Basic income – a solution to welfare?

wpid-20130429_153749_edit0.jpgIf you follow me on twitter, you may have caught me sharing posts about Basic income over the last couple of days. Most notably a petition to the European Union which closes today. The petition is to investigate basic income, not to actual start it, but it’s the first step, and one that I increasingly think needs taking. It’s an idea I’ve been exploring for a little while, as an alternative to things like minimum wages or living wage. Sounds a bit ridiculous doesn’t it, just giving *everyone*, regardless of their financial situation, enough money to live on. And surely we can’t afford it?

But I’m beginning to think what we can’t afford is going on the way we are.

Austerity appears to mean pushing money at banks and rich people (quantitative easing and tax cuts) while cutting benefits for people with next to nothing. (Bedroom tax. Benefits sanctions. Welfare.) And each pound cut from those with little actually means less money going into the economy as people cut back on food. Heating. You know, luxuries like that.

What would it look like instead if we put money into the system from the ground up? Can you imagine it? What would you do if you had an income of £10,000 a year?

It’s not a lot, is it, £10,000. It wouldn’t be luxurious living. But you could get by on it. You could study. Start that business you’ve already dreamed about. Work hours that fitted around the children if you wanted or needed to work for a top up. And you wouldn’t have to accept just any old job, so I think employers would suddenly find that they’d have to make working for them a bit more attractive and respect their employees.

Wouldn’t the system fall apart though, if people didn’t need to work?

Here’s the thing. When pilots have been done on this kind of system, people do still work. People like working. They like being busy, feeling important, achieving something. And they like extra money ;) Yes, some people stop working, or cut down their hours, but that might mean that the people who want to work can find jobs, and the people who don’t don’t have to do the whole benefits rigmarole that costs a fortune to implement anyway.

And what’s more, educational outcomes are improved. (Teenagers aren’t out scrabbling for jobs to help support their family – school attendance rates are improved.) Crime levels drop, health levels improve. (Which means lower costs for emergency systems and so on – it’s convoluted working out how this all interacts, but I think the overall is positive.) There have been a number of trials around the world of various sections of this system, and they are, as far as I can tell, positive.

One of the things that I think would make a huge difference, is that women could be far more independent even while having children. You would be able to stay home with your baby if you wanted to. Or work flexibly. I think the implications are immense – although I haven’t been able to find any articles focussed on this aspect.

What I do find though, is articles discussing the moral aspects of the system. Shouldn’t work pay? Isn’t it better to be gainfully employed – a striver, not a skiver? Our coalition government and media is full of this kind of assertion, and it seems to me that it isn’t based on anything other than fear and control. Money is given away all over the place already, and we don’t know where half of it is going. Let’s be up front about it, accept that all people deserve to live in dignity and explore what basic income could do for society. It’s got to be worth a try.

Read on to find out if the basic income could actually save us money.

About Jax Blunt

I'm the original user, Jax Blunt I've been blogging for ten years, give or take, and if you want to know me, read me :)

Comments

  1. I can see lots of problems in implementing a basic income.

    The biggest probably the objection to people being given something for nothing and not just because of demonstrable need.

    • Jax Blunt says:

      Yes. I think it would be very difficult to break down that barrier. But no reason not to investigate it to begin with.

    • Oh and if all the land hadn’t been stolen, people would be more able to arrange their own basic income….
      http://www.thelandmagazine.org.uk/articles/short-history-enclosure-britain

    • All the pilot projects for basic or unconditional minimum income for the past four decades have roundly disproved the a-priori judgement that people wouldn’t work. In fact what happens is quite the opposite – people prove more likely to take up some form of paid work (especially now that most is so precarious) if they know they won’t loose their basic income if they do so (or have to report constantly to the benefits office), and for similar reasons people feel freer to set up small enterprises. Also the health, education benefits and reduction of crime also proven (especially domestic violence) should more than outweigh these fears.

