More evidence that UBIs work

The report is back on another Universal Basic Income trial, this time in the USA. And as with the others, it shows that this policy works:

After getting $500 per month for two years without rules on how to spend it, 125 people in California paid off debt, got full-time jobs and reported lower rates of anxiety and depression, according to a study released Wednesday.

[...]

When the program started in February 2019, 28% of the people slated to get the free money had full-time jobs. One year later, 40% of those people had full-time jobs. A control group of people who did not get the money saw a 5 percentage point increase in full-time employment over that same time period.

“These numbers were incredible. I hardly believed them myself," said Stacia West, an assistant professor at the University of Tennessee who analyzed the data along with Amy Castro Baker, an assistant professor at the University of Pennsylvania.

$500 a month is fairly low, but its also clearly enough to make a big difference to people's lives and wellbeing. The article has a caution that the limited duration of the experiment - two years - may mean it doesn't properly capture employment effects, as people may not quit their jobs if the money only lasts two years. The answer to that, of course, is longer experiments. And it would be nice to see such an experiment in New Zealand.

A UBI in Spain

So far, universal basic income policies, which see people given a regular income without any conditions, have been trailed only on a small scale. But now, Spain is introducing one nationwide as a response to the pandemic:

Spain is to roll out a universal basic income (UBI) “as soon as possible” to mitigate the impact of coronavirus.

Minister for economic affairs Nadia Calvino told Spanish broadcaster La Sexta on Sunday night that the move was intended to help families during the pandemic.

But Ms Calvino, who is also deputy prime minister, said the government’s ambition was that UBI could become something that “stays forever, that becomes a structural instrument, a permanent instrument”.

Here's hoping. And hopefully it will also provide data on how such a system works on a wide scale, and its impacts on health and happiness.

But they still hate cats

Gareth Morgan's Opportunities Party has announced a $200 a week youth UBI:

All New Zealanders between 18 and 23 will be given an obligation-free $200 a week under an Opportunities Party policy announced this afternoon.

The policy would allow young people to "pursue their dreams" and "take stress off ... at a pivotal time" in their lives, the party said.

The Opportunities Party (TOP) has previously announced an "unconditional basic income" for over-65s and families with children under 3.

But today it said budget surpluses announced this year would make it possible to extend a basic income to "one of the most needy and neglected groups in society possible".

We already have a UBI for over 65's: its called "New Zealand Superannuation". Expanding it to true universality would be good for everyone, and that expansion has to start somewhere. Starting at the bottom, with young people, is a good place to do it. In a flash it would remove the inequity of students having to borrow to eat, while also replacing or supplementing student allowances, youth unemployment benefits, and the DPB for young parents. For those pursuing work rather than study, it would massively improve their bargaining position by allowing them to just walk away from a bad job. And because oppression starts at the bottom, this would have significant flow-on effects on the pay and conditions of older workers. And all for the price of Nationals' tax cuts.

And on the gripping hand: Gareth Morgan hates cats, so fuck him and his party. Him floating the idea is useful, but I'll get someone else to implement it, thanks. Someone who doesn't want to murder half my family.

UBI: An idea whose time has come?

The Guardian reports that Finland has begun trialling a Universal basic Income scheme, with a test pool of 2000 unemployed Finns given a no-strings attached €560 a month to see what happens and how it affects employment incentives. But they're not the only ones. Further down, the article has a list of the UBI trials taking place this year:

Basic income experiments are also due to take place this year in several cities in the Netherlands, including Utrecht, Tilburg, Nijmegen, Wageningen and Groningen. In Utrecht’s version, called Know What Works, several test groups will get a basic monthly income of €970 under slightly different conditions.

One will get the sum as unemployment benefit, with an obligation to seek work – and sanctions – attached. Another will get it unconditionally, whether or not they seek work. A third will get an extra €125 providing they volunteer for community service. Another will get the extra €125 automatically, but must give it back if they do not volunteer.

The Italian city of Livorno began giving a guaranteed basic income of just over €500 a month to the city’s 100 poorest families last June, and expanded the scheme to take in a further 100 families on 1 January. Ragusa and Naples are considering similar trials.

