Ipswich Unemployed Action.

Campaigning for Unemployed Rights.

Basic Income Trials: Solution to Benefit Poverty or Mirage?

with 38 comments

A Universal Basic Income Is Essential and Will Work - Global Research

Solution or Mirage?

 

Support is said to be growing for Basic Income. Some of our contributors have shown interest and have noticed that this experiment is underway:

Germany to give people £1,000 a month, no questions asked, in universal basic income experiment

The Independent article says,

Researchers in Germany will give a group of people just over £1,000 a month, no strings attached, as part of an experiment to assess the potential benefits of introducing a wider universal basic income (UBI).

The radical idea has attracted a growing amount of interest around the world as a way of potentially supporting people during the coronavirus pandemic and beyond.

Advocates claim a small, regular income from the state to all citizens would help tackle poverty, encourage more flexible working practices, and allow some people to spend more time caring for older family members.

The German pilot study will initially see 120 people handed the monthly sum of 1,200 Euros (£1,085) to monitor how it changes their work patterns and leisure time.

Researcher Jurgen Schupp – who is leading the ‘My Basic Income’ project at the Berlin-based German Institute for Economic Research – said he wanted to discover how a “reliable, unconditional flow of money affects people’s attitudes and behaviour”.

The present trial follows this one in 2019.

Germany’s ‘money for nothing’ experiment raises basic income questions

250 randomly-selected recipients of Hartz IV, the bottom rate “safety net” German welfare payment, have begun to receive their monthly €416 without any conditions attached.

Hartz IV recipients have certain obligations to meet, for example, the need to keep appointments at the job center or to show evidence of looking for work. Failure to meet the conditions might see their benefits cut via “sanctions.”

For the next three years, the activist organization Sanktionsfrei (“Sanctions-Free”) will automatically reimburse any sanctions imposed on the 250 test recipients. Effectively, they will be guaranteed a basic income of €416 every month.

The participants will fill out regular questionnaires, documenting the effects of their new status. An additional 250 Hartz IV recipients will act as the control group, filling out the same form while still being subject to the usual conditions.

Strictly speaking, this endeavour, labeled “HartzPlus” is not a Universal Basic Income (UBI) experiment. For starters, it is backed by a private organization and is not supported by the German government.

…..

some observers of HartzPlus have pointed out that it is not a UBI as it is not paid if the person finds a job which pays more than the welfare claim.

The present experiment is just that, an Experiment.

Germany is set to trial a Universal Basic Income scheme

  • Starting this week, 120 Germans will receive a form of universal basic income every month for three years.
  • The volunteers will get monthly payments of €1,200, or about $1,400, as part of a study testing a universal basic income.
  • The study will compare the experiences of the 120 volunteers with 1,380 people who do not receive the payments.
  • Supporters say it would reduce inequality and improve well-being, while opponents argue it would be too expensive and discourage work.

The study, conducted by the German Institute for Economic Research, has been funded by 140,000 private donations.

Interest in Basic Income continues.

There is interest in the USA.

This was reported in July.

Twitter boss donates $3m to basic universal income project

BBC.

Twitter chief executive Jack Dorsey has become the first investor in a radical plan to give people a basic income, regardless of job status.

He has donated $3m (£2.4m) to the scheme, which is being piloted by the mayors of 16 US cities.

He said it was “one tool to close the wealth and income gap”.

The idea of governments paying a basic income to citizens has gained momentum in response to the threat to jobs from artificial intelligence

There are three basic problems with applying  experiments in Basic Income  to a whole country.

  • Unlike social security payments they do not redistribute money by taxation from those who make extra cash out of other people, business and the wealthy, and give some of this surplus to those who have less money. Everybody gets the same basic income.
  • Despite claims that Basic Income schemes would give everybody “enough to live on” no proposed system can allow for the variable and extra costs that payments under social security systems (in Europe at least) cover, Housing Benefit (local Housing Allowance), or the extra cash needed by ill or disabled people (PIP and so on). The German plans, for example, would mean that somebody who is unemployed and paying rent would still have to rely on getting welfare payments to cover housing costs that go beyond the sum given.
  • Apart from not fully covering people’s needs, they do not answer a problem that unemployment brings for those who wish to work: to use our abilities as we can.

There would have to be criteria to get Basic Income – they could not be open to anybody from anywhere to come and claim.

A large proportion of public spending would go on any variety of the scheme. We would have the absurd position in which those with large private incomes would get an extra “top up” every month.

Would pensioners get the money? If this is the case we would see a huge increase in spending on the retired alone.

