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A UNIVERSAL BASIC INCOME

Questions answered

by

Colin J. Whitmill

 

Here are the main questions that people have asked about a universal basic income: -

 

1.      What is a basic income?

2.      What is its purpose?

3.      Would a basic income provide an adequate living income?

4.      What would be the rate of basic income?

5.      Is basic income just a replacement for social security?

6.      Why do we need a basic income?

7.      Why would everyone receive a basic income?

8.       What evidence is there that massive frauds would not result?

9.      Where's the money coming from to pay for  a basic income?

10.   Why should tax be taken so some layabout can sit on the beach?

11.   Why shouldn't someone work for the basic income?

12.  Would there be a mass exodus from the labour market with basic income?

13.   Would people work so hard if they had a basic income?

14.   Isn't it better to put money into improving education and training?

15.  What do critics of basic income say?

16.  What are the benefits in having a basic income?

 

QUESTION 1.  What is a basic income?Return to contents

A.  It is a non means tested, non discriminating, guaranteed income paid to every citizen or legal resident whether old, young, disabled, unemployed, employed, rich or poor, single or married.

 

QUESTION 2.  What is the purpose of basic income?Return to contents

A.  The purpose is to provide each person with the financial assurance of an income without degrading means tests or being victims of political ideology.  Apart from the human right aspect of facilitating access to basic needs, positive action is required to break the link between the need for paid employment, any paid employment, to gain access to income.

The assurance of a right to a basic income would liberate people from the fear of unemployment, at any time.  It would free people, desperate for any type of paid work, from the need to take any job, however boring, immoral, frustrating or despicable.

Payment of a basic income would recognise the unpaid valuable contribution made to society by carers, such as mothers raising their children.

There is considerable evidence over the years from medical experts and authorities that unemployment and/or a low income results in physical and mental ill health, and violence and death coming earlier than for those with employment and/or income.

 

QUESTION 3.  Would a basic income provide an adequate living income for everyone so that no body would ever need to work again?Return to contents

 A.  It is hoped that a basic income could provide a basic living income, but whether it would be adequate or not would depend upon one's lifestyle.  What it would provide is an assurance of an income as of right, a base from which one could earn by one's own efforts, without penalty, additional income to provide for a better standard of living.

 It stands to reason that the income any society enjoys cannot exceed the rate at which it creates not just money, but real wealth of goods and services.  If people, computers and machines in society are inefficient, or not working at all, then real wealth, as opposed to financial wealth, cannot be provided for basic needs and society will inevitably be poorer.  If there is no real wealth then there cannot be a basic income.  So everyone won't be lying around doing nothing or else they'll die.

 

QUESTION 4.   What would be the rate of basic income?  How much can we expect?  Will it remain the same for years or would it fluctuate depending upon government policies?Return to contents

 A.  The rate would depend upon the government introducing the measure.  If the payments were set as a distinct percentage of the nation's wealth or gross domestic product, it would rise or fall.  So, if fewer people worked or provided services, or technology and machines failed to produce enough for all, then the basic income would fall.  If wealth were to increase, then the basic income should rise.

 Some advocates of a basic income believe the payment should be set at a particular rate and not fall.

 

QUESTION 5.  Is basic income just a replacement for social security benefits, although payable to everyone?Return to contents

 A.  No.  Although it is not a new concept, basic income is a completely new approach to tackling inequalities in society as well as introducing a more meaningful system of democracy.  It would provide all with a human right to have an income to access basic needs.  It would not be means tested.  It would be a more efficient way of helping those who need financial assistance at particular times in life without the need to go through the rigorous soul-destroying ritual of begging from a bureaucrat.  It would mean those who have saved through self-denial need not have to dissipate their assets first before qualifying for some assistance.

 

QUESTION 6.  Why do we need a basic income?Return to contents

 A.  Social security legislation has been introduced in the past to provide monetary benefits for those whose income, if any, is insufficient upon which to exist.

 The social security system was designed to meet the needs and assumptions at the time.  It has served us well, but it no longer does so.  It has become a patchwork of handouts and means for politicians to control, and gain the favour of, many through the manipulation of qualifications and benefit sums.  This leads to massive fraud.  It also requires a huge bureaucracy to operate.  The rules and regulations, form-filling, interviews, incorrect assessments and judgments by public servants, continual government amendments, and the deterrent of appeal board hearings for those wanting to challenge rulings are well known to the underclass and others.  The system can justifiably be called begging for money.  It is little wonder that social security offices generally are more well guarded than banks.

 The frustration and annoyance that this begging system generates often leads to preventable violence.  When it is considered that the status of women has changed, the needs of families altered, guarantees of full time employment diminished, with technology advancing rapidly, a career for life no longer envisaged, differing types of employment evolving, single parent families rising, the number of elderly increasing, and people between jobs for much longer, the basis on which social security income support was introduced is no longer relevant.  Time has passed it by.

