Former Prime Minister John Key thought a Basic Income was "barking". It seems many countries disagree and are piloting the idea. As new technology threatens the jobs of many, might a Basic Income become an essential polcy?

"Money is better than poverty, if only for financial reasons" Woody Allen.

Many years ago, I took part in a public forum where the keynote speaker advanced the radical idea that a Basic Income (BI) be paid unconditionally to all residents.

The audience was generally supportive, but there were enough awkward questions to ensure that a lively and inconclusive debate too place. Over coffee and a biscuit, we seemed to agree that the idea was interesting but unlikely to be put into practice.

Fast forward to today and a BI has not only been considered by the New Zealand Labour Party as part of its Future of Work platform, it is also being trialled in such sensible countries as Canada while being championed by opinion leaders from across the political spectrum.

Of course, there are still many detractors whose position has been neatly summarised by former Prime Minister John Key when he referred to the BI as "barking"mad.

Barking or not, it seems that the BI is an idea that is not going away. So what is it and what is the case for and against?

What is it?

While there considerable debate about what a BI would mean in practice, its main features are:

* received by all residents;

* paid at the level of a "living wage";

* no conditions;

* funded from general taxes;

* replaces as many benefits and personal taxes credits as possible;

* can be supplemented by additional earnings.

The Case For

The economic case for a BI is based on the drop in demand for unskilled/semiskilled labour. Over recent decades, governments have tried to solve this problem by investing in education and training with the aim of ensuring everyone has the chance to be part of a high skills, high wage, high productivity economy.

As sensible as this seems, there are still large numbers of people who remain unskilled, unemployed and marginalised. For these people, the argument is that a BI would allow them to continue in a low paid job or no job yet have enough income to ensure they are able to participate fully in society.

There is also the argument that the current pool of people for whom the BI might be immediately relevant is about to be joined by an even larger section of society. These are the people whose jobs will be taken over by technology. Given assessments that technology might replace 1 in 3 jobs in developed countries over the next 20 years, a BI might not be just desirable but an absolute necessity.

Although we live in an era when everything has to be justified in economic terms before it can be taken seriously, there is a moral case for the BI that deserves attention. It is that all citizens have the right to participate in society and share in whatever the society produces. This kind of thinking underpinned the welfare states that appeared in the middle of the 20th century.

In the 21st century, the notion of equal entitlement for all citizens is far less fashionable. In its place, we have the division between the deserving and the undeserving poor. To find out who is deserving and who is not, the state now has in place a vast array of criteria designed to prevent anyone deemed unworthy of community support from gaining access to a benefit and to put pressure on those who do. An enormously costly surveillance state has evolved with the aim of policing that section of society who, it is widely assumed, are the authors of their own misfortune.

The BI would not only restore what it means to be a citizen but it would also potentially save a considerable amount of money given that a lot less staff would be needed to breath down the necks of "the poor".

The Case Against

While there is growing interest in the BI, the values underpinning most societies, to put it bluntly, favour the Biblical dictum that if "you don't work, you don't eat". People should not get something for nothing, the argument goes, and paid work is the best way to make a contribution to society. This is a well-rehearsed argument that, as things stand, would prevent anything more than a trial BI being put in place. Views might change, however, if prophecies about the impact of technology prove to be true.

In the current environment, where it is still a minority of people for whom paid work is not a practical option, there is also the problem that the BI may serve to exclude people from the mainstream of life. Pilots that have been run around the world thus far, suggest this might be the case. It is, however, not easy to arrive at firm conclusions when pilots are usually run for people on a benefit rather that for the whole society. If the BI was available to everyone the matter of exclusion might go away. And, if the numbers of people excluded from paid work rise dramatically, the impact of the BI on behaviour might be very different than if it applies only to a small already stigmatised group.

Finding the funding is, of course, one of the major barriers. Champions of the BI argue that by abolishing all benefits, minimising tax credits and downsizing staff, funding would become avaiable. But these savings are unlikely to cover all costs. There is also the matter of what would do if they had just enough to live on. Would we, for example, continue to see two-income households with the accompanying tax being paid (where jobs existed) or would some people choose to work less or pursue other interest? No one knows, but the unintended consequences of such a fundamental shift remain an obstacle to change.

Conclusion

There is no doubt that the BI will continue to capture the attention of policy makers. It should, but my view is that anything more than a pilot would be premature at this time. This is not say the current situation is working because it is not. What was once a commitment by society to support all citizens during crises in their lives has become a mean-spirited stigmatisation of anyone desperate enough to ask for help. Worse still, as the crises people experience become more frequent and less predictable, the system has not evolved to meet the times we live in.

What is needed today is a state that will be active throughout people's lives, helping them through a very uncertain future. The focus should be on constantly lifting the capacity of people so they can meet new challenges. The current system does not do that no matter how often Ministers might say it does.

