John Harris wrote this in the Guardian this morning:
Welcome to the world of a unconditional basic income, or UBI, otherwise known as citizens' income or social wage. It might look like the stuff of insane utopianism, but the idea is now spreading at speed, from the fringes of the left into mainstream politics — and being tried out around the world. The UK Green party has supported the notion for decades: staunch backing for a version of UBI was one of its key themes at the last election. At its spring conference last month, the Scottish National party passed a motion supporting the idea that “a basic or universal income can potentially provide a foundation to eradicate poverty, make work pay and ensure all our citizens can live in dignity”. A handful of Labour MPs have started to come round to the idea — and serious work is being done among thinktanks and pressure groups, looking at how it might work in the here and now.
This is not abstract thinking.
This is plausible.
This is Howard Reed and my take on the issue,meh owing it can be done to really transform the economy.
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Housing, yet again, is the cockroach in the ointment due to Governments turning a blind eye to 40 years of bubbling. There will still be a problem, I suspect, between those working and receiving UBI and those out of work in many cases needing extra housing benefit. So we’ll still get the ‘strivers/skivers’ narrative-although the grounds for this ideologically manipulated resentment may be less due to the ‘virtuous’ mortgage slaves feeling better off.
While UBI would go some way to tackle inequality, I would much prefer a Job Guarantee, since that targets specifically the low skilled (and thus low paid/unemployed) end of the spectrum. And when I say “job guarantee”, I don’t just limit this to paid, public sector jobs – it could form the basis for paid training, volunteer work etc.
Well that’s nice, posting at 9.25am to target the low skilled end of the spectrum.
That’s where I operate these days since the diminishing British engineering sector no longer requires my experience as a design engineer. And you want to make sure I keep grinding away – thanks a bunch my idle friend.
What is all this ridiculous tosh about “creating jobs”! What on earth for – didn’t we create robots and CNC machine tools and need I really go on?
Whereas paying a fixed amount to every person regardless is so much better for someone in your position? How is that going to create jobs in design engineering?
While I agree that the decline in industry has been detrimental to the country on a whole host of levels, giving cash to everyone, including millionaires, will not resolve that. Especially as anyone in decent paid work will probably find they are paying more in tax to fund the UBI, so we’ll end up with the same “scroungers & strivers” rhetoric we’re finding with unemployment benefits, creating artificial resentment just to justify cutting or even abolishing the benefit, then we’re back to square one.
A JG doesn’t mean low skilled jobs only, you know. It can be used for other things, such as training/education, business startups and so on. Which means people with former demand skills could use the income to either retrain in newly demanded skills, or try using their existing skills to generate demand for them.
I really do think you’re missing the point that those paying more tax will be benefits recipient and may really rather like that fact
That and the fact that there will be no tax disincentives to work
I’m sure we’ve all looked at the growing literature on UBI schemes from around the world, I know I have. They can and in some circumstances have achieved some positive results. There are some things to approve of and promote in them. But they all suffer from an insurmountable problem; public perception of allowing nay promoting a scrounging, free-riding sub-section of our society. And this problem is what will inevitably poison UBI schemes.
I agree with Daniel in that there is a better alternative in JG schemes. Guaranteed jobs for every citizen over the whole of their working lives, available without restriction on application, paid at the living wage (the real one not Osborne’s scam). As a supplement to universal health care it would, in my opinion, offer a blueprint for the compassionate society that humans have craved for centuries and build the foundation for peace and prosperity.
How to pay for it? Richard and others have shown the way with massive and productive state investments like the green QE scheme. There are currently 4.5 million people suffering some form of worklessness and this productive capacity can be utilised by a JG scheme rather than trashed by austerity economics. A JG scheme would at a stroke denude the exploitative business models of much of the service economy jobs and provide a solid and reliable platform upon which most people would be happy to build their lives.
How would it benefit society? Mainly by providing the resources (either directly or indirectly) to replenish the people and skills so obviously missing from foundational sectors like health, mental health, education and social work that exist and are getting worse now. With this massive resource injection to our NHS, our school system, our infrastructure projects and our local government services provision, many of the social problems we currently experience and drain our social resources or stretch them to breaking point could be addressed and we could genuinely invest in preventative measures rather than constantly operating in crisis mode. We could plan and provision the beat social problems like homelessness, drug abuse, obesity, joblessness, sink estates, crime, rehabilitation, life-long learning and every problem that hampers our lives.
A dream? No. Entirely practical. All possible, practical and implementable right now. With the political will.
Why make work the only goal?
In a world where work us going to change considerably that makes no sense at all
Thank you for your useful engagement.