As Anna Coote says (Guardian. 2019.  Universal basic income doesn’t work. Let’s boost the public realm instead)

The cost of a sufficient UBI scheme would be extremely high according to the International Labour Office, which estimates average costs equivalent to 20-30% of GDP in most countries. Costs can be reduced – and have been in most trials – by paying smaller amounts to fewer individuals. But there is no evidence to suggest that a partial or conditional UBI scheme could do anything to mitigate, let alone reverse, current trends towards worsening poverty, inequality and labour insecurity. Costs may be offset by raising taxes or shifting expenditure from other kinds of public expenditure, but either way there are huge and risky trade-offs.

Money spent on cash payments cannot be invested elsewhere. The more generous the payments, the wider the range of recipients, the longer the scheme continues, the less money will be left to build the structures and systems that are needed to realise UBI’s progressive goals.

The report Coote cites, Universal Basic Income. A Union Perspective, says,

At the heart of the critique of UBIs contained in this brief is the failure of the most basic principle of progressive tax and expenditure, which can be summarised as “from each according to their ability, to each according to their need”.

Whereas universal benefits such as healthcare or unemployment payments are provided to all who need it, UBI is provided to all regardless of need. Inevitably it is not enough to help those in severe need but is a generous gift to the wealthy who don’t need it. It is the expenditure equivalent of a flat tax and as such is regressive. But the consequences are more than a question of principle.

The estimates of funds required to provide a UBI at anything other than token levels are well in excess of the entire welfare budget of most countries. If we were able to build the political movement required to raise the massive extra funds would we chose to return so much of it to the wealthiest, or would it be better spent on targeted measures to reduce inequality and help the neediest?

What’s more such schemes require the total current public welfare budget to be used. Do we really want to stop all existing targeted programmes such as public housing, public subsidies to childcare, public transport and public health to redistribute these funds equally to billionaires.

UBI would erode the basis for the welfare state.

And this raises other practical political issues. With a UBI in place many have argued that the states obligations to welfare will have been met. That people would then be free to use the money as they best need – free from government interference. With such a large increase in public spending required to fund a UBI it would certainly prompt those who prefer market solutions to public provision with powerful arguments to cut what targeted welfare spending might remain.

Arguments put by proponents of UBI to counter these questions usually involve targeting of payments, or combination with other needs-based welfare entitlements. However, as this report notes, models of UBI that are universal and sufficient are not affordable, and models that are affordable are not universal. The modifications inevitably required amount to arguments for more investment, and further reform, of the welfare state – valuable contributions to public debate but well short of the claims of UBI.

It is a mirage solution.

It is one of the unfortunate mirages of UBI, as clear from the evidence and trials outlined in this report, that UBI can mean all things to all people. But the closer you get to it the more it seems to recede. A further, and significant point for trade unionists, is the assumptions UBI proponents make about technological change and the effect on workers. The argument that technology will inevitably lead to less work, more precarious forms and rising inequality is deeply based on the assumption that technology is not within human control. In fact, technology is owned by people and can be regulated
by government if we chose.

Work is not disappearing – there are shortages of paid carers and health care workers, amongst others, across the globe. And precarious work can be ended at any time with appropriate laws. What is missing is the political will to control technology, and work, for the benefit of the population. In this regard UBI is a capitulation to deregulation and exploitation, not a solution to it.

If, in a sense, with the Pandemic work is disappearing. Is a massive transfer of spending from the welfare state to everybody through UBI, instead of targeted schemes that focus on maintaining employment, the answer?

The German scheme, DW noted back in 2019, has this difficulty,

The most persistent criticism that advocates of a universal basic income face is the question of cost. For example, to take a crude measurement, if the close to 70 million adults in Germany were all to receive an unconditional, universal basic income payment of €416 per month (the current Hartz IV rate), the annual cost to the German government would be around €350 billion. In a savings-obsessed country, that might prove a hard sell.

All the problems outlined above indicate that Universal Basic Income is not a solution but a mirage.

The neoliberals of the Adam Smith Institute  think differently.

 

 

Written by Andrew Coates

August 23, 2020 at 9:42 am

38 Responses

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  1. I’m sure that Universal Basic Income is the way of the future. The only question is how far in the future ?
    It concentrates on the basic essential, that people have money for food and rent. And doesn’t confuse survival with the less essential Protestant Work Ethic.

