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Category: Wealth redistribution

  • 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.”

    The post Could a Universal Basic Income be the answer to cost of living woes? appeared first on Basic Income Today.

  • Cash Transfers Significantly Reduce Death Rates of Women

    By: Apoorva Mandavilli

    See original post here.

    Cash grants made directly to poor families or individuals have led to fewer deaths among women and young children, according to a new analysis of more than 7 million people in 37 countries.

    In countries that began making such payments, deaths among women fell by 20 percent, and deaths among children younger than 5 declined by 8 percent, researchers reported on Wednesday in the journal Nature. The impact was apparent within two years of the programs’ start and grew over time.

    The reductions in death rates were similar whether the funds came with certain conditions, such as school attendance, or whether they had no strings attached, the analysis found. Programs that covered bigger shares of the population or distributed larger amounts of cash produced even greater benefits.

    Countries with poor health care and high death rates had the biggest drop in deaths.

    In 2019, more than 8 percent of the world’s population lived in extreme poverty, subsisting on less than $2.15 per day, and about half the world on less than $6.85 per day. Poverty has insidious effects on housing stability, education, health and life expectancy.

    The pandemic drove 97 million additional people into extreme poverty in 2020, according to a World Bank estimate, prompting more countries to start cash transfer programs. Of 962 such programs worldwide, 672 were introduced during the pandemic.

    Direct cash transfers have been shown to improve school attendance, nutrition and use of health services. A few single-country studies have linked the payments to reduced death rates. But it was unclear whether those trends applied on a global scale.

    “There’s some concerns about whether these programs are sustainable, whether governments can and should pay for them,” said Harsha Thirumurthy, an economist at the University of Pennsylvania and a co-author of the analysis.

    More than 100 low- and middle-income countries have introduced cash transfer programs designed to mitigate poverty, though they differ widely in how much they pay, how often and to whom.

    The new study is the first to examine the effect of cash transfers on death rates worldwide, the researchers said. They collected information on these programs between 2000 to 2019 in 29 countries in sub-Saharan Africa, one in northern Africa, four in the Asia-Pacific region and three in Latin America and the Caribbean.

    The data included information on more than 4 million adults and nearly 3 million children. Roughly 300,000 deaths were recorded during the study. Recipients received between 6 percent and 13 percent of the per capita income in a particular country, often much less than $100.

    “These are not amounts that are anywhere near as large as some of the amounts we’re talking about in the U.S. when it comes to guaranteed income programs,” Dr. Thirumurthy said.

    Still, the findings are relevant even for high-income countries, said Audrey Pettifor, a social epidemiologist at the University of North Carolina at Chapel Hill who studies cash transfers for H.I.V. prevention and women’s health.

    Donors often worry that beneficiaries may misuse the funds to buy alcohol, junk food or other nonessential items, but “the data just doesn’t back that up,” she said.

    The researchers could not identify the beneficiaries, so they analyzed population-level death rates. The findings suggest that cash transfers may be helpful not just to women, but to families and entire communities.

    “These social protection programs actually account for the vast majority of the income” in households in places like South Africa, Dr. Pettifor said. “One would expect these spillover effects.”

    Berk Özler, a developmental economist in the World Bank’s research division, offered an alternate explanation. Cash transfers are often accompanied by improvements to health care services or other infrastructure that helps communities, he noted.

    “Maybe it’s not the direct effect of people having more cash in their pocket,” he said.

    The study did not look at adults older than 60 or at distinct features of the programs, such as duration or frequency of the payments, whether the beneficiaries are men or women, how the money is delivered or whether it is bundled with counseling or education.

    “I do think it’s useful to look at that in future work,” Dr. Thirumurthy said.

    The post Cash Transfers Significantly Reduce Death Rates of Women appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Study reveals how cash grants can generate more income

    By: Leila Patel

    See original post here.

    South Africa has one of the world’s most expansive social grant systems: 47% of the population relies on a monthly grant. Of these, 18 million are permanent beneficiaries and about 10 million receive a temporary Social Relief of Distress Grant.

    This was introduced during the Covid-19 pandemic for working-age adults who do not receive formal social protection, such as unemployment insurance and for those engaged in informal work.

    The vast majority of the grants are child support grants (R500 or around $27 a month) paid to a child’s primary caregiver based on a means test.

    There is ample, global evidence that such cash transfers bring many positive outcomes. For instance, they reduce child hunger, improve school attendance and help reduce poverty.

    Although social grants are spent largely on food, there is growing evidence that they are also used for productive investments in livelihood activities. These are actions people undertake to meet their basic needs such as food, shelter and clothing. Recipients find various ways to “grow” their grants by engaging in informal work and other income-generating activities.

    But little is known about the nature and scope of these activities, or how the government and other social partners like NGOs, development agencies and corporate social investment (CSI) initiatives could support recipients’ agencies and strengthen their livelihood strategies. This is important to consider against the backdrop of South Africa’s 32.8% unemployment rate.

    To fill this knowledge gap, we conducted a quantitative analysis of social grant beneficiaries’ employment status drawn from household survey data from 2008 to 2021. We wanted to get a better idea of how many grant recipients – caregivers of children, older persons, people with disabilities and unemployed adults engage – in informal work and income-generating activities.

    We found that 31% of grant beneficiaries engage in informal work. These are jobs with no written contract and where the businesses are not registered for tax. They include care work, informal trading or self-employment. 

    In 2021, grant beneficiaries were 13% more likely to be doing informal work than formal work. There was a greater probability of child support grant beneficiaries being engaged in survival-oriented business activities (11%) followed by 9% of beneficiaries of the Social Relief of Distress grant and 4% of old-age pensioners.

    Although the study found that the proportion of self-employed social grant recipients appears to be small, this is not the case when compared to self-employment (10%) as a proportion of total employment. In this regard South Africa fairs poorer than other upper-middle-income countries such as Turkey, Brazil and Mexico.

    Second, we synthesised the findings from three qualitative studies by post-graduate students of the Centre for Social Development in Africa and the Department of Anthropology and Development Studies at the University of Johannesburg.

    Grant beneficiaries’ stories emerging from these studies show a strong desire to be productive – such as having a job, or starting their own business and finding ways to improve income and personal and family well-being. They also faced significant barriers in promoting livelihoods, reducing poverty and improving psychosocial well-being. These findings indicate the need to design multi-pronged poverty reduction strategies that combine grants with livelihood support services.

    Participants across all three studies articulated a strong motivation to improve their lives. Others expressed a strong desire for independence, to be active and productive.

    In all three studies, regardless of the grant received and its value, interviewees said the grant monies were insufficient to meet their needs.

    They found various ways to “grow” their grant. Some were income-generating activities like buying and selling goods, providing services such as building, painting, photography, running restaurants or taverns, renting accommodation and traditional healing. Some played fahfee (a form of betting) or engaged in community gardening, sewing, recycling and beadwork.

    Others invested in future livelihood strategies such as supporting children with their job search. Some used their grants as seed money to cover business start-up costs, buy new equipment such as a chip fryer, and beads for their craft work or expand their existing operations.

    We also found that some recipients were investing a portion of their grants, primarily through stokvels (a type of informal credit union) or savings schemes. They hoped to reinvest savings in their businesses or to use the money during an emergency. Across the three qualitative studies, beneficiaries reported that households with multiple income streams were more financially stable.

    The most common barriers identified were related to:

    • Women’s childcare responsibilities in the home.
    • The opportunity costs of working (such as high transport and childcare costs).
    • A lack of jobs.
    • Lack of capital.
    • Lack of access to affordable micro loans.
    • Competition for customers from large retailers.
    • A lack of experience, knowledge and skills in, for example, financial literacy.
    • Some expressed concerns about crime and violence in the community.

    Few grant beneficiaries were able to access formal support services from the government. Only one group of women crafters engaged in beadwork received support from a local cooperative. Most turned to their social networks, family and friends to support them, and provide guidance, advice and financial assistance. Due to a lack of access to small loans, they turned to money lenders when they needed to access cash resulting in indebtedness.

    A major barrier also relates to the precarious nature of informal work and the lack of protection for vulnerable workers.

    Informal work is a crucial livelihood strategy for grant beneficiaries who supplement their income through multiple livelihood activities. Most worked in elementary occupations, services, sales and craft-related trade. A small proportion is self-employed, running survivalist businesses. This is contrary to the view that beneficiaries are passive and disengaged from the labour market or do not desire to work.

    There is a need for greater recognition of informal work and its role in poverty reduction as a national policy objective. Moreover, social grants plus complementary livelihood supports are needed. These include access to capital, credit and small loans. The development of knowledge and skills and mentoring and coaching are also critical.

    Few government departments target beneficiaries for livelihoods support such as small-scale farming and entrepreneurship programmes. There is a need to explore innovative delivery modalities – whereby livelihood supports may be crafted onto existing government programmes. Incentives should be provided for those who wish to pursue productive activities.

    There is room to scale up livelihood support through existing governmental, NGOs, development agencies and CSI programmes. However, more research and experimental intervention research is needed to inform the design of livelihood support policies and strategies.

    About the author: Leila Patel is a Professor of Social Development Studies, University of Johannesburg. Viwe Dikoko and Jade Archer co-authored the research brief on which this article is based.

    The post Study reveals how cash grants can generate more income appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • AI-powered “robot” lawyer won’t argue in court after jail threats

    See original post here.

    A “robot” lawyer powered by artificial intelligence was set to be the first of its kind to help a defendant fight a traffic ticket in court next month. But the experiment has been scrapped after “State Bar prosecutors” threatened the man behind the company that created the chatbot with prison time. 

    Joshua Browder, CEO of DoNotPay, on Wednesday tweeted that his company “is postponing our court case and sticking to consumer rights.”

    Browder also said he will not be sending the company’s robot lawyer to court. The AI creation — which runs on a smartphone, listens to court arguments and formulates responses for the defendant — was designed to tell the defendant what to say in real time, through headphones. 

    But according to Browder, the prospect for bringing the first robot lawyer into the court room wasn’t worth the risk of spending six months in jail.

    Backlash from lawyers against Browder’s proposed stunt suggests that those in the legal profession have concerns over AI-powered chatbots usurping their jobs. 

    The AI lawyer was set to take its first case on February 22, Browder had announced on Twitter.

    “On February 22nd at 1.30PM, history will be made. For the first time ever, a robot will represent someone in a US courtroom. DoNotPay A.I will whisper in someone’s ear exactly what to say. We will release the results and share more after it happens. Wish us luck!” he tweeted. 

    He did not disclose the name of the client or the court.

    DoNotPay has already used AI-generated form letters and chatbots to help people secure refunds for in-flight Wifi that didn’t work, as well as to lower bills and dispute parking tickets, according to Browder. All told, the company has relied on these AI templates to win more than 2 million customer service disputes and court cases on behalf of individuals against institutions and organizations, he added.

    It has raised $27.7 million from tech-focused venture capital firms, including Andreessen Horowitz and Crew Capital.

    “In the past year, AI tech has really developed and allowed us to go back and forth in real time with corporations and governments,” he told CBS MoneyWatch of recent advances. “We spoke live [with companies and customer service reps] to lower bills with companies; and what we’re doing next month is try to use the tech in a courtroom for the first time.”

    DoNotPay had said that it would have covered any fines if the robot were to lose the case. 

    Legal in some, but not most courtrooms 

    Some courts allow defendants to wear hearing aids, some versions of which are Bluetooth-enabled. That’s how Browder determined that DoNotPay’s technology could legally be used in this case. 

    However, the tech that runs DoNotPay isn’t legal in most courtrooms. Some states require that all parties consent to be recorded, which rules out the possibility of a robot lawyer entering many courtrooms. Of the 300 cases DoNotPay considered for a trial of its robot lawyer, only two were feasible, Browder said. 

    “It’s within the letter of the law, but I don’t think anyone could ever imagine this would happen,” Browder said. “It’s not in the spirit of law, but we’re trying to push things forward and a lot of people can’t afford legal help. If these cases are successful, it will encourage more courts to change their rules.”

    Lawyers “would not support this”

    The ultimate goal of a “robot” lawyer, according to Browder, is to democratize legal representation by making it free for those who can’t afford it, in some cases eliminating the need for pricey attorneys.

    “What we are trying to do is automate consumer rights,” Browder said. “New technologies typically fall into the hands of big companies first, and our goal is put it in hands of the people first.”

    But given that the technology is illegal in many courtrooms, he doesn’t expect to be able to commercialize the product any time soon. When he initially announced that DoNotPay’s robot lawyer would appear in court, lawyers threatened him and told him he’d be sent to jail, he told CBS MoneyWatch.

    “There are a lot of lawyers and bar associations that would not support this,” Browder said. 

    Putting ChatGPT through law school

    Browder wants to arm individuals with the same tools that large corporations can typically access, but are out of reach for those without deep resources. 

    AI-powered chatbot ChatGPT has exploded in popularity recently for its ability to spit out coherent essays on wide-ranging topics in under one minute. The technology has drawn interest from investors, with Microsoft on Monday announcing a multibillion dollar investment in parent company OpenAI. 

    But Browder highlighted its shortcomings and in some cases, lack of sophistication. 

    “ChatGPT is very good at holding conversations, but it’s terrible at knowing the law. We’ve had to retrain these AIs to know the law,” Browder said. “AI is a high school student, and we’re sending it to law school.” 

    This post was originally published on Basic Income Today.

  • Two-thirds of the new wealth amassed since the start of the pandemic has gone to the richest 1%

    By: Larry Elliott

    Oxfam has called for immediate action to tackle a post-Covid widening in global inequality after revealing that almost two-thirds of the new wealth amassed since the start of the pandemic has gone to the richest 1%.

    In report to coincide with the annual gathering of the global elite at the World Economic Forum in Davos, the charity said the best-off had pocketed $26tn (£21tn) in new wealth up to the end of 2021. That represented 63% of the total new wealth, with the rest going to the remaining 99% of people.

    Oxfam said for the first time in a quarter of a century the rise in extreme wealth was being accompanied by an increase in extreme poverty, and called for new taxes to be levied on the super-rich.

    Policies introduced to combat the economic impact of Covid 19 – such as cuts in interest rates and the money creation process known as quantitative easing – boosted the value of property and shares, which tend to be owned by richer people.

    The report said that for every $1 of new global wealth earned by a person in the bottom 90%in the past two years, each billionaire gained roughly $1.7m. Despite small falls in 2022, the combined fortune of billionaires had increased by $2.7bn a day. Pandemic gains came after a decade when both the number and wealth of billionaires had doubled.

    Danny Sriskandarajah, the chief executive of Oxfam GB: “The current economic reality is an affront to basic human values. Extreme poverty is increasing for the first time in 25 years and close to a billion people are going hungry but for billionaires, every day is a bonanza.

    “Multiple crises have pushed millions to the brink while our leaders fail to grasp the nettle – governments must stop acting for the vested interests of the few.

    “How can we accept a system where the poorest people in many countries pay much higher tax rates than the super-rich? Governments must introduce higher taxes on the super-rich now.”

    Oxfam said extreme concentrations of wealth led to weaker growth, corrupted politics and the media, corroded democracy and led to political polarisation. The super-rich were key contributors to the climate crisis, the charity added, with a billionaire emitting a million times more carbon than the average person. They were also twice as likely to invest in polluting industries, compared with the average investor.

    The report called on governments to introduce immediate one-off wealth levies on the richest 1%, together with windfall taxes to clamp down on profiteering during the global cost of living crisis. Subsequently, there should be a permanent increase in taxes on rich, with higher rates for multimillionaires and billionaires.

    In support of its call for redistribution of wealth, Oxfam said:

    • Food and energy companies had more than doubled their profits in 2022, paying out $257bn to wealthy shareholders at a time when more than 800 million people were going hungry.
    • Only 4 cents in every dollar of tax revenue came from wealth taxes, and half the world’s billionaires lived in countries with no inheritance tax on money they give to their children.
    • A tax of up to 5% on the world’s multimillionaires and billionaires could raise $1.7tn a year, enough to lift 2 billion people out of poverty, and fund a global plan to end hunger.

    In a foreword to the report, Colombia’s finance minister, José Antonio Ocampo, said: “Taxing the wealthiest is no longer an option – it’s a must. Global inequality has exploded, and there is no better way to tackle inequality than by redistributing wealth.”

    He added: “Fairness is at the heart of Colombia’s tax reforms. Concretely, this means a new wealth tax, higher taxes for high-income earners and large corporations reaping extraordinary profits in international markets, and ending tax incentives that exist without clear social or environmental justification.

    “We are also implementing digital services taxes and adopting a corporate minimum tax rate, building on the international tax deal.”

    This post was originally published on Basic Income Today.

  • DeepMind’s CEO Helped Take AI Mainstream. Now He’s Urging Caution

    By:  BILLY PERRIGO 

    Demis Hassabis stands halfway up a spiral staircase, surveying the cathedral he built. Behind him, light glints off the rungs of a golden helix rising up through the staircase’s airy well. The DNA sculpture, spanning three floors, is the centerpiece of DeepMind’s recently opened London headquarters. It’s an artistic representation of the code embedded in the nucleus of nearly every cell in the human body. “Although we work on making machines smart, we wanted to keep humanity at the center of what we’re doing here,” Hassabis, DeepMind’s CEO and co-founder, tells TIME. This building, he says, is a “cathedral to knowledge.” Each meeting room is named after a famous scientist or philosopher; we meet in the one dedicated to James Clerk Maxwell, the man who first theorized electromagnetic radiation. “I’ve always thought of DeepMind as an ode to intelligence,” Hassabis says.

