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There was a time when the concept of a universal basic income (UBI) was dismissed out of hand by most political and economic opinion.
Too costly, too dodgy in that it would encourage indigent people to remove themselves from the workforce.
Those tropes were constantly trotted out whenever the idea was mooted. Not any more. The evolution of thinking on the issue, along with the kind of reflection brought on by the fall-out form the pandemic, has ensured that UBI is now a concept that is receiving some serious consideration.
A universal basic income is defined as an unconditional payment that is made regularly, is sufficient to live on, is not means tested and carries on work requirements. Pilot projects have been carried out in various countries, and currently a major one is afoot here involving a UBI for artists.
The move was ostensibly in response to the particular challenges that artists faced during the pandemic. A taskforce recommended that a basic income be awarded to artists independent of whatever income they earn. The income was set at €325 per week.
Over 9,000 applied for the 2,000 places on the scheme, with the lucky recipients selected randomly. Arts Minister Catherine Martin said of the scheme that it had the “potential to fundamentally transform how we support the arts and creativity”.
“Ireland could lead the way on a new model to support people active in the sector, recognising its importance to all people,” she said.
For some, however, UBI is a concept that could make huge chances in society in general, above and beyond the arts sector.
Social Justice Ireland has long campaigned for a UBI — along with Basic Income Ireland — on the basis that it would be a highly effective tool in tackling poverty.
But despite that, the Commission on Taxation and Welfare, the body charged with providing a blueprint on how best and equitable to organise taxes and welfare, has rejected it.
The commission’s report, published last September, stated it “does not support the development of a UBI in Ireland”.
Before the Oireachtas budgetary oversight committee, Social Justice Ireland (SJI) points out what it perceives as flaws in the commission’s analysis.
The commission, for instance, reported that a UBI would require a tax rate of 65%, a figure taken from an ESRI report in 1994. SJI says this figure is “inappropriate, misleading and erroneous”.
The commission ignores that this figure was reduced in a subsequent report by the ESRI to 51% and that the Department of Finance has actually suggested the tax rate to accommodate a UBI would be 47.6%.
The commission also suggests the cost of any UBI would be prohibitive but SJI points out its own analysis and that of other experts has been done on the basis it could be cost neutral.
A third aspect of the commission report on UBI that has raised eyebrows is the contention that “the income distribution effect of the proposal did not benefit many low-income families”.
Considering that those who advocate loudest for UBI are doing so on the basis of tackling poverty, this contention has been highly controversial.
“These mistakes alone render the commission’s conclusions fundamentally flawed,” SJI director Fr Sean Healy claims.
SJI told the Oireachtas committee that a green paper from the Government on basic income concluded that 70% of households in the lowest socioeconomic brackets would benefit from a UBI.
The flaws in the commission’s analysis all appear to be rooted in historical data, much of it originating with bodies like the ESRI. Yet the most recent study by the ESRI, published last December, appears to reflect the evolution in thinking around the concept. Among the benefits set out in that study are:
It’s not all wine and roses. There are other aspects of a UBI system which would have to be addressed.
These pros and cons should be examined further and read in conjunction with the analysis produced by SJI and Basic Income Ireland. In this respect, the appearance of SJI before the Oireachtas committee should provide further food for thought on the concept.
What is now obvious is that a UBI has entered mainstream thought as one of the innovative measures that will have to be addressed in the new paradigm in which the world now exists.
The old way of doing things, of letting the market decide to the greatest extent, with intervention largely confined to attempting to alleviate poverty, is looking increasingly out of date.
Structural inequality in some societies, the advancement of climate change and an increasingly insecure world all suggest new ways of living will be required.
A system of universal basic income needs to be examined in that context, not through data and attitudes from the past when things were so much different, and arguably, simpler.