In Canada, Ontario is set to launch a C$25m (£15m) basic income pilot project this spring. In Scotland, local councils in Fife and Glasgow are looking into trial schemes that could launch in 2017, which would make them the first parts of the UK to experiment with universal basic income.

All of which is a good step towards getting more empirical data. We'll never convince the right, of course - they're ideologically committed to widespread economic insecurity for the benefit of the few, a morally repugnant position. But if enough voters can see that it will make them better off and that the fearmongering is unjustified, then the politicians will follow, no matter what they believe.

Labour on Universal Basic Income

Labour is following the Greens in investigating a Universal Basic Income:

A proposal to pay every adult Kiwi more than $200 a week as a "universal income" from the Government is being considered by the Labour Party.

A discussion paper from the party has mooted the idea of a universal income, where every adult New Zealander would receive $11,000 a year ($211 a week) in exchange for scrapping many current welfare payments.

The proposal is part of the party's Future of Work Commission, a project to look at the impact of new technologies on careers and the workforce.

Good. I've long argued that a UBI should be a key goal for the left, and its good to see Labour thinking the same way. And their discussion paper linked above gives a good summary of the available evidence and makes a strong case. By disconnecting work from survival, a UBI would allow us to find a better balance between work and leisure. It would address the changing nature of work, which has seen jobs become ever more insecure and poorly-paid, and give people a cushion against frequent redundancy as well as the confidence to risk entrepreneurship. It would be fair, progressive, broadly affordable as a replacement for existing social support systems, and has positive health and education benefits. Why wouldn't you want to investigate this policy?

The discussion paper suggests paying close attention to overseas pilots in Utrecht and possibly Switzerland and Finland. More importantly, it suggests running a multi-year pilot in New Zealand so we can see what the effects of this policy are. That seems sensible and reasonable. Again, why wouldn't you want to do this?

(The right's answer, via Kiwiblog, is to cry "unaffordable". Gareth Morgan already dealt with that one years ago, and in any case that just makes it a question of priorities. The real answer, of course, is that they are committed to widespread economic insecurity for the benefit of the few. And that is simply not a morally supportable position).

Towards a UBI in Finland

Finland is planning to introduce a Universal basic Income:

The Finnish government is currently drawing up plans to introduce a national basic income. A final proposal won’t be presented until November 2016, but if all goes to schedule, Finland will scrap all existing benefits and instead hand out €800 ($870) per month—to everyone.

It sounds far-fetched, but it’s looking likely that Finland will carry through with the idea. Whereas several Dutch cities will introduce basic income next year and Switzerland is holding a referendum on the subject, there is strongest political and public support for the idea in Finland.

A poll commissioned by the government agency planning the proposal, the Finnish Social Insurance Institution or KELA, showed that 69% support (link in Finnish) a basic income plan. Prime minister Juha Sipilä is in favor of the idea and he’s backed by most of the major political parties. “For me, a basic income means simplifying the social security system,” he says.

Its a good idea. The evidence we have so far suggests that a UBI means a healthier, more educated and more economically productive community, simply because people can afford to take time off to invest in education or childcare, or when they get sick. And from a left point of view, removing the employers' boot from our neck results in better workplaces and a massive boost in practical human freedom. There are implementation questions, of course - the big one being high-needs beneficiaries who would be made worse off by a change - but Finland moving to such a system will help us work out what the good answers are.

Why are we still working?

On his blog, SF author Charles Stross asks the big question about modern society: most jobs are bullshit, and many of them are disappearing due to technology. Meanwhile, as a society we're richer and more productive than ever before. So why are we still working?

We can still produce enough food and stuff to feed and house and clothe everybody. We can still run a growth economy. But we don't seem to know how to allocate resources to people for whom there are no jobs. There's a pervasive cultural assumption that people who don't work are shirkers or failures, rather than victims of technological change, and this is an enabler for populist politicians who campaign for support from the frightened (because embattled) working majority by punishing the unlucky, rather than admitting that the core assumption—that we must starve if we can't find work—is simply invalid.