    Hassabis, 46, has always been obsessed with intelligence: what it is, the possibilities it unlocks, and how to acquire more of it. He was the second-best chess player in the world for his age when he was 12, and he graduated from high school a year early. As an adult he strikes a somewhat diminutive figure, but his intellectual presence fills the room. “I want to understand the big questions, the really big ones that you normally go into philosophy or physics if you’re interested in,” he says. “I thought building AI would be the fastest route to answer some of those questions.”

    DeepMind—a subsidiary of Google’s parent company, Alphabet—is one of the world’s leading artificial intelligence labs. Last summer it announced that one of its algorithms, AlphaFold, had predicted the 3D structures of nearly all the proteins known to humanity, and that the company was making the technology behind it freely available. Scientists had long been familiar with the sequences of amino acids that make up proteins, the building blocks of life, but had never cracked how they fold up into the complex 3D shapes so crucial to their behavior in the human body. AlphaFold has already been a force multiplier for hundreds of thousands of scientists working on efforts such as developing malaria vaccines, fighting antibiotic resistance, and tackling plastic pollution, the company says. Now DeepMind is applying similar machine-learning techniques to the puzzle of nuclear fusion, hoping it helps yield an abundant source of cheap, zero-carbon energy that could wean the global economy off fossil fuels at a critical juncture in the climate crisis.

    Hassabis says these efforts are just the beginning. He and his colleagues have been working toward a much grander ambition: creating artificial general intelligence, or AGI, by building machines that can think, learn, and be set to solve humanity’s toughest problems. Today’s AI is narrow, brittle, and often not very intelligent at all. But AGI, Hassabis believes, will be an “epoch-defining” technology—like the harnessing of electricity—that will change the very fabric of human life. If he’s right, it could earn him a place in history that would relegate the namesakes of his meeting rooms to mere footnotes.

    But with AI’s promise also comes peril. In recent months, researchers building an AI system to design new drugs revealed that their tool could be easily repurposed to make deadly new chemicals. A separate AI model trained to spew out toxic hate speech went viral, exemplifying the risk to vulnerable communities online. And inside AI labs around the world, policy experts were grappling with near-term questions like what to do when an AI has the potential to be commandeered by rogue states to mount widespread hacking campaigns or infer state-level nuclear secrets. In December 2022, ChatGPT, a chatbot designed by DeepMind’s rival OpenAI, went viral for its seeming ability to write almost like a human—but faced criticism for its susceptibility to racism and misinformation. So did the tiny company Prisma Labs, for its Lensa app’s AI-enhanced selfies. But many users complained Lensa sexualized their images, revealing biases in its training data. What was once a field of a few deep-pocketed tech companies is becoming increasingly accessible. As computing power becomes cheaper and AI techniques become better known, you no longer need a high-walled cathedral to perform cutting-edge research.

    It is in this uncertain climate that Hassabis agrees to a rare interview, to issue a stark warning about his growing concerns. “I would advocate not moving fast and breaking things,” he says, referring to an old Facebook motto that encouraged engineers to release their technologies into the world first and fix any problems that arose later. The phrase has since become synonymous with disruption. That culture, subsequently emulated by a generation of startups, helped Facebook rocket to 3 billion users. But it also left the company entirely unprepared when disinformation, hate speech, and even incitement to genocide began appearing on its platform. Hassabis sees a similarly worrying trend developing with AI. He says AI is now “on the cusp” of being able to make tools that could be deeply damaging to human civilization, and urges his competitors to proceed with more caution than before. “When it comes to very powerful technologies—and obviously AI is going to be one of the most powerful ever—we need to be careful,” he says. “Not everybody is thinking about those things. It’s like experimentalists, many of whom don’t realize they’re holding dangerous material.” Worse still, Hassabis points out, we are the guinea pigs.

    Hassabis was just 15 when he walked into the Bullfrog video-game studios in Guildford, in the rolling green hills just southwest of London. As a child he had always been obsessed with games. Not just chess—the main source of his expanding trophy cabinet—but the kinds you could play on early computers, too. Now he wanted to help make them. He had entered a competition in a video-game magazine to win an internship at the prestigious studio. His program—a Space Invaders-style game where players shot at chess pieces descending from the top of the screen—came in second place. He had to settle for a week’s work experience.

    Peter Molyneux, Bullfrog’s co-founder, still remembers first seeing Hassabis. “He looked like an elf from Lord of the Rings,” Molyneux says. “This little slender kid came in, who you would probably just walk past in the street and not even notice. But there was a sparkle in his eyes: the sparkle of intelligence.” In a chance conversation on the bus to Bullfrog’s Christmas party, the teenager captivated Molyneux. “The whole of the journey there, and the whole of the journey back, was the most intellectually stimulating conversation,” he recalls. They talked about the philosophy of games, what it is about the human psyche that makes winning so appealing, and whether you could imbue those same traits in a machine. “All the time I’m thinking, This is just a kid!” He knew then this young man was destined for great things.

    The pair became fast friends. Hassabis returned to Bullfrog in the summer before he left for the University of Cambridge, and spent much of that time with Molyneux playing board and computer games. Molyneux recalls a fierce competitive streak. “I beat him at almost all the computer games, especially the strategy games,” Molyneux says. “He is an incredibly competitive person.” But Molyneux’s bragging rights were short-lived. Together, in pursuit of interesting game dynamics that might be the seed of the next hit video game, they invented a card-game they called Dummy. Hassabis beat Molyneux 35 times in a row.

    After graduating from Cambridge, Hassabis returned to Bullfrog to help Molyneux build his most popular game to date: Theme Park, a simulation game giving the player a God’s-eye view of an expanding fairground business. Hassabis went on to establish his own game company before later deciding to study for a Ph.D. in neuroscience. He wanted to understand the algorithmic level of the brain: not the interactions between microscopic neurons but the larger architectures that seemed to give rise to humanity’s powerful intelligence. “The mind is the most intriguing object in the universe,” Hassabis says. He was trying to understand how it worked in preparation for his life’s quest. “Without understanding that I had in mind AI the whole time, it looks like a random path,” Hassabis says of his career trajectory: chess, video games, neuroscience. “But I used every single scrap of that experience.”

    By 2013, when DeepMind was three years old, Google came knocking. A team of Google executives flew to London in a private jet, and Hassabis wowed them by showing them a prototype AI his team had taught to play the computer game Breakout. DeepMind’s signature technique behind the algorithm, reinforcement learning, was something Google wasn’t doing at the time. It was inspired by how the human brain learns, an understanding Hassabis had developed during his time as a neuroscientist. The AI would play the game millions of times, and was rewarded every time it scored some points. Through a process of points-based reinforcement, it would learn the optimum strategy. Hassabis and his colleagues fervently believed in training AI in game environments, and the dividends of the approach impressed the Google executives. “I loved them immediately,” says Alan Eustace, a former senior vice president at Google who led the scouting trip.

    Hassabis’ focus on the dangers of AI was evident from his first conversation with Eustace. “He was thoughtful enough to understand that the technology had long-term societal implications, and he wanted to understand those before the technology was invented, not after the technology was deployed,” Eustace says. “It’s like chess. What’s the endgame? How is it going to develop, not just two steps ahead, but 20 steps ahead?”

    Eustace assured Hassabis that Google shared those concerns, and that DeepMind’s interests were aligned with its own. Google’s mission, Eustace said, was to index all of humanity’s knowledge, make it accessible, and ultimately raise the IQ of the world. “I think that resonated,” he says. The following year, Google acquired DeepMind for some $500 million. Hassabis turned down a bigger offer from Facebook. One reason, he says, was that, unlike Facebook, Google was “very happy to accept” DeepMind’s ethical red lines “as part of the acquisition.” (There were reports at the time that Google agreed to set up an independent ethics board to ensure these lines were not crossed.) The founders of the fledgling AI lab also reasoned that the megacorporation’s deep pockets would allow them access to talent and computing power that they otherwise couldn’t afford.

    In a glass cabinet spanning the far wall of the lobby at DeepMind’s London headquarters, among other memorabilia from the first 12 years of the company’s life, sits a large square of wood daubed with black scribbles. It’s a souvenir from DeepMind’s first major coup. Soon after the Google acquisition, the company had set itself the challenge of designing an algorithm that could beat the best player in the world at the ancient Chinese board game Go. Chess had long ago been conquered by brute-force computer programming, but Go was far more complex; the best AI algorithms were still no match for top human players. DeepMind tackled the problem the same way they’d cracked Breakout. It built a program that, after being taught the rules of the game by observing human play, would play virtually against itself millions of times. Through reinforcement learning, the algorithm would update itself, reducing the “weights” of decisions that made it more likely to lose the game, and increasing the “weights” that made it more likely to win. At a tournament in Korea in March 2016, the algorithm—called AlphaGo—went up against Lee Sedol, one of the world’s top Go players. AlphaGo beat him four games to one. With a black marker pen, the defeated Lee scrawled his signature on the back of the Go board on which the fateful game had been played. Hassabis signed on behalf of AlphaGo, and DeepMind kept the board as a trophy. Forecasters had not expected the milestone to be passed for a decade. It was a vindication of Hassabis’ pitch to Google: that the best way to push the frontier of AI was to focus on reinforcement learning in game environments.

    But just as DeepMind was scaling new heights, things were beginning to get complicated. In 2015, two of its earliest investors, billionaires Peter Thiel and Elon Musk, symbolically turned their backs on DeepMind by funding rival startup OpenAI. That lab, subsequently bankrolled by $1 billion from Microsoft, also believed in the possibility of AGI, but it had a very different philosophy for how to get there. It wasn’t as interested in games. Much of its research focused not on reinforcement learning but on unsupervised learning, a different technique that involves scraping vast quantities of data from the internet and pumping it through neural networks. As computers became more powerful and data more abundant, those techniques appeared to be making huge strides in capability.

    While DeepMind, Google, and other AI labs had been working on similar research behind closed doors, OpenAI was more willing to let the public use its tools. In late 2022 it launched DALL·E 2, which can generate an image of almost any search term imaginable, and the chatbot ChatGPT. Because both of these tools were trained on data scraped from the internet, they were plagued by structural biases and inaccuracies. DALL·E 2 is likely to illustrate “lawyers” as old white men and “flight attendants” as young beautiful women, while ChatGPT is prone to confident assertions of false information. In the wrong hands, a 2021 DeepMind research paper says, language-generation tools like ChatGPT and its predecessor GPT-3 could turbocharge the spread of disinformation, facilitate government censorship or surveillance, and perpetuate harmful stereotypes under the guise of objectivity. (OpenAI acknowledges its apps have limitations, including biases, but says that it’s working to minimize them and that its mission is to build safe AGI to benefit humanity.)

    But despite Hassabis’s calls for the AI race to slow down, it appears DeepMind is not immune from the competitive pressures. In early 2022, the company published a blueprint for a faster engine. The piece of research, called Chinchilla, showed that many of the industry’s most cutting-edge models had been trained inefficiently, and explained how they could deliver more capability with the same level of computing power. Hassabis says DeepMind’s internal ethics board discussed whether releasing the research would be unethical given the risk that it could allow less scrupulous firms to release more powerful technologies without firm guardrails. One of the reasons they decided to publish it anyway was because “we weren’t the only people to know” about the phenomenon. He says that DeepMind is also considering releasing its own chatbot, called Sparrow, for a “private beta” some time in 2023. (The delay is in order for DeepMind to work on reinforcement learning-based features that ChatGPT lacks, like citing its sources. “It’s right to be cautious on that front,” Hassabis says.) But he admits that the company may soon need to change its calculus. “We’re getting into an era where we have to start thinking about the freeloaders, or people who are reading but not contributing to that information base,” he says. “And that includes nation states as well.” He declines to name which states he means—“it’s pretty obvious, who you might think”—but he suggests that the AI industry’s culture of publishing its findings openly may soon need to end.

    Hassabis wants the world to see DeepMind as a standard bearer of safe and ethical AI research, leading by example in a field full of others focused on speed. DeepMind has published “red lines” against unethical uses of its technology, including surveillance and weaponry. But neither DeepMind nor Alphabet has publicly shared what legal power DeepMind has to prevent its parent—a surveillance empire that has dabbled in Pentagon contracts—from pursuing those goals with the AI DeepMind builds. In 2021, Alphabet ended yearslong talks with DeepMind about the subsidiary’s setting up an independent legal structure that would prevent its AI being controlled by a single corporate entity, the Wall Street Journal reported. Hassabis doesn’t deny DeepMind made these attempts, but downplays any suggestion that he is concerned about the current structure being unsafe. When asked to confirm or deny whether the independent ethics board rumored to have been set up as part of the Google acquisition actually exists, he says he can’t, because it’s “all confidential.” But he adds that DeepMind’s ethics structure has “evolved” since the acquisition “into the structures that we have now.”

    Hassabis says both DeepMind and Alphabet have committed to public ethical frameworks and build safety into their tools from the very beginning. DeepMind has its own internal ethics board, the Institutional Review Committee (IRC), with representatives from all areas of the company, chaired by its chief operating officer, Lila Ibrahim. The IRC meets regularly, Ibrahim says, and any disagreements are escalated to DeepMind’s executive leaders for a final decision. “We operate with a lot of freedom,” she says. “We have a separate review process: we have our own internal ethics review committee; we collaborate on best practices and learnings.” When asked what happens if DeepMind’s leadership team disagrees with Alphabet’s, or if its “red lines” are crossed, Ibrahim only says, “We haven’t had that issue yet.”

    One of Hassabis’ favorite games right now is a strategy game called Polytopia. The aim is to grow a small village into a world-dominating empire through gradual technological advances. Fishing, for example, opens the door to seafaring, which leads eventually to navies of your ships firing cannons and traversing oceans. By the end of the game, if you’ve directed your technological progress astutely, you’ll sit atop a shining, sophisticated empire with your enemies dead at your feet. (Elon Musk, Hassabis says, is a fan too. The last time the pair spoke, a few months ago, Polytopia was the main subject of their conversation. “We both like that game a lot,” Hassabis says.)

    While Hassabis’ worldview is much more nuanced—and cautious—it’s easy to see why the game’s ethos resonates with him. He still appears to believe that technological advancement is inherently good for humanity, and that under capitalism it’s possible to predict and mitigate AI’s risks. “Advances in science and technology: that’s what drives civilization,” he says.

    Hassabis believes the wealth from AGI, if it arrives, should be redistributed. “I think we need to make sure that the benefits accrue to as many people as possible—to all of humanity, ideally.” He likes the ideas of universal basic income, under which every citizen is given a monthly stipend from the government, and universal basic services, where the state pays for basic living standards like transportation or housing. He says an AGI-driven future should be more economically equal than today’s world, without explaining how that system would work. “If you’re in a [world of] radical abundance, there should be less room for that inequality and less ways that could come about. So that’s one of the positive consequences of the AGI vision, if it gets realized.”

    Others are less optimistic that this utopian future will come to pass—given that the past several decades of growth in the tech industry have coincided with huge increases in wealth inequality. “Major corporations, including the major corporation that owns DeepMind, have to ensure they maximize value to shareholders; are not focused really on addressing the climate crisis unless there is a profit in it; and are certainly not interested in redistributing wealth when the whole goal of the company is to accumulate further wealth and distribute it to shareholders,” says Paris Marx, host of the podcast Tech Won’t Save Us. “Not recognizing those things is really failing to fully consider the potential impacts of the technology.” Alphabet, Amazon, and Meta were among the 20 corporations that spent the most money lobbying U.S. lawmakers in 2022, according to transparency watchdog Open Secrets. “What we lack is not the technology to address the climate crisis, or to redistribute wealth,” Marx says. “What we lack is the political will. And it’s hard to see how just creating a new technology is going to create the political will to actually have these more structural transformations of society.”

    Back at DeepMind’s spiral staircase, an employee explains that the DNA sculpture is designed to rotate, but today the motor is broken. Closer inspection shows some of the rungs of the helix are askew. At the bottom of the staircase there’s a notice on a wooden stool in front of this giant metaphor for humanity. “Please don’t touch,” it reads. “It’s very fragile and could easily be damaged.”

    This post was originally published on Basic Income Today.

  • AI is finally good at stuff. Now what?

    By Rebecca Heilweil 

    See original post here.

    A few weeks ago, Wharton professor Ethan Mollick told his MBA students to play around with GPT, an artificial intelligence model, and see if the technology could write an essay based on one of the topics discussed in his course. The assignment was, admittedly, mostly a gimmick meant to illustrate the power of the technology. Still, the algorithmically generated essays — although not perfect and a tad over-reliant on the passive voice — were at least reasonable, Mollick recalled. They also passed another critical test: a screening by Turnitin, a popular anti-plagiarism software. AI, it seems, had suddenly gotten pretty good.

    It certainly feels that way right now. Over the past week or so, screenshots of conversations with ChatGPT, the newest iteration of the AI model developed by the research firm OpenAI, have gone viral on social media. People have directed the tool, which is freely available online, to make jokes, write TV episodes, compose music, and even debug computer code — all things I got the AI to do, too. More than a million people have now played around with the AI, and even though it doesn’t always tell the truth or make sense, it’s still a pretty good writer and an even more confident bullshitter.

    Along with the recent updates to DALL-E, OpenAI’s art-generation software, and Lensa AI, a controversial platform that can produce digital portraits with the help of machine learning, GPT is a stark wakeup call that artificial intelligence is starting to rival human ability, at least for some things.

    “I think that things have changed very dramatically,” Mollick told Recode. “And I think it’s just a matter of time for people to notice.”

    If you’re not convinced, you can try it yourself here. The system works like any online chatbot, and you can simply type out and submit any question or prompt you want the AI to address.