      There is a wealth of information out there about unconditional basic income, different schemes, different ways to pay for it. A good place to start is our website: http://basicincome.org.uk which has links to other more academic groups like the Citizens Income Trust (UK) and Basic Income Earth Network (BIEN) We at Basic Income UK like to think of it more as a dividend from the huge productivity increases via technology over the past 30 years while wages have gone down and jobs destroyed.

  2. At first I thought it was a great idea – most people would work as the 10,000 (for example) would be a minimum. Some people would be prepared to live off that, content with a roof over their heads, food and not much else but most people would want to supplement it to have more. The ones who didn’t work would get their 10,000 and no more – same as everyone else. As I understand it, you only get something if your income is below 10,000 and only enough to top it up to the 10,000. No one destitute and no one milking the faulty system for thousands more than this.
    However, I have some questions.
    1. Is it 10,000 per adult, per couple, or per household. Per adult would be the fairest or people won’t get married and adult children will have to leave home if they want their money – not good for the housing shortage or parents who need their children as carers.
    2. What is to stop rents and other prices going up to reflect that everyone now has spending power ? More demand for everything unless price rises select the wealthier only. Then there would be an outcry because you couldn’t love on 10,000 per year.
    3. If employers were forced to give higher salaries to cover the cost of going to work (forfeiting your 10,000) plus taxes, plus an amount to make giving up your freedom worth your while, would that be too much of a burden for small businesses (or any businesses)?
    4. I can’t see anyone bothering to work for less than the 10,000 but it could open up a whole new era of volunteerism with people who have time but need to fill it with something meaningful. All good until vast areas of the economy ‘employ’ volunteers who don’t pay taxes. Ditto with people using their free time productively and a whole bartering culture emerging – again no taxes.
    I’m not nay-saying just thinking through possible problems. In theory O love the idea.

    • Jax Blunt says:

      I think there’s lots to work through with it. In the system I link to above with the £10k it’s unconditional for every adult regardless of other income. Does away with all the form filling and means testing which costs a fortune. Then I think everyone pays tax at the same rate on everything earned above that.

      It would result in massive changes to the world of work that’s for sure. People would do what they liked/wanted to do much more and we’d probably end up paying street cleaners a lot more ;) I would love to see it investigated though, what I’ve read on the various trials that have taken place around the world is fascinating.

      • That makes more sense if everyone gets it regardless of income so there is no forfeit to working – it will always be for extra income and bosses won’t have to pay enormous wages. And, I agree that the jobs we need doing that are difficult or dirty would command high wages to attract workers.
        I’d love to hear more about it. Could the country afford it?

        • Jax Blunt says:

          I’ve seen one article costing out the how to afford a version – I think I linked it. Think the real difficulty is working out what the knock on effects would be. You wouldn’t be able to tell how much people would work and therefore what tax income would be and so on. But there are also suggestions that health and police spending would reduce as people would be healthier and crime levels drop. I’m not sure how you’d move towards implementing it in a way that didn’t destabilise society/economy tbh.

  3. it looks good on paper, so every adult has 10k, and then its up them to get more if they need it but almost 50% of what they ‘earn’ is taxed….. for a lot of people it wouldnt be worth working long hours (because some people do) and not every job could be done part time, if you run a business and your hours are long, thats it -so not worth doing, which would mean lots of small/medium businesses closing which would effect a lot of people and the ecconomy and then what happens?? pretty much the same as now is my guess. I love the idea, people doing what they love, shorter working hours, more family time, more leisure time but really dont see how it could work in reality.

    • Jax Blunt says:

      Running a business currently allows for different arrangements in terms of how you get the money out doesn’t it? So the tax system could be set up to encourage that kind of thing. I think one of our problems is the massively convoluted tax system which isn’t fair and encourages businesses in particular to do all sorts of things which don’t really help anyone.

      I think there are different suggestions about how it could be supported and how much it ought to be out there, and I’d love to see some more discussion of it.

