Wednesday, 13 May 2020

Universal Basic Income — surely the time has come

The more I think about Universal Basic Income, the more problems I think it would address.

Here are 4 important ones:

#1 It would create employment choice. It would uncouple the necessity connection between employer and employee. For instance, in this pandemic as economies re-open, it would give workers the choice of accepting the opportunity of returning to work or of looking for different employment if their current work or workplace put them or their families at too much risk. Similarly, it would make it far easier to consider relocating to a different part of the country. For instance, people in poverty in the south east of England could relocate to the north, where housing is much cheaper; and people who would love to live in the countryside (where public transport links are poor) but who are tied to an urban job would find it easier to realise their dream.

#2 It would change beyond recognition the lives of people with hidden and undiagnosed conditions (including neurodiversity and psychiatric challenges or trauma), whose limitations make it impossible for them to manage a regular job in mainstream culture. Many such people are not only content with little, they actually have a profound need for a simple, quiet, boundaried existence. A small income allowing them to live in peace would be such a relief.

#3 It would strengthen the local economy, both regionally and nationally. Poor people spend their money on meeting their immediate needs — food and clothing, for instance — so their expenditure benefits their neighbourhood, creating employment in providing local goods and services. Rich people take money out of the local economy, because their lives are on a larger scale and because they absorb money from the localities where they trade and barrow it away to stash in a tax haven.
Of course, rich people would get UBI too, but as they already strip out so much from the common purse and remove it from circulation so it benefits no one but themselves, an extra few thousand a year from the common purse into theirs is only what’s happening anyway.

#4  It would do away the need for a significant tranche of welfare benefits admin, allowing their bureaucratic structure to be both streamlined and more effective. UBI should actually work out cheaper than the current welfare benefits system, and should also alleviate cost to the common purse in healthcare, by alleviating anxiety and poverty diseases (eg malnutrition). It would also give recipients the possibility of studying, and thus enhance their possibilities of further escaping poverty.

The sort of sum I am imagining is five or (even better) six thousand pounds a year (in the UK). It’s not much, but it would make the difference between being able to imagine a future and bleak despair, in many lives.


Suzan said...

The Covid situation has brought some stop gap measures to our woeful welfare system. Suddenly one payment was doubled. Now the government wants to drop the payment before it said it would happen. Some are living well below the poverty line. It is is insanity because those who cannot afford decent food become a heavier burden on the health system. I could go on. I wish our politicians being forced to live on the figure they deem acceptable for quite few moths to see how the problems accumulate. Doing it tough for a few days is not long enough.

Rapunzel said...

I shall go do some arithmetic and think on this.

Pen Wilcock said...

Hi Suzan — yes, long-term poverty is a very different proposition from getting through a difficult patch.

Hi Rapunzel — I'll be interested to see what you come up with; a lot of complexity to integrate!

Rapunzel said...

Hi pen and all--
I think the arguements in favor of UBI make good sense.
However--I did the arithmetic....
six thousand pounds would come to 7,376 in USD.

The rent on my humble cottage is $8,400. One might argue that I could move to a smaller place, I do after all have two bedrooms and a large garden. I could survive without those. However, I have old fashioned and unmaterialistic landlords. To rent an apartment from one of the huge rental agencies in this college town I would end up paying the same money if not more for a single bedroom, no pets allowed.

My utilities come to around $4,000 per year as well.

My other big expense is the car, which is a requirement for my job.
Then there's the matter of clothing, without which I couldn't leave the house, and food, without which I wouldn't need any of the other things.

I can see the UBI working as a nice bonus in addition to a job, but I'm not understanding how it would allow one to quit one job to seek another, or move to another part of the country, or quit work and go back to school. By my arithmetic if I did any of those things I'd be homeless by the end of the month.

Is the cost of living just a lot higher here than it is there?


Pen Wilcock said...

No, the cost of living is (I believe) higher in the UK than in the US, apart from your steep health insurance costs.