    How does GPT even work? At its core, the technology is based on a type of artificial intelligence called a language model, a prediction system that essentially guesses what it should write, based on previous texts it has processed. GPT was built by training its AI with an extraordinarily large amount of data, much of which comes from the vast supply of data on the internet, along with billions of dollars, including initial funding from several prominent tech billionaires, including Reid Hoffman and Peter Thiel. ChatGPT was also trained on examples of back-and-forth human conversation, which helps it make its dialogue sound a lot more human, as a blog post published by OpenAI explains.

    OpenAI is trying to commercialize its technology, but this current release is supposed to allow the public to test it. The company made headlines two years ago when it released GPT-3, an iteration of the tech that could produce poems, role-play, and answer some questions. This newest version of the technology is GPT-3.5, and ChatGPT, its corresponding chatbot, is even better at text generation than its predecessor. It’s also pretty good at following instructions, like, “Write a Frog and Toad short story where Frog invests in mortgage-backed securities.” (The story ends with Toad following Frog’s advice and investing in mortgage-backed securities, concluding that “sometimes taking a little risk can pay off in the end”).

    The technology certainly has its flaws. While the system is theoretically designed not to cross some moral red lines — it’s adamant that Hitler was bad — it’s not difficult to trick the AI into sharing advice on how to engage in all sorts of evil and nefarious activities, particularly if you tell the chatbot that it’s writing fiction. The system, like other AI models, can also say biased and offensive things. As my colleague Sigal Samuel has explained, an earlier version of GPT generated extremely Islamophobic content, and also produced some pretty concerning talking points about the treatment of Uyghur Muslims in China.

    Both GPT’s impressive capabilities and its limitations reflect the fact that the technology operates like a version of Google’s smart compose writing suggestions, generating ideas based on what it has read and processed before. For this reason, the AI can sound extremely confident while not displaying a particularly deep understanding of the subject it’s writing about. This is also why it’s easier for GPT to write about commonly discussed topics, like a Shakespeare play or the importance of mitochondria.

    “It wants to produce texts that it deemed to be likely, given everything that it has seen before,” explains Vincent Conitzer, a computer science professor at Carnegie Mellon. “Maybe it sounds a little bit generic at times, but it writes very clearly. It will probably rehash points that have often been made on that particular topic because it has, in effect, learned what kinds of things people say.”

    So for now, we’re not dealing with an all-knowing bot. Answers provided by the AI were recently banned from the coding feedback platform StackOverflow because they were very likely to be incorrect. The chatbot is also easily tripped up by riddles (though its attempts to answer are extremely funny). Overall, the system is perfectly comfortable making stuff up, which obviously makes no sense upon human scrutiny. These limitations might be comforting to people worried that the AI could take their jobs, or eventually pose a safety threat to humans.

    But AI is getting better and better, and even this current version of GPT can already do extremely well at certain tasks.

    Consider Mollick’s assignment. While the system certainly wasn’t good enough to earn an A, it still did pretty well. One Twitter user said that, on a mock SAT exam, ChatGPT scored around the 52 percentile of test takers. Kris Jordan, a computer science professor at UNC, told Recode that when he assigned GPT his final exam, the chatbot received a perfect grade, far better than the median score for the humans taking his course. And yes, even before ChatGPT went live, students were using all sorts of artificial intelligence, including earlier versions of GPT, to complete their assignments. And they’re probably not getting flagged for cheating. (Turnitin, the anti-plagiarism software maker, did not respond to multiple requests for comment).

    Right now, it’s not clear how many enterprising students might start using GPT, or if teachers and professors will figure out a way to catch them. Still, these forms of AI are already forcing us to wrestle with what kinds of things we want humans to continue to do, and what we’d prefer to have technology figure out instead.

    “My eighth grade math teacher told me not to rely on a calculator since I won’t have one in my pocket all the time when I grow up,” Phillip Dawson, an expert who studies exam cheating at Deakin University, told Recode. “We all know how that turned out.

    This post was originally published on Basic Income Today.

  • Artists stage mass protest against AI-generated artwork on ArtStation

    By: BENJ EDWARDS 

    On Tuesday, members of the online community ArtStation began widely protesting AI-generated artwork by placing “No AI Art” images in their portfolios. By Wednesday, the protest images dominated ArtStation’s trending page. The artists seek to criticize the presence of AI-generated work on ArtStation and to potentially disrupt future AI models trained using artwork found on the site.

    Early rumblings of the protest began on December 5 when Bulgarian artist Alexander Nanitchkov tweeted, “Current AI ‘art’ is created on the backs of hundreds of thousands of artists and photographers who made billions of images and spend time, love and dedication to have their work soullessly stolen and used by selfish people for profit without the slightest concept of ethics.”

    Nanitchkov also posted a stark logo featuring the letters “AI” in white uppercase behind the circular strike-through symbol. Below, a caption reads “NO TO AI GENERATED IMAGES.” This logo soon spread on ArtStation and became the basis of many protest images currently on the site.

    On December 9, criticism of AI art on ArtStation sped up when character artist Dan Eder tweeted, “Seeing AI art being featured on the main page of Artstation saddens me. I love playing with MJ as much as anyone else, but putting something that was generated using a prompt alongside artwork that took hundreds of hours and years of experience to make is beyond disrespectful.”

    Four days later, a widely shared tweet from Zekuga Art promoted the protest further on Twitter, bringing larger awareness to the movement. As of press time on Wednesday, searching for “No AI Art” on ArtStation returned 2,099 results, and “no to AI generated images” returned 2,111 results. Each result represents a separate artist account.

    By participating in the protest, some artists want to disrupt how Stable Diffusion training works, which led to several jokes on Twitter showing garbled AI-generated image results that some people took seriously. In reality, whatever ArtStation artwork Stable Diffusion currently draws upon was trained into the Stable Diffusion model long ago, and the protest will not have an immediate effect on images generated with AI models currently in use.

    Later on Wednesday, ArtStation’s management responded to the protest with a FAQ called “Use of AI Software on ArtStation.” The FAQ states that AI-generated artwork on the site will not be banned and that the site plans to add tags “enabling artists to choose to explicitly allow or disallow the use of their art for (1) training non-commercial AI research, and (2) training commercial AI.”

    The relationship between ArtStation and AI image synthesis dates back to the beta test of Stable Diffusion on its Discord server during the summer of 2022. Stable Diffusion is a popular open source image-synthesis model that creates novel images from text descriptions called prompts.

    Soon after the Discord opened, people using Stable Diffusion discovered that adding “trending on ArtStation” to a prompt would almost magically add a distinctive digital art style to any image it generated. That’s because the creators of Stable Diffusion’s training dataset—the images that “taught” Stable Diffusion how to create images—included publicly accessible artwork scraped from the ArtStation website. (It did this scraping without artists’ permission, which is another key element of the debate over AI-generated artwork.)

    Like “Greg Rutkowski,” the prompt text “trending on ArtStation” became an easy way to get high-quality results from almost any prompt, and the idea spread quickly among users of Stable Diffusion until it became something of a trope in the image-synthesis community.

    In the long term, the popularity of “trending on ArtStation” in Stable Diffusion prompts will likely become a historical curiosity. Recent releases of Stable Diffusion 2.0 and 2.1 integrated a new way of processing text that means “trending on ArtStation” won’t work as a prompt anymore—but the underlying data from ArtStation was likely still included in the Stable Diffusion 2.x training dataset.

    Text parsing changes aside, there’s still the open question of seeking consent when including an artist’s work in an AI training dataset.

    On Wednesday, as the ArtStation protest reached a fever pitch, Stability AI and artist advocacy group Spawning announced that artists would be able to opt out of training for the upcoming Stable Diffusion 3.0 release by registering through the “Have I Been Trained?” website. Although, judging by the recent controversy on DeviantArt, some artists might argue that not being included (and having to manually opt in) should be the default state.

    This post was originally published on Basic Income Today.

  • Expert panel advocates ‘gradual phasing-in’ of basic income grant

    By: Naledi Sikhakhane

    ‘We will fight, we will soldier on even to the extent that we will ensure that we bring upon the introduction of the basic income grant, we are close to it, we are making steady progress towards it.’ — Social Development Acting Director-General Linton Mchunu.

    The Department of Social Development (DSD) and partners on Tuesday released a report into the appropriateness and feasibility of a system of basic income support for South Africa.

    The Expert Panel on Basic Income Support Supplementary Modelling report was produced under the supervision of the International Labour Organization (ILO) for the DSD and the South African government. It is a supplementary report looking at possible models and building on the first one released in 2021, in which the BIS Expert Panel examined the social and economic implications of a basic income support (BIS) grant.

    Acting Director-General of the DSD Linton Mchunu said the report answered some crucial questions on basic income support, such as where the money would come from, whether it would help or hinder the economy, and the feasibility of such support.

    Mchunu also seemed to point a finger at the National Treasury for challenges in implementing the Social Relief of Distress (SRD) grant and ironing out bumps in its provision.

    He said: “The reason why we’re having the difficulties we’re having now with the R350 grant… we’re currently paying about eight million people — yet in the first iteration we were paying about 11.5 million — because we introduced the means testing, and you know why? We were told that if we don’t introduce the means test, we will not receive the money.

    “So, we grappled with finding a balancing act… it’s a difficult thing but, as the Department of Social Development, I want to say we will never deviate from this fight. We go into meetings and say we need a sense of certainty in the long term, can we extend the grant to the next three to five years while we sort out the policy side of this? And we’re told, no, you will only get one [year].”

    Challenges in reaching the intended recipients

    Mchunu said the DSD was restricted by red tape, which delayed processes and left millions in limbo. 

    Panel chair Professor Alex van den Heever said the report looked at the R350 SRD grant as a more permanent model because there was already data around this to analyse, while there wasn’t any for a basic income grant (BIG).

    The idea is for a “gradual phasing for the progressive enhancement of the SRD benefit over time with the objective, together with the overall social assistance framework, of eliminating poverty at the upper-bound poverty line, UBPL [the average non-food-related spending that’s added to the poverty line created by economists and often used by DSD in creating means tests for grants],” said Van den Heever.

    The analysis concluded that a gradual phasing-in of a basic income grant would curb the “economic and fiscal risks” and impacts on the tax system.  An entry-level version of the grant, basic income support, should be considered with the starting benefit value set at the lower-bound poverty line (the average spending on essential non-food items by households whose food expenditure is below, but close to the food poverty line). 

    Van den Heever is the chairperson of Social Security Systems Administration and Management Studies at the Wits School of Governance. The panel of experts was made up of specialists in microsimulation, modelling in the field of social protection, computable general economic modelling and public finance. The deliberations also involved staff from the Social Security division of the DSD and the ILO regional office based in South Africa.

    The modelling results show that “depending upon how it is financed, the SRD grant can be introduced in a manner that is fiscally and economically sustainable while at the same having a material impact on poverty and income inequality if implemented at the level of 13.1 million beneficiaries,” the report states.

    The report posits four different simulations for how the grant will work and which simulations have the most positive outcomes during analysis. 

    The first simulation of the Social Relief of Distress grant spending of R50-billion is financed primarily using an increase in Value-Added Tax (VAT) in the early years of the simulation. 

    The second option is financing it entirely through an increase in the  principal, interest and taxes (PIT) of the top three deciles (a decile is 10%) of high-earning South Africans.

    The third simulation involves a wage subsidy, where R50-billion is financed entirely through PIT increases on the top 10% of earners and allocated to the bottom four occupational groups (domestic workers, elementary workers, operators and skilled agricultural workers).

    The fourth option is to collect R50-billion along with a wage subsidy that will cost 50% of the cost of the grant (R25-billion) and finance both entirely through PIT.

    “A wage subsidy targeted at the four lowest-income occupational categories shows promise for improving economic output but is less effective in addressing poverty and inequality in comparison to the SRD grant. When the interventions are combined, however, there are potential gains for economic output, poverty [reduction] and [decreasing] inequality,” Van den Heever said. 

    “Replicating the modelled wage subsidy with an equivalent programme in practice, however, may prove difficult. While more work is needed to better identify an effective government-subsidised employment intervention, such approaches are not substitutes for income protection. They are instead complementary, as they have distinct, although related, social objects,” the report read.  

    Accepting the report, Brenda Sibeko, the deputy director-general of Comprehensive Social Security, acknowledged the challenges grant recipients have had in accessing grants and said that the DSD and civil society were working tirelessly to secure an income for the impoverished.

    “As so many have said, the BIG is an idea whose time has come,” said Sibeko

    This post was originally published on Basic Income Today.

  • Make UBI a right in independent Scotland, campaigners say

    By: Hamish Morrison

    On Tuesday, Basic Income Network Scotland (BINS) will launch a new year-long campaign to pressure politicians to enshrine in law the right to a universal basic income in an independent Scotland.

    A universal basic income is a payment made to everyone in a country, regardless of their employment status or salary. Proponents say it would boost economic growth while being more efficient than the traditional welfare safety net.

    Scotland has already “led the basic income movement in the UK for some time”, according to Cleo Goodman, the project director of the Basic Income Conversation, who is involved in the push for the concept to be guaranteed post-independence.

    The Scottish Government has previously investigated the possibility of testing the feasibility of a universal basic income – but has not run pilots because of its limited powers.

    Goodman said a Welsh pilot scheme which began in July this year showed more action could be taken “in the meantime” despite the constraints of devolution.

    The year-long campaign will kick off with an event in Edinburgh on Tuesday, and will feature speakers talks from Karyn McCluskey, the chief executive of Community Justice Scotland and Craig Dalzell, head of policy from Common Weal.

    Mike Danson (above), visiting professor in public policy at Strathclyde University and chair of BINS, said: “Over the next 12 months, based on our research and extensive expertise, we will be making the case for a universal basic income so that everyone in an independent Scotland would benefit from our common wealth.

    “No one should ever be facing poverty, having to choose between heating and eating in a developed, energy-rich economy.

    “We will be advocating for a universal basic income to secure a just transition to a Scotland which supports enterprise, creativity and environmental sustainability.

    “We’re really excited to be hosting our first live event since 2019, where we will have an evening of speakers, dynamic discussion and live music, all brought together by a vision for a more fair, empowered and creative Scotland.

    “With the national conversation on Scottish Independence and our future now revitalised, it is crucial that any vision for Scotland moving forward includes a basic income.”

    Goodman added: “Scotland led the basic income movement in the UK for some time with investment in the feasibility study of a Scottish pilot and the groundbreaking research that was published as a result of that project.

    “But now this action from Scottish Government and local authorities has slowed despite the public support for a basic income continuing to increase.

    “Holyrood would need collaboration or independence from Westminster to deliver a basic income, but as the Welsh pilot for care leavers shows, more can be done in the meantime.

    “This campaign from BINS will play a crucial role in ensuring a basic income is a solid part of Scotland’s future.”

    The organisations said in a statement a universal basic income would have the potential to tackle the “epidemic of stress” and could help “eradicate poverty” and unleash “creativity, entrepreneurship and the freedom of time to pursue our dreams”.

    Opponents of universal basic income point to the costs of taking on the project, which a House of Commons briefing paper put at around £316 billion per year (based on a payment of £100 a week for everyone older than 16 and £50 a week for those younger) versus the current UK benefits bill, which is around £250bn per year.

    Strathclyde University’s Fraser of Allander Institute put the figure for covering Scotland only at the level currently provided by benefits as £7bn, rising to £38bn if it was to provide each person in the country with an annual income of £25,000 per year.

    The SNP, Scottish Labour and the Scottish Greens all supported either the introduction of a universal basic income or exploring its feasibility in their 2021 Holyrood election manifestos.

    A Scottish Greens spokesperson said: “Universal Basic Income would be a crucial step in tackling poverty and inequality and could have a hugely positive impact on health and wellbeing.

    “After years of Tory cuts and austerity, there are millions of people who are struggling and being forced to choose between eating and heating their home. It doesn’t need to be like this. Universal Basic Income would allow us to transform our economy.

    “Independence is about breaking from the failed policies of the past and doing things differently.

    “Universal Basic Income is a key part of our vision. It is the kind of vital and ambitious change that is only possible with the powers of a normal independent country.”

    The Scottish Government was approached for comment.

    The campaign launch event will be held at the Wee Red Bar, Edinburgh at 7pm on Tuesday, November 29 and is free to attend.

    This post was originally published on Basic Income Today.

  • Slash Child Abuse With One Simple Trick: Cash

    By: CALEB BRENNAN

    When the COVID-19 lockdown went into effect, child welfare advocates and pediatric experts feared that child abuse that would have otherwise been noticed would remain undetected. It was a logical enough fear, because sites where abuse is often discovered—schools, doctor’s offices, religious centers, and other community spaces—were closed. The economic stressors created by the ensuing explosion of unemployment would likely contribute to a spike in child maltreatment, it was thought. This theory was so strongly believed that even the absence of child abuse reports during the initial lockdown was seen as evidence that malicious treatment by parents was a cause for concern.

    But with multiple years of data to comb over, the verdict has proven to be quite the opposite: Physical child abuse dipped substantially, according to a recent analysis of child abuse indicators and statistics published in a journal of the American Medical Association—in large part due to the substantial government investment in keeping families financially afloat during the economic shutdown.

    It illustrates a major analytical error underpinning American child abuse policy. Appalling cases of beating or rape of children are a major political motivation behind child protective services (CPS) and their habit of “child separation,” or taking kids from their families and placing them into foster or group homes. But in reality, a large and growing majority of child abuse is simple neglect, which can be greatly ameliorated with the welfare state; and CPS actions are themselves often abusive.

    Thanks to decades of PSAs and cultural osmosis, Americans often imagine child abusers as either vicious predators or fiendish, vindictive parents who wish to do intentional harm to their offspring.

