Could a state-funded universal basic income eliminate poverty? One of its most outspoken proponents, Professor Guy Standing, certainly thinks so. As well as teaching economics at the School of Oriental and African Studies (SOAS), University of London, Standing is the co-founder of the Basic Income Earth Network. His 2011 book The Precariat: The New Dangerous Class blames globalisation for an emerging social class without job security. He speaks to Equal Times about why a basic income makes sense to him.
Why is there a need for a basic income in developed regions like Europe?
Basic income is essential in Europe because of the growth of the precariat. And the fact is our existing social protection system doesn’t reach the precariat. The system puts people in horrendous poverty traps. A poverty trap means that if you go from receiving a state benefit to a low-wage job available to the precariat, in many European countries and elsewhere, you face in effect a high marginal tax rate, if you factor in the loss of state benefits for taking a paid job. What it means is that people in the precariat lose benefits and gain very little. That’s an important reason why the unions have to rethink their whole approach to basic income. Basic income would remove the poverty trap because you’d get it as a right.
What impact would a basic income have on trade unions?
I have always been a union supporter and always will be, because without collective bodies to represent us, we are all vulnerable. However, most unions became too labourist in the second half of the 20th century, and have failed to respond to the needs and aspirations of the precariat. Union leaders have long been among the most vehement opponents of a basic income. That has always struck me as sad. When I asked a group of union leaders at a big summer school why that was the case, one responded that he thought it was because if workers had a guaranteed basic income they would not join unions. That is a terrible line to take. Fortunately, it is also wrong. People who have basic security are more likely to join unions, because people who have a degree of confidence are prepared to take the risk of joining. Those who are acutely insecure dare not stand up.
How would basic income affect the drive for a minimum wage?
I’m arguing that a basic income should be a right, regardless of your labour status or contributions to social security. It’s different from a minimum wage. In highly flexible labour systems, the minimum wage should not be regarded as giving security to everybody. It’s a moral imperative, but we should not expect too much from it. It was suited to an industrial society where people were in long-term jobs and mass production, but that is increasingly not the case. The minimum wage can be manipulated easily by labour brokers. Actually they expect more hours of work and therefore it is a deceptive tool. I’m not against a minimum wage, but I don’t think it’s very powerful in the current system.
How can a basic income work in the developing world?
In developing countries too, the idea of going towards basic income is feasible and affordable. Pilot projects in India and Africa show if people have basic income, then they are more likely to work and tend to be more productive when they do. Because when people have more security, they are more cooperative, more productive and less resentful.
How can basic income help reach the new United Nations Sustainable Development Goals (SDGs) of eliminating extreme poverty by 2030?
If people talking about SDGs are honest, then everybody should have a basic income if they can afford it. People in the UN system are talking about a universal social floor. A lot of UN documents I see are platitudinous, because they don’t say how that floor is going to be provided. They leave it open to whether this would be pursued by ‘targeting’ via social assistance. This is the approach favoured by the World Bank over the past two decades or more.
To talk about targeting is frankly dishonest at this stage. The documents also leave open the possibility that we’re seeing: of making income support conditional on certain types of behaviour. This is an intrusion on freedom. It’s paternalistic, and leads to coercion and workfare, which the unions should oppose vehemently. It also forces down wages.
Unions have not opposed workfare enough, perhaps because those pushed into workfare are not unionised. They tend to be youths entering the labour force, forced to do menial labour in return for menial benefits. Unions must focus on identifying mechanisms to increase the security of the precariat. Workfare does the opposite.
How could basic income address the migrant crisis?
Because welfare states have shifted to means-testing. What that means is that the queue for benefits gives priority to those most in need. But it also means that migrants, among those most in need, can appear to go to the front of the queue for benefits. This regrettably has caused a lot of resentment in working-class communities.
If instead you had a basic income that every citizen was entitled to receive, you would not have that situation. You could say ‘sorry, we have to give basic security as a priority,’ and then legal migrants would start receiving benefits after being in the country for a certain period. It’s pragmatic, but you’ve got to give legitimacy to the system and take into account the affordability.
How will you pay for it?
Easy. One of the ways would be to substitute basic income for other benefits. Basic income and supplements for special needs, the disabled, the elderly. And from the unions’ point of view, they should be campaigning to convert the huge amount of money governments are paying in corporate subsidies. Tax breaks to rich that you can pay as basic income…
Here we have situation in Europe where the ECB (European Central Bank) announces it’s going to pour €1 trillion into the financial markets, going to the banks and financial institutions at zero interest so they can invest and make a lot of money. If you use that €1 trillion, you can give everybody a basic income. It’s a basic income for financiers.
Anybody who says we can’t afford basic income is either naïve or ideologically prejudiced.
So your basic income will eliminate the so-called ‘two-tier’ society?
As I have argued in the Precariat books: we have been experiencing the growth of a global class structure in which there are more than ‘two tiers’. A basic income would cause a redistribution of income and strengthen the bargaining position of those in the precariat, allowing them to spend more time on useful work rather than low-paid, resource-depleting labour. And it would alter the dynamics of the economic system. One policy by itself is not a panacea. That’s why the proposed Precariat Charter has 29 articles; basic income is only one. However, it is an essential one, if we believe everybody in society should have basic security in which to build and sustain their lives, and if we are to reduce inequality and enhance personal freedom.