Social Solidarity Requires a Universal Basic Income
By James Magnus-Johnston
Going forward in these uncertain times, a universal basic income could be the best way to maintain social solidarity—whether referring to health, wellbeing, or public order. “Solidarity,” writes Eric Klinenberg, “motivates us to promote public health, not just our own personal security. It keeps us from hoarding medicine” and prompts us “to knock on our older neighbor’s door.” It is a structure and a mindset that breaks down the barriers of inequality and improves trust, maintaining the cohesion and the stability of society.
A basic income is an expression of care and solidarity among members of society across divides of age and opportunity. (Image: CC0, Credit: Matthias Zomer)
A universal basic income (UBI)—otherwise known as a guaranteed income, living wage, minimum income (or its cousin, the “reverse income tax”)—is an ongoing cash benefit for anyone that falls below a certain income threshold. Spain has already embraced a universal basic income, and others may soon follow if the length of the crisis becomes protracted.
Economic stability is essential for strengthening social solidarity as the coronavirus continues to spread. The COVID-19 pandemic drives home the fact that, if everyone’s basic needs are met, we can take care of ourselves (and shelter-in-place) with less fear and anxiety. A universal basic income could improve social and health outcomes, as well as avoid a protracted economic crisis for months and even years to come.
Reaching for Revenue Neutrality
By reducing the number of conditional cash transfers for employment and disability insurance (among other programs), a UBI may not be as expensive as commonly thought. In Canada, former conservative senator Hugh Segal has become a vocal proponent of a nationwide UBI program. The Basic Income Network estimates that a nationwide UBI program would cost $76 billion before savings. After factoring in a reduction in other federal programs, the cost comes to approximately $44 billion. Provinces, collectively, would save over $30 billion—some of that from net federal transfers.
In the context of an economic crisis, there are further savings still. Canada spent $362 billion on mortgages to keep banks solvent during the 2008 financial crisis. Supporting households and individuals is a far more affordable proposition.
Maintaining Social Order and Health
The COVID-caused recession struck at a time when inequality had already reached historic levels. Social solidarity was precarious when the crisis began. Poverty levels in OECD countries were unnecessarily high, at an average of 11.7 percent of the population; 18 percent in the USA.
Recovery from the recession provides an opportunity to correct rather than entrench economic inequality. While temporary cash benefits will keep people sheltered and fed in the short term, they will not prevent the economic contraction that will emerge along with a likely wave of private defaults (which will disproportionately affect those of lower income). A guaranteed income would create long-term security and diminish socioeconomic divides.
Furthermore, there would be huge savings within the public health sector. Those who live at the margins worrying how to feed or shelter themselves suffer from poorer health; the understandable worrying exacerbates stress-induced illness and addictions. If everyone received a living wage, individuals would have easier access to medicine and clinics. A “side” benefit—hardly a minor one—would be a reduction in the spread of viruses conducive to pandemics.
Life-Affirming Simple Living
A basic income would help people replace a precarious and anxious work culture with life-affirming, creative, and healthier pursuits. (Image: CC0, Credit: Re-Essa Buckels)
From an ecological perspective, a basic income has made sense for many years because it enables a simpler, more frugal lifestyle than attempts at keeping up with higher-spending Smiths and Jones. Simple living allows individuals to dedicate more of their time to meaningful family activities rather than constantly struggling to stay afloat in an intense job market.
A UBI incentivizes folks to replace tedious jobs with life-affirming, creative pursuits. With an increase in automation over the last 30 years, job productivity is no longer coupled with the production of income, which has been stagnant over roughly the same time period. Contract, or “gig” work, and clerical jobs have also increasingly replaced labor-intensive ones. A basic income would allow folks to devote energy to passions and priorities outside of these redundant and monotonous careers. They could dedicate themselves to family, artistic, or artisanal projects. They might even have more energy to volunteer for causes they care about.
Solidarity and Hope for the Long Term
For now, a basic income will help secure basic needs and maintain public order as physical distancing will likely be advisable or even required (at least intermittently) for the next 12-18 months. As we look to the long term, we should also recognize the merits of a UBI in helping to balance social, ecological, and economic needs. A simpler, less energy-intensive lifestyle can foster a greater sense of overall wellbeing, improve health outcomes (for individuals, families, and the planet), and save people from anxiety-ridden jobs. While the pandemic may have revealed the weaknesses of an industrial society, it also revealed a world filled with hope and social solidarity. Now’s our chance to maintain that world.
