May 6, 2020 at 4:06 pm #201346
That article you say Mason is touting says there are three Marxist criticisms of UBI,one of which the author says is;
“They interpret economic support for citizens as a subsidy to employers, rather than seeing it as the means by which people can strengthen their negotiating position with employers.”
I don’t see this except perhaps for the lowest paid who wouldn’t have to take the first shitty job on shit pay offered. In most cases the employer will be able to say : you don’t need a pay increase or so much as the government is already paying you £5000 or whatever it is a year, and this will be enforced by the play of the law of supply and demand in labour markets. This would also be taken into account when increasing and fixing the legal minimum wage. It just a pipe dream to imagine that it would be paid in addition to existing wages or benefits. The economic laws of capitalism don’t work like that.May 7, 2020 at 1:13 am #201399
The Finnish government on Wednesday released its evaluation of the two-year experiment in which 2,000 randomly selected unemployed people were paid 560 euros per month. The researchers summed up results as “small employment effects, better perceived economic security and mental well-being.” Participants in the experiment said they “had fewer health issues, fewer experiences with bureaucracy, and better financial well-being than the people in the control group. They experience fewer issues related to mental stress, depression, melancholy, and loneliness. They also estimated that their functional ability was better.” The UBI recipients also “felt that their financial situation and their ability to influence it was better. Their trust in other people and different institutions was higher, and they were more confident in their own future and their ability to influence societal issues.”May 7, 2020 at 4:41 am #201403
That’s what preliminary results had suggested and what you would expect — that with a hassle-free payment people would feel less stress in terms of financial security (relative of course) and not having to prove to the authorities that they were not looking for work all the time. It’s simpler and cheaper for the authorities to administer too.
The trouble is that, while paying the same amount to every citizen whether working or not avoids means testing for the unemployed, this would be hugely expensive and have a perverse effect on the wages of those in employment. It is also politically difficult as the unemployed are not a group that is universally popular ( which might explain why when UBI was put to a referendum in Switzerland 70% voted against).
UBI would only work if you took the U out ( or made it stand for Unemployment rather than Universal ) and so as a reform of the welfare system (poor law). To avoid means testing it would have to be paid to anyone not working even if voluntarily. The rate would have to be minimal (€560 is only about £125 a week) so as not to undermine the wages system by encouraging too much voluntary unemployment. £125 a week would seem low enough for that but nobody could live on that amount unless their housing was free or subsidised (and so back to means testing!). Such a reform might work if a government could get the political support to bring it in ( which is not automatically evident).
There is nothing wrong with the idea that everybody should have access as of right to something they need — that’s the basis for distributing goods and services in socialism — but is of limited applicability under capitalism. And even under capitalism doing this directly by providing something free is probably better than doing this via a monetary payment.May 8, 2020 at 2:54 am #201545
“…Along with the International People’s Assembly, Tricontinental: Institute for Social Research produced a 16-point declaration that includes immediate relief and long-term measures. In our most recent dossier, we look carefully at one of these policies, the call for a Universal Basic Income (UBI). We lay out our critical view of the UBI scheme, offering our assessment of why this must be an undiluted universal scheme and why it must be funded by taxes on the wealthy and on profits rather than merely by dismantling other social service schemes. We take a socialist approach to the UBI, insisting that it be a supplement to other social wages rather than perpetuate the myth of the ‘deserving poor’ to sift out who should qualify and who should not…”
For that further analysis on UBI
Scroll down to Part 3
“…We should be clear about the limitations of the UBI. The UBI would free the enormous surplus population from unemployment and destitution, but it would not emancipate people from either the money form or from the power of the capitalist state. Cash disbursement means that cash would still be needed to buy essential goods and services, which could otherwise be provided on a need basis without the exchange of money (public education, as an example, or public food distribution systems). Part of the attraction of a UBI for the neoliberal bloc is that they would put cash in the hands of the surplus population, who would then be able to buy goods and services that they would otherwise not purchase. The social relations of capitalism are not threatened by the UBI, which is merely a social welfare scheme within the norms of the capitalist system. In the context of widespread hunger and desperation, such a scheme should not be scoffed at, even if it has immense limitations in scope and implementation…
…If the UBI scheme is not a substitute for the social wage, but a supplement to it, and if the UBI scheme is truly universal, then it has the potential for being a valuable demand within the capitalist system to alleviate the suffering of many while continuing to work towards the abolishment of the capitalist system. If it is a substitute for the social wage and if it is targeted, then it is no longer a universal basic income, but a dangerous mechanism to commodify and privatise social benefits and to exacerbate divisions within the working class…
…One of the questions raised about the UBI is how states are expected to pay for it, and, based on that, what the actual income payment would be per working-age individual. The neoliberal solution is to shut down other social programmes, incorporate that money into one corpus, and then make cash payments from there; this is unacceptable from a socialist standpoint because it privatises social goods that should be treated as a universal human right. Instead, a socialist mechanism for payments would rely upon at least four different sources:
A wealth tax.
