentious aspect associated with universal basic income schemes. While proponents argue that such schemes would help reduce poverty rates by ensuring everyone receives a minimum amount of money regardless of their employment status or wealth level, opponents suggest that it might inadvertently exacerbate inequality by distributing resources uniformly without considering differences in needs among recipients.

    Henceforth, while there exists potential for substantial savings in healthcare expenditures through the implementation of universal base incomes – as evidenced by several case studies – these myriad challenges underscore the need for careful deliberation before adopting such radical socioeconomic reforms.

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  • Could a Universal Basic Income be the answer to cost of living woes?

    By Madeleine Wedesweiler

    See original post here.

    Models for a Universal Basic Income (UBI) show that giving money to everyone in Australia would never come cheap.

    But experts say the concept, which has been around since the 1800s, provides useful ideas around policies that could help ease people’s financial pain during rising inflation and cost of living pressures.

    A UBI is essentially a payment from the state to each and every household with no strings attached, like a ‘dividend’ from being a ‘shareholder’ in society.

    It would allow some not to work, but others would need to work and pay extensive taxes on their income.

    Proponents argue such a payment would provide a society-wide safety net, protect workers from job losses from the increasing automatisation of work, and lead to greater equality.

    It has widespread support – 51 per cent of Australians are in favour, according to the 2019−20 Australian Survey of Social Attitudes – but there are many challenges involved, the biggest one being finding the money to pay for it.

    How would a UBI work in Australia?

    Associate Professor at the Australian National University’s Centre of Social Research and Methods Ben Phillips told SBS News a model of basic income he costed was “wildly expensive”.

    The model would see every adult in Australia take home $27,600 a year, roughly what the current age pension is, and wouldn’t mean an end to some payments that need to continue including childcare and family payments.

    “It would increase welfare spending from about $140 billion a year at the moment to probably over $550 billion per year, if done in a full-blown way,” he said.

    Associate Professor Phillips said that kind of spending is not a live policy option, and he would recommend updating the current welfare system instead.

    “You’d be looking at having to pretty much double personal income tax,”

    he said.

    “So if your current tax rate was, say, 30 cents of the dollar, it becomes 60 cents in the dollar. You might have to increase the GST from 10 per cent to 25 per cent, on everything.”

    In 2018, the then Greens leader Richard Di Natale announced a universal basic income policy for Australia, suggesting a scheme of between ‘$20,000 and $40,000 year’ would be necessary to ensure adequacy.

    Greens Treasury spokesperson Nick McKim declined to comment for this article.

    Co-Director of the Australian Basic Income Lab, Ben Spies-Butcher, said another model he costed was a liveable income guarantee that was centred on changing the requirements around JobSeeker requirements.

    It would cost around $103.45 billion and require income taxes to be raised by 12 percentage points.

    “The welfare system has a lot of surveillance and very harsh oversight, so this model said instead of having this thing that means you have to go to all these job appointments, or all these training programs, which often are pretty useless, what we should do is broaden our understanding of what a contribution to society looks like,” he said.

    “So if you’re caring for people, if you’re volunteering in the community, those sorts of things also count, and we should change it, so it’s similar to the tax system.”

    How have other countries trialled a UBI?

    A new trial announced this month in England would see 30 recipients receive no-strings-attached payments of around $2,800 a month for two years.

    Dr Spies-Butcher said there had been an explosion of UBI pilots and experiments and renewed interest in the topic during the COVID-19 pandemic.

    “If the pilots and trials weren’t working, they wouldn’t still be going,”

    he said.

    Since September 2022, Ireland has been trialling a program of giving 2,000 artists a payment of around $525 a week so that they could focus on making music, poetry and visual arts without focusing on a day job.

    It is not means tested, so participants may still be eligible for social welfare payments and will still be able to earn other money from their work.

    Fellow Co-Director of the Australian Basic Income Lab, Troy Henderson, said it could bring positive spillover effects for the rest of society.

    “But I’d make the broader point that if we’re talking about a UBI, we would like it to be available to everybody,” he said.

    Would it solve inflation problems?

    Dr Henderson said increasing any kind of social assistance could have a very important impact on people living in poverty in current circumstances.

    “I think there’s some merit to the argument that we should consider a universal basic income right now in relation to the cost of living crisis, because we’ve seen even when you break down inflation, that the largest increases in prices have been in relation to staple goods, things that people need on an everyday basis. They’re not discretionary,” he said.

    “So those goods are disproportionately important to people on lower incomes, including those receiving different types of social assistance payments.”

    Dr Spies-Butcher said a UBI wouldn’t benefit everyone right now, but it would take pressure off some groups, including parents with young children and students, who would benefit from not working.

