Sunday, 5 April 2015

Here Comes Everybody: Basic Income, the Precariat and beyond

Last month, when releasing a report showing that 100,000 children went hungry in Britain in 2014 because their parents’ benefits were stopped or cut, Niall Cooper, chief executive of pressure group Church Action on Poverty, made a simple yet devastating analogy.

“If you commit a crime, no court is allowed to make you go hungry as a punishment. But if you’re late for an appointment at the Job Centre they can remove all your income and leave you unable to feed you or your family for weeks,” he said.

In fact, there is evidence of people stealing in order to be sent to prison and guaranteed three meals a day.

This is the most urgent justification of a basic income. More than 900,000 people in Britain used the food banks of just one provider, the Trussell Trust, in 2013-14 and the most common reasons were benefit sanctions or benefit delays. Always cruel, many of the reasons are arbitrary and absurd. So there is a critical need, you could even call it a demand, for an unconditional income floor – an income that cannot be whisked away at a moment’s notice, at the whim of a bureaucrat with a target to meet. Everyone has their basic subsistence covered. Period.

That seems to be the rationale behind the UK Green Party’s “long term aspiration” for a basic income of £3,700 a year. And while the Greens are mulling it over, 19 well-known economists, including Guy Standing, have called on the European Central Bank to introduce an unconditional income of €175 a month (€2,100 a year), as an alternative to alleged economic stimulus of quantitative easing. Similarly, the Spanish anti-austerity party, Podemos, wants an unconditional income for the unemployed, though like the UK Greens, Podemos is committed, in principle, to a basic income.

Obviously, no-one can live on €2,100 a year, or £3,700 for that matter. These are policies for unconditional income support, rather than a liveable basic income. But they are edging their way towards a minimum income for everyone. For argument’s sake, let’s put the level at £7,000 pa. As one American supporter of basic income writes. “Without an income floor set at the poverty level as a bare minimum, I believe poverty and inequality will continue to grow, the middle classes will continue to shrink, and the livelihoods of all but the top fifth of society will continue to slip away.”

This is one kind of basic income. An income floor for the increasingly numerous precariat. 13.5 million people in Britain live on incomes at or below 60% of the median, which is about £21,000.

But there is another kind of basic income and it has far more ambitious horizons. The Swiss 
Generation Basic Income group who will spearhead a referendum campaign for the introduction of a basic income in Switzerland in 2016, want it to be much more than a subsistence fall-back. They are calling for it to be set at 2,500 Swiss francs a month, the equivalent of £20,000 or US$ 30,000. Another advocate of an unconditional income, the Australian trade union organiser, Godfrey Moase, sets the bar at AUD$30,000 (about £15,000). A universal basic income is not just for the precariat, says Generation Basic Income’s Enno Schmidt, it is for everyone. It is not a product of class struggle, he insists, it does not exclude the rich.

Each kind of basic income obviates the problems thrown up by the other kind, though in turn generates new issues.

To take the first sort of income floor basic income. Though few can doubt its necessity, the intrinsic problem with this kind of unconditional income it that it is only relevant for the bottom 30 or 40% of society – people who can’t get enough hours to support themselves or their dependants, the working poor or unemployed, adults in education or simply those who would gladly trade a stressful job for substantially less money but the freedom to choose the life they want.

The dilemma this variant of basic income provokes is that you can easily imagine it inculcating a reverse politics of envy. The excluded two-thirds or 60% of society will feel they are financially carrying the lucky minority who have the freedom not to work, or work less, and devote themselves to freely chosen pursuits. Astonishingly, this inverted politics of envy is already being avidly stoked in Britain by the Conservatives and their ‘strivers v shirkers’ rhetoric. A basic income would probably elevate this sentiment to astronomical proportions. Once introduced, it is conceivable that a basic income would engender an exodus of people from the world of work to the Saturday morning world of unconditional income. But that would still leave a resentful 50% with the perception of an even greater burden and the pressure from the other side to raise the basic income. Although you can foresee a new social dispensation taking shape, there would be immense social strife in the meantime.

The other, more ambitious, kind of basic income avoids stirring up envious feelings. Set at a much higher level, it is overtly an unconditional income for everybody. Basic income doesn’t exclude,” says Enno Schmidt. “It’s about humans.” It is clear that the social problems that have prompted an interest in an unconditional income are not restricted to the precariat. Anxiety and depression are rampant across social classes and a sense of powerlessness and control by outside forces affects people with full-time, well paid jobs as much as those on the fringes. “Who, experiencing for years the daily toll of intense corporate pressure, could truly escape severe anxiety?” wrote Alan Lightman in his 2001 novel, The Diagnosis.

Beyond the issue of how to pay for this kind of unconditional income (which I will come to in part 3), two questions arise. One is why pay a basic income to rich people, or people with moderate but secure incomes for that matter, and secondly, what exactly would they do with it if they received such an income? The frequent justification for a basic income that it represents a new attitude to work and would act as a balm for feelings of stress, burn-out and anxiety. “We’re facing a shift of the paradigm of what work means to us, and it is this generation who is ready to express this shift”, said Marilola Wili of Generation Basic Income in 2013.

The fact that a basic income would be paid to all adults, not households, means that, set at a generous level, it would certainly enable those that wished to, to swap their jobs for less demanding ones, or pack in work altogether. But for those that didn’t choose those options, a basic income would just mean the amassing of a lot of additional money. Maybe the possibility of escape represented by the mere existence of a basic income, would engender a seismic change in the culture of work. That could be one effect, but it’s also possible that the repercussions of introducing a basic income would be much more modest than its advocates envisage.

Pilot studies in basic income undertaken in the US and Canada in the 1970s indicate that participants responded by only slightly reducing their working hours.  Such findings have been used to assuage fears that, with the introduction of a basic income, industrial civilisation would grind to a halt and everyone would sit around, doing nothing. But another conclusion is also possible – why go to all the trouble of introducing a basic income if the results are so meagre?

Because in the real world society we inhabit, it is a neo-classical fiction that, even with a basic income to fall back on, people in employment would have the choice to reduce their working hours. They could leave their jobs, certainly, or maybe switch to a less demanding job, or become self-employed. Within households, one partner may leave their job while the better-paid one stays on. But it is my hunch that many would people make the decision to stay in their jobs, working similar hours, and so the only palpable effect of a basic income for many would be to supply a large extra income. You could argue this would reduce inequality but it also has the potential to be funnelled into buying property, stoking an even bigger housing bubble than the one we have now.

I think here we can see the limitations of what a basic income can do. Basic income is not the same thing as Bertrand Russell's 'organised diminution of work'. It can immeasurably strengthen the hand of the individual as they negotiate with the world of the work. That feature should not be underestimated. But in choosing to leave what goes on in that world untouched, basic income reveals itself as impotent in dealing with the ‘daily toll of intense corporate pressure’. Many institutions, in pursuing targets or profits or simply impact of some kind, are now intensely oblivious to the welfare of the people that populate them. And, ironically, I can sense in basic income the same reluctance to challenge the behaviour of large institutions and the distribution of property and profits that used to be exhibited by welfare state leftism – the very movement whose demise is giving such momentum to the movement for a basic income. On its own, a basic income is not enough to really change society.

In part 3, I want to look at the ways in which a basic income might be funded, and whether that can be done in an equitable, not acrimonious, way.

Here is the first part

And part three