Is universal basic income sustainable? | 1 In October 2013, after gaining enough petition signatures to hold a referendum on UBI, Swiss activists celebrated by publicly dumping eight million coins. Source: Stefan Bohrer Is universal basic income sustainable? Universal basic income (UBI) means replacing means-tested benefits with an unconditional regular payment that everyone receives. It is an idea that has received considerable media attention recently, following a Swiss referendum on UBI on 5 June 2016. Although the measure was comfortably rejected, 1 the referendum has made basic income a global debate topic, with Finland set to launch basic income pilots at the beginning of 2017. 2 This briefing specifically evaluates the sustainability of UBI in the UK, by looking at its effects on population, consumption and technology. It finds that, while there are some risks, the overall picture from a sustainability perspective is quite positive. This briefing therefore recommends that UBI continues to be researched, discussed and seriously considered. What is universal basic income? According to political theorist Phillippe van Parijs, UBI “is an income paid by a political community to all its members on an individual basis, without means test or work requirement.” (van Parijs, 2006, p.4). 3 UBI is therefore significantly different to more conventional methods of social security, which are conditional, and paid to households. The definition is loose, and actual basic income schemes can vary greatly in terms of scale (regional, national, supranational), sources of funding, size of the income, and inclusivity (do citizens receive the income or all legal permanent residents?). UBI can also be given at different levels for different individuals, for instance the amount of income that children or pensioners receive may differ from what working adults receive. 3 Background Thomas Paine, one of the Founding Fathers of the United States, is usually credited as being the first to propose a form of basic income. Paine believed that land was the common inheritance of mankind, and therefore owners of land should pay a tax, and this tax revenue would be used to provide individuals with a lump sum upon reaching adulthood. 4 UBI, along with similar proposals like the negative income tax, is notable for having attracted support from economists both on the left, such as James Tobin, and on the right, such as Milton Friedman. 5 Indeed, a form of basic income in all but name was almost introduced by Republican President Richard Nixon, when it passed Congress, but was defeated in the Senate. 4 Many on the left see UBI as an effective tool for wealth
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Is universal basic income sustainable? | 1
In October 2013, after gaining enough petition signatures to hold a referendum on UBI, Swiss activists celebrated by publicly dumping eight million coins. Source: Stefan Bohrer
Is universal basic
income sustainable?
Universal basic income (UBI) means replacing
means-tested benefits with an unconditional
regular payment that everyone receives. It is an
idea that has received considerable media
attention recently, following a Swiss referendum
on UBI on 5 June 2016. Although the measure
was comfortably rejected,1 the referendum has
made basic income a global debate topic, with
Finland set to launch basic income pilots at the
beginning of 2017.2
This briefing specifically evaluates the
sustainability of UBI in the UK, by looking at its
effects on population, consumption and
technology. It finds that, while there are some
risks, the overall picture from a sustainability
perspective is quite positive. This briefing
therefore recommends that UBI continues to be
researched, discussed and seriously considered.
What is universal basic
income?
According to political theorist Phillippe van Parijs,
UBI “is an income paid by a political community to
all its members on an individual basis, without
means test or work requirement.” (van Parijs,
2006, p.4).3 UBI is therefore significantly different
to more conventional methods of social security,
which are conditional, and paid to households.
The definition is loose, and actual basic income
schemes can vary greatly in terms of scale
(regional, national, supranational), sources of
funding, size of the income, and inclusivity (do
citizens receive the income or all legal permanent
residents?). UBI can also be given at different
levels for different individuals, for instance the
amount of income that children or pensioners
receive may differ from what working adults
receive.3
Background
Thomas Paine, one of the Founding Fathers of the
United States, is usually credited as being the first
to propose a form of basic income. Paine believed
that land was the common inheritance of
mankind, and therefore owners of land should
pay a tax, and this tax revenue would be used to
provide individuals with a lump sum upon
reaching adulthood.4
UBI, along with similar proposals like the negative