James Magnus-Johnston is a PhD researcher at McGill University in the Leadership for the Ecozoic program.
Question. Is the traditional idea that “bread and circuses” partly caused “The Rise and Fall of the Roman Empire” more of a myth or a reality? And if a reality–in what way is this “classical sign of decadence” different from the “universal basic income”? Certainly they have a similar potential to quell discontent and generate blind support of the status quo–stifling reform and regeneration–do they not? Also perhaps akin to the “pork barrel politics” of the Tammany Hall era. And numerous analogies today.
I am not a skeptic but playing devil’s advocate to understand the ramifications. I am not an economist but here is my understanding. It seems a widely accepted fact that at least in America, poor people are terrible at saving money. Back in the 70’s they just had to have that CB radio–in spite of the fact it was sure to end up in the pawn shop. Today perhaps it is the latest ipad. The highly successful rent-to-own industry is said to have evolved from “loan sharking” and other forms of “predatory lending” which take advantage of people who are not financially astute.
But there is a flip side to this. It means that if we were to give cash to millions of lower-class Americans–they would go right out and spend. And for conventional economists–the cure for every recession seems to be, “Burn up your savings! Go out and spend!” And my reply is, “Oops… I already did what you guys said during the last recession… No savings means no safety net for me or for the economy…”
I.e. this “conventional economics” is not exactly “my kind of economics.” Nonetheless–the world is what it is. I do not see how any “conventional economist” can disagree with the premise of a “universal basic income.” I.e. the way the world functions today–seems that a trillion dollars to poor people is a far more sure boost for “the economy” than a trillion dollars in tax breaks to billionaires and corporations. If we can do the second–then we can and should do the first instead.
Agree. How do we make it happen?
If you have time, James, please list the best success stories in adopting the UBI or something similar. As I am asking my elected officials to include UBI in the post-pandemic “new normal”, I need all the best arguments I can get, as this sounds anathema to most of them, no matter the political affiliation.
Two of my favorite references on this topic are: “Utopia for realists” by Rutger Bregman and “Bullshit Jobs” by David Graeber. I would appreciate other references.
A COMMENT ON THE “BASIC INCOME”:
Anyway, a “Basic Income” based in a “Central State Economic Taxes Economy”, has the problem of the “Depletion of Natural Resources”, be them Non-Renewables and, if not carefully managed, even the Renewables, for which the revenue of it would be progressively decreasing.
So, to arrive to a finally “Steady State Economic Activity”, based finally in “Renewable Natural Resources”, it seems it has to be supplemented with other forms of economic activity, like “Community Currencies” as ways of Barter, and “Self-Sufficiency” at personal and family and Community levels of basic needs such as the fundamental that is Food, and “Self-Reliance” of not basic others at the Regional, National and some fews at International levels, and all this in a sustainable and Fair ways.
I always thought of a UBI as revenue stream that every citizen received as a birthright from the government, regardless of how much (or how little) else they earned or were worth. The terms “minimum income” and “reverse income tax” (RIT), which are equated here with a UBI, are only paid when a person’s income falls below a given threshold, and the government then pays only enough to bring them up to that threshold. There are some big differences between the two!
A UBI incentivizes people to seek additional work, since they get to keep every penny they earn, whereas an RIT means nobody would take any job that was not assured of paying at least as much as its threshold. In particular, nobody would do odd jobs of any kind (so forget hiring a self-employed handiman), and the “gig” economy would cease to exist. It’s difficult, in fact, to see how even student summer jobs and internships would survive such an arrangement! From the perspective of a steady state advocate, much of this would probably be seen as a good thing, which is probably why the RIT is being promoted here, even though it’s being called a UBI.
Another (presumably unintended) consequence of an RIT, however, is that it also promotes an informal economy, aka “black market” for labor, in which people work either for direct cash payments or in exchange for other goods and services. Hence if an RIT ever happened, I’d hazard a guess that cash would soon be eliminated (as bills over $100 already have been) in order to try to prevent this, but barter would still be there and would almost certainly result in a substantial, and totally unregulated, shadow economy. It is harder to argue that this is also a good thing.
The author of this article should have discussed these distinctions and issues.
Astute observations, Krystof! I suppose one of the questions that stems from your comment is whether a basic income provides more than the basics (ie. “decadence”). I’d wager that the best outcome for most folks below the basic income threshold is the alleviation of stress!