Home > Economic History, Economic Systems, Labour Market, Unemployment > Should we have a Universal Basic Income?

Should we have a Universal Basic Income?

November 28, 2016 Leave a comment Go to comments

Post Cap MasonI posted on this issue last year when Kim Hill (Radio NZ) interviewed Paul Mason  – author of Post Capitalism (now out in paperback). Mason makes the point that we are going to live through a long transition from capitalism – the state and the market to post capitalism which is the state, the market and the shared collaborative economy. With technology taking a lot of the jobs in traditional industries in the UK he states that further development in this sector is not the way of creating new jobs. He talks about delinking work from wages by just paying people to actually exist – rather than tax to exist.
Liam Dann (NZ Herald) wrote a piece about Amin Toufani’s presentation at SingualrityU summit in Christchurch where he talked about people in the labour force having to learn, unlearn, and learn again – unlearning should be core competency. However as there maybe many people who will struggle with this concept Toufani believes that a universal basic income (UBI) may need to be adopted – see RSA video below.

Recent events – UBI

  • Switzerland held a referendum on a basic income in June this year but it was comprehensively turned down.
  • Finland is going to run a U.B.I. experiment in 2018
  • Y-Combinator, a Silicon Valley incubator firm, is sponsoring a similar test in Oakland USA.

Why has the UBI become such a popular talking point?

  • The automation of a lot of jobs has left people very concerned about redundancy.
  • The modern economy can’t be expected to provide jobs for everyone
  • The UBI is easy to administer and it avoids paternalism of social-welfare programmes that tell people what they can and can’t do with the money they receive from the government.

Concerns

  • Potentially drives up wages and employees will compare their wages with the UBI.
  • Easier for people to take risks with their job knowing there is the UBI to fall back on.
  • It takes away the incentive to work and lowers GDP
  • UBI – not cheap to administer and would likely cost 13% of GDP in the US

Positives

  • In the Canadian province of Manitoba where the UBI was trialled, working hours for men dropped by just 1%.
  • The UBI would make it easier for people to think twice about taking unrewarding jobs which is a good consequence.
  • In the developing world direct-cash grant programs are used very effectively – Columbian economist Chris Blattman.
  • In New Jersey young people with UBI were more likely to stay in education

If the U.B.I. comes to be seen as a kind of insurance against a radically changing job market, rather than simply as a handout, the politics around it will change. When this happens, it’s easy to imagine a basic income going overnight from completely improbable to totally necessary. 

James Surowiecki – New Yorker – 20th June 2016

 

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