Money for nothing? Tracking global basic income initiatives


As the threats of automation, diminishing social welfare, and wealth gaps loom in parts of the world, forms of universal basic income (UBI) look more appealing to some than existing economic structures, with a number of countries even pushing for lump sum hand-outs to solve poverty.

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Universal basic income is a type of welfare program in which all citizens of a country or state are given regular and unconditional payments by the government.

The premise is that handing out unconditional money to all citizens, employed or not, would help reduce poverty and inequality, and increase motivation and happiness.

The idea of a guaranteed income is not new. It goes as far back as 1797, when political theorist Thomas Paine pitched the idea that governments pay everyone a standard £15 a year.

It didn’t catch on then, but gained popularity from 1968 to 1980, when basic income experiments using the Negative Income Tax format, in which taxes paid by higher earners are given to those earning less, were held in the United States.

Trials held in Seattle and Denver, Gary, Indiana, Iowa & North Carolina and New Jersey & Pennsylvania gave low-income citizens unconditional pay-outs. Researchers found work hours decreased and that the material effects of poverty were generally reduced, according to the Basic Income Earth Network (BIEN).

In 1975, Canada held the Mincome experiment in Manitoba province that trialed an unconditional annual income for low-income households, but a final report was never released after the new conservative Canadian government cancelled the project in 1979. Those involved in the scheme cited its benefits in eliminating poverty.

Namibia and India also conducted UBI experiments in the late 2000s and early 2010s (Basic Income Earth Network).

Now, several countries are considering and in some cases trialing variants of an unconditional pay-out. WikiTribune is tracking these current initiatives to paint a picture of basic income and radical social reforms across the world today.

Europe

Finland: The Nordic country best known for social progress and stability – it topped the United Nations 2018 World Happiness Report – is undergoing a trial of basic income for unemployed people.

Although the government announced it would not continue the trial once it is over at the end of 2018 and critics denounced the experiment for poor design and for not entailing real UBI qualities – only unemployed people were on the trial – it became one of the first countries to try out a form of basic income in a large study.

Read WikiTribune’s report from Finland about the experiment.

United Kingdom: British think-tank Resolution Foundation proposed a two-year study of “citizen’s inheritance” (The Guardian) which would aim to address the wealth gap between Millennials, the generation born between the early 1980s and early 2000s, and Baby Boomers, born between the 1940s and the 1960s.

The proposal was that every adult would be given £10,000 at the age of 25 to redistribute wealth to British youth, who are believed to be less well-off now than they were in past generations (The Guardian).

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Scotland: Pilots and studies looking at the feasibility of introducing a citizen’s income are underway in Scotland, as part of a public inquiry to see if money-for-nothing will help the economy and employment. The plan has cross-party support and backing from Scottish First Minister Nicola Sturgeon (The Guardian).

Netherlands: The Dutch city of Utrecht (Atlantic) is trialing a small sample size of 250 people receiving government benefits to see if a guaranteed income meets people’s needs. The two-year local government-led trial started in 2017 and gives citizens in Utrecht and some nearby cities €960 ($1,100) per month.

Germany: Launched in 2014, the non-profit organization based in Berlin, Mein Grundeinkommen (“My basic income”) has been providing a one-year basic income of €1,000 ($1,120) per month to its selected members. It selects recipients on a lottery basis (DW) and 180 people have been granted a basic income to date. The funds are raised by crowdfunding.

France: Thirteen county councils plan (Le Monde) to request a law allowing them to test basic income on a sample of 20,000 people. The proposal would replace benefits for jobseekers without conditions.

Switzerland: The Swiss rejected a basic income in a June 2016 vote after plans to give everyone in the country a set amount failed to get support.

Supporters of the plan proposed 2,500 Swiss francs ($2,563) for every adult to increase human dignity but opponents said it would cost too much.

Italy: One of the main campaign promises of the Five Star Movement (M5S) – that received the most votes (CNN) in Italy’s general election in March 2018 but did not win a majority – was a guaranteed minimum income for the poor. The proposed plan is not a universal basic income as it does not apply to all citizens unconditionally.