    “The insecurity that’s associated with (the welfare system) is really debilitating,” he said.

    “Economic security is not just about how high costs are, it’s about being able to rely on having income and being able to plan in order to be able to meet your needs over time and not be completely terrified and stressed out all the time about whether payments will be cut or reduced.”

    Dr Spies-Butcher added it’s important to realise a UBI wouldn’t be a silver bullet for the rising cost of living but would need to be complemented by other policies on housing and healthcare.

    How would a UBI impact the workforce?

    One of the common arguments against a UBI is that it would be a disincentive to people working, and their productivity and the economy would decline.

    Dr Spies-Butcher said there’s extremely little evidence of that.

    “There’s been heaps of trials around the world, and the trials are different so that, they’re targeting different things. But pretty consistently, there’s been a very small labour market effect,” he said.

    However, Associate Professor Phillips disagreed and said that because of the extraordinary taxes people would have to pay on their income, it wouldn’t overall be a good thing for employment but would benefit mental health.

    What about other welfare policies?

    The UBI is not in the mainstream frame of policy discussion by major parties, but it does offer insights into other ideas on modernising welfare policy.

    “There’s elements of our welfare system that I think are a bit too harsh,” Associate Professor Phillips said.

    “I think loosening some of those is probably a good thing would help a lot of people, particularly very disadvantaged people, and making the system a bit more generous for those who really need it. That’s where I would be going first, rather than a UBI.”

    Dr Henderson said if the Labor government wants to be progressive on welfare issues, it first needs to tackle “some of the cultural norms and stereotypes we have around the deserving and undeserving poor”.

    “The classic example is, you know, we have the pejorative term in Australia of the dole bludger, the person kicking back eating, you know, corn chips and, and smoking, while everyone else works hard.

    “Then, if you reach retirement age the next day, you are a deserving old age pensioner.”

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  • How “windfall profits” from AI companies could fund a universal basic income

    By Dylan Matthews

    See original post here.

    There’s a lot of money in AI. That’s not just something that startup founders rushing to cash in on the latest fad believe; some very reputable economists are predicting a massive boom in productivity as AI use takes off, buoyed by empirical research showing tools like ChatGPT boost worker output.

    But while previous tech founders such as Larry Page or Mark Zuckerberg schemed furiously to secure as much control over the companies they created as possible — and with it, the financial upside — AI founders are taking a different tack, and experimenting with novel corporate governance structures meant to force themselves to take nonmonetary considerations into account.

    Demis Hassabis, the founder of DeepMind, sold his company to Google in 2014 only after the latter agreed to an independent ethics board that would govern how Google uses DeepMind’s research. (How much teeth the board has had in practice is debatable.)

    ChatGPT maker OpenAI is structured as a nonprofit that owns a for-profit arm with “capped” profits: First-round investors would stop earning after their shares multiply in value a hundredfold, with profits beyond that going into OpenAI’s nonprofit. A 100x return may seem ridiculous but consider that venture capitalist Peter Thiel invested $500,000 in Facebook and earned over $1 billion when the company went public, an over 2,000x return. If OpenAI is even a 10th that successful, the excess profits returning to the nonprofit would be huge.

    Meanwhile, Anthropic, which makes the chatbot Claude, is divesting control over a majority of its board to a trust composed not of shareholders, but independent trustees meant to enforce a focus on safety ahead of profits.

    Those three companies, plus Microsoft, got together on Wednesday to start a new organization meant to self-regulate the AI industry.

    I don’t know which of these models, if any, will work — meaning produce advanced AI that is safe and reliable. But I have hope that the hunger for new governance models from AI founders could maybe, possibly, if we’re very lucky, result in many of the potentially enormous and needed economic gains from the technology being broadly distributed.

    Where does the AI windfall go?

    There are three broad ways the profits reaped by AI companies could make their way to a more general public. The first, and most important over the long-term, is taxes: There are a whole lot of ways to tax capital income, like AI company profits, and then redistribute the proceeds through social programs. The second, considerably less important, is charity. Anthropic in particular is big on encouraging this, offering a 3-1 match on donations of shares in the company, up to 50 percent of an employee’s shares. That means that if an employee who earns 10,000 shares a year donates half of them, the company will donate another 15,000 shares on top of that.

    The third is if the companies themselves decide to donate a large share of their profits. This was the key proposal of a landmark 2020 paper called “The Windfall Clause,” released by the Centre for the Governance of AI in Oxford. The six authors notably include a number of figures who are now senior governance officials at leading labs; Cullen O’Keefe and Jade Leung are at OpenAI, and Allan Dafoe is at Google DeepMind (the other three are Peter Cihon, Ben Garfinkel, and Carrick Flynn).

