Below is the full text of a
letter I have just sent Jackie Doyle-Price, my local MP. I wonder if she’ll even read it?
Dear Ms Doyle-Price,
As one of your constituents
and as I know that one of your stated political interests is welfare, I was
wondering if you had read the following article from The New York Times? It outlines a novel idea for a policy of a
basic income. Perhaps you could put this
forward as an idea for use in the UK to your colleagues in the Cabinet who
could actually make a decision on this idea?
Switzerland’s Proposal to Pay People for Being Alive
By ANNIE LOWREY
November 12, 2013
This fall, a truck dumped eight million coins outside the
Parliament building in Bern, one for every Swiss citizen. It was a publicity
stunt for advocates of an audacious social policy that just might become
reality in the tiny, rich country. Along with the coins, activists delivered
125,000 signatures — enough to trigger a Swiss public referendum, this time on
providing a monthly income to every citizen, no strings attached. Every month,
every Swiss person would receive a check from the government, no matter how
rich or poor, how hardworking or lazy, how old or young. Poverty would
disappear. Economists, needless to say, are sharply divided on what would
reappear in its place — and whether such a basic-income scheme might have some
appeal for other, less socialist countries too.
The proposal is, in part, the brainchild of a German-born
artist named Enno Schmidt, a leader in the basic-income movement. He knows it
sounds a bit crazy. He thought the same when someone first described the policy
to him, too. “I tell people not to think about it for others, but think about
it for themselves,” Schmidt told me. “What would you do if you had that income?
What if you were taking care of a child or an elderly person?” Schmidt said
that the basic income would provide some dignity and security to the poor,
especially Europe’s underemployed and unemployed. It would also, he said, help
unleash creativity and entrepreneurialism: Switzerland’s workers would feel
empowered to work the way they wanted to, rather than the way they had to just
to get by. He even went so far as to compare it to a civil rights movement,
like women’s suffrage or ending slavery.
When we spoke, Schmidt repeatedly described the policy as “stimmig.”
Like many German words, it has no English equivalent, but it means something
like “coherent and harmonious,” with a dash of “beauty” thrown in. It is an
idea whose time has come, he was saying. And basic-income schemes are having
something of a moment, even if they are hardly new. (Thomas Paine was an
advocate.) But their renewed popularity says something troubling about the
state of rich-world economies.
Go to a cocktail party in Berlin, and there is always
someone spouting off about the benefits of a basic income, just as you might
hear someone talking up Robin Hood taxes in New York or single-payer health
care in Washington. And it’s not only in vogue in wealthy Switzerland.
Beleaguered and debt-wracked Cyprus is weighing the implementation of basic
incomes, too. They even are whispered about in the United States, where certain
wonks on the libertarian right and liberal left have come to a strange
convergence around the idea — some prefer an unconditional “basic” income that
would go out to everyone, no strings attached; others a means-tested “minimum”
income to supplement the earnings of the poor up to a given level.
The case from the right is one of expediency and efficacy.
Let’s say that Congress decided to provide a basic income through the tax code
or by expanding the Social Security program. Such a system might work better
and be fairer than the current patchwork of programs, including welfare, food
stamps and housing vouchers. A single father with two jobs and two children
would no longer have to worry about the hassle of visiting a bunch of offices
to receive benefits. And giving him a single lump sum might help him use his
federal dollars better. Housing vouchers have to be spent on housing, food
stamps on food. Those dollars would be more valuable — both to the recipient
and the economy at large — if they were fungible.
Even better, conservatives think, such a program could
significantly reduce the size of our federal bureaucracy. It could take the
place of welfare, food stamps, housing vouchers and hundreds of other programs,
all at once: Hello, basic income; goodbye, H.U.D. Charles Murray of the
conservative American Enterprise Institute has proposed a minimum income for
just that reason — feed the poor, and starve the beast. “Give the money to the
people,” Murray wrote in his book “In Our Hands: A Plan to Replace the Welfare
State.” He suggested guaranteeing $10,000 a year to anyone meeting the
following conditions: be American, be over 21, stay out of jail and — as he
once quipped — “have a pulse.”
The left is more concerned with the power of a minimum or
basic income as an anti-poverty and pro-mobility tool. There happens to be some
hard evidence to bolster the policy’s case. In the mid-1970s, the tiny Canadian
town of Dauphin ( the “garden capital of Manitoba” ) acted as guinea pig for a
grand experiment in social policy called “Mincome.” For a short period of time,
all the residents of the town received a guaranteed minimum income. About 1,000
poor families got monthly checks to supplement their earnings.
Evelyn Forget, a health economist at the University of
Manitoba, has done some of the best research on the results. Some of her
findings were obvious: Poverty disappeared. But others were more surprising:
High-school completion rates went up; hospitalization rates went down. “If you
have a social program like this, community values themselves start to change,”
Forget said.
There are strong arguments against minimum or basic incomes,
too. Cost is one. Creating a massive disincentive to work is another. But some
experts said the effect might be smaller than you would think. A basic income
might be enough to live on, but not enough to live very well on. Such a program
would be designed to end poverty without creating a nation of layabouts. The
Mincome experiment offers some backup for that argument, too.“For a lot of
economists, the issue was that you would disincentivize work,” said Wayne
Simpson, a Canadian economist who has studied Mincome. “The evidence showed
that it was not nearly as bad as some of the literature had suggested.”
There’s a deeper, scarier reason that arguments for
guaranteed incomes have resurfaced of late. Wages are stagnant, unemployment is
high and tens of millions of families are struggling in Europe and here at
home. Despite record corporate earnings and skyrocketing fortunes for the
college-educated and already well-off, the job market is simply not rewarding
many fully employed workers with a decent way of life. Millions of households
have had no real increase in earnings since the late 1980s. Consider the
current debate over fast-food workers’ wages.
The advocacy group Low Pay Is Not OK posted a phone call,
recorded by a 10-year McDonald’s veteran, Nancy Salgado, when she contacted the
company’s “McResource” help line. The operator told Salgado that she could
qualify for food stamps and home heating assistance, while also suggesting some
area food banks — impressively, she knew to recommend these services without
even asking about Salgado’s wage ($8.25 an hour), though she was aware Salgado
worked full time. The company earned $5.5 billion in net profits last year, and
appears to take for granted that many of its employees will be on the dole.
Absurd as a minimum income might seem to bootstrapping
Americans, one already exists in a way — McDonald’s knows it. If our economy is
no longer able to improve the lives of the working poor and low-income
families, why not tweak our policies to do what we’re already doing, but better
— more harmoniously? It’s hardly uplifting news, but minimum incomes just might
be stimmig for the United States too.
Annie Lowrey is an economics reporter for The Times. Adam
Davidson is off this week.
I look
forward to hearing your thoughts on the subject either by mail, e-mail or on
any media outlet this gets debated on.
Regards,
Myles
Cook
If I get
a reply, I’ll post it right here!