    In our popular media, this runs the gamut from the abrasive and revanchist punishment of Piper Laurie’s character in the film Carrie to the sensitive acknowledgments between Matt Damon and Robin Williams in Good Will Hunting. In our news, we are horrifically entranced by both the systemic routine abuse perpetrated by religious leader Warren Jeffs and the bizarrely intimate, idiosyncratic manipulations of Munchausen by proxy cases like that of Gypsy Rose Blanchard. In our literature, books like A Child Called “It”—which chronicles one man’s childhood experience with more than a decade of jaw-dropping abuse at the hands of his mother—consistently sell millions of copies.

    And, in the age of QAnon, deranged moral panics about child abuse are once again rampant. A July 2022 study from the University of Miami found that of the 2,000 adults surveyed, a third believed that “members of Satanic cults secretly abuse thousands of children every year,” and a quarter thought “Satanic ritual sex abuse is widespread in this country.”

    But such inflammatory portrayals of child abuse obfuscate the unfortunate mundanity of the situation. “Almost none of [the cases of abuse] are like the horror stories, but … when you hear the words child abuse, people generally think of rape, murder, and torture that exists, but it exists in very, very small amounts,” says Richard Wexler, executive director of the National Coalition for Child Protection Reform.

    “That doesn’t make them any less serious. But it does have a profound effect on how you try to solve that problem. Meanwhile, the system grows and it grows and it grows and laws and definitions are expanded,” Wexler explained.

    Studies bear out Wexler’s observations. What happened during the pandemic follows a longer trend of a steady, 30-year decline in physical and sexual child abuse—while the overall quantity of maltreatment remained roughly steady. The reason is neglect—defined as a failure to provide basic needs like food, shelter, medical care, or safety—which has increased, accounting for more than three-fourths of all child abuse cases and 1,750 deaths in 2020.

    While neglect also diminished during the pandemic, this de jure category of maltreatment still remains the major reason for intervention by CPS and its use of family separation. Most of the time when agents of the state are snatching children away from their families, it is because of neglect, not beating or sexual abuse. There have been something like nine million child separations over the past 20 years, and the investigation of countless more. Unsurprisingly, there are deep racial disparities: Of the 1 out of every 3 children investigated by CPS for abuse or neglect, 53 percent are Black.

    A growing chorus of child welfare professionals, legal specialists, and parents separated from their children under such guidelines are harshly critical of this approach, arguing that it ensures that instances of neglect caused by economic precarity are treated as equivalent to cases of parental sexual abuse. Many times, these critics argue, such policies criminalize poverty and do little to meaningfully intervene in the widespread and often overlooked crisis of rampant child poverty in the most industrious and wealthy country on Earth.

    Jey Rajaraman, an attorney who spent 15 years as the chief counsel of Legal Services of New Jersey’s Family Representation Project, argues that the child welfare system’s overreliance on courts and family separation has proven especially unhelpful in actually dealing with the holistic causes of what we define as neglect. In many cases, the problem is simply that parents do not have enough money to provide a baseline standard of living for themselves or their kids, and separating them is not a humane way to fix that problem.

    “I’ve done this for close to 20 years now, and I honestly can say I’ve never had a case or a parent I defended where I was like, ‘Oh, I’m so glad they took their kids or I’m so glad their rights are terminated,’” Rajaraman said.

    This can in part be attributed to child welfare cases being deeply related to issues of poverty such as lack of income for new, clean clothes, rather than particularly violent or sexually exploitative incidents. The official statistic is that 47 percent of cases are linked to matters of financial instability, but this does not include variables like child care or inability to afford health care—an extremely problematic issue for working-poor parents who work extra hours and have long commutes.

    “It’s always been the other way around. Like, if they were provided a system that supported them, this would not have happened. We have to really think about what we’re doing to families: Drug use and being poor or struggling is not a reason to intervene or interfere [with family separation],” Rajaraman continued.

    Indeed, in many cases, separation actually enables the worst kinds of abuse. Many such children are sent to foster homes or group homes, where, ironically, sexual abuse is four times and 28 times more likely to happen, respectively.

    ONE CAN EASILY FIND UNDENIABLE CASES of economic deprivation that could constitute child maltreatment. Deamonte Driver, for instance, was a 12-year-old boy whose toothache turned deadly back in 2007. All he needed was a standard $80 tooth extraction, but his family had recently lost their Medicaid coverage, and his mother couldn’t spare the cash. The infection traveled into Driver’s brain and eventually killed him.

    Such conditions also create a negative-feedback loop: The stress of poverty can induce mental unwellness in parents, resulting in higher levels of depression, anxiety, and substance abuse—thus creating the conditions for CPS to interact with families. And since poor families rely on services like Temporary Assistance for Needy Families (TANF), Medicaid, and Section 8 housing, they are more likely to come in contact with—and be surveilled by—state entities that are entwined with CPS.

    As Dorothy Roberts’s new book, Torn Apart: How the Child Welfare System Destroys Black Families—and How Abolition Can Build a Safer World, argues, CPS is essentially a police agency and thus carries all the well-known pathologies of American police departments.

    Moreover, caseworkers operating under the authority of CPS are able to probe and investigate families in ways in which traditional law enforcement officers cannot, and because child welfare operates under the umbrella of civil legality, the Fourth Amendment’s protection against unreasonable searches and seizures is not always applicable.

    “All it takes is a phone call from an anonymous tipster to a hotline operator about a vague suspicion to launch a life-altering government investigation,” Roberts, a law professor at the University of Pennsylvania, writes.

    “A child might seem unkempt or unattended. A parent might be observed smoking marijuana. A house might appear dirty. Most of the people investigated by CPS are unaware of their rights or the name of a lawyer to call when a caseworker rings the doorbell without warning.”

    Instead of having a teacher report a case of child malnutrition to CPS for investigation, we should simply allocate more resources so a family can eat.

    Much like with American policing more broadly, Roberts contends, this form of “public safety” actually targets Black and brown communities rather than addressing the material concerns that create the conditions for child neglect. This, in turn, transforms family poverty into a proxy criminal offense and makes parents culpable actors.

    “This isn’t a system that cares about parents. The money tells you that, right? What we know is that, you know for every seven dollars we spend on adoptive services, we spend one dollar on reunification. It isn’t funded to support families. It’s funded to keep the machine working,” Shrounda Selivanoff, director of public policy at Children’s Home Society of Washington, told the Prospect.

    Selivanoff, who was charged with neglect while struggling with addiction in 2007, is intimately aware of the byzantine and irrational policies that govern child welfare.

    “I don’t think that it’s an accident that we have the majority of folks in child welfare that don’t need to be there,” she added.

    EVEN WHEN THE VULNERABILITIES that create neglect aren’t inherently present, CPS still cracks down on struggling families. Iesha, a mother of three from New Jersey, was separated from her children following an episode of domestic violence perpetrated by her children’s father. When both parties were arrested and Iesha was sent to transitional housing for battered women, CPS separated Iesha from her children.

    “They removed the children that night because I didn’t have anyone there that could care for them, no one after that was qualified to care for them, and they didn’t think I was qualified to care for them,” she told the Prospect while making her way to her daughter’s cheerleader performance.

    “So they decided that I needed intensive therapy and to move to a shelter where they told me that’s where I would get my children back … but then they told me that wasn’t stable housing, and that the children couldn’t come to live with me there,” she said. Even then, Iesha made sure the spare room in her shelter was prepared for a visit from her children.

    Iesha argued that CPS penalized her for being a victim of domestic violence: “Basically, they told me that I was endangering my children by choosing an abusive man. So they wanted to make sure that I wouldn’t fall into the same pattern before they decided to give me my children back.”

    That CPS decision kept Iesha away from her children for four years. She did eventually regain full custody, but the period of separation has left understandable scars. “They see police lights now and they get scared. Somebody knocks on the door, and they don’t want to answer it,” she said, her voice cracking.

    “We never really knew how it was going to affect them until later.”

    The issue, advocates for intensive reform say, is the ability of CPS and family services to liquidate—rather than provide for—poor families that supposedly neglect their children. For example, instead of having a teacher report a case of child malnutrition to CPS for investigation, we should simply allocate more resources so a family can eat.

    The data backs this up: According to a 2021 study by the University of Washington, a 10 percent increase in the allotment of cash to families from the Earned Income Tax Credit resulted in a 9 percent decline in neglect cases.

    The best policy in American history along these lines was President Biden’s Child Tax Credit expansion, which provided some 35 million families with $3,600 for each child under age 6 and $3,000 for children ages 6 through 17. Despite some technical flaws, that’s the kind of universal welfare state policy that would seriously cut down on child poverty and therefore child neglect. Alas, it expired this past January thanks to Sen. Joe Manchin (D-WV), who was reportedly convinced that poor families would spend the money on drugs.

    Until politicians shake off these notions, an expansion of national, universal cash assistance, social housing, and health care will remain impossible—despite these being far and away the best tools for fighting child poverty and all its associated problems.

    “In child welfare, you might hear about inadequate income, lack of child care, unstable housing or food insecurity—any of those things,” says David Kelly, a human rights attorney who worked with both the Obama and Trump administrations on child welfare but now directs Family Integrity & Justice Works.

    “The most helpful response would be to try to address some of those needs, but the more common response is to blame the parent, to see the parent as unfit because those needs aren’t met, and, potentially, remove a child.”

    Throughout the Trump years, there was a deep (and understandable) preoccupation with family separations carried out through the immigration system. But until we respond to the economic deprivation that leads to similar separations with the same sense of urgency, thousands more children will be cruelly severed from their families—and liberal policymakers will have only their austerity mindset to blame.

  • Universal basic income and macro models: What can we learn?

    By: Geoff Crocker

    The macroeconomics of universal basic income (UBI) is insufficiently addressed, both in proposing and in evaluating UBI. The UBI/macroeconomy interface is bidirectional. Macroeconomic analysis generates a strong case for basic income, whilst basic income proposals have significant macroeconomic impact, and need to show macroeconomic sustainability. The redistribution of income proposed in microeconomic simulation models of UBI feeds into the aggregate consumption function of the macroeconomy, further driving production and investment functions with their onward effect on government expenditure, trade balances etc until a new dynamic macroeconomic equilibrium is reached.

    Only a comprehensive macroeconomic model can address these questions.

    The affordability of basic income proposals is the usual macroeconomic concern. Will higher existing taxes, and/or the introduction of new wealth, land, or ecological taxes be necessary to ‘pay for basic income’? Will basic income inevitably drive inflation or devaluation?

    A specific macroeconomic interpretation generates a case for basic income to fund consumer demand. The argument distinguishes between high-tech developed economies and low-income developing economies.

    In high-tech economies, technology implemented as automation reduces labour income in proportion to output. This is likely a priori, and also results from a thought experiment of a totally automated economy with neither labour nor wage, where goods and services could only be allocated by vouchers, equivalent to basic income. In this case, UBI would amount to 100% of GDP.

    A more nuanced argument is therefore that degrees of automation cause degrees of relative reduction in labour income, requiring degrees of basic income as a component of disposable consumer income. Research at the University of Bath Institute for Policy Research (IPR) confirms that technology empirically reduces the labour share in the economy. It is a valid alternative structural explanation of the 2007/8 economic crisis that inadequate consumer income led to the huge increase in unsustainable household debt.

    In developing economies, a similar but different Keynesian argument for basic income arises. Such economies are widely restricted to low debt/GDP ratios of 50-60%, in contrast to developed economies running debt/GDP ratios in excess of 100%, in Japan’s case reaching 265%. Traditional Keynesian fiscal stimulus operated through government capital expenditure working through the consumer income multiplier effect.

    A more direct Keynesian proposal would provide basic income to consumers to stimulate demand, and hence production and investment, to create sustainable non-inflationary growth. The application of this policy would need macroeconomic modelling in each country economy to test the response of the supply side, to ensure against inflation from excess demand, or devaluation from increased imports. Supply side production and investment policies could then integrate with the basic income policy.

    The challenge of macroeconomic affordability is ever present in basic income debates. Basic income proposals are costed, taxes are raised, and welfare benefits reduced to pay for the net UBI scheme cost. This assumes that government financial balances are the measure of affordability. But an alternative measure of affordability was advanced by Keynes in a 1942 BBC address in which he said, “Anything we can actually do, we can afford”. Ultimately, we can consume what we can produce.

    This shift from financial balances to real resource constraints requires a radical redefinition of the ontology of money in the economy. Orthodox thinking insists that money has inherent value, derived historically from gold reserves, or currently from the sale of government bonds and the assumption of government debt. It is clear that this is an artefact, and not necessarily the case.

    Governments can simply create money, as commercial banks currently do when making personal and business loans. Such money creation does not need to count as debt but must observe the constraint of output GDP to avoid inflation. Not only is this conceptually true, but it has been proved empirically by the widespread current practice of central banks holding a very large proportion of government debt, which, since the central bank is owned by the government, is not net debt at all. Currently, the UK Bank of England holds £875bn of UK government debt in this way. Academic papers by leading central bank economists such as Michael Kumhof also challenge the definition of money as debt.

    The question then arises of whether a substantial aggregate basic income can be funded by debt-free sovereign money. Research by Cambridge Econometrics assumed an injection of aggregate basic income funded by debt-free sovereign money into a multisectoral model of the UK economy. The result was a stable equilibrium, collapsing into neither inflation nor devaluation. The demand stimulus of basic income initially took up spare supply side capacity, and then fed into the investment function to yield non-inflationary growth.

    A further simulation of the model showed that basic income funded by debt-free sovereign money restored labour income lost by extensive future automation. A current outstanding proposal is to conduct similar modelling with a stock-flow-consistent model of the UK economy with a specific financial module to simulate money flows and balances.

    Basic income is therefore a sustainable, affordable, macroeconomic necessity.

  • “Billionaires Cannot Have It All” – Sanders Calls for Redistribution of Wealth

    As the wealth gap between middle-income Americans and the 1 percent balloons, Sen. Bernie Sanders (I-Vermont) is calling for redistribution of wealth from the wealthiest Americans to the middle and working classes as one of the first steps needed to save the country from the far right and “restore democracy.”

    In an interview with CBS on Tuesday, Sanders said that Democrats need to recognize that billionaires are only getting richer and richer, while workers are falling behind – and, as long as this trend continues, people will keep losing faith in the idea that the government exists to work for them.

    “Right now, a lot of people are losing faith in government,” he said. “If you are a worker out there – and your job went to China, your job went to Mexico, you’re making less than you used to make, your kid can’t afford to go to college, you can’t afford health care – and somebody puts a 30 second ad up on CBS, ‘vote for me,’ [you’d] say ‘go to hell. You’re all the same, you’re not doing anything for me.’”

    “You want to restore democracy? Have a government that works for ordinary people,” he said.

    When asked about the threat to the U.S. from the far right and Donald Trump, Sanders said that a large problem is that voters and regular people don’t see candidates that vow to work for them.

    “You’re not going to hear it much on corporate television. I happen to believe we need redistribution of wealth in this country. We need to protect the middle class and working class, and the billionaires cannot have it all,” he said.

    While there has been a redistribution of wealth over the past half century, he said, it has “gone in the wrong direction.” “We’re talking about trillions of dollars going to the 1 percent while the working class and the middle class become poorer,” he emphasized.

    Indeed, according to a report commissioned by Sanders and released by the Congressional Budget Office (CBO) on Tuesday, the share of all wealth held by the top 1 percent shot up from 27 to 34 percent between 1989 and 2019, while wealth held by the bottom half of Americans dropped from 4 percent to 2 percent over the same period.

    Overall, in 2019, while the bottom 50 percent of Americans owned $2.3 trillion in wealth, the top 10 percent owned $82.4 trillion, the report found.

    Student debt has been a major factor in the suppression of the wealth of the bottom 25 percent. In 2019, according to the report, student debt was the largest source of debt among the bottom 25 percent, surpassing the amount of debt from mortgages and credit cards combined.

    The wealth gap has likely grown throughout the pandemic. Though pandemic provisions like the child tax credit and the stimulus checks kept millions of Americans afloat through the first two years of the pandemic, those financial programs are now over – while the economy remains unstable and inflation remains high.

    On the flip side, however, U.S. billionaires have added over $1.7 trillion to their collective wealth since the start of the pandemic, much of this growth accruing to the very richest people in the world. According to a January Oxfam report, the world’s 10 richest people have doubled their wealth during the COVID-19 pandemic, adding $5 trillion to their collective wealth – or more than two times the $2.3 trillion total wealth owned by the bottom 50 percent of Americans in 2019.

    This post was originally published on Latest – Truthout.

  • Ottawa group says there’s enough evidence to support a basic income program

    By: Kate F. Mackenzie

    An Ottawa group is advocating for a basic, livable income for those living below the poverty line. 
     
    Joe Foster, who is involved in the Basic Income Ottawa group, told The Sam Laprade Show on Sept. 20 that it would ensure people meet their basic needs regardless of their work status.

    He added that the recent spike in people accessing food banks in Ottawa indicates greater poverty problems. 
     
    Foster, whose background is in economics and engineering, said the concept of a basic income has been around for a long time, but people still know little about it. He explained that myths around providing a basic income include that people will be too lazy to find work and that the program would be too expensive.

    “If you look at the money we put into poverty from federal, provincial, municipal [levels], we’re pouring in lots of money… we’re putting a lot of money into poverty elimination, but we’re not really doing it properly,” he said. 
     
    Foster said there have been enough pilot projects to realize it’s a viable option, with countries including Finland and Brazil experimenting with it, and Canada testing it in Manitoba from 1974 to 1978.

    “Look at the facts. There’s enough evidence,” he said. 

    This post was originally published on Basic Income Today.

  • This man wants to give $1,000 to every poor person on Earth – but could his plan really work?

