India is nearly done building the plumbing to enable such a system by connecting the Aadhaar-based biometric ID system to individual bank accounts. It’s already replaced LPG gas canister subsidies with cash, a program that has 150 million beneficiaries and is the now the world’s largest cash transfer program. So could India take this example to its logical conclusion and replace all welfare benefits with UBI? (GiveDirectly is asking a similar question in a bold 10-year $30 million experiment in Kenya.)
The Survey’s assessment begins with quotes from Mahatma Gandhi suggesting both support and objection to the principles of UBI. The chapter then methodically addresses the conceptual pros (e.g., justice, equity, agency, efficiency) and potential cons (e.g., labor disincentives, moral hazard, political objections). It attempts various modeling, including a rough estimate that cutting national poverty in half via UBI would cost just 1.5 percent of GDP, less than the subsidy bill in the 2016-17 budget. For the data nerds, there are seven (!) appendices explaining all the estimates and calculations. Continue reading
Recently, there have been increasing calls for dialogue on a universal basic income (UBI) from political parties, think tanks (including the Royal Society for the Encouragement of Arts, Manufactures, and Commerce (RSA)), civic activists, trade unions, and leading entrepreneurs such as Tesla chief executive Elon Musk. These calls are a response to growing income insecurity, some sense that welfare systems may be failing, and as a preparation for the potential effects of automation and artificial intelligence on employment prospects in industries that might be better served by machines.3 UBI-style pilots are planned in Finland, the Netherlands, and Canada as a potential answer to these questions and concerns.4
In the UK, growing interest is being driven by two deep-seated structural trends: the growing fragility of the jobs market and the inadequacies of the existing, increasingly punitive, intrusive, and patchy benefits system. With its built-in income guarantee, a universal basic income (UBI) would help relieve both problems. It would bring a more robust safety net in today’s much more precarious working environment while boosting the universal element of income support and reducing dependency on means-testing. A UBI also offers a way of providing income protection as the robotic revolution gathers pace, and could be used to help ensure that the possible productivity gains from accelerated automation are evenly shared rather than being colonised by a small technological elite. Continue reading
The argument goes that because we currently target money to those in need, by spreading out existing revenue to everyone instead, those currently targeted would necessarily receive less money, and thus would be worse off. Consequently, the end result of basic income could be theoretically regressive in nature by reducing the benefits of the poor and transferring that revenue instead to the middle classes and the rich. Obviously a bad idea, right? …
Basically, this particular argument would only make sense if we in no way altered our tax system to achieve UBI, and if our programs worked as we assume they work because that’s how they should work. The problem is they don’t work that way.
In the United States today, on average, just about one in four families living underneath the federal poverty line receives what most call welfare, which is actually known as Temporary Assistance for Needy Families, or TANF. It gets worse. Because states are actually just written checks to give out as they please in the form of “block grants,” there are states where far fewer than one in four impoverished families receive cash assistance. Continue reading
An Economic Bill of Rights for 21st Century
In the summer of 1967, King announced what was to be the most expansively radical adventure of his life – a national movement called the Poor People’s Campaign, mobilizing Black, White, Hispanic, Native American. It was to demand an annual $30bn federal investment to deliver full employment, guaranteed annual income, 300,000 units of low cost housing per year.
Tragically, Dr. King was assassinated on 4th April 1968, and the April 16 edition of USA Look magazine carried a posthumous article from King titled “Showdown for Nonviolence” — his last statement on the Poor People’s Campaign. The article warns of imminent social collapse and suggests that the Campaign presents government with what may be its last opportunity to achieve peaceful change — through an Economic Bill of Rights. Three weeks after Dr King’s death, the Committee of 100 — set up to lobby on behalf of the campaign – called for just this – an economic bill of rights with five planks to deliver economic justice.
- A meaningful job at a living wage
- A secure and adequate income for all those unable to find or do a job
- Access to land for economic uses:
- Access to capital for poor people and minorities to promote their own businesses:
- Ability for ordinary people to play a truly significant role in the government
Despite the intervening decades since the Poor People’s Campaign, it is true to say that Dr King would recognise the same issues today as he faced then – inequality, corporate power, racism and militarism. Now, we have other factors that also need to be incorporated – climate change, the total capture and consolidation of political power by the financial and business class; the globalisation of the neo-liberal agenda (north and south alike). So, it is imperative for our renewed Economic Bill of Rights to reflect this.
Among the big ideas, the one that will be integral for us to solve the first 2 demands of the 1968 Economic Bill of Rights in the 21st century is the universal basic income. Continue reading
This would be a sound argument if it didn’t miss the point. UBI isn’t really about welfare spending: It’s about tax policy.
UBI is an unconditional cash transfer, which means that you get money from the government to spend however you want. That’s an unusual government spending program. In the US, besides Social Security, the government usually either spends money on a service (like health care or education) or gives conditional cash in the form of things like food stamps.
But the government also spends a lot of money each year on cash transfers through “tax expenditures,” which is the money the government doesn’t collect in taxes because of exclusions in the tax code. Except for the Earned Income Tax Credit, those expenditures almost always help the rich more than the poor. By replacing them with UBI, we would create a more progressive system. That, not the elimination of all government programs, should be the starting place for debates about UBI. Continue reading
The people of Switzerland rejected a proposal for a universal basic income in a referendum last weekend. As Leonid Bershidsky writes, the right conclusion to draw is that the proposal — of paying every citizen a regular amount of money without a work (or any other) requirement — was pitched too high, too soon, and in a place least likely to need it. As he also writes, the wrong conclusion is to bury the idea. …
Claims about the supposed economic unfeasibility of UBI, however, have an unfortunate tendency to intellectual fogginess. …
The relevant reference to the right level of UBI is surely households’ disposable income — the amount they have left on average after taxes and transfers to cover their material standard of living. To be guaranteed 50 per cent of this surely qualifies as reasonable, perhaps too reasonable. But in the UK, for example, “disposable income” (what households have to spend) is less than two-thirds of national income (what the nation has to spend if it does not borrow from other countries). So paying 50 per cent of current disposable income to every citizen would, on its own, cost about 33 per cent of national income. Continue reading