    The idea is simple: The clause is a voluntary but binding commitment that AI firms could make to donate a set percentage of their profits in excess of a certain threshold to a charitable entity. They suggest the thresholds be based on profits as a share of the gross world product (the entire world’s economic output).

    If AI is a truly transformative technology, then profits of this scale are not inconceivable. The tech industry has already been able to generate massive profits with a fraction of the workforce of past industrial giants like General Motors; AI promises to repeat that success but also completely substitute for some forms of labor, turning what would have been wages in those jobs into revenue for AI companies. If that revenue is not shared somehow, the result could be a surge in inequality.

    In an illustrative example, not meant as a firm proposal, the authors of “The Windfall Clause” suggest donating 1 percent of profits between 0.1 percent and 1 percent of the world’s economy; 20 percent of profits between 1 and 10 percent; and 50 percent of profits above that be donated. Out of all the companies in the world today — up to and including firms with trillion-dollar values like Apple — none have high enough profits to reach 0.1 percent of gross world product. Of course, the specifics require much more thought, but the point is for this not to replace taxes for normal-scale companies, but to set up obligations for companies that are uniquely and spectacularly successful.

    The proposal also doesn’t specify where the money would actually go. Choosing the wrong way to distribute would be very bad, the authors note, and the questions of how to distribute are innumerable: “For example, in a global scheme, do all states get equal shares of windfall? Should windfall be allocated per capita? Should poorer states get more or quicker aid?”

    A global UBI

    I won’t pretend to have given the setup of windfall clauses nearly as much thought as these authors, and when the paper was published in early 2020, OpenAI’s GPT-3 hadn’t even been released. But I think their idea has a lot of promise, and the time to act on it is soon.

    If AI really is a transformative technology, and there are companies with profits on the order of 1 percent or more of the world economy, then the cat will be far out of the bag already. That company would presumably fight like hell against any proposals to distribute its windfall equitably across the world, and would have the resources and influence to win. But right now, when such benefits are purely speculative, they’d be giving up little. And if AI isn’t that big a deal, then at worst those of us advocating these measures will look foolish. That seems like a small price to pay.

    My suggestion for distribution would be not to attempt to find hyper-specific high-impact opportunities, like donating malaria bednets or giving money to anti-factory farming measures. We don’t know enough about the world in which transformative AI develops for these to reliably make sense; maybe we’ll have cured malaria already (I certainly hope so). Nor would I suggest outsourcing the task to a handful of foundation managers appointed by the AI firm. That’s too much power in the hands of an unaccountable group, too tied to the source of the profits.

    Instead, let’s keep it simple. The windfall should be distributed to as many individuals on earth as possible as a universal basic income every month. The company should be committed to working with host country governments to supply funds for that express purpose, and commit to audits to ensure the money is actually used that way. If there’s need to triage and only fund measures in certain places, start with the poorest countries possible that still have decent financial infrastructure. (M-Pesa, the mobile payments software used in central Africa, is more than good enough.)

    Direct cash distributions to individuals reduce the risk of fraud and abuse by local governments, and avoid intractable disputes about values at the level of the AI company making the donations. They also have an attractive quality relative to taxes by rich countries. If Congress were to pass a law imposing a corporate profits surtax along the lines laid out above, the share of the proceeds going to people in poverty abroad would be vanishingly small, at most 1 percent of the money. A global UBI program would be a huge win for people in developing countries relative to that option.

    Of course, it’s easy for me to sit here and say “set up a global UBI program” from my perch as a writer. It will take a lot of work to get going. But it’s work worth doing, and a remarkably non-dystopian vision of a world with transformative AI.

    The post How “windfall profits” from AI companies could fund a universal basic income appeared first on Basic Income Today.

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  • Opinion: Why every adult should get $500 a week from the government, no questions asked

    By Peter FitzSimons

    See original post here.

    Adjunct Professor Everald Compton AO, 92, has been the most successful professional fundraiser in the country. He is the founder of National Seniors Australia, co-founder of the Brisbane Lions and leader of the team that got voluntary assisted dying legislation through the Queensland parliament. I talked to him on Thursday.

    Fitz: Everald, we’ll get to your proposal on the Universal Basic Income (UBI), but first I want to go back to the principles of fundraising which you taught me 40 years ago, through which you have raised half a billion dollars on more than 1000 public campaigns.

    EC: Go on.

    Fitz: The first one was, “no-one built great things on 20-cent pieces thrown into a bucket.”

    EC: Exactly. To get big money for big and important causes, you ultimately need to get most of that money from the people who can write big cheques. And this is the thing to bear in mind: people don’t so much give money to causes as to people. So I never took a job unless everyone on the fundraising committee had themselves dug deep. Then, and only then, will they be able to get other people to do the same.