    By: Will Brown 

    More than a trillion aid dollars have been pumped into the continent since the 1960s. Famines have been averted. Hundreds of millions have been vaccinated. Yet the total number of Africans surviving on less than $1.90 a day has hovered around 400 million for about 40 years. 

    But could the solution have been staring us in the face the whole time? Could we get rid of the white United Nations 4x4s, arcane development plans dreamt up in Western capitals and concentrate on one thing: giving poor people money?  

    Rory Stewart, former UK cabinet minister and one-time Conservative leadership contender, thinks so. He has just been appointed President of GiveDirectly, an American NGO trying to shake the foundations of the aid world.  

    “Instead of giving a tent to people in poverty, which they sell for cash to buy what they want, or moving wheat halfway around the world from a farmer in Idaho, we’re actually letting people determine what their needs are,” Mr Stewart tells The Telegraph in Kilifi, a drought-stricken county in southern Kenya.  

    GiveDirectly’s pitch is as radical as it is simple. They argue that if you give every family in an impoverished community a no-strings-attached one-time payment of $1,000 (£865) – roughly four days’ salary for a typical UN staffer – you can transform their lives for the better in almost every way.  

    “Cash has this magic multiplier effect. It gets the general economy going,” says Stewart. “It allows people to buy a roof for their homes. “A cash donation lets people get a cow which produces milk and gives calcium to their kids. It lets them set up a small business or get their children through school. It improves their diets, so they’ll have fewer sick days,” he says.  

    There is a quiet revolution couched in his words. For half a century, the aid industry has revolved around legions of Western expatriates, with fancy master’s degrees, parachuting into far-off places to tell locals what they need to get out of poverty.

    ‘Now I have some dignity’

    UN agencies and NGOs will sometimes play dazzling accounting tricks that give the illusion that most of their donations go directly to those in need. But ineffective projects, huge overheads for contractors and dodgy officials often suck up resources, leading to widespread disillusionment among rank and file humanitarians. 

    Stewart, who was Secretary of State for International Development in 2019, is damning in his criticism of patronising attitudes in the aid sector. “We dress it up in fancy words like best practice and capacity building. But basically, ‘best practice’ means we know what’s best. And ‘capacity building’ means we need to teach you what to do. And then if you fail, we say there’s a lack of ‘political will’. In other words, you’re lazy,” he says. “At some level, these are fancy jargon words for suggesting that communities in Asia or Africa are ignorant, unskilled and idle.” 

    By effectively cutting out the highly paid middlemen, GiveDirectly claims that its work has a better bang for its buck than almost any other intervention. But many national governments are cautious of the idea. The international community has already been sold many dud silver bullets and giving out cash to poor people is not a popular political decision. Could this really work on a grand scale?  

    Five years ago, almost everyone in the Mgandamwani village lived in fragile, leaky huts. There was no electricity and women used to walk three hours a day to the nearest reservoir to get water. Most men earned a pittance – £3.50 to £7 – working the occasional hard labour job in town.  

    Villagers say their lives transformed overnight when they received $1,000 on their mobile money accounts. They got local builders to get tin roofs, concrete floors, solar panels and lights so their children could read in the evening. Some young men went on training courses to become electricians or welders. Three middle-aged women – Kanze, Dama and Kadzo – pooled their cash together to lay water piping in the village for the first time. 

    “It’s the genius of the market. It’s very pure market economics,” says Stewart excitedly after coming back from seeing a new herd of goats.

    “Most people in extreme poverty have spent their entire lives thinking about what they would do if they got a bit of money and they can get it much cheaper than we can.” 

    Broader research backs up the improvements at Mgandamwani. A major study by academics at the Universities of California San Diego and Georgetown found that a simple $500 transfer reduced the child mortality rate by 70 per cent and improved child growth. A review of seven studies in Africa found that cash transfers reduced risky sexual behaviour, increased the use of antenatal care and increased the likelihood of having a nurse on site when a woman gave birth.

    The villagers in Mgandamwani are all still brutally poor on a level almost unimaginable to anyone in Britain. But that’s not how recipients see it.

    “I spent all the money on my house,” says Zawadi Kitsao, an illiterate woman who is probably much older than the 36 years written on her ID card.

    “Before, I didn’t even have a door on my house for privacy. Now I have some dignity,” she says as she walks around her newly constructed breeze block home. 

    One fear many critics of cash payments have is that men will end up spending the money on drugs, alcohol and cigarettes. While this happens in some isolated cases, researchers say this is a tired cliche and that most people seize the opportunity to change their lives for the better. But several broader problems remain. Most countries where GiveDirectly have been working are stable and relatively law-abiding. 

    It is hard to see how the lean NGO can guarantee security for cash recipients in war-ravaged nations like South Sudan, where whole villages are sometimes taken hostage for the money stored on their digital mobile wallets. The next problem is one of scale. 

    Since the organisation was founded by four students at Harvard University and the Massachusetts Institute of Technology in 2008, they have reached more than 300,000 households with large payments across Liberia, Kenya, Malawi, Rwanda and Uganda. Could the massive investment of liquid cash cause rampant inflation? 

    The answer is not entirely clear, although Stewart cites economic modelling showing that you would need to dump about 20 per cent of GDP to have a serious impact on inflation. Many aid workers still need to be convinced. But in some ways, it is easy to see why the simple idea of giving people cash has faced so much resistance. 

    “It’s difficult. It’s not just that people are selfish; it’s psychological. People have dedicated their whole life to the idea that they have a unique set of knowledge and skills and that they are necessary to save people,” says Stewart. “If you have to confront the fact that actually the villagers have a better idea about what they need than you do, your whole life is called into question.”

    This post was originally published on Basic Income Today.

  • Proposal for Prince Edward Island Basic Income Now at Advanced Stage

    By: Marie Burge

    Never before has the need for a basic income for Canadians been more urgent, and never before has the reality been in such close grasp. A proposal for a guaranteed basic income (GBI), known in P.E.I. as basic income guarantee (BIG), is now at an advanced stage. The authors of the P.E.I. basic income implementation proposal for the P.E.I. basic income program are at the cusp of putting this model into the hands of the province of Prince Edward Island in order to move towards negotiations with the federal government.

    The transferal of this report will set off a dynamic process in which officials of both governments will meet at the same table to begin, in earnest, to design next steps for concrete action on basic income.

    No official government body commissioned the development of this proposal. (That saved a bunch of public money!). However, I am making a well-justified claim that it was, in fact, commissioned by the people of Prince Edward Island.

    Special committee

    The initiative and the inspiration for the development of basic income in P.E.I. comes from the P.E.I. community which, now for almost 20 years, has kept alive the aspiration, the hope, that it is possible to eliminate poverty in this territory. In P.E.I. the spirit of basic income comes from the people and was captured and articulated by an NGO, a civil society organization – the P.E.I. Working Group for Livable Income (WGLI).

    We are proud of the engagement of Island politicians who were willing to consider alternatives. When after a number of discussions and two unanimous votes around basic income in the legislature, the legislative assembly of Prince Edward Island commissioned the special committee on poverty in P.E.I. to do its work. Then the assembly voted unanimously once again to approve the recommendation of the special committee to establish a full-fledged basic income program in P.E.I. Most astoundingly, the essential principles of basic income established by the WGLI were accepted and endorsed. 

    It is important to note that from that point the language began to develop and solidify around P.E.I. as an ideal launching place for basic income in Canada. The feasibility of a five- or seven-year demonstration program, Island-wide and inclusive, fully funded (federal-provincial), independent from attachment to the work force and accessible to all who need to be brought up to the official “poverty line” became real. We continue to insist that basic income is not solely about poverty: it is an investment in people, in the economy, and in the health, well being, and democratic engagement of the population.

    Justified expenditure

    From Day 1, the community and policy makers struggled with what basic income would look like on the ground, its implementation challenges, and of course how to pay for it. We have said from the beginning that basic income is not revenue neutral. It will cost. It will also save. And the costs are well-justified by the benefits.

    It is not often that P.E.I. attracts the attention of groups across the country. But that happened in 2019 when P.E.I.’s initiative, in the community and in the legislature, inspired the Kingston Action Group for Basic Income Guarantee in the person of Toni Pickard. And that is how Coalition Canada basic income – revenu de base came to be. It now has representatives from 10 provinces and two territories. Its vision for basic income is pan-Canadian, with on-going support for establishment of the P.E.I. basic income demonstration program. Out of Coalition Canada grew a massive production of the cases for basic income designed by, and with, the first voices and their allies in many academic fields as well as a whole range of studies and submissions. Not to mention the number of sectors from health, religious and the Senate which were inspired to speak out in favour of basic income for Canada. This national work also resulted in the formation of two new organizations, Basic Income Canada Youth Network and Basic Income NOW Atlantic.

    Co-ordinated effort

    From the very beginning in P.E.I. we, in the community and in the public sector struggled with how could basic income best be presented to the federal government. The premier was commissioned by the P.E.I. legislature to bring that forward.

    So, we are in late 2022, after untold commitment and volunteer work of a team of professionals: eight economists; five politicians from five political parties; bureaucrats; and civil society advocates. Toni Pickard of Kingston co-ordinated the work of the economists. Barbara Boraks of Toronto co-ordinated the engagement of the politicians.

    We have a model, not perfect for sure, for the implementation of a P.E.I. demonstration program. It merely shows a reasonable level of economic feasibility and sturdy grounds for federal-provincial dialogue.

    Guaranteed basic income is a program by which we can eliminate poverty, being universally accessible to those who need to have their income brought up to the official “poverty line”. GBI as a poverty eliminator affects the lives of millions of people in Canada and a large percentage of the population of Prince Edward Island. Families living in impoverished situations will find their lives radically transformed for the better. But GBI has a wider societal impact. This program promises to better the lives of the majority of people in society. As it is primarily an investment in people, it contributes to economic growth, improves the health, self-esteem, and well being of the community as a whole and it encourages the increased democratic engagement of the population. There is something in GBI for everybody.

    We say to the province of Prince Edward Island and to the government of Canada: “We are handing you a gift.” We want you to take it in good faith and get your provincial-federal conversation going in the best and most effective way you know. We ask you to honour our proposal for a guaranteed basic income benefit for Prince Edward Island. You do this by being open to the possibilities and being sincerely committed to collaborative efforts to overcome any obstacles in the path to implementation. If government is to be truly “all about the people”, it must be about all people.

    ___________________________

    Marie Burge works with Cooper Institute, a member of the P.E.I. Working Group for a Livable Income since 2003, Coalition Canada basic income – revenu de base, founded in 2019, and Basic Income NOW, Atlantic Canada, organized in 2021.

    This post was originally published on Basic Income Today.

  • New $42M guaranteed basic income program is using innovative tech to distribute funds

    By: Chase DiBenedetto

    As guaranteed income programs continue to expand and benefit thousands of families around the country, Illinois’ Cook County unveiled the largest one yet: A $42 million promise for thousands of Chicago-area families.

    The substantially-endowed Cook County Promise Guaranteed Income Pilot will serve 3,250 low-income families, each receiving $500 monthly cash payments for 24 months. It’s similar to many other city-based free money programs, which range anywhere from $200 to $2,000 a month for thousands of households, that offer a localized glimpse into what could be accomplished with Universal Basic Income (UBI). Studies of direct cash payments and universal income have provided ample evidence that such aid promotes both financial and social prosperity among lower-income communities, and can provide needed assistance to portions of the population that often go untouched by federal relief. Recent U.S. Census data has also shown that general direct aid in the form of straight-to-individual payouts helped reduce poverty overall.

    Guaranteed income programs offer a similar type of long-term cash payments as UBI — a standardized financial safety net with few to no conditions attached — but for a select group of city residents. They’re a great way to prove the aid’s efficacy.

    “With a $42 million investment, this two-year pilot is the largest publicly funded guaranteed income initiative in American history and will provide thousands of our residents with a stable economic foundation — many for the first time in their lives,” said Cook County Board of Commissioners president Toni Preckwinkle.

    The program is in partnership with global NGO GiveDirectly, which will oversee the program’s payment administration, and technology company AidKit, which will help build and host applications and payment processing tools for participants.

    “The core of it is really wanting to empower people with choice, dignity, and opportunity,” said AidKit CEO and co-founder Katrina Van Gasse. “Direct cash assistance is one of the most direct ways to do that.”

    AidKit’s payment technology is uniquely accessible to a broad range of prospective recipients, and was intentionally designed to help make the logistic process of direct cash assistance more efficient. The organization was originally founded after seeing the success of tech built and installed to support the Left Behind Workers Fund, a pandemic relief program for undocumented workers in Colorado. The company began to scale its services to aid more than a dozen emerging direct cash and guaranteed income programs, starting initially with Atlanta, Georgia’s In Her Hands income pilot.

    “Our highest goal at AidKit is to leverage technology to improve people’s lives. Cook County Promise represents an unprecedented opportunity to do that at scale,” wrote Van Gasse in the program’s press release. The organization has become a go-to resource for similar programs around the country, helping to distribute $50 million dollars to more than 34,000 people in various test programs like Cook County Promise.

    “We created a tool that effectively and efficiently gets direct cash assistance out to people who need it most, in a dignified way. And it’s really focused on ensuring we’re reaching the most vulnerable populations that are typically excluded,” Van Gasse explained. “How do we make sure this is accessible for them?”

    What makes AidKit’s tech so successful is its ease — the sign-up process for recipients is designed for mobile device compatibility and fully completed in under 30 minutes. Applicants don’t need their own computers or laptops, and the simplicity benefits those working to assist these populations, as well. Required documents can be submitted on the applicant’s time, with both in-person and online support if needed, and uploaded simply by taking a photograph.

    The application forms (and all follow-up communications) are also multilingual, available via text-to-voice technology, and compatible with screen readers. They can be accessed by people with a range of verbal and literacy skills, as well as people with disabilities. The process is also easy for those who are unbanked, a group which makes up approximately five percent of the population, according to AidKit. The application allows for direct cash payments via bank transfer as well as prepaid debit card or virtual card, which can be picked up by or delivered to recipients.

    It’s important that options like these exist for those involved. “Some programs are designed in a way where it can feel like such a black hole for people. Applicants are just swimming in this black hole, and they have no idea what’s happening next, what they’re supposed to do, and what their status is,” Van Gasse said. “The way we’ve designed AidKit is to make it really just a supportive and informed experience.”

    Cook County Promise isn’t the first, and probably won’t be the last, guaranteed income program born and fostered in the Chicago area. Chicago City Alderman Gilbert Villega originally announced a proposed guaranteed income program in April 2021, which boasted a $30 million endowment for 5,000 families and was tested that June. The Resilient Communities program began issuing monthly payments this past July, and will continue to supplement the incomes of 5,000 families with a year of $500 monthly payments.

    The program is a substantial, and history-making, addition to these direct cash efforts. AidKit’s simple-to-use technology is helping to prove that such initiatives are scalable, and that they’re efficient social interventions — as long as they have the appropriate political, financial, and technological support.

    Applications for the Cook Country Promise pilot will go live on Oct. 6. City residents can sign up to receive updates and information on how to apply.

    This post was originally published on Basic Income Today.

  • White House and Senate Democrats eye child tax credit Hail Mary

    By: Hans Nichols

    The White House is engaging with Senate Democrats about making one last push for an enhanced child tax credit this year — and in return for GOP votes, may dangle support for corporate tax credits for research and development that expired last year, Axios has learned.

    Why it matters: Some Democrats see a year-end legislative horse-trade as their last chance to enshrine some version of President Biden’s enhanced child tax credit into law before Republicans take one — or both — chambers of Congress.

    • A compromise package would require 60 votes in the Senate, meaning that at least 10 Republicans would need to support it without any Democratic defections.
    • In response to the Supreme Court decision on Roe v. Wade, some Republican senators, including Mitt Romney (R-Utah) and Marco Rubio (R-Fla.), have been floating pro-family policies, including a cheaper and less expansive version of Biden’s child tax credit.

    But, but, but: A Hail Mary tax package would face not only a ticking congressional clock but also potential opposition from Sen. Joe Manchin (D-W.Va.) — who may not be willing to support more deficit spending.

    Context: Republicans and Manchin let Biden’s one-year child tax credit, which provided families with up to $3,600 per child, expire at the end of 2021.

    • After some discussions about lowering the income caps and including it in a slimmed-down version of Build Back Better, the tax credit ultimately didn’t make it into the Inflation Reduction Act that Biden signed into law in August.
    • To lower the costs of his 2017 corporate tax cuts, President Trump covered only four years of the R&D credits, putting an expiration date on tax incentives that had long been in place for corporations.
    • Republicans were banking on a future Congress to extend them, but 2021 passed without any action and they lapsed. Business groups have been looking for opportunities all year to restore them.

    Driving the news: Biden officials have been in quiet conversations with Democratic senators, including Sen. Michael Bennet (D-Colo.) — one of the child tax credit’s main champions — to discuss how to get a deal.

    • “It is a priority for the White House and it’s absolutely a priority for me,” Bennet told Axios. “We should have never allowed it to sunset, and I think we can find a way at the end of the year.”
    • “I would be very reluctant for us to extend things like the R&D tax credit for business enterprises, without extending this important tax cut for working families,” he said. “And I hope we can come to an agreement on that.”

    The big picture: Congress will return to Washington after November’s election for a lame-duck session, in which funding the government, and potentially a debt-ceiling package, will be atop the agenda.

    • But taking action on a child tax credit is clearly a priority for Democrats, who feel they have found a potential point of leverage over Republicans, according to Business Insider.

    Between the lines: If Democrats retain control of both chambers — and pad their majority in the Senate — there will be less urgency to fiddle with the tax code this year.

    • Biden will want to use a potential 2023 budget reconciliation package to revive many of his Build Back Better priorities that were vetoed by Manchin.
    • The Senate’s initial $3.5 trillion dollar legislation, with fresh funding to dramatically expand the social safety net, was ultimately trimmed to a $740 billion package that only included new money for climate, health care and the IRS.

