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Opinion

The case against Universal Basic Income

Daniel Sage and Patrick Diamond / Feb 2017

Image: Shutterstock

 

Is the universal basic income an idea whose time has finally come? Benoît Hamon, the presidential candidate of the French Socialists, believes so, having placed basic income at the centre of his campaign. In the UK, Labour recently announced it would ‘investigate’ a basic income advised by Guy Standing, a fervent supporter of the idea. Basic income experiments are underway or being considered in Finland, the Netherlands and Scotland. What has for decades been considered a utopian dream might be on the brink of becoming reality. Its recent popularity can be explained by its claim to solve four key challenges facing advanced welfare states.

The first is automation and the potential for technological change to disrupt labour markets. While fears around automation are far from new, recent studies have added to concerns (or hopes amongst some) that millions of occupations are at risk from automation. If this comes to pass, unemployment will become a more commonly experienced phenomenon. In this context, basic income could provide people with a platform of security with which to retrain into new jobs, or enable people to live without the requirement of working for a wage.

The second challenge is labour market precariousness, especially for young people. Youth unemployment rates continue to be astoundingly high in some countries, while the post-crisis incomes of young people in the UK have recovered only slowly. According to Guy Standing, young people dominate the ‘precariat’: a new, ‘dangerous’ class defined by chronic labour market insecurity. Basic income, in contrast to the traditional welfare state, could empower the precariat with greater economic security and more autonomy in the flexible labour market.

In addition to automation and precariousness, gender equality has stalled in most of Europe. Across the EU as a whole, the gender pay gap increased between 2010 and 2014 and, relatedly, progress has been slow in interventions that support and promote female employment. Only six EU countries have met the Barcelona targets for the proportion of children in formal childcare. These failures have led some to argue that basic income could promote higher female employment rates, while simultaneously leading to a more equal participation of men in the home.

Finally, basic income is proposed as a solution to the unhealthy centrality of work to everyday life, and the desire by many people for a better work-life balance. Technological change, weaker job security and stronger expectations of flexibility have intensified work-related pressures. Meanwhile, increased caring pressures add to the struggle of balancing work with private life. Basic income could give people greater power and autonomy outside of work to take breaks from employment, to reduce working hours, to fulfill caring responsibilities or to abandon work altogether.

That these are profound and genuine challenges for many societies is without doubt. Yet we are not persuaded that basic income is the solution. On three key tests, the proposal is unconvincing.

The first test is to win widespread public support: it is doubtful that basic income can, at least in the present, achieve this. Basic income will require a higher tax settlement than at present, and there is little public enthusiasm for more public spending. The perception in countries like the UK - that the centre-left is dangerously spendthrift - make calls to expand the welfare state a risky endeavour.

More fundamentally, basic income is at odds with social norms on welfare deservingness, with entitlement to social security largely wedded to notions of contribution and need. Basic income violates these ‘moral codes’; it would go to those who do not contribute, as well as to those who are less in need. It is important that social policy proposals designed to help those who need support go with, not against, the grain of public opinion.

The second test is the capacity of basic income to correct the problems its supporters identify. There is a case that basic income is not nearly transformative enough: it offers us society as it is – unequal and precarious for many – with low-level compensation doled out to the losers. It does not seek to correct the structural inequalities in incomes and labour markets. It treats inequalities as inevitable and, absent of an idea for how to eradicate them, offers a small income to compensate people’s losses.

The final test regards the impact that basic income would have on existing and alternative social policies. Basic income could be used to retrench existing welfare arrangements by less sympathetic governments.

The advance of the inclusive welfare state should not be a lost cause for the Left. There are plausible, credible and evidence-driven social policies that have strong claims to winning public support, while transforming our societies. They may not have the radical appeal of a basic income, but they are more likely to work.

 

 

Daniel Sage

Daniel Sage

February 2017

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Patrick Diamond

Patrick Diamond

February 2017

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