The enhancement of the tax jurisdiction and dismantling of tax havens and tax shelters.
An increase in taxes on socially undesirable sectors (armaments, for example).
An increase in profit taxes.
To ensure that the state will be able to collect this income, which would otherwise fly off to tax havens, it will need to initiate capital controls. A UBI scheme that is not implanted as part of a suite of measures to develop economic sovereignty would merely become unaffordable and therefore seen as a failure because it would either be inadequate (if unfunded) or too much of a burden on the existing budget (if there are no new taxes)…”
And if wishes were horses, every tramp would ride, goes an old saying.May 20, 2020 at 2:49 am #202685
A rare media sceptical story on the UBI,
If universal basic income is such a good idea, why has nobody implemented it before now?
The problem is that, despite its superficial attractions, there are major flaws in all the models for UBI that have been put forward. Setting UBI too low would increase poverty, while setting it high enough for all would involve eye-watering levels of taxation…another reason why UBI should be opposed, and that is because it offends the basic belief that work is good for people. There is a long Scottish tradition that work is fulfilling, gives purpose to life, and is a reward in itself …Workplaces are not simply locations housing wage slaves: they are environments where we interact with other human beings, socialise, and feel that our efforts are of value.
Not so sure about wage-slavery being admirable and to be expected from Conservative politician but yes, work is both social and socialiable. Often our closest friends aren’t our neighbours but our job colleagues.May 20, 2020 at 3:01 am #202686
And from RobertS diligent Grist, we have this report again from the right-wing.
Ive Marx, an economist and sociology professor at the University of Antwerp, tested the effects of introducing a universal basic income in the Netherlands. Their model assumed that the government would give every adult under the age of 65 a monthly check of €700 ($760 U.S.) and €165 a month to minors. The program’s €94 million price tag would have to be paid for with a combination of tax increases and service reductions.
Marx said a UBI would reduce income inequality, but it would increase poverty by 3%.
Marx concluded a UBI “is massively inefficient if one cares about the least well-off in society.”May 20, 2020 at 10:18 am #202687
From a capitalist and a reformist point of view that Marx is right. If you want to help “the poor” why not simply tweak the welfare state instead of proposing a massive reform which will have all sorts of consequences and complications?
It is true that paying the unemployed a basic income whether or not they are looking for work would benefit them in that they would no longer be harassed by officials to report on their search for a job, etc. But if the scheme was just for them then it would no longer be a “universal” basic income.
In any event, governments responsible for running capitalist affairs are unlikely to agree to doing even this watered-down version as it would tend to undermine the wages system. As the report on the Finnish and other pilot schemes concluded, these schemes didn’t encourage people to seek employment. Which was why they were judged failures.
This particular reform like workers coops is no solution but it’s now something all “progressives” have to advocate. But both really are practicable diversions from what is the way forward and we should hammer them every time they rear their ugly heads, emphasising that what is needed is a society based on common ownership and democratic control of the means of life, with production directly for use and distribution on the principle of “from each according to their ability, to each according to their needs.”May 25, 2020 at 7:18 am #202921
It is to be expected with the preponderance of sympathetic articles
TWO thirds of Scots support the introduction of universal basic income, according to a new poll.May 27, 2020 at 8:52 pm #203047Young Master SmeetParticipant
Varoufakis on Universal Basic dividend…May 27, 2020 at 11:16 pm #203068
Faced with such popularity, perhaps it is an opportune moment to have a issue of the Socialist Standard devoted to the topic.
We shouldn’t forget that America have had another form for decades in the shape of the Alaska Fund, that pays out an annual dividend where each qualified resident receives the same annual amount, regardless of age or years of residency. In 2019 it was $1,606.
A 2018 paper found that the Alaska Permanent Fund “dividend had no effect on employment, and increased part-time work by 1.8 percentage points (17 percent)… our results suggest that a universal and permanent cash transfer does not significantly decrease aggregate employment.”