    What they’re saying: “I’ve got a proposal that has a good deal of support on our side of the aisle,” Sen. Mitt Romney (R-Utah) told Axios. “I have not really socialized it yet on the other side of the aisle.”

    • “I’ve had conversations with the White House,” Romney said. “They say they have interest and we’d like to chat about it.”
    • “Would I like there to be a deal? Absolutely,” said Sen. Mark Warner (D-Va.). “I think they are both good policies.”
    • “I am for both the child tax credit and I’m for the R&D,” said Ron Wyden (D-Ore.), chair of the Senate Finance Committee.
    • “We’re simply not going to help business, help big corporations, without helping the child tax credit,” said Sen. Sherrod Brown (D-Ohio). “This administration is full in on this.”

    Be smart: Bennet, who is facing a stiff challenge from moderate Republican Joe O’Dea, would love to have movement on the child tax credit before the election to help motivate his progressive base.

    • But he’s realistic about the short-term prospects: “I don’t think plausibly it will be done before my election,” he said.

    This post was originally published on Basic Income Today.

  • 5 ways South Africa could fund a basic income grant – and why Treasury doesn’t want to hear any of it

    See original article here.

    South Africa’s National Treasury has voiced its opposition to a campaign by the Department of Social Development and civil rights groups for stipends to be paid to millions of the country’s poorest citizens on a permanent basis.

    Extending a temporary R350 monthly grant that was introduced in 2020 to shield the vulnerable against the fallout from the coronavirus pandemic would cost at least R50 billion a year, the Treasury said in a document, which was penned ahead of next month’s medium-term budget policy statement and seen by Bloomberg.

    The only way to secure the money would be to raise taxes, incur new debt or reallocate funds, and none of those options were desirable, it said.

    The Treasury refused to comment on the document because discussions on the 26 October budget update are still ongoing. These are its potential options for raising additional revenue and why it doesn’t favour any of them:

    Raise personal taxes

    The document outlines several scenarios for increasing the personal income tax take, by raising the marginal rates and not adjusting tax brackets to account for inflation.

    But individuals in South Africa already pay more personal income tax than their counterparts in peer countries, Australia and the UK, and increasing their burden would further erode the country’s competitiveness.

    Furthermore, previous tax increases didn’t yield as much revenue as anticipated, failed to narrow the budget deficit and may have hampered economic growth, the Treasury said.

    Levy a wealth tax

    South Africa already taxes wealth indirectly by imposing estate duty, donations tax and other levies.

    While a new wealth tax may help reduce inequality, in practice, such measures raise limited revenue, are expensive and difficult to administer, and often lead to capital flight and discourage savings and investment, the Treasury said.

    Increase value-added tax

    VAT is the most reliable source of revenue and from a purely macroeconomic standpoint, increasing the rate would have a less detrimental effect on economic growth and employment than raising personal income tax, according to the Treasury.

    It estimates that raising the rate by two percentage points to 17% could generate R49.4 billion, although the measure may be somewhat inflationary in the short term. Labour unions have fiercely opposed VAT increases in the past, arguing that the poor are most negatively impacted.

    Take on new debt

    The Treasury is adamant that increasing the state’s debt burden, which currently stands at R4.2 trillion and costs about R306 billion annually to service, is a terrible idea. “Debt-service costs have become a binding constraint on the fiscus,” are the single-largest item of spending and are growing at a faster rate than gross domestic product, it said.

    Re-prioritize funds

    A number of projects across a range of government departments could be terminated or scaled back, but the potential saving would only amount to R21.2 billion, according to the Treasury.

    Delaying capital projects provides the biggest scope for reallocation — about R12.8 billion may potentially be realized. Another R2.4 billion could be saved by ending a peacekeeping mission in the Democratic Republic of Congo.

    While consideration could be given to merging some departments with similar mandates and doing away with others, the state may incur additional legal costs and administrative charges and have to give severance pay to those who lose their jobs, the Treasury said.

    This post was originally published on Basic Income Today.

  • South Korea plans to provide every family with a newborn child a monthly allowance of $740 as ‘parent pay’

    By: Sam Kim

    South Korea plans to provide every family with a newborn child a monthly allowance of 1 million won ($740), in its latest move to encourage more births and try to address the world’s lowest fertility rate.

    The handout will begin next year at a level of 700,000 won a month and then rise to the full amount in 2024, according to a budget proposal unveiled this week. Once the child turns one, the stipend will be reduced by half and run for a further year.

    Dubbed locally as “parent pay,” the 1 million-won allowance was among a series of election campaign pledges by President Yoon Suk-yeol to address Korea’s dangerously low birth rate.

    Yoon, who took office in May, has described the demographic outlook as a national “calamity.”

    The expanded support for parents comes even as the nation shifts to a more stringent fiscal policy in order to rein in pandemic-era debt. The spending initiative on newborns underscores the urgency of tackling one of the nation’s greatest long-term risks.

    Under the previous administration of Moon Jae-in, who ran a more expansionary fiscal policy, each newborn child was provided with 300,000 won a month over their first year. That program will now be subsumed by Yoon’s.

    South Korea shattered its own fertility record in 2021 when the expected number of babies per woman slipped to 0.81 from 0.84 a year earlier. That shone a light on an already dire outlook with the United Nations predicting the population of 51 million will more than halve by the end of this century.

    A shrinking workforce presents an array of challenges for policy makers that includes everything from stagnant economic growth to soaring welfare payments.

    Korea’s demographic problem may be a harbinger for the rest of the developed world that is also aging rapidly.

    Among economies with per capita GDP of at least $30,000, Korea is the fastest-aging, according to UN and World Bank data. By 2100, its population is projected to fall by 53% to 24 million.

    In the decades following the 1950-53 Korean War, the population at least doubled, and in an effort to curb the baby boom in the early years of economic development the government encouraged couples to have only one child. That policy was scrapped around the turn of the century as births started to tumble.

    Korea is estimated to have already spent hundreds of billions of dollars on trying to reverse the decline. The results so far have been underwhelming, with only 260,600 babies born last year, or 0.5% of the population.

    This post was originally published on Basic Income Today.

  • A Decent Level for All: Economic Justice and Universal Basic Income

    By: Tanner Matthews.

    See original post here.

    Demands for “economic justice” in public policy debates are emotionally powerful, imparting a profound sense of purpose and moral urgency to a cause. However, these appeals must be more than a mere rhetorical tactic. Clarity about ends is a prerequisite for choosing effective means.
    Of the three contrasting accounts of economic justice most commonly considered—economic egalitarianism, laissez-faire capitalism, and the “decent level view”—economic egalitarianism and laissez-faire each fall short in their own way. The decent level view constitutes the most plausible account of economic justice.

    Universal basic income is a potential means of implementing the decent-level view. Although dialogue and debate should continue, universal basic income could be a feasible vehicle for achieving economic justice in our society.

    What Is Wrong With Economic Egalitarianism?

    Economic egalitarianism is “the doctrine that it is desirable for everyone to have the same amounts of income and of wealth.”

    Economic egalitarianism is attractive to many people repulsed by the excesses of our economic status quo.

    They survey our society, where some are stuck in abject poverty while others are sitting on more wealth than they could possibly spend in a thousand lifetimes and correctly conclude that something has gone horribly awry. Still, they are mistaken to identify economic inequality as the root problem and an equal division of wealth as the remedy.

    If economic egalitarians were to reflect at length on what bothers them about the current system, I think most would come to see that inequality is not really the issue. Our economy generates astonishing wealth and abundance, yet many remain mired in poverty. This is a scandal.

    But it is not the inequality per se that makes it so disgraceful; rather it is our collective choice to permit poverty despite having at our disposal the resources to eradicate it.

    This line of argument gains support from the following thought experiment. Imagine a society where those at the bottom of the “economic ladder” were millionaires, while those at the top were billionaires. This society is economically unequal–possibly extremely economically unequal–but there is no economic injustice.

    As the philosopher Harry Frankfurt points out, “Economic equality is not…of particular moral importance. With respect to the distribution of economic assets, what is important…is not that everyone should have the same but that each should have enough. If everyone had enough, it would be of no moral consequence whether some had more than others.” Economic egalitarians are correct to see our current economic order as sick. But their focus on inequality misdiagnoses the true nature of the disease.

    The Limits of Laissez-Faire

    Laissez-faire capitalism equates economic justice with the results of free market processes left to their own devices.

    Laissez-faire capitalism holds that a just distribution of income and wealth is identical to whatever pattern the free market produces, even if this spells starvation for some and opulence for others. People deserve whatever they manage to earn in the market—no more and no less. And any government “meddling” with the market distribution of income is unjust.

    Laissez-faire capitalism holds great appeal for many Americans, particularly those who identify as libertarians. However, there are a number of significant problems with this view. To begin with, it fundamentally misunderstands the role of markets. Markets are merely a means to an end and not ends in themselves. When kept within their proper bounds, markets can make great contributions to prosperity and human flourishing. But they are not the barometer of justice. 

    Many people assume that markets necessarily give people what they deserve.

    The line of thinking goes something like this: Working hard and contributing to society makes one deserving of a high salary; the market rewards people who work hard and make important contributions to society with high salaries; therefore, the market distribution of wealth is just. But it is simply not true that the market always allocates rewards in this manner.

    Markets operate in accordance with the laws of supply and demand—not any innate tendency to recognize and reward merit. To see this one need only contrast the phenomenon of passive “windfall profits” with the backbreaking labor of the people who grow our food or compare the earnings of researchers developing life-saving vaccines with those of the Kardashian family.

    Moreover, the market is, in part, a government creation sustained by collective investment in roads, education, a legal system that enforces contracts, and other public goods.

    There would be no functioning free market in an unstable and insecure state of nature.

    Given that the very possibility of acquiring private wealth in the market depends on the social order that government secures, it is only right and proper that a portion of this wealth be subject to taxation and redistribution.

    Finally, laissez-faire capitalism leaves no room for what the philosopher Stephen Nathanson calls “human desert.” We should resist the idea that a decent standard of living must be “earned.” People are entitled to be treated in certain ways and to be provided with a certain level of resources simply because they are human beings with inherent dignity. The decent level view recognizes this truth; laissez-faire capitalism denies it.

    Fleshing Out the Decent Level View

    The decent level view does not seek economic equality and imposes no definite “ceiling” on the level of wealth and resources that individuals may attain. But neither does it accept the unfettered free market as the arbiter of economic justice. In the wealthiest nation in human history, there is a moral obligation to ensure a “decent level” of resources for all, a guaranteed “floor” below which no individual should be allowed to fall.

    It is important to clarify what I mean by a “decent level.” Some thinkers draw a distinction between absolute and relative poverty. “Absolute poverty” refers to circumstances in which people struggle to meet even their most basic human needs for food and shelter. “Relative poverty” describes circumstances in which people who may not be experiencing absolute poverty nevertheless “are deprived of the conditions of life which ordinarily define membership of society.”

    The decent level view calls for the elimination of both absolute and relative poverty. The concept of “dignity,” or what the economist and Nobel laureate Amartya Sen refers to as “self-respect,” is crucial here. We should make sure that everyone has not only food to eat and a roof over their heads but also the resources they need to flourish and fully participate in 21st century American life. The precise details can be worked out, but the aim is to provide to all a level of resources that qualifies as decent and dignified by current societal standards.

    The decent level is at once radical and conservative. It contemplates the end of poverty but keeps the underlying capitalist economy in place. If it were implemented, some would have more than others, but no one would be poor.

    Universal Basic Income: The Decent Level View in Action?

    According to Juliana Bidadanure, universal basic income (UBI) is “a cash payment granted to all members of a community on a regular basis, regardless of employment status or income level. It is meant to be individual, unconditional, universal and frequent.” We could wipe out absolute and relative poverty alike in a single stroke by simply paying people an annual income sufficient to be at a decent level.

    In contrast to our current tangle of means-tested benefits, eligibility for UBI would not be conditioned on adherence to a set of arbitrary criteria. The demeaning scrutiny of recipients’ personal lives associated with many of today’s welfare programs would disappear.

    At last, we would have a social safety net that treats people with dignity and respect. As a universal benefit available to all members of society, UBI would concretize the decent level view’s commitment to “human desert.” Instituting UBI could help us to transcend traditional distinctions between the “deserving” and “undeserving” poor that have shaped poverty policy for far too long.

    The advent of UBI would advance freedom and human dignity across multiple spheres. People would be empowered to turn down or resign from exploitative jobs. Individuals in abusive relationships would find it easier to leave, secure in the knowledge that the UBI will shield them from poverty.

    Responding to Criticisms of Universal Basic Income

    Many objections have been raised against UBI. Some argue that UBI would disincentivize work to a dangerous degree. With legions of people exiting the labor market and electing to live off their UBI payments, the economy will cease to generate the wealth needed to fund a UBI in the first place. Ironically, UBI will then have sowed the seeds of its own demise.

    It bears remembering, however, that while UBI would remove the fear of poverty as a motivation to work, it would not do away entirely with financial incentives. The promise of obtaining a standard of living better than a decent level would still be enticing to many people, as would the status and prestige associated with certain jobs.

    In addition, the objection might take an overly cynical view of why people work. Financial incentives play a role, but being part of a team, engaging in productive activity, and developing professional capacities carry intrinsic appeal for most of us. Some would no doubt opt out of the labor force if they knew they could rely on UBI to support themselves, but the objection may overestimate the frequency with which this would actually happen.

    Another objection insists that people simply should not get something for nothing. This is not so much a pragmatic concern that UBI would undermine itself as it is a moral conviction. Those who raise this objection are uncomfortable with the idea that people would receive an income without being expected to “make some reciprocal contribution to society.”

    However, many who claim to hold this belief fail to apply it consistently. People who choose to live off a substantial inheritance from their parents seem to violate the principle that “one should not get something for nothing” just as flagrantly as those who might choose to live off UBI payments, yet few have stepped forward to propose that we abolish inheritance.

    Besides, as philosopher Matt Zwolinski has observed, holding down a traditional job is not the only legitimate way to contribute to society. UBI would enable people to pursue parenting, caregiving, the arts, or volunteer work. The market does not typically compensate for these forms of labor, but they clearly “give back” to society in important ways. The decent level view provides a cogent interpretation of what “economic justice” requires, and UBI is a serious candidate for making the decent level view a reality

    The post A Decent Level for All: Economic Justice and Universal Basic Income appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Opinion: To sustain our current economic model we need to start paying citizens

    By: Rhiannon Picton-James.

    See original post here.

    A universal basic income, regardless of salary, savings and no strings attached. No repayments. It is being discussed by the government in Wales, after they just rolled out a £1,600 a month basic income for young people leaving the care system.

    The idea of it being available to everyone has been around for a while, but this new scheme has floated the idea of a basic income for everyone again. The exact figure on offer has not been decided.

    But what a great idea for the whole of the UK? With depressed wages, a cost of living crisis, and the number of women in the workforce the lowest it’s been in 30 years – now would be the time.

    The Conservatives aren’t keen. They argue that people will be less likely to find work. But it’s just not true. Having free money has never dampened anyones chances of making more of it, or being professionally successful. If that were true, we would worry more about the future of children of hedge funders, not council estate kids.

    Having a reliable source of income doesn’t hinder anybody. Most of the rich list are the products of generational wealth. But no one is saying: “We better stop inheritances – it wouldn’t be helpful for someone to have all this free money. It wouldn’t be fair to them! What if it stopped them getting a job?”

    Finland ran a two-year pilot, where they gave unemployed people an unconditional €560 (£490) a month. The study showed that it didn’t make people lazier or less likely to work, and that health and wellbeing improved  because people didn’t have to worry about their finances.

    The benefits would be huge. It would relieve stress, have a positive effect on wellbeing, and essentially, relieve the financial pressures so many of us are facing. Having money and resources, and not worrying about whether to “heat or eat” would help people in terms of health, wellbeing and productivity. We don’t need people to be actually, physically hungry to make them hungry for the job. We really need to shake this Victorian idea that the only reason people work is if they need the money to survive.

    I don’t think people have ever wanted jobs. But people do want to work. People want to be part of something, to belong to a community, and to work for it, to have purpose. It’s not just about money.

    Social life today shouldn’t look like it did in Victorian England. People working full time shouldn’t need to be using foodbanks, and grants to afford school uniforms for their children. Mothers shouldn’t be asking cashiers to stop scanning groceries because they’ve reached £50 too soon, and can’t afford their regular shop because the price of food has gone up.

    To sustain our current economic model, we need to start paying citizens. The biggest barrier is convincing working people that they deserve a basic income, and that no one should have to struggle.

    And, let’s not forget, it costs money to make money and women are finding themselves priced out of the job market thanks to the unsustainable cost of childcare. Women can’t afford to work. It’s more expensive to be poor and the Future Generations commissioner’s report showed that a weekly payment to everyone could cut poverty in half.

    The post Opinion: To sustain our current economic model we need to start paying citizens appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • A Basic Income Is The Answer To Poverty in Canada

    By: WIL ROBERTSON AND TRACY SMITH.

    See original post here.

    Basic income is too complex to implement. At least that’s the thinking in the latest release by the Atlantic Provinces Economic Council. Yet data from Statistics Canada demonstrated that changes to the Canada Child Benefit—a basic income program for families—were largely responsible for a nearly four percent decline in poverty from 2019 to 2020.

    APEC’s report claims that “the evidence on national, long-term basic income programs is limited,” but we do have significant evidence that negative income tax programs (a form of basic income) are effective.