  4. I have loved this idea for many years ever since I heard the Irish Social justice organisation then called CORI talking about it. I’m sure that there would be unintended consequences, but I love the simplicity of the system and I think that people would work – here in Ireland almost everyone who could work did during the boom years. That tends to be forgotten in a recession when all the talk is about ‘forcing’ people to work. Great post xx

  5. First time I have ever heard this idea.
    While many will want to work and try and get well there will unfortunatly always be those who blow the lot on drugs and alcohol within a few weeks and look to other means of getting more x
    Tho good idea in principle

    • In trials of variety of different approaches unconditional income actually has other effect and helps people get straight, oddly. It’s worth reading around. Lots of interesting stuff on it.

  6. Would their be an amount for children? And what about the disabled who have extra costs – would they be only entitled to the minimum still, same as those who are not working because they cannot find work?

  7. The biggest problem is it would cost roughly six hundred and seventy billion pounds a year for every man woman and child. Before anyone has paid a teacher, soldier, doctor, the lot. adding on top current state spending on top of this the country would spend just shy of £100% of GDP before investment.

    Or, we’d go bankrupt in less than a year or be subject to such rapid inflation we’d be as close as you can get to being bankrupt whilst still being able to hold on to control of money supply.

    • Jax Blunt says:

      Number of points. Some schemes include payments to children, some don’t.

      It wouldn’t be on top of all current spending, it would replace quite a bit, pensions, income support, job seekers allowance and so on.

      I’m not sure why this would cause hyper inflation? The suggestion is to reroute a lot of money that is pumped into the economy anyway but spread it out. Why would this even sharing be so much of a issue?

  8. If you’d ask me about this a year ago I’d have written it off. Now, I think it could be a solution to lots of practical problems (obviously implementation would cause others), but more importantly I have a feeling that it would have the potential to help create a more cohesive society because every individual was considered to have value in their own right, which is something sorely lacking currently, IMO.

  9. Just to add: I suspect this potential cohesiveness would be one reason why those who didn’t ought to be in power would never implement it!

  10. I think it’s an attractive prospect but I can’t see it happening any time soon.

  11. I have a feeling something along these lines was bandied about by the Liberal party many moons ago. I’ve long thought that something along these lines was a good idea. Universal benefits are so much more fair imho. Of course your average moron could never grasp the concept so there is a problem there. I also feel that inflation of one sort or another could be an issue but other controls could be put in place to counteract these concerns. It could also be phased in so as not to be an instant jolt. But there is enough wealth in this country to pay for it, easily. Remember the scaremongering about the minimum wage? The world as we know it didn’t end when that was introduced.

    • I must have a dig about and see what I can find. You’re absolutely right about the wealth and the phasing in. It wouldn’t have to be flicking a switch.

  12. I have a very good activist friend who has been talking about this for a while, and though first I was of the opinion that we should be looking at proper living wages instead of a basic income, the more I’ve thought about it, the more I think it’s a good idea.
    One interesting thing I think is that the higher the income of the recipient in the first place, the less use it is to the economy. If you’re loaded already, that £10K will be squirrelled away somewhere, or used to pay down a mortgage, or invest in some offshore fund or something. Whereas if you gave £10K to someone who doesn’t start out with that much, they’ll probably spend it on actual STUFF. (That’s Stuff that the Daily Mail thinks they shouldn’t have, of course). But the fact that they are spending it rather than squirrelling it, means that it’s money pumping into the economy, which means the multiplier effect kicks in, and potentially raises the standard of living across the country. Inflation is a obviously risk on this but surely manageable in the big scheme of things – as you say, a phased rollout.

  13. Paul Davis says:

    This idea is rapidly spreading and is indeed very worthy of further discussion and investigation. On first impressions it seems like something out of the Communist manifesto and this is a undeserving tag that needs removing.

    Why this is becoming more appealing is that we live in an increasingly automated work. The future will be increased automation, be High Frequency Trading algorithms replacing bankers or machines like this (http://www.zerohedge.com/news/2014-01-12/meet-smart-restaurant-minimum-wage-crushing-burger-flipping-robot) replacing fast food burger flippers.

