A while back I wrote about the incredible benefits of providing a Universal Basic Income. Read the article here. At the time Switzerland had done a national Referendum on 6 issues and the Basic Income was one of them receiving a 20% vote to pursue. Not enough to do anything about it at the time but certainly a big enough vote for the rest of the world to see it as an idea whose time may be coming sooner than we think.
More recently Finland and and Ontario, Canada have begun real-time trials with groups living below the poverty line to test the results.
Finland
In Finland the group conducting the trial is Kela, the Social Insurance Institution of Finland which is a government department. Their experiment will run over 2 years with 2000 random people selected and no interviews or results collected until the end of the trial period. They have said they are not collecting data on health and well being – which is odd to me because this would have a ripple effect on the Healthcare costs for government, domestic violence, general crime… all sorts of implications. Kela are more interested in the employment rates to see if those receiving the benefit can or will go back into the workforce.
It’s not a lot of money, I don’t know how it compares with living costs in the areas of where they live, but to have that backstop no matter whether or not they are working – it’s unconditional – will be interesting to see what behaviour patterns emerge.
They are also addressing how much the government will save by offering a social security benefit that is not means tested. Every government has massive man power costs in constantly testing to see whether a beneficiary matches the criteria to receive a benefit. In Australia they are Newstart (unemployment benefit), Child Support, Solo Parenting Benefit, Family Tax Benefit, Veterans, Sickness benefits, Pensioners, Study grants, Day Care allowances etc. By giving one benefit that is the same amount for everyone – adding a bit more per dependent or child the beneficiary cares for – means all those extra government personnel would not be needed in constant assessment and testing. It simplifies the process of distributing the benefits.
More information is on the Kela website on Universal Basic Income here.
Ontario Canada
A couple of weeks ago the Premier of Ontario announced a similar “Basic Income Pilot” trial in Canada involving 4000 beneficiaries from 3 different specific geographical areas over a 3 year period. This is great way to see the community and neighbourhood benefits that might result.
It’s not as cut and dried as the Finnish version. If the beneficiaries are a couple they receive less than two individuals – that immediately adds a means test for the ever changing scene of relationships for a start = more government staffing costs. If the beneficiary does get work the benefit cuts 50c for every dollar earned so it’s more of a soft experiment.
One thing that is important though is that they will get the benefit whether or not they are looking for work, if they work a lot or a little.
In Australia I know our Unemployment benefit – maybe other benefits as well – have a test that you can receive it providing you can prove you’ve applied for something like 5 jobs a week. Major disaster! Not only is the government now farming out the job to independent agencies at great cost to follow up on this test every 2-4 weeks for EVERY beneficiary, but for the local businesses it becomes a huge headache. Every time they put out a job vacancy ad they have literally hundreds more job applicants sending in CVs that have no relevance to the job at all just to keep up with the test. Each business needs to send a receipt of application which becomes proof the beneficiary applied so I believe the amount of time, expense and frustration this must add to the process of recruitment will run up a cost for local business well beyond the benefits of means testing. For a business that has heavy recruitment needs this adds to their costs considerably.
Ontario has only just announced their trial which will start fairly soon. They are looking from a slightly different point of view, not just about bridging the gap for those who are hard to employ but also gauging the effects on health and education… a much more rounded view.
More information from the office of the Premier in Ontario about Basic Universal Income Pilot here.
So both countries are offering support but they’ve stated their goal is to get more people employed. They aren’t addressing what Yanis Varoufakis talked about in his interview. According to him Futurists around the world expect 40-50% of jobs will be overtaken by technology in the next 10-15 years. That puts the need to support “unemployed” in a very different light. No point making people more employable if we don’t actually need them to work to provide the community with the goods and services needed.
I know that’s a totally Socialist view but one worth thinking about. When Australia’s government makes those who are unemployed feel humiliated, embarrassed, ashamed and not worth spit, the effect on wellbeing and confidence of each individual costs money! It does. It adds to the Medicare bill. It boosts addiction numbers. In some cases causes violence and crime, accidents… there are many things they never seem to consider.
Here’s the interview with Yanis Varoufakis about the benefits of UBI here.
There are other countries such as Spain, Italy and the Netherlands considering starting their trials but are still scrapping over the conditions of receiving it which pretty much nullifies many of the positive effects.
There is some excellent research and reporting on the website http://basicincome.org if you want to keep up to date with progress around the world in more detail.
San Francisco
Financial Times reported last week that the techies in Silicon Valley are also mindful of how their technology replaces human jobs. An organisation called “Y Combinator” didn’t even bother for the government to give them the go-ahead. They privately collected the money, chose 100 people, started giving them $2000 a month and are gauging their own results. They plan to expand this to 1000 people.
In the article they also mention eBay founder Pierre Omidyar contributed to the foundation GiveDirectly which gives cash to 26,000 Kenyans due to being aware of geographical areas in the world which have less opportunity for manufacturing or new industry due to globalisation.
Lawrence Quill, a political-science professor at San Jose State University has said “a basic income transforms the working poor into entrepreneurs in the making…” which I also wrote in my last article (link at the top of this post). Once you remove the stress of survival, each person’s stress drops dramatically and their mind is free to bring in new innovative ideas for improvements, creativity and inventions.
Imagine a world where every one has their needs met and is free to create what comes naturally to them. That’s when we will see real progress!
Here’s the Financial Times article.
So it looks like the movement towards Universal Basic Income is finally kicking into action. Like all good movements there will be the trail blazers who discover and point out all the benefits nobody thought to consider, then the early adopters. Then everybody else will look like bloody losers if they don’t pull their finger out and implement it as quickly as possible.
Will that be America and Australia? Very possibly.
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