    Fitz: The other one I remember is: “People don’t want to just give money into a gaping maw of need, they want to see exactly what their money goes to, and get the feeling that their money has made an actual difference.”

    EC: You remember it well. And afterwards, the donor must be kept up to date on achievements reached with their money. Otherwise, they’re not going to give again.

    Fitz: And so now, Everald, after you have put your weight behind fundraising causes for almost 70 years, I confess myself more than a little stunned to see you advocating for the Universal Basic Income for all Australians, the basic idea being that every adult in the country be given the rough amount of the pension – $500 a week – regardless of their job status or wealth. You state this should not be viewed as welfare, but as a basic human right.

    EC: Why are you stunned?

    Fitz: Well, for one thing, when I knew you well, courting your fine daughter in the early ’80s, you were a great supporter of Queensland premier Joh Bjelke-Petersen and I know you to be a close friend of John Howard – a friendship which included you fundraising for him, for free. All up, I would have had you marked down as a strong conservative. But this UBI sounds a lot like socialism. Just wait until Bronwyn Bishop hears about it!

    EC: What I believe I’ve done is to move to the centre of politics because I reject pure capitalism on one side and socialism on the other. I look at things and I say, “What is the best way to fix this problem?” And I don’t care whether the world thinks the UBI is a left-wing solution – it will work, and it is vital.

    Fitz: But, Everald, can we start with the cost? I don’t just mean the government giving out free money to everyone. Think of the number of microphones of the shock jocks that will simply blow up at the very idea of it, the word processors destroyed as the columnists unleash their thunder! And, more seriously, the gutting of the hard-working taxpayer to pay for such largesse, including to those who simply don’t want to work!

    EC: For all my life, there’s been a stigma attached to those getting money without work attached – the whole “lifters and leaners”, “dole-bludgers” and “welfare cheats” thing – and most of it is unfair. We must get away from this. The whole Universal Basic Income idea was designed in the Scandinavian countries and in those parts of the nations where it has been applied on a trial basis – in parts of the US and Canada, Finland, India, Iran, Uganda and so forth – it works. So here, instead of having an entire welfare apparatus expending huge resources to work out who qualifies for payments, who doesn’t, and trying to catch cheats, your starting point is that everybody gets it. You no longer need people who need money to fill out 25 pages for someone else to go through to decide. So the first virtue is simplifying the system and supporting everyone, including the people who don’t qualify for payments now and fall through the cracks for all sorts of reasons. And with the UBI, you’d never have the horrors of things like robo-debt.

    Fitz: But even if you did give it to the poor, is it not absurd to give $500 a week to wealthy people who simply don’t need it? And is it tax-free?

    EC: No, it’s not absurd. And if you are wealthy, you could tick a box where you decline it or donate it. But if you take it, all of it goes onto your taxable income. And here’s the thing. What’s been proved in places where this has been applied is that once people know they are to get a monthly remittance from the government, they are more inclined to try and set up their own business rather than go to work because they have the confidence to take risks. It helps with mental illness and the overall social benefits of a happier society are massive. With this simple system, you shrink your own vast bureaucracy, as you just get rid of all the narrowly applied means-tested social welfare programs and all the costly apparatus to work out who should get it and who shouldn’t.

    Fitz: Maybe it will encourage some people to be entrepreneurial and help the economy that way. But surely it would also encourage others to lie on the beach all day long, do nothing and live off the teat of the government, courtesy of the taxpayers?

    EC: Well, there’s a hell of a lot of them doing that right now. And the evidence is that instead of people sitting on their backsides and do nothing, it actually encourages people to do something, and it also enables people who are in a job that they don’t like to break out and learn a new profession while they’re living on their UBI.

    Fitz: But Everald, I come back to the tax! All that money has to come from somewhere, and it is surely inevitable that taxes would indeed have to go up to the Scandinavian levels.

    EC: No. Think of all the money spent trying to alleviate poverty and all the problems that come with it – the ill-health, the crime, the dysfunction. We say it is cheaper to pay the money first, to alleviate the problem from the beginning, instead of trying to fix it downstream.

    Fitz: It will still be hideously expensive.

    EC: That is why you must put the whole thing together with a different tax code where instead of people dodging high tax on income, people would have to pay a low tax on all the money that goes through their account – with no loopholes, no write-offs, no deductions. There will be no more tax evasion, and the rich will at last have to pay their fair share. If you did it that way, you could not only finance this, you could also finance all the roads, bridges, hospitals and schools, etc. Because the amount of money that rich people don’t pay in tax, with all these trusts and schemes and deductions, is so enormous. We’d end all that.

