Basic income as a right is feasible and desirable

With growing economic insecurity the world over, calls for a guaranteed basic income for all are gaining currency.

by Kanaga Raja

GENEVA: An international group of policymakers, academics and experts from 28 countries meeting here to discuss research on basic income as a fundamental right is of the view that providing people with a guaranteed minimum income as a right is both feasible and desirable to improve economic security.

The group, comprising the Basic Income European Network (BIEN), was to hold its 9th Congress from 12-14 September to discuss the dangers of the current global trend to increased selectivity and conditionality of benefits, the right to income security, and how to legitimize that right in both the industrialized and developing countries.

According to the group, economic insecurity has become a byword of globalization and in all parts of the world, income insecurity has been growing, due to changing labour markets, cutbacks and reforms of social protection policies, and economic insecurity. Moreover, existing policies are failing to reduce income security while some are making it worse.

According to surveys conducted in many parts of the world, large majorities of people are in favour of a basic income, but the problem lies in translating this into political commitment, according to Guy Standing, the director of the International Labour Organization’s (ILO) Socio-Economic Security Programme and co-chair of the BIEN Congress.

According to Standing, the ILO was merely hosting the Congress and does not have a position on the question of basic income. However, Standing said at a briefing to the press in his capacity as co-chair of the BIEN Congress that basic income is an area that needs to be explored by the ILO.

“There is growing support for basic income as a right for everybody,” Standing said, adding that this support has been coming from Nobel Prize-winning economists as well as other eminent thinkers and policymakers around the world, many of whom are members of BIEN.

As a result of greater interest emerging from other areas of the world especially from outside Europe as well as from the developing countries, one of the decisions that would be taken at the Congress was to replace the “European” in the acronym BIEN to “Earth,” Standing emphasized.

More poor, less protection

The number of people classified as “working poor” has been growing in Europe as well as in North America, and data from across all industrialized countries show that there is no longer an association between higher employment and poverty reduction.

An Income Security Index has been created by BIEN that takes into account poverty rates, share of GDP and the legal framework of countries, among others, based on information garnered from a databank of over 100 countries.

Data from 19 of the industrialized countries surveyed showed that there was a decline in income security in 15 of these countries in the 1990s while only 4 countries improved their positions.

The data examined were from the periods 1990 and 1999/2000. The 19 countries were situated in Europe and North America, as well as Australia, New Zealand and Japan. The countries that had the highest ranking in the Index were the Netherlands, Luxembourg and Denmark.

Those that did badly in the rankings in 1990 were Portugal, New Zealand and Japan. In 1999, the lowest-ranked countries on the Index were Portugal, Japan and the United Kingdom. The US came in 12th during both these periods.

For countries in the South, 9 out of 10 people do not have entitlement to any state benefits and only 2% of GDP is spent on social protection in these countries.

About one in ten West European workers in full-time jobs has earnings below the poverty line. Moreover, older people are finding that a guaranteed pension is less likely, the age which they can obtain a state pension is rising (it rose by a year on average for women in the last 10 years, half a year for men), and the amount has been declining.

BIEN points out that even in the most industrialized countries, a majority of the unemployed no longer have access to unemployment benefits, while a growing proportion of the population in many countries depend on means-tested and behaviour-tested benefits to avoid poverty.

Growing inequality has made it harder for even rich European countries to maintain social insurance systems and many governments have cut back on social protection on the grounds that they need to make their economies more competitive, leading to a policy of “social dumping”. Most importantly, BIEN argues that “social dumping” is not an inevitable consequence of globalization.

One of the major areas of concern of the BIEN Congress has been the drift to a paternalistic social policy by governments and a tendency towards behaviour-related benefits.

Standing expressed concern about how this would affect the freedoms of workers especially in the lower segments of the labour market. This drift to all sorts of behavioural conditions for receiving benefits also creates a sense of “dependency” on bureaucratic social workers.

For example, the tightening of conditions for entitlement to benefits has pushed many of the unemployed, above all women, into employment traps, which are particularly strong in countries such as Belgium.

In light of such circumstances, Standing predicts that conventional unemployment benefits will scarcely exist by the end of the decade. For the first time, according to Standing, a minority of the unemployed in the North has entitlement to benefits. In the US, only one in three receive unemployment benefits.

Economic rights will become an important area in human rights, said Standing. One of the proposals considered by the Congress is that everybody should be provided with a basic income as a right of citizenship. In this respect, Standing cited Article 25 of the UN Declaration on Human Rights that commits governments to ensuring that all people should have an adequate income on which to survive.

A guaranteed basic income would be a means of reducing poverty and inequality. Basic income is defined as an individual unconditional payment to an individual regardless of work, gender, marital status and is paid either as cash or as a tax credit.

A result of surveys in several countries finds that a large majority of people were ascribed to that principle of social justice. For example, in China, 85% of those surveyed said that they were committed to that principle, while in Finland, 35% of young people said that basic income as a right should be introduced.

A number of countries are already experimenting with schemes that are moving towards a basic income as a right. Among these are the renda minima  schemes employed in many Brazilian cities that provide a basic income for women on condition they send their children to school. These schemes have reduced poverty among women, increased female employment and reduced child labour.

One reason for supporting a basic income is that all old-style schemes of social protection were based on the performance of labour, usually in full-time wage jobs. Standing suggests one method to decouple the right to income from the performance of labour.

This is through the provision of capital grants. An example of this is the Alaska Permanent Fund set up in 1976 that provides residents with an annual grant of several thousand dollars every year.

Objections to the provision of a basic income have mainly centred on the issue of cost. But a paper to the Congress on South Africa’s experience in its national campaigns has shown that introducing a basic income is economically and fiscally affordable.

In reference to other organizations’ views on the right to a basic income, Standing said that the IMF is strongly in favour of targeting policies like restricting social spending, and this leads to a lot of exclusion of the poorest of the poor. Meanwhile, the World Bank has become more interested and sympathetic towards this issue. (SUNS5190)                            

From Third World Economics No. 289 (16-30 September 2002)