Work isn’t the goal of a JG scheme merely the most ubiquitous current mechanism for enabling an acceptable social contract provision as well as enabling far more personal economic empowerment (as the UBI schemes aim to do as well). The mechanism would adapt as the manner in which people lived their lives changed. There is no compulsion to join a JG scheme at all. None. It remains available as an option for people to consider, no more.
Universal Income is only workable in the context of a universal Social Security, in which the neccessities of life are available and accessible on that income: above all, housing.
Universal income will fail in its stated objectives if housing is subject to artificial shortages that enable landlords to raise rents by a thirty pounds every time the universal income rises by twenty.
That being said, the unconditional income we used to give to all mothers – child benefit – did a great deal of good; less than the stated objectives of a universal income, but still worthwhile.
So my view on Universal Income is that it will do far, far less than it is intended to do: but this is no reason to abandon it, because what will actually do is still worth doing.
Meanwhile, restoring Social Security is essential: the worthy efforts of food banks can and will fail.
Agreed. A job guarantee scheme however restores access to basic requirements while doing so within a system of work not handouts; the psychological effects are starkly different as are the abilities to ‘sell’ the idea to the general public.
If we want to put exploitative business models into the rubbish bin of history as well as build Social Contract 2.0 we should campaign for a job guarantee scheme.
I have read your proposals for a unified tax system and am in agreement with virtually all of what you say in the report. Can I add two extra thoughts to your ideas? You discuss the idea of amalgamating the income tax and NI systems to remove high marginal rates of tax on lower income people, however you still retain the idea of separate tax bands. Tax bands always cause high marginal rates at the boundaries so why not replace the band system with a formula based one. I could draw you a graph of what I think the result would look like and I’m sure there are clever mathematicians who could devise the formulas. This would allow for a totally progressive tax system that would be easy to understand and administer.
I would further add that I would like to see the progressive removal of all tax allowances and breaks. I’m not even sure if I would not prefer a negative income tax rather than a citizens wage, but I am sure that tax allowances are the cause of a huge amount of tax fiddling and evasion. Combine this with bringing corporation and personal tax rates into alignment and I feel you have a starting recipe for a fairer more manageable system.
In terms of implementing such changes, could we not devise a system whereby they are progressively phased in over a period of say five years, with people being able to choose to go over at a point that suits their personal circumstances but each year their tax bill is modified to become closer to the new system.
I am waiting for someone or group to metaphorically dump the tea chests into the harbour and demand fair taxation and representation. A UK reform party committed to democratic and tax reform would get my vote. Is there a leader for a coalition for democratic reform out there? Are you up for it?
Thanks
Genuinely quite a lot to think about in there
Luxembourg is trying negative tax rates
Joe – I don’t follow the point on high marginal rates at the border. We have a progressive tax system that only tax the income that’s over the limits at higher rates not the whole lot. It’s not the same as the old stamp duty regime.
Also, how would your formula based rates work with respect to your suggestion of harmonising personal and corporate rates? Typically companies are owned by many individuals so whose rate do you choose? If it’s a blend it would be an admin nightmare for a plc many of the shares of which are owned by pension funds, individuals, investment funds etc.
How do you intend to overcome the enormous pull factor on immigration from such a policy?……Higher wages have increased economic immigration, how much extra from a policy of UBI?
Or do you think it could be denied to EU nationals?
I am hearing if the idea all over the EU
Not sure that really addresses the point, as a UBI in the UK would no doubt be higher than that in Bulgaria.
So you need some qualification criteria to affect the “pull” effect, though how that would be done in an equitable way I can’t see whilst we’re in the EU
( That’s not to say I’m against either a UBI or the EU )
Interesting read. I support a basic income and policies aimed towards full employment.
Your paper discusses idleness. How about the economic idleness of rentier activity which tend to suppress rather than support demand, production and gro
I address how to tax that in The Joy of Tax
Investment income surcharges are the answer
wth.If you linked the basic income with higher taxes on unearned income and land value taxation we might be getting close to Pareto optimal.
🙂
Excellent article. Should be required reading for every economics, social and political studies student and every aspiring politician. We live in a critical time facing combined ecological, economic, social and political melt downs. To prevent mass global poverty, resource depletion, irreversible global warming and major social unrest we must get to grips with alternative thinking that you advocate.
the thing I like about UBI is the fiscal freedom for an individual to pursue further education, re-training or low paid apprenticeship/internship,
it allows a workforce flexibility that employers fantasise about,
I also suspect it could in one swoop alleviate the epidemic of depression and anxiety currently sweeping the western world,
surely this would be a huge factor in raising productivity and possibly return smiling and whistling jauntily to a national pastime!
I imagine the only obstacle to UBI to be dogmatic ideology and Victorian morality,
i.e. no real ‘rational’ obstacle!
