Trialled in Canada and Finland, endorsed by Silicon Valley executives, and touted as a potential flagship policy for a future Labour government, universal basic income is the big idea on everyone’s lips. But how would it actually work? We ask our expert the difficult questions.
What’s the problem?
It’s not just about the rise of the robots, the real problem is that not everyone gets a fair share in the wealth of the economy. UBI is an old idea proposed by intellectual giants such as Martin Luther King, William Morris and Virginia Woolf. Since the dawn of the industrial revolution most of the income has gone to those who own land or capital, while everyone else has been left to scrabble around to find an income. At the moment if you’re born into wealth you can fail repeatedly without material consequences; for most people if you have a run of bad luck you can end up forced into an unsuitable job, sick or homeless. That’s a massive waste of human potential – as a society we all lose by that.
What’s the solution?
To give people a greater share of the wealth through an unconditional, regular payment from the state. In its most basic form, a UBI will give everyone enough to live on. In terms of an amount, I would go for something along the lines of the poverty level – the minimum you need to participate in society – which the Joseph Rowntree Foundation has found to be about £17,000 a year (£325 per week). Several think tanks have costed plans of about £70 to £80 per week, which as a welfare rights advisor I know would make a massive difference to people who are struggling to get by now – but we shouldn’t lose sight of the fact that everyone should have enough to live on as a human right.
How do we afford it?
We need to tax the rich fairly. Taxes on unearned incomes (money accrued from already existing wealth ie rent, shares, inheritance: basically anything other than work for a wage) have gone down dramatically in the last 30 to 40 years. They used to be much higher. Reduced corporation tax was justified with the notion that it would be invested in the real economy, while we’ve seen instead it has been socked away in tax havens. Land Value Tax (LVT) is being talked about quite a lot. LVT taxes unearned income from renting the land out. Quite a huge proportion of the rent landlords collect is down to their property’s location in relation to infrastructure and resources, such as transport and cultural venues, that everyone has paid for.
Wouldn’t people just not do any work?
People will always want to contribute to society, that isn’t the issue. But right now most people are having to work far too hard for survival, whether they have a job or not. They’re not getting enough time with their families, they’re not able to participate in their communities. When someone says “Oh no one will ever do anything if they have enough money to live on,” and you ask them if they had a basic income what they would do, hardly anybody says they would stop doing anything. They would do less of it maybe, or they would do something different – often they’d start their own business, do more community work or education. With 37% of people saying that their jobs are pointless, the discussion should be about what work is worth doing.
Why would we pay a basic income to people who don’t need it?
It’s so that the people who do really need it don’t have to jump through all sorts of hoops. International studies have shown that means-testing leads to at least 20% non-uptake on any benefit, and in the UK, with additional conditions and sanctioning, it’s up to 60% for some. When people grouch about a few rich people getting UBI, who are they more concerned about? Most of it will be taxed back from people who don’t need it anyway. UBI is more like a share in the economy than welfare: it’s a recognition of everyone’s part in society. There’s also the symbolism: society currently values people according to how much money they have access to; if everyone get the same basic amount you’re saying that fundamentally everyone has equal worth.
What do you envision a post-UBI society to look like?
Firstly, I think there’d be a huge, collective sigh of relief. Immediately, if we were to start paying a UBI, there’s a lot that needs fixing – there’s an awful lot of trauma that’s been induced by poverty and stress. There’s so much we need to do in terms of the environment, infrastructure, in terms of helping each other reach our full potential. It’s quite extraordinary that our model for economic growth is predicated on a finite earth having infinite resources, yet money is treated as scarce, even though it is the only resource created entirely by humans. We are extracting more and more from people and the earth for the benefit of a few; a UBI would help us towards an economy which works for all people and our planet.
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