    The Canada Child Benefit and Guaranteed Income Supplement in Canada demonstrate the efficiency and efficacy of providing income security for children and older adults in Canada. There are also reams of global research on the effectiveness of cash transfer programs.

    The “work disincentive” argument (that people will stop working if they receive a basic income) also reared its head in APEC’s report, despite evidence that shows people do not suddenly leave their jobs when they receive income support. Robert Gilbert and colleagues in 2018 examined 16 basic income programs around the world and found they had “no substantial impact” on labour market participation.

    APEC also points to the Canada Emergency Response Benefit (CERB) to bolster its work disincentive argument. Yet a recent report to Senator Nancy Hartling of New Brunswick debunked the false narrative that the CERB caused mass labour shortages.

    Likely the biggest argument levelled against a basic income is that it would be too expensive. The APEC report lays out concerns that implementing a basic income would lead to widespread tax hikes and reductions in government expenditures, threatening its long-term viability.

    No consideration is given, however, to the savings that such a program would invariably accrue over time. Sustaining a system of poverty is hugely expensive. Addressing only the symptoms of poverty, as our systems are currently oriented to do, is costly not only in dollar figures but in human lives.

    A basic income, if offered at an adequate level to those who need it, could essentially eradicate poverty, with tremendous immediate and upstream cost savings.

    The introduction of new taxes could indeed be helpful but only if they target those with excessive wealth. In 2021, the richest one percent collectively owned roughly 30 percent of the wealth in this country, according to researchers James Davies and Livio Di Matteo.

    Perhaps now is time to consider options to make our tax system more progressive. Alex Hemingway, in a policy note composed last year, suggested that imposing a modest tax (one percent on net wealth of more than $10 million, two percent on wealth over $50 million, and three percent on wealth over $100 million) would raise $363 billion in Canada over 10 years. Taxing wealth is an area that others are also considering. U.S. President Joe Biden has proposed a “Billionaire Minimum Income Tax” of a full 20 percent for those making more than $100 million. A basic income is not out of the realm of possibility.

    There is nothing inherently complex about implementing a basic income program in Canada; we have done it in the past and will invariably need to do so again in the future. Hopefully, for Canadians in the Atlantic Provinces and across the country, this future isn’t too far off.

    That future could be closer than most realize. In Prince Edward Island, significant progress has been made towards a demonstration project to trial a basic income, an endeavour supported unanimously by the province’s legislature, including its Progressive Conservative premier, Dennis King. In April, the premier and other party leaders in PEI called on the federal government to help launch the project, but the Prime Minister has yet to agree to move forward.

    As the APEC report highlighted, bills C-223 and S-233, introduced by NDP MP Leah Gazan in the House and independent senator Kim Pate in the Senate, call for the establishment of a national framework for a guaranteed livable basic income – in essence to study and determine what a basic income would look like if we were to implement it across the country. If it is, no doubt we will see that basic income is the answer to poverty we’ve been waiting for.

    ________________________________________

    About the Authors: Wil Robertson is a basic income advocate, researcher, and steering committee member for Coalition Canada Basic Income: Revenu de Base. Tracy Smith-Carrier is Canada Research Chair for Advancing the UN Sustainable Development Goals and an associate professor at Royal Roads University

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  • Pandemic-era checks rewired how these Americans see money: ‘Stimulus changed how I think about what’s possible’

    By: Greg Iacurci

    See original post here.

    ________________________________________

    KEY POINTS:

    • Pandemic-era stimulus checks helped many Americans pay bills, reduce debt and build savings. For some, the payments altered how they think about money.
    • “The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money,” said Denise Diaz, a recipient who lives outside Orlando, Florida.

    _________________________________________

    For Denise Diaz, the benefits of pandemic-era stimulus checks went beyond everyday dollars and cents. They rewired how she thinks about money.

    Diaz, a mother of three who lives outside Orlando, Florida, received more than $10,000 from three rounds of “economic impact payments.”

    They were among the 472 million payments issued by the federal government, totaling about $803 billion. The effort amounted to an unprecedented experiment to prop up households as Covid-19 cratered the U.S. economy.

    The checks (and other federal funds) are at the epicenter of a debate as to whether and to what extent the financial assistance helped fuel inflation, which is running at its hottest in about 40 years.

    How Americans spent their three rounds of pandemic stimulus

    But they undoubtedly offered a lifeline to millions of people during the worst unemployment spell since the Great Depression. Recipients reached by CNBC used the money in various ways — to cover household staples, make debt payments and create rainy-day funds, for example.

    Diaz, who co-directs a local nonprofit, Central Florida Jobs With Justice, used the funds to pay off a credit card and a car loan. Her credit score improved. She built an emergency fund — previously nonexistent — which the household was able to lean on when Diaz’s partner lost his job earlier this year.

    Consequently, Diaz, 41, feels more financially stable than during any other period of her adulthood.

    The financial buffer and associated peace of mind also changed her psychology. She automated bill payments (for utilities, a second family car and credit cards, for example) for the first time.

    Average amount of the three Covid-19 stimulus checks, by income bracket

    “We weren’t doing that [before],” Diaz said. “Because you never knew what could happen [financially], so I never trusted it.”

    These days, Diaz thinks more about budgeting. Homeownership seems within reach after years of renting.  

    “The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money,” she said.

    ‘Tough to make a dent’

    The stimulus checks were the result of legislation — the CARES Act, Consolidated Appropriations Act and American Rescue Plan Act — Congress passed in 2020 and 2021 to manage the fallout from Covid-19.

    Households received payments of up to $1,200, $600 and $1,400 a person, respectively. Qualifications such as income limits and payment amounts for dependents changed over those three funding tranches.

    Census Bureau survey data shows most households used the funds for food and household products, and to make utility, rent, vehicle, mortgage and other debt payments. To a lesser extent, households used them for clothing, savings and investments and recreational goods.

    Salaam Bhatti and Hina Latif, a married couple living in Richmond, Virginia, used a chunk of their funds to reduce credit card debt, which has proven difficult in recent years, especially after having kids. (They have a 3-year-old and a 3-month-old.)

    Bhatti and Latif paid off several thousand dollars of the debt during the pandemic and have about $30,000 left, they said.

    “It’s been tough to make a dent,” Bhatti, 36, said. “Sometimes it just feels like you’re not making any progress.”

    The couple had a gross income of about $75,000 during the pandemic. Bhatti was the public benefits attorney at the Virginia Poverty Law Center (he’s now the deputy director), and Latif teaches online at the College of DuPage in Illinois.

    Prior to getting the stimulus payments, the duo used a “debt shuffle” approach to stay afloat, Bhatti said. That included taking advantage of multiple balance-transfer offers that carried periods of zero interest, he said.

    They also used stimulus funds to help cover higher household costs for groceries and other items like diapers.

    The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money.

    Denise Diaz, STIMULUS CHECK RECIPIENT IN FLORIDA

    Bhatti and Latif, like Diaz, also received monthly payments of the enhanced child tax credit — up to $250 or $300 per child, depending on age — that lasted for six months starting in July 2021.

    “Costs increased with our new baby so it often feels like we’re scooping water out of a boat with a hole in it,” Bhatti said. “We are not living extravagantly by any means, but because the bulk of our income [is] going to the debt, we are pretty much living paycheck to paycheck.”

    ‘Every dollar really matters’

    Nestor Moto Jr., 27, largely used his stimulus payments to chip away at student loans. The Long Beach, California, resident received about $4,000 from federal and state-issued payments.

    He used about half for loans and 10% for savings. The remainder helped Moto, an office manager for an accounting firm, pay bills (phone and car insurance, for example) when his employer reduced his full-time schedule to about 10 hours a week earlier in the pandemic.

    “They really helped me catch up on my student loans,” said Moto, who graduated from California State University Long Beach with a bachelor’s degree in political science. He still owes about $10,000 of an $18,000 initial balance.

    Moto wanted to reduce his debt even though the federal government paused payments and interest for the last two-plus years. He’s not expecting the Biden administration to wipe out his outstanding debt.

    “I saved money,” Moto added. ”[The stimulus] really helped put into perspective how much money I make a month and week and how much I spend.

    “It showed me how much every dollar really matters.”

    While grateful for the financial assistance, Bhatti feels a slight letdown after getting a brush with financial freedom. The U.S. economy has rebounded significantly since early 2021, when lawmakers passed the last broad pandemic aid package for individuals; another doesn’t appear likely despite ongoing financial pressures for some households.

    “It feels like such a tease,” Bhatti said of the stimulus payments. “It felt like dangling a carrot in front of you, the government saying, ‘We know we can help you.’ And then eventually choosing not to.”

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  • Social assistance recipients have given up on government help

    By: Sally Palmer.

    See original post here.

    The cold, wet weather of late winter and early spring was discouraging for everyone, combined with illness and restrictions brought on by COVID-19, and inflation rising to a 30-year high. But most of us have had a warm place to live and access to healthy food.

    It has been much worse for our citizens who depend on social assistance, which the PC government has frozen at $733 per month since 2018, for single people considered to be employable. No indexing to inflation, despite Canada’s annual rate peaking to 6.7 per cent in March. And no mention of social assistance rates in the Ontario budget.

    The Hamilton Social Work Action Committee and the Campaign for Adequate Welfare and Disability Benefits began a petition campaign asking the government to raise social assistance rates to match the federal CERB benefit: $2,000 per month for single people who lost their employment during the pandemic. To get “in-person” signatures, we reached out to people who lined up outdoors for donated food, often for over an hour in miserable weather.

    One cold, rainy evening at the Ferguson Avenue station we approached a group of about 25 hungry people, many living on social assistance, some with no fixed address. They were there for food, shivering in the cold rain, when a truck came by with light snacks at 5:30 p.m. After a 90-minute gap, some church volunteers arrived to cook hot food for the small crowd. No one had given up and left. We met many of the same people on Saturday mornings at Gore Park, again waiting patiently in the cold for food.

    Some of the food seekers refused to sign our petition, saying that the government will never increase social assistance. We are also hearing this now, as we knock on doors in government-subsidized apartment buildings, encouraging the residents to vote.

    We can understand why social assistance recipients have given up on being treated fairly by our government.

    Some of them were part of a basic income pilot, initiated by the previous Liberal government. Researchers from McMaster University found that many participants reported improvements in their physical and mental health, they had more hope for the future, and some had reached out for education and training that would help them to find employment.

    During the 2018 election campaign, the PCs promised to continue the basic income pilot, but cancelled it after winning the election. The last time a PC government gave a raise to social assistance was six per cent in 1985. This was nullified 10 years later by a 21.6 per cent cut by the Mike Harris government.

    Ironically, this government promised to make improvements to social assistance in their 2018 election platform. In Premier Ford’s words, “The best form of social assistance is a job.” He planned to find employment for recipients by subsidizing employers for the first few months. This approach has been used in other countries, but evaluations showed that the employees were dismissed when the subsidies ended. Although the government has promoted this plan over the past four years, there has never been a report on its progress.

    It is understandable that the hungry people who wait for food in miserable weather have given up on the government.

    Progressive Conservative candidates are seeking re-election at a time of extreme inflation, without even mentioning social assistance in their budget. This suggests that citizens who are hungry and homeless do not exist on their radar. We hope that public-spirited people will remember this when they vote June 2.

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  • People from societally advantaged groups think equality-promoting policies will affect them negatively, even if they would actually benefit

    By: Carissa Wong

    See original post here.

    People from privileged groups may misperceive equality-boosting policies as harmful to them, even if they would actually benefit.

    Previous studies have found that advantaged people often don’t support interventions that redistribute their resources to others who are disadvantaged, in zero-sum scenarios where there are limited resources.

    Now, researchers have explored the degree to which people from advantaged groups think equality-promoting policies would harm their access to resources, in scenarios where the strategies would benefit or have no effect on their group, while bolstering the resources of a disadvantaged group.

    Derek Brown at the University of California, Berkeley, conducted a series of studies involving a total of more than 4000 volunteers.

    In one study, they presented white people who weren’t Hispanic with policies that didn’t affect their own advantaged group and benefited a disadvantaged group that they did not belong to – people with disabilities, those who had committed a crime in the past, members of a racial minority group or women. Importantly, the team told participants that resources – in the form of jobs or money – were unlimited.

    For example, one policy would direct more money to mortgage loans for Latino homebuyers without limiting how many mortgage loans were available for white people.

    Participants were then asked to rank how they thought the policy would affect the advantaged group’s access to resources on a scale from greatly harmful to greatly beneficial.

    The team found that, on average, advantaged people perceived equality-boosting policies as harmful to their resource access, even though they were told that resources were boundless.

    “We find that advantaged members misperceived these policies as a sacrifice to their group, even when that’s not the case,” says Brown.

    The researchers then asked participants to consider a win-win scenario involving equality-promoting policies that benefited both the disadvantaged and advantaged groups – but the latter to a lesser extent. People were also asked to consider inequality-enhancing policies that would reduce access to resources for everyone.

    In this case, the team found that most advantaged people thought equality-enhancing policies with benefits for all would be more harmful to them than inequality-enhancing polices that came at a cost to the advantaged group.

    “We thought, maybe if we make a win-win or mutual-benefit situation, then maybe [advantaged people] will see the equality-enhancing policies as helpful. But they didn’t,” says Brown.

    Advantaged people tended to see equality-promoting policies as less harmful to their resource access if they benefitted people who were disadvantaged but who shared an identity with them. For example, white participants generally thought they would lose less from a policy that directed relatively more money to disadvantaged white people, compared with a policy that gave disadvantaged Black people the same benefits.

    “Advantaged people saw these policies more accurately when we made salient a disparity within their own group versus one that occurs between different groups,” says Brown. “This suggests that when we identify ourselves with a certain group, and see a disparity occurring within our group, we are motivated to reduce that in-group disparity.”

    In another experiment, the researchers asked a diverse group of participants to take a bogus personality test and then assigned them into a made-up advantaged group. Again, they found that people tended to misperceive equality-promoting policies as harmful even when they benefitted the advantaged group. This suggests that anyone at an advantage – for any reason – may misperceive beneficial equality-boosting policies as harmful.

    “It’s pretty troubling what we found. [But] I think people have the capacity to believe in these policies. And I think there’s a way forward, we just have to find it,” says Brown.

    Education could help to tackle inequalities by making people more aware of this tendency to misperceive equality-boosting policies that would actually benefit them, says Brown.

    “It was an ambitious series of studies that did an excellent job of ruling out alternative explanations,” says Dan Meegan at the University of Guelph, Canada. “The work paints a pretty dark picture for those trying to convince people to support policies designed to reduce intergroup inequality. The authors gave their participants every opportunity to see that helping disadvantaged groups need not come at the expense of advantaged groups, to no avail.”

    “In terms of reliability and importance, this research checks all the boxes. What I would say is the fact that [the findings] aren’t surprising is alarming to me,” says Shai Davidai at Columbia University in New York.

    Further work will need to establish if the same behaviour applies to people outside the US, although Brown and Davidai think it probably will.

    “My own and others’ work has already shown that zero-sum beliefs replicate in many cultural contexts and across different nations, and I would not be surprised if this is the case for the current work as well,” says Davidai.

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  • What would a basic income mean for the Arab world?

    By: Diana Bashur

    See original post here.

    _______________________________________

    In a nutshell.

    • What a regular, individual and predictable basic income has done is make people more engaged in productive activities, start own-account work and carry out small productive investments such as purchase of cattle and sewing machines.
    • A key opportunity is to restructure peace-building programmes to include a basic income for countries coming out of conflict, ensuring that reconstruction funds reach those most often side-lined in traditional post-conflict situations.
    • While policy-makers are often reluctant to trust the poor with unconditional cash, it has been consistently shown that the most vulnerable are in fact best placed to know where their priorities lie and spend accordingly.

    _______________________________________

    The idea of a regular, unconditional and individual cash payment distributed to all citizens is gaining ground. This column argues that such a basic income would ensure that everyone is able to meet their basic needs unconditionally, thereby improving people’s resilience and solidifying communities. Ultimately, a basic income could help to rebuild the social contract in the Arab world where governments would uphold human dignity by awarding citizens economic security as a right.

    The policy tool called basic income – a regular, unconditional and individual cash payment distributed to all – has gained significant attention globally. The main driver is its potential to mitigate social and economic inequalities (Standing, 2020), which have been made only more visible through Covid-19 (Wignaraja and Horvath, 2020). There have been over 20 basic income pilots around the world, with particularly transformational results in trials in India (Davala et al, 2015) and Namibia (Haarmann et al, 2009).

    Let’s contemplate what a basic income would mean for the citizens of Egypt, Iraq, Lebanon, Morocco, Syria and the rest of the Arab world.

    A monthly unconditional cash allowance would ensure basic economic security to recipients. Its predictability would decrease people’s stress levels in seeking to meet their needs. Citizens’ mental bandwidth could then expand beyond their immediate necessities.

    A sense of dignity is restored as basic income is awarded as a right and is non-withdrawable. Rather than mere supplicants for welfare, people are thus treated as the adults they are. With their basic needs met, citizens are empowered to contemplate different productive activities in which to engage, ones that they are eager to sustain to contribute to their communities. With better prospects for the future, a sense of expanded trust towards others is then possible. This will strengthen overall resilience.

    Some deem basic income a controversial policy tool because it essentially allocates a regular sum of cash without any behavioural conditions or considerations of poverty levels. But it is worth noting that the current economic system already awards considerable amounts of cash in exchange for ‘nothing’.

    Think about wealth inheritance, exorbitant tax breaks to affluent companies or tax avoidance by the rich who use public services free of charge (Standing, 2017). If we accept these forms of wealth transfers and exemptions in exchange for what essentially is nothing particularly productive, a basic income may represent a form of reparation to equalise the playing field for those without access to such wealth transfers.