I tend to evaluate the things around me using a number of rules of thumb, one of which is that the success of a social system can be measured by how well it supports those at the bottom of the pile—the poor, the unlucky, the non-neurotypical—rather than by how it pampers its billionaires and aristocrats. By that rule of thumb, western capitalism did really well throughout the middle of the 20th century, especially in the hybrid social democratic form: but it's now failing, increasingly clearly, as the focus of the large capital aggregates at the top (mostly corporate hive entities rather than individuals) becomes wealth concentration rather than wealth production. And a huge part of the reason it's failing is because our social system is set up to provide validation and rewards on the basis of an extrinsic attribute (what people do) which is subject to external pressures and manipulation: and for the winners it creates incentives to perpetuate and extend this system rather than to dismantle it and replace it with something more humane.

Obviously, its good for the people at the top to continue this way. But for the rest of us, trapped in jobs we hate and whose utility to society we doubt, which we'd give up in an instant if an alternative became available? Not so much.

There is an obvious policy solution to this, in the form of a Universal Basic Income. This would disconnect work from survival, and allow us to find a better balance between work and lesiure (and permanently removing the employers' boot from our neck would make those jobs which need to be done or which we choose to do much more pleasant). It's affordable, its better for us, and we already have one in New Zealand for over-65's.

I was going to say that none of our political parties are grappling with this problem that, none of them want to question the sacred cow that work, no matter how meaningless, is the only way. And for National and Labour, that's true - both are committed to the current orthodoxy, the ideology of work and brutally punishing those the economy does not work for. But a quick check shows that the Greens are different - they're committed to "investigat[ing] the implementation of a Universal Basic Income for every New Zealander". That's a cautious statement, but its still lightyears ahead of the other two parties, and shows they're looking at our actual problems, rather than committed to protecting the status quo regardless.

Today's must read

Why we should give free money to everyone by Rutger Bregman: Short version: the empirical evidence shows its more effective and cheaper than current methods of making assistance contingent on intrusive supervision. if you give homeless people a pile of cash, they don't spend it (as the right would have you imagine) on booze and drugs, but instead spend it on finding long-term solutions to their problems. If you give money direct to villagers in poor countries, they use it to improve their situation far more efficiently than top-down aid does. And if you give everyone a Universal Basic Income, they don't stop working, but do take time off when they get sick, and invest more in education, resulting in a healthier, more educated and more economically productive community.

Left wing policy: not just more moral, but also empirically more effective!

A UBI for Switzerland?

Switzerland will hold a referendum on a Universal Basic Income:

Switzerland will hold a vote on whether to introduce a basic income for all adults, in a further sign of growing public activism over pay inequality since the financial crisis.

A grassroots committee is calling for all adults in Switzerland to receive an unconditional income of 2,500 Swiss francs ($2,800) per month from the state, with the aim of providing a financial safety net for the population.

Organizers submitted more than the 100,000 signatures needed to call a referendum on Friday and tipped a truckload of 8 million five-rappen coins outside the parliament building in Berne, one for each person living in Switzerland.

There's no hints yet on its chances of success, but I'll be watching it closely. I've long argued that a UBI should be one of the key goals from the left. Quite apart from ensuring basic wellbeing for all (without the stigmatisation of the benefit system), it will also give us control over our lives and permanently remove the employers' boot from our neck. And if Switzerland votes for one, we'll have a chance to see about the implementation details.

Guthrie and Morgan on tax and UBI

Susan Guthrie and Gareth Morgan have an interesting piece in the Herald today about "the rot at centre of modern economics": selfishness and a monomaniacal focus on (measurable) paid work. The former has led to debates around taxation being purely around cuts, with no recognition of why we pay tax or of the need for redistribution. The latter doesn't just mean that the economic picture is incomplete; it also has led to the active devaluation of some people as citizens:

Worshipping unfalteringly at the altar of paid work exhibits a tunnel view of how value is created in society. Who is going to claim that raising a child is worth less than packing shelves at a supermarket? The market certainly does.

To acknowledge the value of unpaid work and admit that by far the majority of people are in either paid or voluntary work, each making a contribution to society - that very few indeed can be accused of being a dead weight on others - means overcoming a prejudice that the unwilling should be forced into paid work.

[...]

That our consumer society has become so mesmerised by materialism that the common belief is that everyone should be in paid work is testimony to the corrosion of what we value and our obsession with material gain, no matter how trivial. We have, sadly, lost the plot.