 

QUESTION 7.  Why would everyone receive a basic income?  Is it not ridiculous to pay a basic income to millionaires and other wealthy people?  They just don't need the money, nor ask for it.Return to contents

 A.  Some rich people are already entitled to universal benefits and don't need them.  However It is easier and cheaper to administer and more efficient to pay everyone a basic income than have a process of sifting out those whom politicians consider are worthy of financial assistance.  But, be that as it may, the basic income concept is not just a financial assistance measure.  It is a human right to have the means to exist.  Whether rich or poor, all should have the right because it is a right.

 

QUESTION 8.  What evidence have you that payment of a basic income to all would not result in massive frauds with non existent people being invented, emigrants still collecting the income and the dead not being declared as deceased?Return to contents

 A.  Unless there were to be a moral and spiritual revival, there is no doubt that people will try to cheat the system as they do now with social security frauds and tax evasion.  However, it is probable that with a basic income it would be far cheaper and far easier to spot the cheat than it is now.

 At the present time, all the forms, questions, interviews, threats and penalties involved in trying to obtain a small sum of money, as well as having to go through a maze of bureaucratic procedures and risk upsetting the clerks with the power, encourages dishonesty through cheating, inaccurate answers or withholding information.  With basic income, all that stress causing hassle would be gone.  All the cheating involved would be by the creation of non-existent people.  It should be easier administratively to catch any basic income cheats because there is less opportunity for cheating for a start.  All the authorities have to do is to ensure that a person existed, lives, and is a permanent resident.  Cross checking through births, deaths and marriages, through immigration and emigration returns, electoral roles and tax returns, if any, and the such like should not be too difficult a problem.  The opportunities for cheating are far fewer with basic income than with the myriad of means tested benefits.  And means tested benefits cost the taxpayers quite a lot of money to run.

 

QUESTION 9.  Where's the money coming from to pay a basic income?  Won't it mean massive tax increases?  Surely we really cannot afford it?Return to contents

 A.  Whoever introduces the basic income would know from where the money would come and, in a democracy, seek electoral approval for the proposal.

 There are many ways of funding a basic income such as from a variety of taxes, a non-inflationary pre-distribution of the public credit, or as dividends from ownership of shares of publicly owned, and in some cases privately owned, ventures.  The Alaska Permanent Fund, and its dividend payments to citizens from it, is an example.  A basic income would produce financial savings from the current welfare payments system in administration.  As payments continued it is expected that there would be financial savings resulting from better mental and physical health and fraud prevention.  A change to the current debt-based monetary system could mean it costs the taxpayer, individual or business, less to fund a basic income for all than it does to fund the current social security benefits. Tax savings!

 

QUESTION 10.  If the payment is to come from taxation, why should any hard earned money be taken by taxation just so some lazy layabout can sit on the beach?Return to contents

 A.  This sort of objection has been leveled against all sorts of social programmes which involve some redistribution of wealth.  Depending on what system is used to fund a basic income, it may be that the tax take is used.  But that happens already.  Taxpayers pay for the elderly and children to receive unearned incomes - to sit around and do nothing and also pay the unemployed - on condition they don't work at all!  What will be different?  People with no children pay taxes so that other people's children can be educated, people who are well pay for those who are sick to receive treatment, people who do not favour the buying and using of weapons have to pay for them and people who prefer trains have to pay for motorways.  The young also pay for the old to have pensions. 

 Those who, through choice or fortunate life events, are required to pay to support others, who may make little or no labour contribution to the maintenance of, but use, welfare or community programmes, may believe such redistribution for these causes to be unfair.  They are however legitimate.  Redistribution occurs all the time and mainly in a fair way because the community determines certain social priorities which have to be balanced against an individual's wish to preserve and accumulate personal wealth.

 

QUESTION 11.  If you are handing out money, why shouldn't someone work for it - no work, no money?Return to contents

 A.  That is the Protestant work ethic approach.  Would you ask a 95 year old to work for a basic income?  As all would receive it, including the rich and politicians, would everyone be put to work with no exceptions?  And if there are exceptions, who will determine who does not undertake work for the income?  Would those in paid work, including MPs, also be required to work for the income after they have undertaken a full day's work?  If not, why not?  After all, they would be receiving the income.  What would the work be?  How many hours would people be put to work for a basic income?  At what rate of pay would this be?  Would the rates be varied according to the going rate for the job?  Would "unemployed" basic income recipients be forced to do those jobs which are so unattractive, dangerous or dirty that an employer cannot or will not pay enough to hire anyone to do them?  Who will arrange the work?  Who will inspect the work?  Who will say that the work done is sufficient to warrant a basic income?  Having said that, some have argued that all citizens have an obligation to contribute to socially necessary work in the community.  Instead of a basic income as such, there have been calls for a participation income.  To qualify one would have to be an employee, self employed, unable to work but willing to do so but for ill health, injury, disability or a lack of available paid employment, a career for the young, elderly or disabled, undertaking voluntary work or employed in some training or educational endeavour.  But then this would all call for an army of office workers and inspectors to determine eligibility and vet the work.

