The Progressive Post

Basic income: Feasible for the future

What is there in basic income that can trigger the suspicion of social democrats and what is there is in it that should prompt its enthusiasm?

20/05/2016

The idea of an unconditional basic income is in fashion. From Finland to Switzerland, from San Francisco to Seoul, people talk about it as they have never done. Twice before, basic income was the object of a real public debate, albeit briefly and limited to one country at a time. In both episodes, the centre left played a central role.

 

What is there in basic income that can trigger the suspicion of social democrats and what is there is in it that should prompt its enthusiasm? In order to answer such questions, it is important to clarify what a basic income is and what it is not.

A basic income is an income that is unconditional in three senses in which existing minimum income schemes are also unconditional: it is paid in cash, entitlement is not conditional on having paid social security contributions, and it is not restricted to citizens. It is also unconditional in three additional senses. It is individual, i.e. independent of its beneficiaries’ household situation. It is universal, i.e. entitlement to it is not dependent on the level of their income from other sources. And it is duty-free, i.e. not restricted to those working or willing to work.

Is it not absurd to pay such a basic income to all, including the rich? It is not. The absence of an income test is not better for the rich. It is better for the poor. True, the rich do not need a basic income, just as they do not need to have the lowest layers of their incomes untaxed or taxed at low rates, as they do under current personal income tax systems. High earners will of course pay for their own basic income and for part of the basic incomes paid to others. One great advantage of an income paid automatically to all, irrespective of income, reaches the poor far more effectively than a means-tested scheme, and without stigmatization. Another is that it provides them with a floor on which they can stand, because it can be combined with earnings, rather than a net in which they can easily get stuck if, because it is withdrawn if poor people start earning .

It provides a flexible, intelligent form of job sharing. It makes it easier for people who work too much to reduce their working time or take a career break.

Is it not unacceptable to replace the right to a job by a right to an income? A basic income does nothing of the sort. On the contrary. It provides a flexible, intelligent form of job sharing. It makes it easier for people who work too much to reduce their working time or take a career break. It enables the jobless to pick up the employment thereby freed, the more easily as they can do so on a part-time basis, since their earnings are being added to their basic income. And the firm floor provided by the basic income makes for a more fluid back and forth between employment, training and family that should reduce the occurrence of burnout and early retirement, thus enabling people to spread employment over a longer portion of their lives. As social democrats rightly emphasize, access to paid work is important for reasons that far from reduces to the income it gives access to. Those who advocate a basic income paid without a work condition do not need to deny this. It is even taken for granted by those who are confident that a generous unconditional basic income is sustainable: despite a less miserable fallback option and higher taxation, people will keep working precisely because work means far more to them than just an income.

Does the introduction of a basic income not threaten the very existence of our welfare states? On the contrary, it comes to their rescue. Needless to say, a basic income is by no means an alternative to publicly funded education and health care. Nor is it meant to provide a full substitute to earnings-related social insurance benefits funded by workers’ social contributions. Given that each household member will have his or her basic income, however, the levels of the cash benefits and the funding they require can be correspondingly reduced, the benefits individualized and simplified, and the depth of the traps associated with the conditions to which they are subjected will shrink. Even in the longer run, social assistance cannot be expected to disappear either. Because of its being both individual and universal, sensible levels of basic income will not enable us to dispense with means-tested top ups for people in specific circumstances. Again, given the unconditional floor, traps will be reduced, the number of people dependent on these conditional benefits will shrink and the social workers’ important job will be facilitated. Fitting an unconditional floor under the existing welfare state will not dismantle but strengthen our duly readjusted social insurance and social assistance schemes.

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