Switzerland just completed their voting of a nationwide referendum. One of the voting topics was for an Unconditional Basic Income. Let’s look at why it was up for discussion, what it is and the Pros and Cons of such a Utopian ideal.
What is Unconditional Basic Income?
The Unconditional Basic Income – sometimes called the Universal Basic Income – would be a fixed amount given without means test to every adult who is either a citizen or to those who have been a legal resident for more than 5 years. The initial suggested amount which was yet to be finalised was 2500 francs (approx AUD$3400) and an additional 625 francs (AUD870) per child per month. The amount makes it comparable to their old age pension so hardly a massive amount but enough to keep you off the streets. This one-size-fits-all benefit would replace social security – unemployment benefits, pension, sickness benefits etc.
Why have this UBI?
There were two main reasons the benefit came up for discussion. Firstly the basic human right to live in a dignified manner and be able to participate in public life. Secondly because technology has got to the point where it now replaces thousands of traditional jobs with not as many new jobs created by it. All signs are pointing towards an ever increasing loss of jobs as the digital revolution continues so they wanted to debate it early rather than try and fix it as things got worse.
The debate was heated and plenty of opinions were thrown in the mix.
What are the foreseen obstacles?
Laziness
Charles Wyplosz, economics professor at the Geneva Graduate Institute, told AFP “If you pay people to do nothing, they will do nothing,”. I question this idea. In a world where we consider it virtuous to ignore our spouse, children and needy family members opting instead to be a workaholic, we’ve made lying down and putting our feet up something we should feel guilty about. As a result we become proud of an overfilled schedule and boast about all the activities we can fit in. There is also general disapproval of anyone who does not strive for the same crazy lifestyle.
When I look at the populace of people who might be considered lazy I see most of them as just damn exhausted. If you gave them enough money to cope they are likely to have a good long rest to recuperate. Then, just like children, their energy would return and they would be looking for new things to do and to create.
People would all leave work
According to the Swiss news agency poll of 1076 people only 2% of Swiss would stop working if the government paid them a basic income of CHF2,500 per month. For those working, they are not likely to be satisfied with living on such a basic income and would continue on. However, the difference would be that they may have the opportunity to choose a job they really wanted to do rather than choosing out of the necessity of financial obligation. Then they choose a job for love rather than money.
No money to fund it
It’s over simplistic to think you would need to fund such a scheme by increasing sales tax or personal income tax. Let’s face it. There is more money in the world today than there has ever been before. If we took a bigger picture view on who is getting away with paying little or no tax I think you would find there are very big flows of currency, not just mining and media industries, where you could clip the ticket on the way through and increase the amount the government had in its budget markedly.
One suggestion has been the Transaction tax which becomes a flat rate tax on cashflow – 2% for each inward and outward going transaction in every bank account, offset by a flat tax rate for business at 20%. This would replace sales tax so works out better for both the individual and the company.
Doing it in one country would help. Doing it globally and then distributing the funds per capita back into each country would be quite the revolution. We have the technology, there is potential here.
What are the benefits?
Increased spending
If current workers received what is essentially a pay rise there are more choices they could make. They might save more for their own retirement, increase their own spending or they might give more of both time and money to causes they were passionate about. This supports the Not for Profits, new initiatives, local needy people, crowd funding as startup capital, a boost to Arts, Culture, Entertainment, Hospitality and Retail.
Restructuring of salary
I have a friend who lives in an affluent area on an island in Hawaii. Because most of the people living in the area are retired or visiting on holiday there are a lot less people around to do the personal service work: gardening, house cleaning, computer maintenance, car wash etc. Therefore these jobs become extremely well paid as customers vie for the few workers there are. Think back to the middle Ages in Europe after the Black Plague as well – income for service, trade and labouring workers went up markedly to entice them because there was more demand than supply. Under the Unconditional Basic Income you may find jobs that were traditionally low paid but highly valued such as nursing and teaching may increase in income as well.
Ease on government spending
According to the Australian Work Health and Safety statistics I last downloaded, which was in 2012, work compensation claims based on the affects of Stress account for more than 10 times the average of all other types of claims. Stress, burnout, accidents from not being focussed or overtired, rehabilitation, days off work for stress relief – these accumulate as an enormous cost to our country’s Health System. Stress can drive people towards addiction which also strains the Health System. Pressure from not making ends meet can drive more people to theft, violence and domestic violence in the home so, reducing stress on a nationwide scale will reduce cost to the Legal System.
Efficient government
If one benefit replaced many other benefits and was delivered without constant means testing, the amount of workers required to run the system would be greatly reduced thereby freeing up more money to use elsewhere in the federal budget.
Boost to innovation
Lowering of stress and anxiety in the broader society has deep reaching connotations, one of which is that the intuition opens up. This allows a person to make wiser decisions and come up with fantastic new ideas and inventions for problem solving in every area of life.
Finding Purpose
I spoke in a previous post of the idea of each person finding their true natural gifts. When more in the community raise themselves up the Maslow Hierarchy of Needs they get the opportunity to find these gifts which means they will be working at maximum productivity and potential. This results in peace of mind, deeper satisfaction in life and finding their purpose. You don’t have to look too far in the Google Keywords to know finding purpose is one thing many in the world are searching for.
The happiness factor
We currently have no way to gauge the effects of happiness on a society in general but I expect it would make people a whole lot easier to live and work beside. Increased happiness boosts generosity, more would be caring towards each other in the community and more would opt for volunteering roles increasing connection and adding strength to worthy causes.
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Summing up, you can’t just look at the monetary gain or loss with a Universal Basic Income benefit. The ripple effect of raising the bottom end of society out of the gutter has a far reaching effect on society as a whole. The Swiss referendum resulted in 23.1% saying YES. The idea may be a little ahead of its time but the fact the discussion has now really started to open up is a big step in the direction of a healthier, happier, more evolved society.
– Annabelle Drumm
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Update 15 July 2016
Just noticed this video of Yanis Varoufakis speaking on the necessity of Unconditional or Universal Basic Income
Click here to see another video on Yanis Varoufakis discussing the collapse of the Euro with Noam Chomsky in New York.
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References:
Universal Basic Income: What do you think? – The Local http://www.thelocal.ch/20160602/unconditional-basic-income-what-do-you-think
Basic income: A 500 year old idea whose time has come? – Swissinfo http://www.swissinfo.ch/directdemocracy/welfare-_basic-income–a-500-year-old-idea-whose-time-has-come-/42122622
Guaranteed basic income for all rejected in Switzerland – AFR http://www.afr.com/world/basic-income-to-cover-for-digital-revolution-job-loss-rejected-in-switzerland-20160605-gpc796
A basic income for all – the issue before Swiss voters – Swissinfo http://www.swissinfo.ch/directdemocracy/an-end-to-poverty-_a-basic-income-for-all—the-issue-before-swiss-voters/42096442
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