    Fitz: OK, so I didn’t realise that it’s a twin proposal, that with the UBI you’d put up a flat tax rate as well. If it got up, you’d be putting a lot of accountants out of work.

    EC: I’m doing my best to put PwC out of work already. What you have to realise is that at the top scale, the wealthy people, pay the least tax of anybody in Australia. And once the tax evaders start paying the tax they should, the money will flow from the top to everyone else.

    Fitz: All right. So, if it’s so great, why has no country in the world tried it in full?

    EC: They might soon. But why can’t Australia become a world leader in becoming the first nation to do this? It’s going to take a lot of homework to get it right. But the social benefits of it all are enormous.

    Fitz: I am still not convinced, though I might say that nor was I convinced the first time I heard arguments for normalising the drug laws and completely getting rid of prohibition. Abolishing the drug laws sounds like madness, until you explore, and it makes sense. Still, I’d be amazed if you can get the Australian political class engaged. I know that in the course of your career, you have visited Canberra 120 times, and were acknowledged for that this year in Question Time. What traction have you got on this one?

    EC: The last trip I did to Canberra, we went to all the people in all the parties and some were intrigued. Many have the same concerns as you, but agreed that it might be worth exploring.

    Fitz: Have you run the idea by John Howard, and if so, is he convinced?

    EC: No, I haven’t, Peter, as I know him well enough to be aware he will not buy UBI right now. My initial findings are that most LNP MPs will oppose it on ideological grounds. I have had positive support from MPs who are Labor, Greens, teals and other independents, but am not yet organised for a serious UBI campaign. Will commence that after political scientist Dr Karen Stenner and I formally lodge our petition to parliament asking for a committee to be set up to investigate it. At that point, we will really crank it up. Eventually, I reckon I can win the support of the LNP on the basis of how it will boost small business. At that time, I will call John Howard to get his backing.

    Fitz: I wish you well. Last thing, though. Andrew Denton said to me today that when he was pushing assisted dying in Queensland, you were a real force and had the energy of three men. How is it so, when you are 92?

    EC: That is nice of Andrew. At my age, I am glad to wake up every morning. And I want to achieve things. When I stop achieving things, I will die.

    The post Opinion: Why every adult should get $500 a week from the government, no questions asked appeared first on Basic Income Today.

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  • Basic income as a public health measure could save NHS billions

    by Agency Reporter

    See original post here.

    Researchers at the Universities of Northumbria, York, Bath and Strathclyde, in collaboration with think tanks Compass and Autonomy, have presented groundbreaking evidence on the role that Basic Income can play in dealing with our public health crisis.

    A new report, Treating causes not symptoms: Basic Income as a public health measure uses a range of economic and health modelling, public opinion surveys and community consultation to present cutting-edge evidence on the impact of Basic Income schemes.

    A basic income is a regular and unconditional cash payment to all individuals, designed to reduce poverty, enhance economic security and improve overall well-being.

    As a result of these potential benefits, researchers have looked at the knock-on effects for the economy and public health.

    Economic impact:

    • Even a more ‘modest’ basic income scheme (£75 a week, £3,900 a year) would reduce child poverty to the lowest level since comparable records began in 1961 and achieve more at significantly less cost than the anti-poverty interventions of the New Labour governments.
    • Child and pensioner poverty down by at least 60 per cent each.
    • Working age poverty down by between 29 per cent and 75 per cent depending on the scheme
    • Inequality down 55 per cent to the lowest in the world under the most ambitious scheme.

    Public health impact:

    • Between 125,000 and 1 million cases of depressive disorders could be prevented or postponed.
    • Between 120,000 and 1.04 million cases of clinically significant physical health symptoms could be prevented or postponed.
    • Between 130,000 and 655,000 quality-adjusted life years (QALYs) could be gained, valued at between £3.9 billion and £19.7 billion.
    • Based on depressive disorders alone, NHS and personal social services cost savings in 2023 of between £125 million and £1.03 billion assuming 50 per cent of cases diagnosed and treated.

    Through new polling, the report also found that the British public prefers a more generous Basic Income scheme, that significantly reduces poverty and inequality and improves physical and mental health. They want to fund those schemes through new wealth and carbon taxes and increased corporation taxes, but also view small increases in income tax as tolerable.

    Matthew Johnson, Professor of Public Policy at Northumbria University, and the project lead, said:

    “The findings of this report are clear: there is no obvious alternative to Basic Income that has the same multipurpose impact across society.

    “These first indications of public health impact are debate shifting, while evidence on British public opinion present clear pathways to funding through wealth, carbon and corporation tax increases. This should encourage administrations, such as in Wales and Greater Manchester, which have expressed support for policies like this.”

