Would an unconditional basic income be just?
On June 5th, Switzerland will be the first country to vote on an unconditional basic income (UBI). UBI is “an income unconditionally granted to all on an individual basis, without means test or work requirement”. Although not new, the idea is revolutionary in that it decouples income from work, and it conflicts with many people’s intuitions about justice. It cannot be fair if someone who chooses not to work because she wants to read novels all day is entitled to the same basic income as a person who cannot work due to disability, right? At the same time, the idea has been defended not only on economic and pragmatic grounds, but also for reasons of justice. I will assess the idea from the perspective of justice and conclude that justice recommends giving it a try.
First of all, UBI would be just from a strong egalitarian perspective: everyone would be equal in the sense of being entitled to the same basic income. But the idea of decoupling income from work and achievement seems unacceptable to many of us. We endorse equality in front of the law as well as equal civil and political rights, but we are struggling with the idea of equality when it comes to income. An income is something that needs to be earned, not something that humans are entitled to simply in virtue of being human. Yet in times where there is not enough paid work for everyone, we have to ask ourselves whether it is just to make the financial means for subsistence dependent on work. There are people who do not have the capacities and talents currently asked for by the labour market, and there are those who lose their job because of rationalisation measures.
In judging whether a certain policy measure or institution would be just, we have to compare it with its alternatives. Is it just that a person who cannot find a job that suits her skills and talents is forced to live under the stigma of being unemployed, or to accept a badly paid job that doesn’t suit her skills and talents? Is it just that some people have to have several jobs at the same time in order to be able to support their families? Is it just that people are forced to accept unbearable working conditions? If we answer these questions with “no”, this moves us towards the idea of a UBI. UBI can be said to be just in that it would counteract such injustices.
Whether people are in favour of UBI seems to crucially depend on their view of human nature. Do they think that humans are such that many if not most of them would choose not to work when given a UBI? Or do they believe that most people appreciate working and wouldn’t be satisfied by just living on their UBI and being lazy? I tend to believe the latter, but we cannot make a well-grounded judgement on this. We simply have to try it out. I can imagine that in a society where UBI has been implemented, very few people, if any, are willing to accept a job that is poorly paid and involves overly straining working conditions. If the implementation of UBI causes a big shortage of nurses, carers for the elderly and the like, this has to be answered with better working conditions. Every job that requires a person to perform it has to be made – if not attractive – at least acceptable. Surely such measures would make a society more just.
The vice editor of the Swiss newspaper NZZ am Sonntag, Nicole Althaus, criticised UBI as a “male play of thought” (“Bedingungslos für ihn, Hausfrauenlohn für sie?” NZZ am Sonntag, 24 April 2016). According to her, only families with the traditional division of roles would profit from it. She blames the advocates of UBI for failing to recognise unpaid work as work. “What does the unconditionality of a basic income for cleaning, washing and cooking consist of precisely?”, Althaus asked provocatively. Is UBI unjust from a gender perspective? I think that it is not, because it decouples income from work, both paid and unpaid. Every woman will be entitled to UBI, independently of whether she takes care of a family or not. That she cannot raise her income by bringing up children and doing the washing is a different problem. UBI will not solve that issue, but that does not make UBI responsible for it. I disagree with Althaus that women would not profit at all from UBI. In a society in which UBI was implemented, no woman would depend on a man for subsistence. Additional policy measures are necessary to solve other problems related to gender equality, but this does not disqualify UBI as a purely male idea.
Of course, we need economists to tell us what the effects of implementing UBI will be, but, as far as justice is concerned, I conclude that we should give it a try.
I’d be in favour of a UBI if there was a shortage of useful work to be done. I don’t think we are at that stage yet and so I’m not yet convinced a UBI would improve the distribution of resources.
The cost of it will have to come from somewhere else, and I think it is likely to come from the targeted benefits aimed at the sick and those with other special needs. And if the argument is that we want to support people who are caring or setting up businesses why not do this directly?
The response might be that the cost of testing for such entitlements is a deadweight loss that would be better given to leisure-lovers who will spend their time playing computer games, surfing or (like me) doing political philosophy.
But in response to this I would claim that a UBI would push up labour costs which would be passed on in price rises. This would make everyone worse off by increasing the cost of living.
Which leads to my suggested equity argument against a UBI – it would benefit leisure lovers at the expense of consumption-lovers. People who prefer to live a life which requires expensive resources would have to pay more (in tax, in costs, in time spent working) in order to enjoy the same quality of life they would have had without the UBI. In the meantime leisure-lovers will be better off.
My claim is just that there is no reason to introduce a policy that will mainly benefit leisure-lovers at the expense of everyone else. To put it differently, people’s leisure-time is priced more appropriately without a UBI.