    Others argue that a basic income will encourage laziness, idleness and the consumption of illicit goods. But no such behaviour has been evidenced in trials of basic income nor of the more traditional forms of cash transfers common in humanitarian and development settings (Bastagli et al, 2016; Evans and Popova, 2014).

    Indeed, as shown in the basic income pilot in India, if anything, beneficiaries of unconditional cash work more and sit less, as they have less free time on their hands.

    What a regular, individual and predictable basic income has done is make people more engaged in productive activities, start own-account work and carry out small productive investments such as purchase of cattle and sewing machines.

    Being awarded universally in the community where it has been tested, a basic income encourages common decision-making and solidarity (Davala et al, 2017). Reasons for this transformational impact rest in individual economic security and the empowerment it ensures.

    How could such a policy tool be funded? One suggestion is to include a basic income in the development toolbox of international organisations (Bashur, 2022).

    Specifically, a key opportunity is to restructure peace-building programmes to include a basic income for countries coming out of conflict. This would ensure that rather than channelling reconstruction funds through the private sector as was done in Lebanon and Iraq (Abboud, 2014), at least some funds reach those most often side-lined in traditional post-conflict reconstruction programmes. Failing to address the livelihoods and resilience of the most vulnerable would only entrench inequalities and deepen social fragmentation.

    Other forms of funding include restructuring extensive subsidies on fossil fuel products (Standing, 2017), which take up large sums of public expenditure across the countries of the Middle East. Subsidised goods such as fuel and electricity are most often regressive in nature, meaning that they benefit those who consume more. The recent decision in Lebanon to lift subsidies goes in the right direction. But savings from reducing subsidies should be distributed directly to individuals by way of a basic income.

    Beyond funding considerations, what is the main hurdle for implementing such a policy? What is essentially at stake is a question of trust: policy-makers are reluctant to trust the poor with unconditional cash for fear that they will squander it, spending it on unproductive endeavours and essentially wasting it.

    But it has been consistently shown that the most vulnerable are in fact best placed to know where their priorities lie and spend accordingly. For this, supporting the introduction of a basic income would be a real test to the ultimate aims of entities funding colossal aid programmes designed to advance a country’s development.

    Importantly, what a basic income could mean for the Arab world is extracting the all-too-pervasive footprint of donors and their embassies in countries’ internal affairs. Rather than foreign capitals, governments’ strongest backers are inevitably their citizens – as long as they treat them with respect and uphold their dignity.

    This reality is how states function, yet it somehow seems to escape governments of the Middle East. A basic income could help to mend this broken social contract.

    The post What would a basic income mean for the Arab world? appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Basic Income Programs Are Triggering Health Benefits Across the Country

    By: Minerva Canto 

    Original post can be found here.

    We now know what happens when we think the best of people in lower income communities: They thrive.

    Treating people with dignity and allowing them to make their own choices is the premise behind a number of guaranteed income programs in force around the country. Study after study shows that participants in these programs do well, so much so that their health improves.

    “Participants reported notably better mental health than other people with low incomes,” researchers found in a study released by the Urban Institute in February that examined a guaranteed income program in Washington, D.C.

    Similarly, “Recipients saw statistically significant improvements in emotional health, energy over fatigue, and emotional wellbeing” — among the findings of an investigation of a program in Stockton, California.

    And researchers behind a study from 2017 reported that “recipients experienced an 8.5 percent decrease in hospitalizations compared to the control group, especially for mental health, accidents, and injuries.”

    These findings bode well as Los Angeles County launches the latest guaranteed income program this week. Like dozens of other municipalities nationwide with similar programs in the past two years, Breathe aims to provide participants “the chance to ‘breathe’ easier knowing they are more financially secure.”

    The fundamental guideline for most guaranteed income programs is that participants can decide for themselves how to spend the money — without any restrictions.

    For three years, 1,000 participants living in the county will receive $1,000 each month. Participants must meet low income eligibility requirements but will be chosen randomly. Breathe is believed to be the biggest and most extensive such program yet, in a county that’s the most populous in the country and where an estimated 25% of children live in poverty.

    The city of Los Angeles already has a similar program underway. Meanwhile, California has earmarked $35 million over five years for guaranteed income pilot programs.

    The fundamental guideline for most guaranteed income programs is that participants can decide for themselves how to spend the money — without any restrictions. These programs generally aim to help people in impoverished neighborhoods, who tend to be predominantly Latino or Black. Some guaranteed income programs target specific communities such as foster youth aging out of care or lower income college students.

    Paula Hernandez, a participant in one Southern California program, says the extra money allowed her to pay her rent, and ensure she and her daughter had healthy food to eat after her savings ran out during the pandemic.

    “I was always two or three hundred dollars short after my supervisor shortened my hours,” says Hernandez, who works at a small family restaurant, which didn’t need as many servers after it switched to takeout only. “Each month, I worried about how I would make the shortfall. So many sleepless nights and my days spent in a fog as a result.”

    Before participating in the program, Hernandez was concerned about how the financial stresses would impact her 10-year-old daughter.

    “I tried not to talk about money problems in front of her, but did she notice how many times I told her I wasn’t hungry as my stomach was growling with hunger?” she says. “Once I was receiving the money, I wasn’t always in a state of worry. Or hungry.”

    California is leading the way when it comes to guaranteed income programs, in large part spurred by the success of a program in Stockton created by former Mayor Michael Tubbs.

    Having access to healthy food is a primary indicator of wellness, and the lack of it can lead to serious medical problems such as diabetes and high blood pressure. Yet it’s estimated that nearly 11% of California residents don’t have enough to eat.

    California is leading the way when it comes to guaranteed income programs, in large part spurred by the success of a program in Stockton created by former Mayor Michael Tubbs. He founded Mayors for Guaranteed Income in 2020 to help other municipalities replicate or advocate for these programs. To date, 62 mayors have signed on, including 14 in California, the most of any state.

    “This has provided millions of families what I did for 125 families in Stockton,” writes Tubbs in his memoir, The Deeper the Roots, “the dignity of being able to breathe and to have the agency to make the right decision for themselves and their families.”

    A guaranteed income program in Washington, D.C., helped people who live in an area known as Ward 8, where researchers found that “residents face higher rates of food insecurity and related health issues than residents in other parts of the city because of disinvestment and limited health care access.” For many years the area did not have a grocery store, making it a so-called food desert — affordable, nutritious food was inaccessible.

    As a result, organizers of the guaranteed income program “saw unconditional cash transfers as an important mechanism for undoing Ward 8’s history of displacement and segregation.”

    Importantly, organizers from four community-based organizations working together created a set of impressive guidelines to steer their decision-making and ensure racial equity for the program:

    • We value the power of our residents to make their own decisions.
    • We treat our community with respect.
    • We will always act with integrity.
    • We believe in a racially and economically equitable community.


    As partners, organizers would consult these guidelines whenever difficult questions arose, such as when it came time to decide whether participants should get $5,100 in one lump sum or over five monthly payments. These values, specifically the first, called for residents to decide for themselves how they wanted the payments disbursed. The study showed that participants were thoughtful in making this decision, carefully considering their specific circumstances.

    “Trusting folks to make their own decisions was key in many ways,” says Mary Bogle, an Urban Institute researcher who led the Washington, D.C., study.

    This stance is starkly different from one commonly voiced by policymakers for decades.

    “The idea that we were given this money to improve our lives was powerful. For the first time in a long time, I felt like someone believed in me.”

    ~Damon Jones, guaranteed income program participant

    Past policies aimed at helping people with lower incomes treated them as would-be criminals. Policymakers agreed to provide cash aid or food benefits only with harsh restrictions and requirements to avoid fraud that they believed would otherwise ensue.

    “Because of these perceptions we don’t unleash the power of the country to help people in any real way,” Bogle says.

    The term “welfare queen” is racist. As single moms have been vilified, the holes in the safety net have only gotten bigger.

    Indeed, it’s the poverty of choices that tends to hamper the outcomes of lower income people.

    In his memoir, Tubbs details how he “fought against the bigotry of low expectations” from teachers and others when he was growing up in Stockton. Despite being a top student, he narrowly avoided the school-to-prison pipeline when he was nearly arrested over a high school senior prank, he writes. Thankfully, his grandmother was able to help smooth things over, and Tubbs graduated and continued to Stanford.

    During Tubbs’ first successful run for city council, he visited residents in impoverished neighborhoods and saw the effect a low income can have on one’s health.

    The correlation between income and health is suggested by statistical evidence. One 2021 report produced for the Federal Reserve Bank of Boston for which a number of studies were examined found that higher minimum wages for parents had a positive effect on children’s birth weights, that during pregnancy and early childhood it had positive health effects on children into their adulthood, and that higher minimum wages reduced the number of suicides. Researchers found other positive health benefits linked to higher incomes.

    “The idea that we were given this money to improve our lives was powerful. For the first time in a long time, I felt like someone believed in me,” says program participant Damon Jones.

    People from lower income communities have known and fought against the idea that poverty can be a never-ending cycle of broken dreams.

    “Oftentimes, poverty in Stockton is a family heirloom,” Tubbs writes in his memoir.

    Guaranteed income programs empower people to help break that cycle.

    The post Basic Income Programs Are Triggering Health Benefits Across the Country appeared first on Basic Income Today.

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  • $1,000-a-month in basic income changed this NYC mom’s life: ‘You don’t have to stress’

    By: Aditi Shrikant.

    Original Post: https://grow.acorns.com/how-a-thousand-dollar-cash-handout-ubi-changed-nyc-mom/

    ____________________________________

    KEY POINTS:

    • Since July 2020, Shakeya Hudson has received $1,000 per month in guaranteed cash payments from The Bridge Project, a program that gives cash to low-income mothers.
    • She uses the money on necessities for her daughter, like formula and diapers.
    • Getting the payments is hugely helpful: “It takes a load of your chest,” Hudson says.

    ___________________________________

    When Shakeya Hudson’s friend messaged to tell her there was a program giving free money to mothers in her zip code, Hudson was a bit skeptical. But she was pregnant with her first daughter, who is now a little over one year old, and the pandemic had eliminated one of the two jobs she was working. She decided to apply.

    “I didn’t expect it to go through,” Hudson, 33, says. “I said I’d try it and see if someone calls me back.”

    Someone did call her back, and since July 2021 she has received $1,000 per month in guaranteed cash payments from The Bridge Project. She is one of 100 moms who are receiving unconditional, monthly cash payments for three years from the program.

    Hudson, who lives in New York City, mainly uses the money on formula and diapers, she says. It also buys her a little bit of breathing room.

    “It helped with my daughter and it boosts your confidence because it takes a load off your chest,” she says. “You don’t have to stress over something because you know you have that extra income coming in.”

    Before The Bridge Project, she was working 2 jobs

    Hudson was working two jobs before the pandemic started: As a security guard at a hospital where she earned $40,000 per year and as a temporary worker for the Department of Education, helping teachers with special needs students. Her income from teaching varied based on how many shifts she picked up.

    When the pandemic hit, her help was no longer needed at the school, and she was suspended from the hospital because it claimed she faked a doctor’s note. Hudson says she did not falsify the note and is working with her union to get her suspension lifted and obtain her final paycheck.

    “I went from working two jobs to working one job to working no job,” she says. “It’s just like down, down, down.”

    Now Hudson is back to working at the Department of Education. She helps teach in a classroom with six children and tries to pick up as many shifts as possible. However, her contract doesn’t include any paid time off.

    You don’t have to stress over something because you know you have that extra income coming in.

    ″[My daughter] had Covid in November so that was a whole two weeks that I missed and I couldn’t go to work,” she says. “And then holidays, I don’t get paid.”

    The cash payments Hudson receives through The Bridge Project make her finances a little less precarious.

    ‘This is your money you’re saving’

    Pretty much all the money Hudson receives from The Bridge Project goes to her daughter’s immediate needs. “We spend almost $300 a month on formula,” she says.

    She uses some of the money to create memories with her daughter, too. “I took her to the CoComelon show,” she says. “Those tickets were $150 and that’s how I was able to pay.”

    She is also putting some money into a fund that her daughter won’t be able to access until she is 18.

    “It can be a college fund, or if she ever wants to go on a nice little vacation with friends,” she says. “Schools take you on those kind of trips now if you want to go aboard. Whatever you want to do this is your money, you’re saving.”

    Some programs focus on new mothers

    Like The Bridge Project, there are many nonprofits that focus on new mothers as recipients for guaranteed cash payments.

    Baby’s First Years, for example, is a program that gives unconditional cash payments to low-income mothers in four cities: New York City, New Orleans, Omaha, Nebraska, and Minneapolis-St. Paul, Minnesota. Magnolia Mother’s Trust in Jackson, Mississippi distributes $1,000 per month for one year to low-income, Black mothers. 

    “There is a lot of literature out there that points to the prenatal period and the first 1,000 days being the crux of development,” Megha Agarwal, executive director of The Bridge Project recently told Grow.

    Giving low-income mothers cash payments for the first year of their baby’s life appears to increase the baby’s brain activity, according a new study that analyzes data from the project Baby’s First Years. The activity is associated with developing stronger cognitive skills.

    There is a lot of literature out there that points to the prenatal period and the first 1,000 days being the crux of development.

    Megha Agarwal – EXECUTIVE DIRECTOR OF THE BRIDGE PROJECT

    Most research from guaranteed cash programs show that, like Hudson, recipients spend money on the basics.

    In the Magnolia Mother’s Trust, for example, mothers who were able to pay bills without additional support jumped from 37% to 80%, and the percentage of mothers who were able to cook homemade meals increased, according to a study by the Economic Security Project analyzing the program’s data.

    “Mothers are using it on the necessities like diapers, food, formula, and electricity,” Agarwal said of The Bridge Project. “Then you see mothers who are saving it. One mother is putting aside half of the payment every month to afford a better apartment in the future. We have a mother who was able to leave her previous job and go back to nursing school.”

    For Hudson, the payments have been “a big help” and even taught her how to budget better.

    “I used to only have to budget for myself,” she says. “Now I budget for two people, so the extra income has to be spent on her needs.”

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  • Murphy: I’m 25. I don’t have children. But I know the Child Tax Credit is an opportunity we can’t afford to miss.

    Data confirm that the Child Tax Credit is more effective anti-poverty legislation than many of its policy peers yet it has lapsed. What’s next?

    By: Connor Murphy.

    Original Post: https://www.loudountimes.com/opinion/murphy-i-m-25-i-don-t-have-children-but-i-know-the-child-tax/article_9d795676-8f71-11ec-a85a-b3d980ba4e27.html

    Leesburg mother Nicole Lee recently wrote to the Times-Mirror, explaining the importance of the Child Tax Credit to her family. For her, this meant added support for her son, Seamus, who lives with high-functioning autism. Amid rising costs at the gas pump and grocery store, the CTC enabled her family to support him with social skills classes and therapy.

    All of that support for Nicole and millions of parents nationwide is at risk today, as monthly payments have ceased. Congress has a complex and challenging year ahead, with tenuous circumstances abroad, hearings on a Supreme Court nominee ahead, and midterm elections around the corner. It would be easy for them to let extending the Child Tax Credit slip from the list of priorities to act on in 2022. But, it would be a mistake.

    I’m 25 years old. I was born and raised in Loudoun County. I don’t have children, but I know this policy is an opportunity we cannot afford to miss. Here’s why:

    Data confirm that the Child Tax Credit is more effective anti-poverty legislation than many of its policy peers. A recent story by Pro-Publica observed that policies like TANF, which involve a labyrinth of red tape to not only qualify for, but receive, was significantly less effective policy for supporting families due to the limited access provided to families. $5.2 billion funding for TANF is going entirely unused, instead of performing its appropriated intent.

    In contrast, six monthly payments of the Child Tax Credit avoided red tape and lifted nearly 4 million children from poverty in doing so, according to Columbia University. Another 6 million were lifted from deep poverty. In the first monthly payment alone, the U.S. Census Bureau tracked a 24% reduction in food insufficiency among recipient households.

    I wouldn’t be surprised if you had to read that again to understand the gravity of this policy. One in four households with children in America were no longer hungry after one direct payment from the Child Tax Credit. That is staggeringly effective public policy at work.

    Children who are fed, clothed and given shelter have brighter futures ahead of them. They’re able to learn more, lead healthier lives and grow into adults who strengthen our communities.

    We also know that CTC has neutral workforce participation effects or better for parents. According to a recent analysis of Census Pulse Survey data, Washington University in St. Louis’ Social Policy Institute found that there is no evidence “that CTC payments are leading to people leaving the workforce.”

    Financially secure adults are also more likely to start businesses and employ others in their communities. Further research from the Social Policy Institute found that an additional 3% of households earning under $50,000 each year, or an estimated 300,000 households, were encouraged by the Child Tax Credit to start their own small businesses.

    Finally, and perhaps most importantly to skeptics of the policy, analyses of CTC determine that it is extremely cost effective. As it turns out, sending direct cash to American families produces some of the best returns on investment for taxpayer dollars spent on social programs. For every dollar spent directly on reducing child poverty, Congress saves eight dollars in crime reduction, healthcare costs, and other costs associated with children who grow up without being able to escape poverty.

    I may not benefit from the CTC directly, but I will be better off because I’m living in an interconnected world that thrives when others prosper.

    Some day, I will be a father in this community where I grew up. Our representatives will have another little person or two to think about in Washington. I would urge them to not let perfect be the enemy of the good, and find a way to reach a compromise with their peers on this policy. If efforts to extend the Child Tax Credit succeed, I’ll be glad to know that the future of all children – mine included – will be brighter.

    The post Murphy: I’m 25. I don’t have children. But I know the Child Tax Credit is an opportunity we can’t afford to miss. appeared first on Basic Income Today.

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