Let me not to the marriage of true minds admit impediments. But….. I can’t help but feel some stirrings of irritation at Labour’s new found enthusiasm for a universal basic income.
Good stuff to recognise all the future shocks of new technology and the impact on jobs. Great to have the debate today at the Future of Work conference. It’s about time.
And a hearty yes. We can all agree more income security for the bulk of workers will greatly improve well-being. Such improvements are required with urgency as the casualisation of the labour market grows and misery deepens for too many in the digitalised world.
But a basic income for all as a solution to poverty traps and income insecurity is a futuristic idea about a Utopia. I hope we get there one day too but let’s be real about it. Children are dying and lives are being stunted right now.
Typically serious writers on the basic income like Max Harris are very careful to say they are talking about a concept not a fully-fledged costed workable blueprint for the Labour government to implement after winning election in 2017. See A Universal Basic Income for New Zealand by Max Harris and Sebastiaan Bierema.
The problems of the basic income are enormous. When writing a chapter for “Basic Income in the Antipodes: Perspectives from the ‘Other Side of the World’. (Editors: Jenni Mays, Greg Marston and John Tomlinson, 2016) I checked out the Garth Morgan proposal and wrote this:
The basic income idea has many admirers but few ask the practical question of how we get from where we are to an ultimate, basic income “Nirvana”. A big bang approach, such as suggested by Morgan and Guthrie in the Big Kahuna (2011) is unlikely to be politically acceptable. People are nervous about large shifts from one paradigm to another. The essential trade-off is that a level of basic income for all that removes poverty would be very expensive. Moreover the taxes necessary to fund it would entail high marginal rates and would have an impact on behaviour, for example, the willingness to earn extra income. Thus, while the idea of a basic income is intellectually appealing, unless we can realistically show how to get there it will remain in the textbooks.
It will also fall flat unless it clearly and meaningfully reduces poverty. New Zealand has high rates of family poverty (Perry, 2014a) and reducing child poverty is a pressing and urgent social issue (Dale, O’Brien, & St John, 2014). Thus Gareth Moran’s Big Kahuna falls short when calculations under their changes show that a sole parent on a benefit with two children will actually be worse-off. The personal calculator on the website that delivers this information, chirpily appeals her sense of being happy for others:
Oh no, you’ll be worse off. But others won’t be!
Even if she earns as much as NZ$35,000 per annum in paid work, the calculator finds she will be NZ$6000 worse off than before. This is not a minor inconvenience but a major structural challenge to the acceptance of the universal basic income.
Nevertheless we are faced with the precarious state of employment and the ongoing casualization of the labour market in the 21st century that demands new thinking of our support systems and antipoverty measures. The consequences of not doing so and of continuing to link social provision to paid work will be increased poverty and insecurity.
Let’s not pretend we can achieve the basic income nirvana in anything but the long run.
So my plea to the basic income advocates is please demand changes that move us towards better policy in line with the principles of the basic income right now.
Our struggling families and sick children cant wait.
First, we need an individually based benefit system that does not penalise relationships. What we do now belongs in the dark ages but in line with the basic income concept for a modern world, benefits should not be based on the couple as the unit, see CPAG Complexitity of relationship report.
Second, like the basic income, we need secure child payments can be relied regardless of employment status of parents. Currently families in insecure work have enormous variability in the Working for Families payments. Labour has said it wants to leave no one behind. But it was the party that introduced the fixed hours of work that families must achieve every week if they want their children to benefit from the full package of tax credits.
Those fixed hours 20 for a sole parent and 30 for a couple are anachronistic in the extreme in the world described this week at the ‘Future of work conference.
Working for family tax credits are for the children and should be secure and regular. If a sole parent’s hours of work fall to 19 for instance, she loses $72.50 a week for her children. This is 44 percent of her Working for Families tax credits for her children. I am waiting to hear Labour pledge to remove all fixed hours of work requirements from Working for Families to show us they really mean what they say about basic incomes.
Moreover for working families, one expects to hear condemnation of the subtle reductions National is making over time for families in low paid work as outlined in the Fix Working for Families campaign to be launched 1 April. See also FWFF Facebook page