    Kate Pickett, Professor of Epidemiology, University of York, and co- author of The Spirit Level, said: “Given decades of measurable failure, it should be clear that people in local communities affected by poverty, insecurity and lack of opportunity are the authoritative voice on what they need to enhance their health and wellbeing. We need to listen to their expressed needs and lived experience and create policies that support them to flourish.”

    Dr Jonathan Coates, a GP in Newcastle upon Tyne and National Institute for Health Research In-Practice Fellow, Durham University, said: “As a GP, I increasingly find that my patients are in financially precarious positions, regardless of whether they are in work or on benefits, and this has a clear impact on their physical and mental health. Basic Income represents an opportunity to follow in the footsteps of previous bold interventions to address the causes, not the symptoms, of illness.”

    The research was funded by the National Institute for Health and Social Care Research.

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  • Go for Universal Basic Income, urges professor in Malaysia

    By Petaling Jaya

    See original post here.

    Malaysia University of Science and Technology economics professor Geoffrey Williams said the government can look into providing a monthly Universal Basic Income scheme to help Malaysians in need.

    “There’s no other targeted subsidies that should be introduced apart from electricity prices and tiered prices for petrol.

    “However, the government can provide targeted social assistance to make the cost of living more affordable,” he added.

    Prof Williams said the previous assistance scheme (Sumbangan Tunai Rahmah), which was paid out on Jan 17, had cost RM1.67bil.

    “If this is continued in Budget 2023 and paid each month as a Universal Basic Income scheme, it would cost RM20bil – which is within the current budget,” he said, adding that it would be more financially viable than providing more subsidies.

    He said that further price controls and subsidies would be harmful to the economy as they would be costly and could cause market distortions as well as supply shortages.

    In his Royal Address at the Dewan Rakyat yesterday, the Yang di-Pertuan Agong expressed concern over the hardship faced by those in the B40 group.

    The King spoke about taking a more holistic approach in dealing with the rising cost of living.

    Prof Williams said the government had made swift decisions that would help the people cope with the cost of living.

    “For example, freezing electricity tariffs, bringing forward the assistance payments and beginning to open up markets to competition.”

    He also noted that the central bank had paused interest rates so that credit costs would not rise.

    “Inflation actually peaked in August last year and is now on a clear downtrend,” he added.

    Consumer Association of Penang (CAP) education officer NV Subbarow said the government through the Menu Rahmah initiative had helped a lot of people since its inception, including university students.

    However, he urged the relevant ministries to also continue ensuring that prices of necessary goods were controlled.

    “Make sure only people in need get subsidies,”

    he said.

    Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said the King’s concern for the rakyat was clearly reflected in His Majesty’s speech yesterday that touched on economic empowerment and human capital development to boost economic recovery.

    He urged the government to continue prioritising targeted assistance in any form to the lower (B40) and middle (M40) income groups, who comprised 80% of the population.

    “Any incentives, subsidies or (cash) handouts from the government should have a targeted approach,” he said.

    He also said the business community was looking forward to grants to help them grow their business, aside from human resource training.

    The post Go for Universal Basic Income, urges professor in Malaysia appeared first on Basic Income Today.

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  • A New Kind of Disaster Aid: Pay People Cash, Before Disaster Strikes

    By Somini Sengupta

    See original post here.

    Disasters can push the world’s poorest deeper into poverty. Now aid agencies are trying something new. They’re giving small bits of cash to people just before disaster strikes, instead of waiting until afterward.

    While these experiments are in the early stages, and there is little research on their effectiveness, there are signs that they can help people protect themselves and their property in ways they couldn’t otherwise.

    This approach has been tried out in several different circumstances: before a cyclone was due to make landfall in Mozambique last March, before a hurricane brought torrential rains to Central America last October, and now, to help people move away from the landslide-prone slopes of Mount Elgon in Uganda.

    The reason these one-off payments, known as anticipatory cash relief, matter now is that disasters are being supersized by human-induced climate change, and they’re often inflicting the most pain on the poorest people in the world. When crops or property are uninsured, sudden disasters like floods, or a slow ones, like droughts, can be ruinous. People can lose their only means to make a living, their land, and their only assets, livestock animals.

    Consider what happened when the World Food Program sent about $50 to 23,000 families who lived along the Jamuna River in Bangladesh, just days before the area was projected to be hit with extreme floods in July 2020. People who got the money were “less likely to go a day without eating” during those floods, compared with those who didn’t receive payments, according to an independent review by researchers at the University of Oxford and the Center for Disaster Protection, which is funded by the British aid agency.

    More surprising, even three months later, researchers found that those who received cash were eating better, and they were less likely to have sold off their animals or taken out high-interest loans.