On £5k/£6k a year, I could not afford to live in my own accommodation, run a car, buy groceries and pay utilities. In the UK, nurses with starting salaries of £23.7k pa are frequently in the headlines because they have to resort to food banks.

In our household, three of us earn around £12k pa, my income this year is about £6k basic with bits and pieces (where I can pick them up) coming in, and one of us earns something sometimes. If we lived separately, we'd each be stuffed.

My idea of UBI (others may imagine differently) is not an amount that allows a person to live all found in an independent household, but is a starter sum that allows one to rent a room, or get together with others to share a house, or live in a caravan in someone else's field — just something to keep the wolf from the door while one comes up with a plan.

I don't know what annual sum they are proposing in Scotland where this is in their blue sky thinking, but I moot it as the sort of sum that allows a person not to die but still leaves plenty of margin for endeavour.

I'd be happy with something that let me live in a tent keeping warm from foraged firewood: just *something*.

I guess I take my standard from being part of a family replete with euro-diveristy and accustomed to living on the wild-eyed edge of despair!


Ann said...

You might find this interesting concerning health insurance costs in the US:

My husband and I had a business of our own for 20 years while raising 2 children. The cost for health insurance premiums started out at $400 per month for a family of 4 in 2000. By 2016 that had gone up to $2,000 per month. Plus a $12,000 deductible before insurance would cover anything. That meant $36,000 out of pocket each year if we needed medical treatment.

Fortunately, we didn't. Then my husband had a breakdown in 2016, our income plummeted to poverty level and suddenly we could get free health coverage from the county, called Medicaid. But many things weren't covered and no dentist would take us at all.

I managed, by sheer miracle, at age 53, to find a job with health insurance. Now I support the family and pay $$350 each month, out of my paycheck, for family coverage. And my co-workers complain about the deduction. They have no idea of the extremes in this country.

But now, with Covid-19, my job may be in danger. My new motto is that I must be as fluid and dynamic as reality itself. Universal basic income might help, but I fear costs would just outpace the income.

Pen Wilcock said...

Thank you! So interesting!

I think, however steep the challenges, Universal Basic Income would certainly help. Like many people I have sustained myself from a variety of income sources, and have found that a steady stream one can rely on, even if it is not sufficient to cover all outgoings, makes all the difference.

Rapunzel said...

I must say I'm having a grand time studying all of this.
It seems like it would work well for families who live together, but not so much for a single person. As it happens my children live all over the place, and I've outlived most of my relatives so I'm on my own.

I suspect even if the US does a universal basic income I'll be one of the masses who die with my boots on. It doesn't look like retirement is in my future.

I can see how it would be a good boost for persons with a low income, who already have housing, transportation etc.

Will do more research!

Pen Wilcock said...

I do think it would ask flexibility of us. The key word in the phrase Universal Basic Income is 'Basic'. I don't know how others envisage it, but I think of it as a safety net, a buffer against destitution — not an alternative to a salary. I imagine it to be the nucleus upon which a person builds. So if you were prepared to share (and that could be with friends, doesn't have to be family) and live in absolute simplicity, maybe forage and scavenge a bit, it would enable you to just squeak by.

Or, take for instance the present Covid situation. Imagine a family, two parents and three children, three-bedroomed house on a mortgage. Mother runs a small business from home and has a part-time job in a bakery, Father works full-time at a store. Along comes Covid, and the store where Father works goes bust and Mother's part-time work evaporates. They manage to obtain a three-month mortgage holiday, but Mother's little business from home also slows up a bit — not even enough to pay groceries, let alone bills.
The point of UBI is that in such a pass, the two adults have £5k pa each coming in: maybe not enough of itself to allow them to never work again, but enough to cover their outgoings while they think what to do next.

Gosh, there are so many scenarios I could paint for you! It's meant to buffer people, keep the wolf from the door. It's not meant to be a private income of such magnitude that all citizens stop working. What you said "a good boost for persons with a low income" is what it's intended to be — plus also, it lifts out of abject poverty the many who, for whatever reason, fall through the holes in the safety nets already in place.