The Spanish parliament’s recent agreement to introduce a Universal Basic Income for the poorest segments of society has renewed interest in a decades old idea. For supporters on both sides of the political spectrum it is seen as a legitimate response to new trends in work and pay that characterize globalization and the rise of AI. But is it really that simple?
Universal Basic Income involves giving people a guaranteed income in the form of regular cash payments. Unlike traditional welfare payments it is not tied to specific needs like housing or food. Recipients can spend it however they want. As the pandemic spreads and unemployment rises, especially amongst blue collar workers, UBI is gaining ground. It’s simplicity means that administration costs are reduced. Although others argue that it may result in reckless spending and discourage people from looking for work.
Spain’s planned UBI would be well below the minimum wage.
Spain’s left wing coalition government has agreed that they will roll out a modest UBI in the region of 440 euros a month for those in greatest need. This certainly doesn’t constitute a living wage. In Spain the minimum wage is 950 euros a month. However in a country where 30% of children are at risk of poverty, deputy Prime Minister, Pablo Iglesias says the measure was needed even before the arrival of the corona pandemic. Some commentators argue that other EU countries like France and Germany have had basic income support for the most vulnerable for years. Spanish Labor Minister Yolanda Diaz calculates that some 5 million of Spain’s 47 million population may be eligible for this UBI.
I recently heard from two staunch labourites on the future of work. Guy Standing, author of The Precariat (2011) and long-time advocate of basic income. Along with Paul Mason, author of PostCapitalism (2015) and Clear Bright Future (2019). Mason stresses the importance of human agency and blames neoliberalism for the ‘hollowing out’ thereof. Standing argues that the introduction of a universal basic income can counter these tendencies. Citing a pilot study in India as evidence, he points to its transformative effects in terms of welfare, equity, growth and emancipation.
Beware the ‘new dangerous class’ – Standing.
Standing makes a simple but compelling argument for the difference between work and labour. Work is all human activity including that often done by women within the home like cooking, cleaning and child-rearing. Labour is what the market recognises as worthy of financial remuneration. It therefore excludes all those who are not part of this system. He calls for the values of work to be placed above those of labour. He also raised concerns about ‘a new dangerous class’, who rely almost entirely on money wages. The so-called precariat’s relationship with the state is characterized by an ever increasing loss of rights. As the world economy heads into ever deeper recession, the precariat’s position may well prove ever more precarious.
Emancipatory value of UBI far greater than its monetary value – Standing.
The central idea behind UBI is that a greater range of human endeavour will be automatically rewarded. It extends current, limited definitions of work and provides a safety net so that each can follow his/her own passions and talents. This might include spending more time with one’s family or going back to full time study. Strangely enough, coronavirus has inadvertently presented many with just these opportunities. UBI assumes that human beings, given the chance, will choose to self-actualise, to improve their own lives and those of their loved ones.
Citing three recent unconditional basic income schemes in India, funded by UNICEF, Standing claims the primary value of UBI is what he calls, its emancipatory effect. It is not, he explains, a panacea. Rather, he sees it playing a role in a whole package of EU reforms aimed at development aid and migration.
But what of UBI in developed economies? The Finnish government recently completed a 2 year pilot study in which monthly payments of 560 euros were made to 2000 unemployed people. The trial was launched by a centre-right government at a cost of approximately 20 million euros. The idea was to see whether unconditional income might incentivise unemployed people to take up work. Two years on, it was found that this group was happier but employment rates were no better or worse than a control group. God is in the details.
Is money better spent on improving Universal Basic Services?
Anna Coote, co-author of Universal Basic Income: A Union Perspective wrote in the Guardian newspaper of the findings of a meta-study (May, 2019) conducted for a global trade union federation. Sixteen practical projects, each of which has tested various ways of distributing regular cash payments to individuals across different income groups, were investigated. No evidence of the sustainability of such schemes nor of their ability to achieve lasting improvements in wellbeing and equality was found. The report concludes that the money would be better spent on improving Universal Basic Services (UBS). As Coote clearly states, ‘Collective provision offers more cost-effective, socially just, sustainable ways of meeting people’s needs than leaving individuals to buy what they can afford in the marketplace.’
So we return to familiar ideological divisions regarding the advantages or disadvantages of markets and the importance of individual vs communal choice. Economists on both the left and the right have argued for UBI as a source of personal empowerment. It allows greater choice for citizens – concerning work, caring, leisure and education. Such views clearly chime with the humanist perspective of someone like Paul Mason. Yet they have also found an ear amongst the entrepreneurs and venture capitalists of Silicone Valley, Mark Zuckerberg included.
Can UBI help to trim the excesses of the welfare state?
From a traditional libertarian perspective, UBI may be seen as a solution to the intrusive inefficiency of the welfare state. Furthermore, in an age of what some economists have termed ‘cognitive capitalism’, characterised by the growing importance of cognitive labour rather than traditional material production, UBI could reward the growing amount of unpaid, communal work that increasingly characterises the internet age.
UBI is perhaps better understood as an umbrella concept that includes a variety of options. Key questions include: what level of payment to use? How UBI might be combined with or even replace other social security benefits and how the tax and pension system should treat it? All require further research. Ideologically attractive to humanists on both sides of the political spectrum, UBI is as complex as many other economic models and vulnerable to similar political manipulation. However UBI does provide a bold, more enlightened view of human endeavour. It acknowledges the large amounts of untapped wealth and potential that an increasingly globalised world has to offer, in spite of coronavirus.