By Guy Standing
See original post here.
At the moment, pioneered by the First Minister, Mark Drakeford, the Welsh Government is piloting a basic income for all those leaving care at age 18. Over 500 young people are receiving an unconditional monthly basic income for two years. The scheme, designed to help a vulnerable group adjust to adult life, marks a significant departure from the position of the UK Government, which opposes basic income approaches.
However, the Welsh scheme is one of numerous pilots taking place globally. As a technical adviser to the Welsh project and to several others, and an advocate of basic income for over three decades, I confess to delight at both the initiatives and the results pouring in from evaluations. It may be that what is happening amounts to a revolution by stealth, a groundswell of demonstration projects that are harbingers of a future that mainstream politicians fear to construct. What is so disappointing is that many of the so-called left are resistant. As argued elsewhere, the reasons do not stand up to scrutiny. But the opposition is fading.
Millions of people are experiencing chronic insecurity and stress, while social policies manifestly do not correspond to the main failings of today’s economic system.
We are living in an era defined by rentier capitalism and chronic socio-economic uncertainty and politicians have failed to address what is a pandemic of insecurity.
This is the new context in which basic income has such appeal. Means-tested, behaviour-tested, conditional policies just do not do that. They do not even pretend to do so. The grossly misnamed Universal Credit, the UK Government’s flagship welfare reform, is a harshly punitive scheme designed to shame and humiliate ‘claimants’, forcing them to undergo prolonged waiting periods and oft-repeated complex intrusive questioning, armed with a sanctions regime.
In normal democratic society, being late for interviews is not a crime, let alone something for which you can lose your means of subsistence. Yet so-called ‘work coaches’ are encouraged by the Department for Work and Pensions (DWP) to treat people as if it were a crime justifying depriving them of their livelihood, without any respect for due process. Similarly, in earlier times a doctor was required to certify whether someone was ‘fit to work’. Now, it is down to an untrained bureaucrat. It is not surprising that the ‘exclusion rate’ for Jobseeker’s Allowance (sic) is over 40%, although the DWP refuses to publish figures. Four in ten working-age people in the bottom income quintile do not receive any means-tested benefits.
And means-tested benefits such as Universal Credit involve a huge ‘poverty trap’. If you only obtain a benefit if you are poor, you will lose it if you make an effort to become non-poor, and thus pay a remarkably high marginal tax rate if you take or increase work in a low-wage job.
Meanwhile, public support for basic income grows. The piecemeal set of local experiences of basic income trials is boosting that support, allied to polls finding majority support for basic income. Earlier this year, a YouGov poll across the USA found 61% support, against 27% opposition, with 80% of Democrats being in favour. In Europe, a YouGov survey found well over 60% support in all six countries covered – France, Germany, Italy, Poland, Portugal and Spain. In September 2022, a poll in Catalonia found 85% support for a monthly basic income of 600 euros. In the UK, at least 34 local councils have voted in favour of doing a pilot if the government would allow them to do so.
Basic income pilots are spreading particularly fast across the USA. As of early 2023, over 100 cities in 32 States had experiments. In California alone, there are over 40 schemes, giving over 12,000 people basic incomes, costing over $180 million in public and private funds. The drive has been led by the Mayors for a Guaranteed Income scheme. But those Mayors are not alone. There are over 50 other experiments, in States as different as Arkansas, California, Connecticut, Georgia, New Mexico, New York and Texas. And at least eight schemes are about to start. Several of the schemes are for young people leaving care, similar to the Welsh scheme.
So, what do we know from all the experiments? Overwhelmingly, regardless of the design or selected group, a key result is improved mental and physical health. This is immensely relevant since in the era of uncertainty there has been rising morbidity and a rising mortality rate in Britain, the USA and in some other countries. Pilots in Arkansas and New York, echoing a result found in a big pilot in Manitoba, have reported significant increases in the use of healthcare facilities because they could afford healthcare costs more.
Another common finding is improved housing security. Property owners are more prepared to rent to people with an assured income, and basic income recipients are more prepared to take the risk of renting. Projects in Vancouver, California and Oregon, drawing on the success of one in the City of London in 2010, have also shown the homeless moving off the streets.
Children are major beneficiaries. A pilot in Washington DC found baby health was improved. One in Mississippi found mothers were spending more on school supplies. Most dramatic of all has been the finding from an ongoing pilot that began in North Carolina in 1996 that children in families receiving basic incomes were on average one year ahead in school by age 16.
Schemes have shown that many recipients use their basic income to reduce life-constraining debt. In Austin, Texas, half the recipients did so, a majority by 75% or more. Recipients also reduced debt in a scheme in San Antonio.
There has been qualitative evidence that individual basic income has enabled some women to walk out of abusive relationships and women in general to have a greater sense of financial independence.
Finally, contrary to widespread prejudice, there is considerable evidence that basic income results in more work, not less. Part of the reason is that recipients have more confidence and energy. Partly it is because there is no poverty trap and precarity trap; people retain their basic income if they increase their labour and work.
In a big experiment in Ontario, the data showed that recipients had continued to labour, and many had increased it. But perhaps the most famous pilot, in terms of media coverage, was one conducted by the Government of Finland between 2017 and 2019, under which 2,000 randomly selected unemployed people received 560 euros a month. Rigorous evaluation showed that participants did not reduce their economic activity and experienced an improvement in mental and physical health. Even though a new centre-right government had introduced an ‘activation’ scheme to pressure unemployed people to take jobs, at the end of the pilot the employment rate of the basic income recipients, who had not been subject to that pressure, was no lower than for those threatened with sanctions.
There is not space here to deal with other findings. But in developing countries as well, pilots have found increased work, improved nutrition, health, schooling and sanitation, and an emancipatory effect among women, minorities and those with disabilities.
In short, if governments were genuine in saying they will apply ‘evidence-based policy’, we would have a basic income system already. But the political Canutes are just holding back the waves.