    Therefore the goal of full employment is becoming more like a distant dream, and we shouldn’t all be driven in to poorly paid, monotonous work just so it can be fulfilled. Automation is only threat under the status quo.

    A Universal Basic Income is also ironically a Libertarian dream. The state gives you say, £1000 a month and effectively tells you to get on and make the best of your life. There is no state/government to blame if your life is hard. You choose how to use that money. No benefits system, no benefit fraud, no job centres, no tax credits, no state pension system, a less bloated and interfering state, a libertarian paradise.

    Conversely a system loved by those on the left where no one gets forgotten, no homelessness, no food banks, no reason to cut short your education and stop learning and start earning, more artists, more musicians, more beauty, less reason to rob and steal (no UBI for those in prison who’ve broken the law), more volunteering, no fuel poverty.

    Finally people given a chance to find work they like and we all know if you like your work you’ll be far more productive than stuck in a job you hate. More productive work will open up new economies & technologies and generate more wealth.

    A Universal Basic Income needs more discussion but expect to be ridiculed and laughed at.

  14. In principle this idea sounds great but I suspect that we would still have arguments. You know there would be those who would look upon those who didn’t do anything as not deserving of any money and then those who felt that because they did more should be rewarded more. Then you’d get people arguing over whether wealthier people should get it or not, whether disabled or sick people should get more, whether carers should get more and so on.

    Also would a basic income push wage demands up – if people felt that people were getting this for nothing then would those in work want more? If so, how would this affect us in a global market? While I like the idea of ploughing money back into society would it not lead to higher prices if the demand for goods rises? Also would a basic income demotivate people from working? Some people are not materialistic and would be quite happy to live on a basic income but is this good for society generally? Is it good for them? Would we miss out on their skills/talents? I know there are few jobs at the moment but ironically there is a skill shortage out there (believe it or not my OH’s company cannot find engineers – I know crazy). Would this sort of problem be solved if a basic income demotivated them from aspiring for more?

    An interesting idea that has provoked more questions than answers.

  15. This is the first I’ve ever heard of such an idea, and I am really intrigued – I suspect it would be laughed out of Parliament, which is a shame, but I think I’ll do some reading up on the subject.

    • Jax Blunt says:

      I think it might be the kind of thing you’d need a cross party campaign to bring in. I’ve had lots of intrigued responses to it, although also a lot of surprisingly negative responses. I think it would be great to discuss it further and actually get some ideas going on how it could help.

  16. I’m obviously missing something, having not read anything about it apart from your post. Anyone who works gets £10k free of tax anyway, so is this just providing everyone who doesn’t get this basic level of wage that level anyway? Seems a bit strange to just give everyone £10k regardless of need.

    Is there any country that has this system other than pilots? And how would other things be funded like NHS, education etc. I think it would probably take so long to discuss and think about, it’s unlikely to ever be tried. Especially as you’d likely need every party to agree to get it to work.

  17. I think it’s a very interesting idea. No doubt it would reduce an awful lot of public spending too. Not only that, but it would give everybody a chance to live more fulfilling lives – and let’s face it, the western world is plagued by a misery epidemic. Happier people are more productive people, they are more kindly disposed towards others, they commit less crime.

    Considering what we have at present, surely it’s worth a try? Great article Jax – I’ll look forward to the next one. x

  18. I love the idea, but how would you determine eligibility? I detest economic migrants being able to come to this country and claim benefits within 3 months. It’s just not right. (And I came from one of those countries 10+ yrs ago, never having claimed any benefits since).

    • I think that is an interesting question. Perhaps the payments would be related to NI number/tax profile? Although I’ve no idea how that keeps track of nationality tbh.

Trackbacks

  1. […] Trying my patients, Mum of three world, Evan Crittens, The boy and Me, Coombe Mill, Mummy Barrow, Making it up, Edspire and so many […]

Speak Your Mind

*

CommentLuv badge
75 queries in 2.176 seconds.