M5S and their coalition partners, the right-wing Lega Nord, have proposed a “citizen’s income” of €780 ($920) per month for poor families, on the condition that they are actively seeking jobs. The two parties have been in negotiations for weeks following the general election and agreed to form a coalition government on May 18 (Financial Times – may be behind a paywall).

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North America

Canada: The eastern Canadian province of Ontario is undergoing a basic income pilot program (Huffington Post).

Launched in April 2017, the project will offer payments to more than 4,000 people living on less than C$34,000 ($26,500) individually or C$48,000 as a couple. The participants may be in work, education, or on financial assistance and will receive C$16,989 individually, or C$24,027 for couples for three years.

In July 2018, the recently elected government announced the decision to scrap the pilot project. Social Services Minister Lisa MacLeod said the government reversed course after hearing from ministry staff that the program didn’t help people become “independent contributors to the economy”. (National Post) She added that “for the amount it was costing the province of Ontario … it was certainly not going to be sustainable.” (Huffington Post)

United States: A non profit-backed organization has introduced a Universal Basic Income which is distributed as a cryptocurrency and is free to any human individual. It is distributed worldwide but requires the recipient to register online and verify by SMS.

Launched in 2015 as Grantcoin and rebranded as Manna Currency in February 2018, it is funded by (U.S.) tax deductible donations to The People’s Currency Foundation. It claims to be “the world’s first universally accessible, people-powered alternative currency.”

On its Medium blog in May 2018, the organization claimed to have 185,000 registered users, with 1,000 to 2,000 new users per day. Manna says 90,000 people have gone through the full signup process to verify their account for UBI distributions.

The current USD value of the distribution is less than $1 per month and is subject to volatility. Manna can only be traded on one exchange presently.

An independent online shop called Manna Basics accepts Manna to purchase basic foodstuffs and delivers across the United States.

Africa

Kenya: Nonprofit organization GiveDirectly is running one of the largest basic income experiments to date – a 12-year randomized control trial in Kenya that aims to compare the impact of four models of basic income across 190 villages. More than 20,00 people will receive payments of some kind. Households in 40 of the villages – or about 5,000 people – will receive a monthly income of $22 for 12 years. In 80 villages, the same income will be received for just two years. Households in 70 villages will be given an upfront lump sum payment amount equivalent to the two-year income. One hundred villages receiving no cash transfers or basic income will serve as a control group.

This trial follows an earlier two-year experiment by Poverty Action Lab into Unconditional Cash Transfers in Kenya, across 1440 households in 120 villages between 2011 and 2013, carried out by GiveDirectly and JPal. Key findings, of this earlier trial includes:

  • There was no increase in expenditures on temptation goods, such as alcohol and tobacco, by recipient households.
  • Investments increased by 61 percent in assets such as livestock, furniture, and metal roofs; revenues from related activities increased by 33 percent. However, estimated profits did not.
  • Economic effects were constrained to the recipient households; UCT had no major impact on the rest of the village.
  • Recipient households reported a 0.26 standard deviation increase on an index measuring psychological well-being. Psychological well-being was 0.14 standard deviations higher for households in which the recipient was female than for those where the recipient was male.

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Asia

India: India’s chief economic advisor said in January that one or two Indian states could be implementing a form of UBI by 2020 (Economic Times).

His comment coincided with the release of the 2017-2018 Economic Survey of India, that pointed to the economic benefits of cash hand-outs to India’s poorest as an alternative for replacing existing welfare programs.

Though it could eliminate poverty in India, where one in three of the world’s extreme poor live, implementing UBI there would cost the government 4 to 5 percent of its gross domestic product, the report said.

A trial of basic income has been underway in the central Indian state Madhya Pradesh since 2010. Involving 20 villages, some receive a basic income while others are control groups to compare to. The study has led to positive changes (BIEN), such as better health, less food poverty, more spending in the local economy, and increased savings among those receiving pay-outs.

According to economist Guy Standing, this is the first time unconditional and universal cash transfers have been tested in India.

Japan: During the general election held on October 22, 2017, the then Kibō no Tō (希望の党, Party of Hope) led by Yuriko Koike ran its election campaign with UBI explicitly mentioned in its election manifesto (Financial Times). It presented UBI as a viable solution for redistributing wealth and providing welfare. However, the plan was not acted upon as the party failed to secure enough seats (50 of 465 seats) in the lower house.

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