No wonder the calls for a BI that would free people from the constant negative interference in their lives is growing. But before we consider the BI as the only alternative, we should look at what else is on offer. A system of social insurance that would allow people to build independence based on their own earnings and savings is something that has long been discussed but not tried. Such a system assumes that, for most people, jobs will still be available in the future. That, for now, is my assumption.

If, however, the job apocalypse being predicted by so many does eventuate, leaving large numbers of people unable to earn enough to live a decent life then the BI will be due serious consideration - barking or not.

 

 

Comments (7)

by Kyle Matthews on July 18, 2017
Kyle Matthews

It's telling that we're starting to take a BI seriously once middle class jobs are looking like they'll disappear. The last thirty years of neoliberal job losses and structural unemployment.... not so much.

by Shaun on July 18, 2017
Shaun

The UBI is 'an idea whose time has come'.  This paraphrasing of the words of Victor Hugo (author of Les Miserables) is taken up by Rutger Bregman (author of 'Utopia for Realists') in his TED talk (available online).   Support for the notion that it is a needed, timely, and coherent policy is on the basis of not only Bregman, but considering the entirety of contributions made by advocates/proponents of UBI internationally.

The work of these figures (eg., Standing, Van Parijs, Wliderquist, Reich, Santens, Schmidt)  along with the likes of Morgan, Berentson-Shaw, Harris and Harpham here in New Zealand provides a sound argument for implementing a UBI sooner rather than later. The cautions against UBI as a measure on the basis of cost have to account for the costs of maintaining the existing structure.  These are reflected in the social conditions that are unnatural for a supposedly advanced OECD nation, and will receive significant coverage as election day approaches.

While the prevailing expectation of personal responsibility is accepted,  the existing conditions place an unnatural burden on everyday citizens to progress in life.  It's not just the effect of greater technology impacting on employment that's part of discussion around UBI, but the drain on personal resources that prevent citizens from developing their true potential.  After 3 paragraphs, readers can tell I support a UBI.

by barry on July 18, 2017
barry

According to Steven Joyce we have to have sanctions to encourage (actually bully) people into working.  BI gets around that by actually making it worthwhile (carrot rather than stick).

BI is a right wing policy.  It encourages flat taxes and gig-style working arrangements.

It also values volunteering, parenting, art and other pursuits that are not paid currently.

We wouldn't have all the govenment bullshit about refusing to pay for family members caring for relatives, and underpaying women in caring occupations.

The Romans had a version of it 2000 years ago (bread and circuses) paid for by slavery.  Ours will be paid for by cheap oil and robots.

by Ross on July 19, 2017
Ross

 Steve

I dont know where you get the idea that a BI would be paid at the same rate as the living wage. The consensus seems to be that any payment would be modest, about $200 per week. It loses some credibility by being paid to millionaires and MPs. Thats not to say the idea isnt without merit but it probably needs more work before it gets off the ground here.

by Dennis Frank on July 19, 2017
Dennis Frank

There are various ways to design a UBI system.  For instance, if clause 1 of the legislation creates a universal entitlement based on citizenship (and age of adulthood), then I'd make clause 2 authorise the government to withold payment to those who don't need it.  The devil always lurks in legislative details, so clause 3 would corral the devil.

It would define necessity as the lack of income above the level of the living wage, which clause 4 would inflation-adjust.  There would have to be a cross-party consensus to define that living wage initially.  Further clauses specifying how payments would ratchet up in proportion to the number of dependent children in the family would require inclusion.

Barry, the ancient Roman dictum that all you need to do to keep the masses happy is to ensure bread is available/affordable & circuses frequent enough was a formula learnt via multi-generational experience.  Nothing much has changed since:  market forces provide the former, the media provides the latter.  You're right, slavery provided the basis of the economy for them, and our wage-slaves provide it for us.

by KJT on July 31, 2017
KJT

Romove all the jobs, then tell people they have to work before they can eat.

Who's fault is it. Not the jobless workers.

No one seems to worry about the non contributing children of the rich, being idle.

And. A UBI must be universal. Otherwise the tax dodgers will get it, and honest people will not.

by Charlie on July 31, 2017
Charlie

I think UBI would turn out to be a social disaster, just like DPB has:

I see no reason why people should be 'entitled' to anything. You shouldn't get a prize just for being born.

I think that currently a fair percentage of the depression, suicide and addiction among young people in NZ is rooted in hoplessness. In my view UBI would create an underclass of  directionless losers who just subsisted on UBI.

In order to feel valued, young people need to make a contribution to society. They need to strive and burn off some energy.  So in this regard I favour some kind of work for the dole scheme: Right now we need tens of thousands of willing hands to get out in the bush and maintain trap lines to meet our 2050 predator free target. So rather than handing out other people's cash how's about giving them some leadership and introducing them to the great outdoors?

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