I hadn’t read this report by you and Howard, before now, Richard. Good stuff. Incidentally, I was first introduced to the concept of a ‘citizens’ wage’ when I was about 19, by an ex-London docker who’d taken early retirement but did a little bit of work through the summer months on a holiday camp I also spent a season working on. The other member of our small team was an ex-insurance broker, and “self made man”, from Halifax. Boy did they argue about politics! It was my induction into the subject, and one I’ve never forgotten.
On an entirely unrelated topic, I know you are a bit of a birder, so just to mention that the Peregrines that nest in the centre of Nottingham are currently brooding four eggs. The link to the webcam that observes the nest is here:
http://www.ntu.ac.uk/sustainability/biodiversity/falcons/index.html
Well I’m not sure which bit of that is more interesting
Not got a peregrine in my list this year!
Surely a trip to Norwich Cathedral would sort that out.
It would
But have not been that way so far this year….
I like the fact you give some numbers to go with this!
One thing I didn’t follow from your paper:
You’re suggesting more than doubling overall income tax & NIC intake (260bn to 554bn). This is an average rate increase from about 20% to about 45% based if your estimated 1228bn total taxable income is the same now as you predict. This sounds like a very large increase rather than a few percentage points you seem to suggest in the paper. Does this mean you’re assuming a large increase in total taxable income under the new scheme? If so, would you be willing to give a very rough sketch as to where the 1228bn comes from? Thanks!
This is more tax
To pay for more benefits
Some of which will be paid to people in work
In an incredibly simple, effective, low cost system
So no there is no necessarily more income but how the money moves changes
“do you think UBI could be denied to EU nationals?”
This is the difficulty: if Britain exited the EU it could allow free movement only to and from those countries who also had a similar UBI. And would be the only reason I can see to brexit. If Britain remains, the only possibility is a subgroup of UBI countries that are temporarily allowed to prevent immigration from others until they, too, implement the system.
I suppose dreaming can be good for you… as certainly if it ever did come to pass that the EU adopted UBI it would be world changing.
Of course looked at another way, UBI could save the EU! The Parliament/Commission could mandate UBI as a right of being a citizen of the EU. That should get Europeans rallying round and, who knows? that might finally see off the UKIPpers and other incipient and diverse right wing ‘independance’ parties now beginning to appear throughout Europe.
One of the good features of the basic income is that it has support from across the ideological spectrum. That should make it easier for it to be part of a consensus which I think is important for welfare policy. The challenge is the British public is strongly wedded to the idea of a contributory system and is apparently very hostile to the idea of people getting an income as a right. One way out would be to tie it to a work requirement but I would regret that myself as I think it would defeat one of the main points of the idea.
I wrote a pamphlet in favour of a basic income back in the 1980s. I drew on the work of Hermione Parker who had published a costed scheme very similar to yours a few years before. There is a lot to like about a basic income. It is simple and effective as a means of poverty prevention and gets rid of a large bureaucracy, it doesn’t lead to either paternalism or stigmatising, it gets rid of the very bad perverse incentives that means tested benefits create, and it promotes individual autonomy. One of the great benefits is that it gives everyone what Americans call “screw you money”. I do think it is an idea whose time is coming. The big arguments will probably be about the level and whether to link it to a work requirement.
We are much of a like mind
One should be very careful when trying to introduce basic income in a capitalist society,especially nowadays it is being promoted by silicon valley to not pay people.
https://youtu.be/eOpg1wVcBw8?t=2007
If the Unconditional Basic Income was sufficient to get by on why would that matter – or a minimum wage either.
For the first time ever workers would face the market as truly free agents, as presently hypocritically hypothesised by neo-classical economists.
Working class would be journalists could conceivably serve out an internship, presently only possible for those supported by wealthy parents. And the grimy essential jobs which no-one wants to do might command a higher wage than the glamorous jobs that everyone wants. Problem?
Yes, because this is not what’s the plan for the other countervailing force that’s capital. UBI for them is essentially a subsidy for them to not pay enough wages(as in the case of internships), reduce the functions of government,etc. Like the guy in the link says, the UBI has to be on radical left grounds otherwise its just another wasted idea. Its has to be drafted very carefully.
Here’s a few articles to inform both sides of the UBI argument – http://www.nakedcapitalism.com/?s=basic+income
Too darned old to worry about technicalities now but if it gave people a chance to choose not to work a silly amount of hours at a soul destroying job and spend some time on a hobby or learning a new skill or just being with their family then it has my vote right now. Let bigger brains worry about the petty details
Potential side benefit – if people decided not to do a job that pays s*** wages then just maybe pay would increase! Living in hopes that we could also dispense with DWP and the leeches sucking on them.
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