This is part of Guthrie and Morgan's advocacy for a Universal Basic Income (UBI), a simple, equal payment made to every adult, sufficient for a basic standard of living. This would completely replace the welfare and superannuation systems, while recognising unpaid work and giving us more freedom and control over our lives. It would require big changes to our tax system (but not the flat tax Guthrie and Morgan inconsistently advocate for; we can still retain progressivity), but its certainly affordable - and moreso if we tax wealth as well as surplus income.

The question is simply one of what sort of society we want to be: one which values all its citizens, or only those who work for money; one which enables people's freedom, or binds them in economic chains; one which provides for all, or one which doesn't. I favour the former, and so I support a UBI.

Time and freedom

There's been some interesting discussion in the blogosphere in the past week on time and the lack of it in most people's lives. Both KiwiPolitico and Liberation have highlighted the effects of this on our society and our democracy. Chris Trotter argues powerfully that the struggle for more time to spend on ourselves has been at the heart of the left-wing project:

One of the earliest demands of organised labour – dating back over a century – was for a limitation of working hours. And one of the first things the First Labour Government did in 1936 was to reduce the length of the normal working week from 48 to 40 hours.

In a very real sense the entire socialist programme was about how to disengage the individual from the tyranny of the employer’s clock. What, after all, is profit, if it is not the time you spend working for the capitalist rather than for yourself? Public ownership, by doing away with the need for profit, was supposed to reduce the amount of time required to keep society functioning – thereby making more time available for individuals and families.

Trotter sees this through his old socialist economic lens, of course; I view it as a matter of freedom and autonomy. It's not just about enough rest, enough play, family and friends, "work-life balance", stress, happiness and overall quality of life - it's fundamentally about who is making the decisions: time spent doing what I want to do versus time spent doing what other people want me to do. And only during the former am I really free. Every moment I spend working to pay the rent¹ is thus a very real intrusion on my liberty. Which is why they call it wage slavery...

So what is to be done? Obviously, we need to take back more of our time. On Just Left, Jordan Carter tries to present a concrete political programme for doing so, focusing on increasing leave provisions, reinstating the 40-hour week (remember that?), greater paid parental leave and an acknowledgement that "employment" may not be a binary state. This is all good, if incremental, stuff, but somewhat surprisingly misses what I would have thought would be the key policy. Research by the Department of Labour into those who work long hours shows that it can be broken down into two roughly equal groups: professionals working to "get ahead", and people driven to it by poverty. It also shows that those who work the hardest receive the least reward, with the income distribution skewing downwards among those working over 60 hours a week. What this tells us is that if we want to give people their time back, the first step has to be income adequacy and wages families can actually live on.

As for the longer-term, I favour something more ambitious than Jordan's vision. Let's start with a 35-hour week - not as a measure to reduce unemployment, but simply to give us more of our time back (to those who immediately start whining about "productivity", the ball is in the bosses' court; one reason they have not made the capital investments required to boost it is because despite everything Labour has done, labour is still too cheap). Beyond that, we should be moving to replace the benefit and pension system with a universal basic income, a universal payment given to every adult regardless of circumstances. Not only would this give us time (in that people could choose to take that six months off, or even not to work if they were content to do without luxuries); it would also permanently remove the employers' boot from our neck. And that more than anything else will give us our time - and our lives - back.

¹ And contra Trotter's trolls, this is why most of us work. Yes, its nice if you love your job. But most of us are only in it for the money, and would much rather be doing something else.

A social dividend?

The Sunday Star-Times has more tax-cut speculation today, this time of $1,000 cash payments to low-income earners in lieu of cuts to the bottom tax rate. It's a good idea, and certainly far better than anything offered by the "tax cuts for the rich" brigade. It targets support at the needy rather than the greedy, and while it doesn't deliver as much to low-income workers as the proposed tax-free bracket Michael Cullen ruled out last week, it delivers more to those at the very bottom, and significantly more to low-income workers than an equivalent-cost cut to the bottom tax rate.

(There are 1.528 million taxpayers with incomes of less than $20,000, so the cost of a $1,000 social dividend to each of them would be $1.528 billion ($1.29 billion if those with zero income are excluded). A 1% change in the bottom tax rate costs $220 million, so this would fund a cut of 7% (or 6%). Such a cut would deliver a maximum of $660 (or $570) to those earning $9,500 or above).

