Basic Income

I'm creating this page in February 2017 because there has been an explosion of interest in the concept of a universal basic income over the last few months. It seems inevitable that robots and artificial intelligence will take over many of the jobs done by humans over the coming decades (see my page Will robots take our jobs?) and therefore there are likely to be large numbers of people who are of working age but who will not be able to find jobs through no fault of their own. Of courser these people deserve to have a decent standard of living, so the idea would be that every adult would receive a 'basic income' indefinitely whether they are working or not, no questions asked. There would be no requirements to show an individual is looking for a job. In fact there are several reasons why this might be a good idea:

  • There will be large numbers of adults unable to find work but who deserve a decent standard of living
  • Unemployed people currently are reluctant to seek low-paying or short-duration employment because it can severely reduce their unemployment benefit. If they receive a basic income then they could accept such jobs without worrying about losing any benefits. An objection some people raise against basic income is that it would encourage people to be lazy but the point that I making in this paragraph is that it would actually encourage some people who are receiving unemployment benefit to accept these non-ideal jobs.
  • Paying all adults the same basic income would allow many other types of benefit, including but not milted to unemployment benefit, to be scrapped, simplifying the bureaucracy and making the bureaucracy more efficient
  • Knowing that have a guaranteed income, more people would be willing to do charitable work.

Of course, paying a decent basic income to every adult would be a vey expensive proposition - where would the money come from. If you heavily tax the humans with the highest wages then that discourages people from wanting those key top jobs. The better solution is of course to have increase taxes on the work done by robots, or just on automated industrial work in general. I have read that it costs about 4 dollars to hour to run an industrial robot and about 40 dollars an hour to pay a human to do the same job in the west. In places like China it might cost 8 dollars an hour to hire a human worker to do the job that the robot can do for half that cost, so by using robots industry should save enough that they would be able to pay the higher taxes needed to make a basic income feasible. That implies though that the goods being produced or job being done would not drop in price as much as it would do if this heavy tax were not imposed.

I suppose that another problem with one country offering a basic income for life is that it would attract massive immigration from other countries, assuming that immigration was allowed and that immigrants would qualify for the basic income.

As I write this in February 2017 one of the first experiments is being carried out in Finland to see what effect receiving a basic income really does have on people - will it make them lazier or will it encourage people who are receiving unemployment benefit to accept low-paying or short-duration work? Finland will pay €560 (£490; $600) to two thousand unemployed people for a period of two years.

Four Dutch cities are to take part in a trial, the Canadian province of Ontario will hold its own experiment, and Scottish councils in Fife and Glasgow may also stage a trial. See this BBC article.

Basic income is also in the headlines right now because Benoit Hamon has just won the first round of France's Socialist party primary and his programme is built mainly around the radical proposal of a universal monthly payment for all French citizens, regardless of income.