    Jeff Smith

    August 23, 2020 at 10:53 am

    • @ Jeff

      It is of necessity the way of the future. As the population continues to grow and more jobs are lost to technology there will undoubtedly be the need for a Basic Income.

      trev

      September 2, 2020 at 10:22 pm

  2. […] Basic Income Trials: Solution to Benefit Poverty or Mirage? […]

  3. Universal Basic Income is no mirage. It just needs a more progressive change in attitudes in society. Look at what happened to gay rights, to racism, and female equality. On all these issues, there has been a profound change in society’s attitude. All that is needed is for the same to happen in attitudes to social security.
    And UBI would mean social security for everyone.
    Don’t let yourself be distracted by ideas about who would, or wouldn’t work. Mostly from the wealthy, the factory owners and those who have grown rich from the capitalist system, and the current status quo. As they have done for generation after generation.
    That’s not the point.
    UBI would mean that absolute poverty, homelessness and hunger would be ended. It would mean that people would have far more choice in how they lived their lives, knowing that their most basic needs would always be safeguarded.

    Jeff Smith

    August 23, 2020 at 2:01 pm

    • As a Posadist I am waiting for us to join the United Federation of Planets, where money is replaced.

      “In the late 22nd century, the formation of the New World Economy on Earth led to the disappearance of money in the traditional sense on the planet. 23rd and 24th century Humans regularly referred to their species having developed a philosophy without the need for accumulation of wealth, instead focusing on self-enhancement and advancement of the Human race”

      In 2364, Jean-Luc Picard tried to explain to Ralph Offenhouse, a financier from the 20th century, that there would be no need for his services any longer. “A lot has changed in three hundred years,” said Picard. “People are no longer obsessed with the accumulation of “things.” We have eliminated hunger, want, the need for possessions.” (TNG: “The Neutral Zone”)

      When Lily Sloane asked Picard how much the USS Enterprise-E had cost to build, he told her, “the economics of the future is somewhat different. You see, money doesn’t exist in the 24th century… The acquisition of wealth is no longer the driving force in our lives. We work to better ourselves and the rest of Humanity.” (Star Trek: First Contact)”

      https://memory-alpha.fandom.com/wiki/Money

      Andrew Coates

      August 23, 2020 at 4:05 pm

      • The Vulcans never rolled out their version of a UBI on their planet because they were too intelligent and logical to do so. The Ferangi on the other hand did but set their UBI at subsistence level and then made those on it do whatever work they were capable of doing, in order to receive it, meaning that labour costs plummeted when employers discovered they could staff their plants, factories and workplaces with workers receiving UBI without personally having to fork out any wages.

        Thing is a Universal Basic Income is only a fixed sum of money paid to everybody, quite possibly a relatively small token amount, which may not be sufficient to live on decently. Plus it’s kind of daft to tax people heavily (taking money away from them) and then give some of the money taken back to them (by means of UBI), adding a whole new tier of costly bureaucracy in respect to tax and spend, rather than tax people more modestly (taking some money from them) and redistribute that money, by means of targeted benefits, so that citizens in need have sufficient monies to live satisfactorily in a modern western society.

        Also my bet is that Universal Basic Income will actually turn out to be more like a Conditional Basic Income insofar as the unemployed are concerned. The idea that unemployed people fit enough to work will be given the money and allowed to live however they choose, without interference, for however long they decide to is pie in the sky. Whatever else happens THAT will never be the case anywhere in Europe nationally.

        The wistful idea that UBI means the unemployed will be left alone to live the life of Riley is fanciful.

        THAT certainly will NEVER happen.

        Bastedo

        August 23, 2020 at 4:35 pm

      • That is certainly what Quark told me about the Rules of Acquisition, and I would certainly not recommend his Bar’s Holosuite either.

        Andrew Coates

        August 23, 2020 at 8:00 pm

      • A wealthy man can afford anything except a conscience.

        Klingon Proverb

        Vakantar

        August 24, 2020 at 11:41 am

      • Perhaps far in future, an archaeologist specialising in the 21st century will find an old newspaper.
        And use this as basis for his thesis on welfare inequality, and how the Legacy Claimants were so shamefully treated.

        Logan 5

        August 25, 2020 at 12:57 pm

  4. Good news from Germany!

    They’ve handled this crisis far better A-Z and have a vision on the future that some form of long term state support is likely to be required as unemployment isn’t going away overnight and ease high poverty and social problem levels getting out of control at this time of crisis.Its all about getting it right first time.

