Universal Basic Income: Why It Is Not Crazy And Not Going Away

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Above Photo: Pixabay

The Dutch city of Utrecht is developing a pilot project for a universal basic income that will launch in January 2017. The Finnish government is designing a trial to see whether giving low-income people a guaranteed basic income destroys their motivation to do any work at all, as critics allege. The idea is not going away because most “real” jobs are on the way out.

The old argument in defence of technological change – that it creates more new jobs than it destroys – no longer holds water. In the 1980s, 8 percent of new jobs created in the developed economies were in entirely new occupations, from call-centres to computer programmers. In the 1990s, only 4.4 percent of the new jobs involved newly invented occupations. In the 2000s, only half a percent did.

So full-time jobs with benefits have declined – only one-quarter of working-age Americans now have one – and the so-called “gigging economy” has not filled the gap. You may be able to stay afloat financially by doing a variety of “gigs” – low-paid, short-term, often part-time jobs – but you will never make ends meet, let alone get a mortgage..

Industrial jobs were the first to be destroyed by automation, but it soon moved on to the less demanding clerical jobs as well. As somebody said: “Every ATM contains the ghosts of three bank tellers.” And now it’s moving on to the kinds of jobs that it once seemed impossible to automate. Driving, for example.

The driverless vehicles that are now to be found meticulously observing the speed limit (and causing angry traffic jams behind them) on the roads of various major cities will soon be out of the experimental stage. At that point, the jobs of many millions of truck-drivers, bus-drivers and van-drivers will be in jeopardy.

Another huge chunk of the economy will start shedding jobs rapidly as online health monitoring and diagnosis take over the routine work of non-specialized health professionals. A similar fate awaits most mid-level jobs in the financial services sector, the retail sector and “management” in general.

The standard political response to this trend is to try desperately to create other jobs, even if they are poorly paid, almost pointless jobs, in order to keep people “in work” and off welfare. Unemployment is sees as a failure by both the government and the victim.

Yet this “problem” is actually a success story. Why would you see an economy that delivers excellent goods and services without requiring people to devote half their waking hours to work as a problem? The real problem is figuring out how to distribute the benefits of automation when people’s work is no longer needed.

And so to this relatively new idea: universal basic income. The core principle is that everybody gets a guaranteed income that is enough to live on, whether they are poor or rich, employed or not. They can earn as much more as they want, if they can find the work, but their basic needs are covered.

The actual amounts did not get mentioned in the Swiss referendum, but the people who proposed it were thinking in terms of a monthly income of $2,500 for every adult, and an additional sum of $625 a month for every child. It would replace the usual humiliating jumble of welfare payments with a single fixed sum for everybody, so it has appeal for the right-wing as well as the left.

In the Swiss model (and in many others) the cost of a universal basic income is about 50 percent higher than current expenditure on welfare payments, so taxes would be higher. But so would incomes, including those of high earners, since even they are getting the same flat annual payment of $30,000 per adult.

As for the inevitable rise of the “gigging economy”, that then becomes just the way people top up their incomes in order to afford luxuries. If there is work available, then people would still want to do it – but if there is not, they would still have decent lives.

About half the remaining traditional full-time jobs in advanced economies will be eliminated by automation in the next 10-20 years, so this is an idea whose time has come. Then why did the Swiss reject it by a 4-to-1 majority? Mainly because their deal with the European Union means that they have relatively open borders.

Luzi Stamm, a member of parliament for the right-wing Swiss People’s Party, liked the idea in principle but opposed it in practice: “Theoretically, if Switzerland were an island, the answer is yes,” he told the BBC. “But with open borders, it’s a total impossibility…If you offered every individual [living here] a Swiss amount of money, you would have billions of people who would try to move into Switzerland.”

Well, tens of millions anyway. But the solution to that is to control the borders, not to abandon the whole idea. And it will be back.


  • jemcgloin

    It seems to me that we will soon face a choice between a guaranteed income and corporate debt slavery.

  • DHFabian

    It would be a hard sell in the US, where human worth itself is defined by class/economic status. Consider the degree to which we’ve gone in the opposite direction. Americans decided that the jobless poor are undeserving of the most basic human rights (per the UN’s UDHR) of food and shelter. That’s quite extreme. A huge number of jobs were shut down/shipped out since the 1980s, and actual welfare was ended in the 1990s. We’ve been implementing the austerity agenda slowly, from the bottom up. Even liberals have merely disregarded the consequences.

    Grasping the value of the basic income guarantee to the nation overall would require a measure of altruism that is simply lacking in our culture.

  • DHFabian

    Incidentally, what “welfare” are we keeping people off of? Actual welfare ended back in the 1990s. (TANF is a short term, marginally-subsidized work program, only for those with children.) Food stamps largely go to the elderly poor and the disabled; in 2015, they were cut from roughly $115 per month, down to $10. The US no longer has jobs for all, and when one’s UI expires, there is no aid for the jobless poor. Those who can no longer work can sign up for disability benefits. IF they can meet the very stringent requirements to qualify for disability benefits, they will have to wait more than a year before they receive the first benefits.

  • kevinzeese

    People in power have been abusing it and there is a counter current that is growing. What is right now the undertow could become the tidal wave that dramatically changes the direction of the nation. The future is hard to predict. It once looked impossible to end slavery, for women to vote, to end segregation, to stop child labor — so many impossible’s have become inevitable’s that we should not shy away for working what we believe is just and necessary.