But in addition to delivering more to those in need, this also points the way to how such things should be handled in the future. Rather than cutting taxes (which permanently reduces income and almost always disproportionately benefits the rich) the government should be paying social dividends. While initially these should be aimed at those on low incomes, the ultimate goal should be for equal payments to every taxpayer (or better, every New Zealander), on the basis that we are all equal participants in our society. Beyond that, we should be aiming to build the system towards a universal basic income - a universal payment given to every adult regardless of circumstances. This could not only substantially replace the existing benefit and pension schemes, it would also remove the employers' boot from our neck. It would substantially improve the actual, substantive freedom of people to lead their lives how they wish. And that should be a core goal of any left-wing government.

For those who are interested, Keith Rankin has some old papers on UBI here.

UBI, employment law, and a vision for the left

Make Tea Not War has a long post up at Work Without End on Flexibility and the Guaranteed Basic Income. While the initial focus is on Sue Kedgley's Employment Relations (Flexible Working Hours) Amendment Bill (and whether it would be effective in helping those who need it most), the real target is the underlying paradigm of employment law. Traditionally, employment law has recognised that there is an imbalance of power between employer and employees, and aimed to correct this through regulation and the promotion of collective bargaining. However, while this helps, it doesn't change the fact that usually employees need to eat far more than employers need their work, and this is a fundamental limit on its effectiveness. And the bottom end of the employment market, where employees tend to be in greatest need of protection because they have few other options available, is precisely where that protection fails, because employers are able to use the threat of starvation to force "agreement" to conditions which noone would voluntarily agree to.

In this situation, MTNW thinks that a universal or guaranteed basic income - a universal payment given to every adult regardless of circumstances - would be the supreme equaliser:

How much easier would it be, for example, to say to an employer, for example, "I will need to finish work every day by 3 so I can be at home with my kids after school" if you weren't depending on that job to put food on the table? I feel pretty sure that if workers had genuine power of exit if their needs can't be accomodated rather than a token right to voice that more flexible working arrangements would evolve very quickly indeed.

And its very hard to disagree. Free people from the necessity of having to work to eat, give them real alternatives to shitty jobs or shitty employers, and the market will be forced to change to accommodate their needs. The work will still need to be done, and, apart from a few people who want to spend their lives surfing or blogging or whatever, people will still want to do it (we have to have something to do with our lives, after all) - but we won't have to put up with so much shit any more. From either party. As MTNW points out,

Equalising the bargaining power of workers would mean that the State could back right off on making rules concerning employment relationships thus reducing red tape and compliance costs significantly.

This is what we should be aiming for. It would dramatically increase the actual, substantive freedom of ordinary people to spend their lives how they wish - a key goal of the left - and end the nastiest practices of the employment market. Yes, we'd have to pay for it - Grey Shade had some interesting calculations on that which I think I still have somewhere - and it would result in substantial economic change; some shitty industries would (deservedly) go to the wall. But it would be well worth it in terms of human happiness and freedom.

Setting the goal

Helen Clark wants us to be more like Sweden. It's an excellent goal, and finally provides a decent vision to back up Labour's electoral machine. Fully-funded universal healh and education, a welfare state that allows everyone to live a decent life and participate in society, a social infrastructure that provides people with real, practical (rather than merely formal) freedom, regardless of the circumstances of their birth or the vagaries of fortune - this is the goal Labour should have enunciated long ago. It will cost, of course, but I think it is a cost New Zealanders are willing to bear. People have repeatedly said they are willing to pay more to get decent health and education; what rankles so much now is that due to means testing, an increasing number of people are paying to insure others while not receiving any benefit themselves. If we want them to buy in to universal care, then that has to change.

But actually, I'd go further than Sweden. Rather than simply rebuilding the welfare state, we should replace it and implement a universal basic income system. This would pay an equal amount (ideally enough to live on) to every adult New Zealander, freeing us from (some of) the basic struggle to eat and giving us greater freedom to control our own lives. It would mean economic change, and some (shitty) industries would almost certainly be wiped out, while employers would have to get used to workers demanding greater flexibility - but it would be well worth it.