    Germany likely to extend its furlough scheme

    https://www.personneltoday.com/hr/germany-likely-to-extend-its-furlough-scheme/

    Short-time work allowance has been a long-standing policy in Germany, compensating workers for taking a cut in hours. It was used extensively during the recession that followed the 2008 banking crash.

    https://www.theguardian.com/money/2020/may/12/how-the-uk-furlough-scheme-compares-with-other-countries

    ken

    August 23, 2020 at 2:41 pm

  5. Universal Basic Income? I’ll tell you something I don’t trust anything to do with the word universal it reminds me too much of Universal Credit. A guaranteed income sounds a lot better to me. What do you think?

    Cloverleaf

    August 23, 2020 at 4:43 pm

    • I never trust any devices with the word ‘smart’ in them… ‘smart’TVs, ‘smart’phones, ‘smart’watches, ‘smart’cars, ‘smart’washing-machines, ‘smart’fridges, ‘smart’bleedin’kettles…

      Betty

      August 23, 2020 at 5:39 pm

  6. Very true, ken. That Yorkshire Jobcentre is as soft as shite. That awful woman Rose is the kind of person who will leech off of everyone in life, literally take take take, probably a massive supporter of Corbyn. She needs good boot up her lazy arse. And what is it with the women staff, clothes and hairstyles firmly stuck in the 70s, was half-expecting Starsky and Hutch to walk in.

    Cynthia

    August 24, 2020 at 6:23 am

  7. University To Universal Credit: How Class Of 2020 Is Graduating Straight Onto The Dole.

    Revealed: Some 71,208 young people received their first Universal Credit payments in July – nearly double the figure for this time last year.

    “Figures from the Department of Work and Pensions reveal that in July there were 71,208 16- to 24-year-olds receiving their first Universal Credit payment – 80% higher than the 39,655 starting on UC in July 2019.

    All in all, there were 725,000 people aged 20 to 24 receiving Universal Credit – a year-on-year increase of almost 420,000.

    “It’s really demoralising,” said Craig, who is relying on benefit payments to survive while he applies for “dozens of jobs a day”. ”

    Andrew Coates

    August 24, 2020 at 10:33 am

    • Plus the question of owing £50,000 as well ….

      Fiona Balmont-Lacey

      August 24, 2020 at 1:50 pm

      • Its those without qualifications too and let’s hope its not another generation on the scrapheap.

        ken

        August 24, 2020 at 9:03 pm

    • And then they want to know why people don’t want to be on Universal Credit.
      Even if it costs them £20 a week to stay off it !

      Tom Sutton

      August 24, 2020 at 1:54 pm

      • It would be interesting to see how much extra money would be needed, to make people transfer to Universal Credit. £20 ? £30 ? £50 ?

        Jack Reid

        August 24, 2020 at 2:42 pm

    • The truth of the matter is that it is down to the discretion of the Work Coach how conditionality is enforced and these days it isn’t enforced strictly because it can’t be – if it was EVERYBODY on universal credit would end up sanctioned. Most Work Coaches will let things slide if you manage a couple or three job applications a week unless you live somewhere very active employment wise. The 35 hour worksearch is bollocks. There is no parallel between a 35 hour job and 35 hour worksearch because YOU GET GIVEN DUTIES AND TOLD WHAT TO DO TO FILL YOU HOURS WITH A JOB whereas with a worksearch you get told to toddle off and INVENT ACTIVITIES AND THINGS TO DO TO FILL THE HOURS YOURSELF which many people, most people, find so difficult as to be impossible. What is particularly bad is that Jobcentres which give you no referrals expect you to drum up places to apply to yourself which is especially difficult when advertised vacancies have fallen by 60% and millions of other people are trying to do what you’re doing.

      Universal Credit is very stupid and very, very cruel deliberately and by design.

      Hero to a Zero

      August 24, 2020 at 3:30 pm

    • How do they expect claimants with no WiFi, landlines or even maybe no credit/Internet left on their PAYG mobile if they have a mobile, to search for jobs or spending an hour or two ringing employers? I have a PAY phone for a tenner per month I have 4GB Internet, fine as WiFi is included in my rent, plus unlimited minutes and texts, I work and top up on payday, but for those on 74 a week or even 94 this is A LOT of money! So I guess there’s still jobclubs and mandatory JCP job search sessions?

      katrehman

      August 25, 2020 at 10:56 am

      • @katrehman _ They don’t care how you do it, but they still expect you to do it. As to the Jobcentres, my local JC is closed up. Sign outside about phoning a number to get an appointment in an emergency. But no visits inside to use the computers etc. People have been four months without a phone call from their Work Coach. So who knows ? This must be the biggest ongoing DWP disaster in the history of Jobcentres.