    Cash relief as a general antipoverty tool has also yielded surprising gains. A recent global study of seven million people in 37 countries found that giving cash directly to poor people led to fewer deaths among women and children. Another study found that cash aid averted food insecurity in some places in southern Africa nearly 20 years ago, although not in others, where food prices soared.

    In the United States, cash assistance to mothers for the first year of their children’s lives strengthened their babies’ brain development. Dozens of American cities have pilot projects to give poor residents no-strings-attached cash.

    Now comes the additional pressure of extreme weather, both slow and fast, aggravated by the burning of coal, oil and gas. Proponents of cash relief say it’s a more efficient way to use aid money because cash incurs fewer logistical expenses and funnels money directly into the local economy.

    “Cash transfers help families survive climate disasters,”

    said Miriam Laker-Oketta, research director for GiveDirectly, an aid group that does just that. “Cash provides choice and reaches quickly.”

    Skeptics say they are a Band-Aid solution that is no match for a battery of hazards that poor people face in the global South: deadly heat, rising sea levels, erratic rains. Not everyone who needs it will get cash. “It’s not sustainable. There will always be a limitation to where that money is coming from,” said Wanjira Mathai, a managing director at the World Resources Institute, an advocacy group.

    Cash payments are increasingly being tried out in different places. The International Federation of Red Cross and Red Crescent has given cash to Mongolian shepherds during severe cold snaps and to families in Guatemala and Honduras just before Hurricane Julia brought catastrophic floods last October.

    The World Food Program has been offering cash not just before a sudden disaster but also, in Ethiopia, before a long drought set in. People used the money to buy food, to pay off loans and, if they were also given drought forecasts, to buy food and medicines for their animals, the agency concluded in its own analysis.

    Dr. Laker-Oketta’s group has targeted villages in Malawi, also hard hit by drought in recent years. Last year, it sent families two installments of $400.

    In one southern village, Chipyali, the chief, Adidja William, bought a tiny solar panel, which allowed her to put up a light and a fan at home. Suwema Grey bought five goats.

    And Maggie Dyton built a brick and tin house to replace her old one, which was made from mud and thatch and leaked every year in the rains. She ran out of money to buy wood for the door, though. She spent the last bits of her cash aid on food.

    Even without a door, she was relieved she had finished her house before the torrential rains came this year on the back of Cyclone Freddy. “The old house,” she said, “would have been completely destroyed.”

    The limits of cash relief were also on full display in Chipyali. Some of those who spent it on expensive hybrid seeds and chemical fertilizers, as they had been advised, lost everything. The rains washed away all they had planted.

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  • In the war over remote work, companies are turning full-time jobs into low-paying gigs

    By Aki Ito

    See original post here.

    Over the past three years, the American workplace has undergone all kinds of changes as a result of the work-from-home revolution. Perhaps the most widely discussed has been the way the remote age has prompted workers to emotionally detach from their jobs. Some bemoaned it as quiet quitting; others celebrated it as a much-needed correction to the toxic demands of hustle culture. Either way, it’s clear that people aren’t feeling as connected and devoted to their jobs as they did when they were seeing their coworkers in person every day. 

    But employees, it turns out, aren’t the only ones distancing themselves from the office: Employers are quiet quitting on the whole idea of traditional full-time employment. In a survey conducted by the Atlanta Fed last year, businesses said remote work had led them to stock up on part-time employees, temps, independent contractors, and outsourced positions both at home and abroad. If workers are going to be remote, the thinking seems to go, why not get the cheapest remote workers available? Fewer full-time jobs means fewer costly benefits: healthcare, pensions, on-the-job training, a steady paycheck. In the age of WFH, companies are gig-ifying the American office.

    “It’s the Uberization of the workforce,”

    says Nicholas Bloom,

    a professor at Stanford University who was one of the economists behind the Atlanta Fed survey. “The more remote you are, the more Uberized the job is, and the more you’re just being paid for the day or for the week.”

    For companies, offering full-time employment has always been expensive and risky. But there was one reason bosses were reluctant to outsource jobs: They couldn’t imagine trusting people to get their work done out of sight. They supervised by way of butts-in-seats surveillance — checking that people were at their desks, typing away and making calls and furrowing their eyebrows in a way that suggested they were working hard. That ruled out contractors, because contractors work remotely. And it ruled out many part-timers, because no one wanted to commute 45 minutes into an office just to work a four-hour day.

    But after the pandemic hit, bosses were astonished to discover that their teams were perfectly capable of doing their jobs from home. They learned to supervise their workers by checking their output, not their hours logged at a desk. That, in turn, made them more comfortable with the idea of hiring far-flung contractors, or part-timers who could put in a few hours a day from home. And in a remote environment, even full-time employees started to feel more distant — less like the cliché that they were “family,” and more like faceless avatars on Slack. 