A 2019 study found “a 14% increase in substance-abuse incidents the day after the [Alaska Permanent Fund] payment and a 10% increase over the following four weeks. This is partially offset by a 8% decrease in property crime”May 30, 2020 at 9:37 am #203270
Spain has introduced a basic monthly income for struggling families amid the growing hardship caused by the outbreak of the new coronavirus.
It will guarantee an income of 462 euros ($512) a month for an adult living alone, while for families, there would be an additional 139 euros ($154) per person, whether adult or child, up to a monthly maximum of 1,015 euros ($1,126) for every home. The funds will be allocated in line with other income, so anyone with a low-paid job would have their salary topped up to meet the threshold outlined. It would mean “that every home would have a guaranteed average annual income of 10,070 euros ($11,180)”.
The government said the measure was expected to benefit about 850,000 homes, affecting a total of 2.3 million people – 30 percent of whom are minors.May 30, 2020 at 10:21 am #203271
That’s not a basic citizens income as advocates of UBI themselves have pointed out because it’s means tested. It’s more like the Tax Credits scheme in the UK and like it a subsidy to employers paying the lowest wages, as that news report indicates (anyone with a low-paid job would have their salary topped up to meet the threshold outlined).May 31, 2020 at 12:15 am #203302
Another article on Finland’s experiments
While recent coverage of the long-term study, released earlier this month, has been more nuanced, much has focused on the minimal effect on employment prospects. The “flop” tag is something Minne Ylikanno, senior researcher at Finland’s Social Insurance Institution (Kela), which carried out the study, rejects. “I would say the experiment was a success,” she says. “No other country in any part of the world has implemented a national basic income based on a law…It’s fair to say that the result is that we can’t see a very big employment effect, that’s true. But the comment that it’s a failure, I would say that’s not fair.”
The findings were based on comparing the 2,000 unemployed participants who had received the €560 a month from January 2017 to December 2018 with a control group of 173,000 who did not. There was only a small statistical difference between the study group and the control group in the number of people who found work after two years.
Where was the success?
Where there was a significant statistical difference, however, was in how happy each of the two groups felt. The people who received €560 a month reported much lower levels of insecurity and stress.
As you said in an earlier comment, people are happier because they don’t have all the bureaucratic hurdles to jump. As a participant confirmed
“It was a great relief because I got rid of all the bureaucracy,” he recalls. “I didn’t need to fill in any forms or attend any classes where they teach you how to make a CV and these kinds of things…”May 31, 2020 at 7:50 am #203309
The various studies mentioned here concentrate on the effect on employment/unemployment as those who run capitalism don’t want UBI to undermine the pressure on workers to find a job. They will be pleased with the finding that UBI (as a reform of the poor law system) would not undermine the wages system.
What would be more interesting from the workers’ point of view would be the effect on wages. In 2002 the ILO did a study of the Alaska payment (Permant Fund Divided) which does mention this (and published on the site of the BIEN, the international organisation of those proposing a basic income for all) :
“Even without a PFD induced increase in the labour supply, the PFD could be exerting downward pressure on the wage differential between Alaska and other, lower cost, regions of the United States. If employers could lower the Alaskan wage rate because of the dividend, then determining the impact of the dividend on the distribution of income would be more complicated than simply observing the addition to incomes directly attributable to the dividend. Of course the dividend could also be driving up the wage rate if, in the absence of in-migration, the labour force participation rate fell.”
[Note: The other studies seem to show that the labour supply has been unaffected, i.e., that the labour force participation rate didn’t fall.]
“However, another possible effect of the dividend that has been completely ignored might be a reduction in the Alaskan wage rate by the amount of the dividend. If the labour market worked in this way, Alaska workers would be sharing the benefits of the dividend with business owners, non-workers, and non-residents.”
“The average real wage in Alaska has fallen by about 10 per cent in the last decade, but it is unclear the extent to which that is due to other factors such as a change in the mix of jobs and a fall in the relative cost of living. But it does raise the possibility that the apparent higher incomes from the dividend are being partially offset by lower real wage rates.”
Further research is needed to see whether or not this possibility is a reality but the comment already recognised that the level of wages generally is linked to the cost of living, which UBI would reduce.May 31, 2020 at 11:10 am #203316Matthew CulbertKeymaster
The only people I can see benefiting from any of these measures are those who have already fallen foul of the draconian rule tightening in the present welfare system and are without any assisting benefits.
And of course, the capitalist class as a whole if taxation and wage costs were reduced.
- This reply was modified 1 month, 2 weeks ago by Matthew Culbert.
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