2 Matthews, D. (2015, December 08). Finland's hugely exciting experiment in basic income, explained. Retrieved July 15, 2016, from http://www.vox.com/2015/12/8/9872554/finland-basic-income-experiment 3 Van Parijs, P. (2006). Basic income: A simple and powerful idea for the 21st century. In B. Ackermann, A. Alscott, & P. Van Parijs (Eds.), Redesigning distribution: Basic income and stakeholder grants as alternative cornerstones for a more egalitarian capitalism (Vol. V, Real Utopias Project Series, pp. 4-39). Lon: Verso. Retrieved July 15, 2016, from http://www.ssc.wisc.edu/~wright/Redesigning Distribution v1.pdf 4 Shafarman, S. (n.d.). A brief history of basic income ideas. Retrieved July 15, 2016, from http://basicincome-europe.org/ubie/brief-history-basic-income-ideas/ 5 Matthews, D. (2016, April 25). Basic income: The world's simplest plan to end poverty, explained. Retrieved July 15, 2016, from http://www.vox.com/2014/9/8/6003359/basic-income-negative-income-tax-questions-explain 6 Time series: United Kingdom population mid-year estimate. (2016, June 23). Retrieved July 23, 2016, from https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/timeseries/ukpop 7 World economic outlook database. (2016, April). Retrieved July 23, 2016, from http://www.imf.org/external/pubs/ft/weo/2016/01/weodata/weorept.aspx?sy=2014 8 Gauke, D. (2016). Budget 2016 (Great Britain, HM Treasury). Retrieved July 23, 2016, from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508193/HMT_Budget_2016_Web_Accessible.pdf 9 Greenstein, R. (2016, May 31). Commentary: Universal basic income may sound attractive but, if it occurred, would likelier increase poverty than reduce it. Retrieved July 15, 2016, from http://www.cbpp.org/poverty-and-opportunity/commentary-universal-basic-income-may-sound-attractive-but-if-it-occurred?version=meter 10 Painter, A., & Thoung, C. (2015, December 03). Creative citizen, creative state. Retrieved July 23, 2016, from https://medium.com/rsa-reports/creative-citizen-creative-state-a3cef3f25775#.t3amk5bm9 11 Review of the RSA report on universal basic income. (2016, January 25). Retrieved July 23, 2016, from http://www.basicincome.org/news/2016/01/review-of-the-rsa-report-on-universal-basic-income/ 12 Sustainability and the Ehrlich equation. (2011). Retrieved July 23, 2016, from http://www.populationmatters.org/wp-content/uploads/ipat.pdf 13 Van Parijs, P. (1995). Real freedom for all: What (if anything) can justify capitalism? Oxford: Clarendon Press. 14 Poverty. (2011). Retrieved July 23, 2016, from http://populationmatters.org/wp-content/uploads/D15Poverty.pdf 15 Hirsch, D. (2013). An estimate of the cost of child poverty in 2013. London: CPAG. Retrieved July 23, 2016 from https://dspace.lboro.ac.uk/dspace-jspui/bitstream/2134/16983/1/Cost%20of%20child%20poverty%20research%20update%20(2013)_0.pdf 16 Laurent, E. (2014). Inequality as pollution, pollution as inequality. <hal-01070526>. Retrieved 23 July, 2016 from https://hal-sciencespo.archives-ouvertes.fr/file/index/docid/1070526/filename/laurent-inequality-pollution.pdf 17 Sighing for paradise to come. (2016, June 04). Retrieved July 15, 2016, from http://www.economist.com/news/briefing/21699910-arguments-state-stipend-payable-all-citizens-are-being-heard-more-widely-sighing 18 Worstall, T. (2016, June 25). Bernie Sanders' influence on the Democratic platform - The $15 an hour minimum wage that kills jobs. Retrieved July 15, 2016, from http://www.forbes.com/sites/timworstall/2016/06/25/bernie-sanders-influence-on-the-democratic-platform-the-15-an-hour-minimum-wage-that-kills-jobs/#42df7bb9fff9 19 Flowers, A. (2016, April 25). What would happen if we just gave people money? Retrieved July 15, 2016, from http://fivethirtyeight.com/features/universal-basic-income/ 20 Barry-Jester, A. M., & Casselman, B. (2015, September 28). 33 Million Americans Still Don’t Have Health Insurance. Retrieved July 23, 2016, from http://fivethirtyeight.com/features/33-million-americans-still-dont-have-health-insurance/#fn-6 21 Frey, C. B., & Osborne, M. A. (2013). The future of employment: How susceptible are jobs to computerisation. Retrieved July 15, 2016 from http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf 22 Schneider, N. (2015, January 6). Why the tech elite is getting behind universal basic income | VICE | United States. Retrieved July 15, 2016, from http://www.vice.com/read/something-for-everyone-0000546-v22n1
23 Skidelsky, R. (2016, June 23). Basic income revisited. Retrieved July 15, 2016, from https://www.project-syndicate.org/commentary/unconditional-basic-income-revisited-by-robert-skidelsky-2016-06 24 Wright, E. O. (2006). Basic income as a socialist project. Basic Income Studies, 1(1). doi:10.2202/1932-0183.1008 25 Forget, E. L. (2011). The town with no poverty: The health effects of a Canadian guaranteed annual income field experiment. Canadian Public Policy, 37(3), 283-305. Retrieved July 15, 2016, from http://public.econ.duke.edu/~erw/197/forget-cea%20%282%29.pdf 26 Sustainable development | Employment | Jobs. (n.d.). Retrieved July 23, 2016, from http://www.sustainable-environment.org.uk/Economy/Employment.php 27 Hum, D., & Simpson, W. (2001). A guaranteed annual income: From Mincome to the millennium. Options Politiques, 22(1), 78-82. Retrieved July 15, 2016, from http://archive.irpp.org/po/archive/jan01/hum.pdf 28 Dubner, S. J. (2016, April 13). Is the world ready for a guaranteed basic income? [Audio blog post]. Retrieved July 23, 2016, from http://freakonomics.com/podcast/mincome/ 29 Giulietti, C., Guzi, M., Kahanec, M., & Zimmermann, K. F. (2013). Unemployment benefits and immigration: Evidence from the EU. International Journal of Manpower, 34(1), 24-38. doi:10.1108/01437721311319638 30 Pugh, J. (2016, June 05). Why Switzerland's universal basic income referendum matters, even though it failed. Retrieved July 23, 2016, from http://qz.com/699739/why-switzerlands-universal-basic-income-referendum-matters-even-though-failed/