 

QUESTION 12.  By eliminating the necessity to work to obtain an income with the introduction of a basic income, would this not result in a mass exodus from the labour market and cause harmful labour shortages?Return to contents

A.  Hardly probable.  Whether or not someone works, and for how many hours, depends on a variety of factors both of a personal and social nature.  The attraction of not working may depend on the rate at which the universal basic income were set.  Someone in an unpleasant job, part time or full time, which brings in only 10,000 a year might decide to resign to live on a basic income of 6,000.  Someone earning 35,000 a year at a job which they enjoy and find satisfaction in doing, and who has a life style which only 35,000 a year could support, might decide that living off a basic income of 6,000 a year is not for them.  There is nothing to suppose that more people are going to loaf around all day rather than be working.  Research shows that unemployed people generally want to work and show flexibility in the type of job and wage levels they seek.  Many lottery winners at home and abroad stay in their same old jobs while more of them start their own businesses, having the assurance of financial security to do so.

 Few people are happy in complete idleness.  Even the wealthy find that they need to do something.  If more people want to give up jobs, and there are some jobs nobody would want were it not for the money, then that is their choice.  The result however may be a lower basic income as, if there were less output, notwithstanding automation, there will be less money available to distribute.  But that will be the freedom of choice.

 

QUESTION 13.  If people knew that they had an assured income, then surely they would not work so hard and diligently and productivity would suffer, the country would lose out in the global economy, causing jobs to be lost and there wouldn't be enough tax to give everyone a basic income?Return to contents

 A.  There is no known evidence which shows that people with an assured income, such as basic income, would not work as hard and as diligently as they had done previously.  People are motivated to work, to participate in society, by a variety of things such as financial security, family, habits, interests, rewards, status, personal fulfilment, obligations, social interaction and the need to feel creative, useful and productive.  There is nothing to suggest that the introduction of basic income would result in losing out in the competitive global economy.  If a company or organisation were uncompetitive jobs could be lost and taxable money reduced, but to suggest that a basic income would create lazy unproductive workers in sufficient numbers to adversely affect a tax intake is to suggest a total collapse of industry.  The level of a basic income does not depend upon the total tax take, but upon the amount of real wealth of goods and services available.  A collapse of industry would result in the loss of real wealth and reduce the rate of the basic income.

 

QUESTION 14.  Surely, as most political parties and economists have advocated, it is better to put money into improving education and training skills to help people fill the skilled jobs which we should have to be competitive and lead to growth in the economy?  The alternative is to be an unskilled low wage economy doing unskilled jobs which other countries would have us do for them.Return to contents

 A.  Education and training is a political sound bite answer to the problems of unemployment, disparity in wealth between the few rich and increasing number of poor, and those struggling under a mountain of debt and unfulfilled ambitions.

If education and training were as vital as politicians tell us, and they are, why is it that they are charging people to learn and/or to obtain a skill and telling us all that tertiary education and training cannot be afforded unless the students borrow money from the private banks to pay for it?

 If all the labour forces of New Zealand, Australia, Canada, South Africa, Zimbabwe, United States, the Arab world, India, Pakistan and the European Union had degrees and technical skills, the problems in each country of unemployment, underemployment, income deficiency, inequality and insecurity would remain the same as it is today.  The fundamental problem is one of income deficiency not lack of education and technical skills.

A good education is a wonderful thing, and highly desirable.  But education is not only an economic policy - it must also be about preparing for creativity and service.

 

QUESTION 15.  What do critics of the basic income proposal say?Return to contents

 A.  Generally, people opposed to the concept do so because it either clashes with their own agenda, is a new idea for people opposed to change, is contrary to their belief that everyone can only be allowed to receive an income if they work for it, or they really haven't understood how it could help them.

 Basic income is an idea so different from current thinking that it challenges the imagination of those not used to doing other than accepting what they have been told or what they have been used to doing.  Dismissive responses have been:-

it won't work

the idea needs more work

the workings are flawed

it is unsound

the time is not right

it's ridiculous

the banks won't accept it

nobody understands it

it will encourage laziness

it's inflationary.

 

QUESTION 16.  What benefits are there in having a basic income for all?Return to contents

 A.  A basic income for all would:-

  • be a fairer way of income distribution

  • recognise in a tangible way the unpaid role of care givers in society and women as mothers

  • remove from politicians and bureaucrats the power to decide who does and who does not deserve an income

  •  ensure that young people need not have to leave their home district just to obtain an adequate income through full time employment

  •  financially be far cheaper to administer than the current benefits system

  •  be easier for people to understand their entitlement

  • prevent considerable benefit fraud

  • provide psychological advantages, freeing people from stress and worry caused through the lack of an assured income

  • eliminate the social stigma of unemployment

  • provide financial security for increased entrepreneurial development

 These are but some of the obvious benefits.

 

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