By Anne Ryan and John Baker of Basic Income Ireland
A universal basic income is a regular payment from the state to each individual, sufficient for a frugal but decent standard of living without supplementary income from other sources. Basic income is always tax-free and replaces social welfare payments, child benefit, the state pension and tax credits as we currently know them. It is paid to everyone, so reaches people in need without complicated conditions or demeaning supplication. People with high incomes get basic income, too, but pay it back through the tax system. Basic income establishes basic financial security as a right to all members of society, whether they engage in paid work or not.
Basic income is not a panacea, but it can help to address a surprisingly wide range of the immediate problems that animate the Left, as well as creating conditions for the longer-term transformations in the structure of the economy necessary for achieving much greater equality and for preventing catastrophic climate change.
For a start, basic income would bring economic security to people whose interests are ignored by the current system: casual and short-contract workers who get no or limited sick pay, holiday pay or pension rights; other employees whose wages are insufficient to meet their needs; many self-employed people and small business owners with limited and insecure income; and those doing the valuable unpaid work, including care work, that our society and economy depend on. Basic income would also give financial support to students and trainees while they develop the skills they need for a good life and for making a positive contribution to society.
Basic income would avoid the ‘benefits trap’ faced by many unemployed people: if they take paid work, especially low-paid or temporary, they often lose out financially, while facing a bureaucratic quagmire of conditions for claiming, and for signing on and signing off. With basic income, there would always be a financial gain from doing paid work, with no need to seek anyone’s permission or face any sanctions for doing so. But although the State would continue to support people’s access to paid work, nobody would be threatened with loss of benefits for not taking up jobs or training.
Basic income would support small-scale innovation, including people trying to establish themselves in creative self-employment, communities developing social enterprises, and cooperatives engaging in new ways of structuring work and production. These forms of economic activity are currently peripheral to the capitalist economy, but will be central to the development of a post-capitalist society that puts people’s needs ahead of profit.
At the same time, basic income would strengthen the bargaining position of workers in conventional employment relationships. Because no one would be forced into a job by the threat of destitution, no one would have to take low-paid, low-quality work simply to get by. No one would be chained to work they considered to be personally, socially or environmentally harmful, through rules that deny benefits to people who are ‘voluntarily’ unemployed. Basic income would serve as a ready-made strike fund for workers taking industrial action.
Basic income would also benefit all workers by providing them with more freedom to leave paid work temporarily for a wide range of reasons, including caring for others, improving one’s skills, personal self-development, or simply taking time off.
Taken together, these dynamics would have a major impact on economic inequality. Not only would they reduce income inequality through a guaranteed minimum income and better access to paid work, but they would reduce inequality in the quality of people’s work and in power relations in the workplace. Everyone recognises the egalitarian credentials of an unconditional, universal right to clean water and sanitation, to education and healthcare. Basic income extends the same logic to the right to a decent level of financial security.
Over a longer timeframe, basic income would contribute to the conditions for adjusting the total amount of paid work in the economy to our real human needs, using the opportunities presented by robotization and other IT-based increases in productivity to reduce working hours, eliminate pointless jobs and move to a post-carbon economy. Of course, these objectives require many more changes in economic priorities and structures, but basic income would provide the universal, basic economic security that is needed to underpin those changes.
Like any other progressive policy, basic income needs to be part of a broader programme of change. It must not, and need not, serve as an excuse for denying everyone access to well-paid, high-quality work, for ignoring structural inequalities of class, gender or ethnicity, for failing to provide good, universal public services, for tolerating inadequate provision for housing and childcare, or for perpetuating a dysfunctional financial system. On the contrary, basic income will be a better, fairer policy in a better, fairer society. As we have already said, basic income is not a panacea.
Ireland is one of the world’s richest societies. There is no reason why it could not provide the universal economic security that basic income represents. Work by Social Justice Ireland has demonstrated that it would be possible to pay a basic income in Ireland, at existing social welfare rates, within our existing revenue system (Healy et al) [see footnote]). Basic income would replace almost all existing social welfare provisions (top-ups would be put in place for people with special needs and nobody would receive less than they currently receive). It also would replace tax credits for employed people. Those resources are already in the system. With our present reliance on income tax as a primary source of revenue, we would need to increase income tax rates, but this nominal increase in tax would be offset by basic income for most households. At current costs of living, a truly adequate basic income would, of course, have to be set at a higher rate than existing benefits, but the mathematics are not very different. In the longer term, a fairer and more ecologically sound tax system, with more emphasis on economic rents, taxing wealth, and taxing resource use, would be desirable for many other reasons and would provide a broader base for financing a basic income.
Basic income cannot solve all our social, ecological or debt problems, nor does it claim to. But its introduction would immediately help to address some major problems in Irish society, and would play an essential role in the wider transformations to which we all on the Left aspire.
[Healy Sean, Michelle Murphy, Sean Ward, Brigid Reynolds, 2012. ‘Basic Income – Why and How in Difficult Times: Financing a BI in Ireland – www.socialjustic.ie/sites/default/files/attach/policy-issue-article/3318/2012-09-11-bihowandwhyinirelandbiencongressmunich2012.pdf] Accessed 18 March 2016.