        Tom Sutton

        August 25, 2020 at 12:34 pm

  8. Superted is already making 16,000,000 job applications every week…

    Roger Ramsbottom

    August 24, 2020 at 1:58 pm

    • Thank you so much for taking the time to send us your details.

      We’ve been bowled over by the interest in the Retail Sales Assistant – Luxury Brand position and we’ve carefully considered your application. We’re afraid, on this occasion, you have not been shortlisted for an interview. This decision was very difficult but was purely based on the skills and experience other applicants could bring to our business.

      superted

      August 24, 2020 at 2:15 pm

      • Retail is one of the worst to apply for on the face of it fairly straightforward but psychometric tests push this up to the most able GCSE level.

        ken

        August 24, 2020 at 9:09 pm

      • Special Operations Division ( Gloucester Jobcentre, Commercial Road )

        Section 7 – Daily Report:

        The claimant known as Superted was observed going into a local supermarket. He stayed for twenty minutes, called into a local newsagents, and then went home. No suspicious activities. But claimant observed not to be wearing a mask. No apparent contact with employers. Unable to verify claimant online activity until property secured for targeted access. Team 2 require 30 mins for this task. Will advise on date.
        End.

        Reginald Steel (CIC Special Operations)

        August 25, 2020 at 12:44 pm

    • @Tom Sutton guess you’re right, during covid I don’t think that they’re chasing you for jobsearch, it’s just another crazy cruel and stupid expectations in the ” normal” pre covid world, even now I feel so sorry for anyone isolated and lonely who can’t send a text to a friend or even call for help if they need it

      katrehman

      August 25, 2020 at 12:47 pm

      • @katrehman _ You seem like a very compassionate lady, and good luck to you for being so. If only more people felt like this. Perhaps then society would not be as ruthless as it is.

        Tom Sutton

        August 25, 2020 at 2:49 pm

  9. Reblogged this on Tory Britain!.

    A6er

    August 24, 2020 at 4:46 pm

  10. Andrew Coates

    August 24, 2020 at 5:43 pm

  11. Off topic but I have the Yorkshire jobcentre on, this guy had his cycle helmet confiscated on the way in by security as it could b used as a weapon!! The security looked scary

    katrehman

    August 24, 2020 at 8:09 pm

    • Top Tip: any security guard in the jobcentre that becomes even vaguely aggressive wait for them to extend their arm towards you – then take a good strong grip of their shirt and fall backwards shouting “I’ve been assaulted”, “I’m being assaulted”, “Get him off me I’m being assaulted” etc (while continuing to tug at the shirt). Then start shouting “you all saw that!”, “he just attacked me without provocation!” etc. Then refuse to leave and wait for the police to arrive, the police will look mildly amused at the security guard with the ripped shirt, while you calmly explain that you have been assualted and have an appointment etc. Ultimately the police will do nothing (they might say something about it being a civil matter), they might even give you a lift home. You will be banned from the jobcentre for 3-6 months for assaulting a staff member and will have to “sign on” by post. The next time you attend the jobcentre you will find the staff are very stand offish with a general hands off approach. I have done this several times and can 100% assure you it works every time.

      RossKemp

      August 24, 2020 at 10:17 pm

    • I keep forgetting to watch it. Same thing once happened to me upon entering a Morrison’s supermarket with a crash helmet in my hand, a £300 crash helmet, that they wanted to take off me without any receipt. I left, telling them I’d go to Tesco instead.

      trev

      September 2, 2020 at 4:09 pm

  12. ken

    August 24, 2020 at 9:41 pm

  13. Psst… watch before it gets deleted. Or buy on fleabay for an outrageous £17 + £10 postage = package. You won’t be seeing this on the Beeb any time soon 😉

    Rik Mayall (deceased)

    August 25, 2020 at 7:16 am

  14. Here’s a clip… be quick. Love Rik 🙂

    Rik Mayall (deceased)

    August 25, 2020 at 7:24 am

  15. superted

    August 25, 2020 at 2:51 pm

  16. Apparently the Lib Dems are in favour of introducing a Basic Income and have some different ideas about how it might work or be funded.

    https://www.libdemvoice.org/a-marketdriven-approach-to-universal-basic-income-64100.html

    https://www.libdemvoice.org/lets-become-the-party-of-the-universal-basic-income-65550.html

    If they hadn’t have betrayed us by climbing into bed with Cameron, Osborne & Co. and participated in the most savage brutal spending cuts in living history I might have believed them. A Basic Income might help to alleviate some of the poverty they helped to cause.

    trev

    September 2, 2020 at 4:04 pm


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