    “If somebody’s coming into your site five days a week, week in, week out, it feels like they’re your employee,”

    says Bloom.

    “You want to give them healthcare, a pension, train them up, have them as a long-term part of the firm. But as soon as they’re not on site, managers are thinking it’s not so obvious they want to pay all those additional costs. Employees aren’t mixing, they aren’t talking over lunch about kids. They may be less loyal to the company. I do hear this from companies — the more remote someone is, the more transactional it feels.”

    Other surveys confirm the shift away from full-time employment. McKinsey estimates that independent workers — a category that includes gig, contract, freelance, and temporary workers — now make up 36% of the workforce. That’s up from 27% in 2016. On Gusto, a payroll platform for small businesses, the average company retains one contractor for every five employees — a ratio that has jumped 63% since 2019. And services that make it easier for employers to hire and manage independent workers have been among the biggest winners of the pandemic. At Deel, which helps companies hire abroad, annual recurring revenue has hit $295 million — up from only $4 million in January 2021.

    Whether all this is a good thing or a bad thing depends on one critical question: Are employees being forced into independent work because they can’t find full-time jobs, or are they opting for gig work because they prefer it? Both McKinsey’s and Gusto’s data indicate it’s mostly the latter. When McKinsey asked people to identify the main reason they’re working in contracting, freelance, or temporary jobs, 25% cited the freedom and flexibility their arrangements offer, and another 25% said they enjoy the work. Everybody has their own reason for stepping away from the full-time grind. Digital nomads don’t want to be tied down by a single job. Sixty-somethings want to work a lighter schedule as they near retirement. New parents are resisting corporate America’s return-to-office dictates. Gen Zers, having lost their sole incomes in the mass layoffs that accompanied the COVID shutdowns, see a different kind of job security in having a diversified portfolio of side hustles. 

    Good or bad, the push to hire more part-time and contract workers will provide an overall boost to the economy. After all, for those who otherwise wouldn’t have or couldn’t have worked at all, a job — even if it doesn’t come with all the perks of being a full-time employee — is better than no job at all. “It’s probably going to increase labor supply by maybe 1% to 2%, which is actually a huge number,” Bloom says. “That’s a huge benefit to everyone, because it increases growth, keeps down prices, reduces interest rates — all good stuff.”

    Still, there’s one detail in McKinsey’s survey that is worrying. In 2016, 14% of respondents said they took contract, freelance, or temporary work mainly “out of necessity to support basic family needs.” In 2022, that share jumped to 26%. Sure, that’s still a minority. But it indicates that a growing share of people are being forced into gig arrangements they don’t want. And if the trend continues, more and more people could end up in jobs that offer no benefits and few career-development opportunities. 

    The shift away from full-time employment could also wind up hurting employers in the long run. As companies invest less in their workers, they’ll get less out of those workers, who in return will invest less in their companies. That’s one reason so many bosses are ordering people back to the office. Without a shared workplace culture, they worry about their ability to engage and motivate employees.

    Jessica Schultz, who founded a consultancy called Amplify Group last year, has been grappling with the tension between full-time employment versus gig work. One of the services Amplify offers is serving as a “fractional” chief revenue officer for early-stage companies that can’t yet afford to bring one on full time. And her own staff, which is fully remote, consists primarily of part-time contractors, several of whom live in developing countries. That saves her on overhead and gives her the flexibility to change course quickly while her business is still growing. But she’s also seeing the downsides of outsourced work.

    “I could go to a contractor and say, ‘Hey, I need this done by Friday,’ but I risk the possibility of them saying, ‘I’m not going to get it done by then because I have other work,’” Schultz says. “You have less control over a contractor. They’re not as loyal to me. So I think we’re all just trying to figure out what the right mix of that is for our respective businesses.” Schultz, in fact, is currently in the process of converting two of her contractors into full-time employees.

    So it’s not as if full-time jobs are going extinct. But as the rise of remote work accelerates the shift toward gig roles, millions of workers could find themselves without the job security and benefits that traditionally come only with a W-2 form. And that could be a huge problem for everyone, given America’s insistence on tying basic benefits to full-time employment. More than half of Americans under 65, for example, rely on employer-based health insurance. It’s one thing for employers to quiet quit their employees. It’s another thing for them to leave those employees without healthcare or 401(k)s.

    “We need to think about how we give people access to social supports that used to be solely provided through an employer,” says Liz Wilke, a principal economist at Gusto. “What is the middle path that maintains all of the benefits this set of workers brings to the workforce — flexibility, agility, really strong incentives for consistent and regular upskilling — while still providing them the kinds of social support we think people who work should have? That conversation should happen, especially if this trend continues — which I think, based on our data, it will.” 

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