Thanks for your comment, Doug. I agree that there is no shortage of useful work to be done, but I take it to support the idea of a UBI that there is (and has been for quite some time) a shortage of paid work. Instead of favouring UBI, one could defend a way of transforming all that useful work that needs to be done and is not yet paid into paid work, but then one has to say how that can happen en whether it is, for instance, cheaper than implementing UBI.
I disagree with your claim that UBI would “mainly benefit leisure-lovers at the expense of everyone else”. As I intended to argue, it would benefit all those who are currently living under the stigma of being unemployed, forced to accept unbearable working conditions or compelled to have more than one job in order to support their families. If it would also benefit “leisure-lovers”, this is rather a side-effect. Here it is also important to see that none of the advocates of UBI envisages it to be much above what is required for subsistence. Most leisure-lovers want to engage in some leisure activities, and most of these activities cost money. (Playing computer-games and surfing surely do.) That means that they will most likely want to have more than what they receive as UBI. This shows that the distinction between leisure-lovers and consumption-lovers, as you call them, is not sharp. Many of us have had the experience that they consume much less when they have less leisure time. Let me also add that I don’t see the appreciation of leisure time as something negative. On the contrary, I think that giving people the opportunity to take some time off from work would generally make them healthier, happier and also more productive.
Regarding the question as to where the money for UBI would come from, I have to say that I am not an economist, but it has been argued that a lot of money would be saved because UBI would make unemployment benefits and the whole bureaucracy that surrounds them obsolete. I have to leave the calculations to the economists, but I don’t see why the money would have to come from the benefits for people with special needs.
I agree with you that UBI would push up labour costs, but I see this primarily as a good thing, because I believe that labour should not be cheap. An important question is of course how big the effect on prices would be, and what that would mean for the possibility of people to consume and engage in leisure activities. Yet I also want to note that I believe that consuming less is not only necessary if we want to save our planet but also to the advantage of individuals.
Thanks Julia, I’m sure we agree on a lot and I’m sorry I didn’t mention your stigmatism point as this is a strong one.
However, if a lot of people supported the UBI then presumably that would be a good sign that the stigma of not working no longer applied. Similarly if a UBI was imposed without wide public support then there would be a stigma attached to obtaining the UBI and not working just as there is now for those who do not work.
Your other points really depend upon the level of the UBI and the assumptions made about how it will affect costs and behaviour. This is where I think things get very slippery.
Yes, there would be bureaucratic savings by switching to a UBI but would all UBI supporters really want a single UBI or would they support extra payments for those with special needs? Because if the latter then a lot of the admin costs would still be necessary. If not, then it becomes unpalatable because you are taking from people with severe needs to provide more to people without these.
The other strong cases were those of “unbearable working conditions or compelled to have more than one job in order to support their families.”
“none of the advocates of UBI envisages it to be much above what is required for subsistence.”
Here is the issue – I doubt UBI would get anywhere near subsistence without hitting other public programmes.
“This shows that the distinction between leisure-lovers and consumption-lovers, as you call them, is not sharp.”
I absolutely agree most people fall somewhere in the middle, but there are enough people who would choose the life of leisure that this group would take a lot of the benefit of the UBI and that also those who prefer to work and consume will have a big hit in their standard of living. That is why I picked out these two groups – most people would end up the same.
“I think that giving people the opportunity to take some time off from work would generally make them healthier, happier and also more productive.”
I agree, but there would be big costs to this….
“I agree with you that UBI would push up labour costs, but I see this primarily as a good thing, because I believe that labour should not be cheap.”
Cheap labour means cheap products and that we all have more time/money to spend on other things which is a good thing.
But I absolutely agree people should be rewarded for their work, particularly where it is onerous. The tax system I propose would no doubt push up the cost of a lot of work (especially unpopular work) so I guess maybe I agree with you to an extent. However, I think that the UBI would push up prices more so than my proposal.
Anyway, returning the UBI it seems like it becomes a self-defeating cycle. The UBI pushes up costs so the UBI isn’t enough for people to live on any more. So the UBI is raised which pushes up costs so the UBI isn’t enough for people to live on any more. And so on…
I’d certainly defer to some high-quality analysis that considers these things, though the assumptions would no doubt have to be heroic, but until then that seems to me to be the most plausible outcome. Which is why I was suggesting that people who want to consume (or just work irrespective of consuming) would be much worse off as prices rise for them and they get no obvious corresponding benefit in return.
“consuming less is not only necessary if we want to save our planet but also to the advantage of individuals.”
I agree, but then if we want to consume less we might have to work more – I expect it would be less productive to run the economy with fewer fossil fuels. Again, this depends on technological developments and a lot of assumptions I’m perhaps not qualified to make.
Hi Julia, you already touched upon many relevant points in your post and your exchange with Doug, but here is yet another consideration: power relations at work. Presumably, most people would continue to work even if there were an UBI (otherwise it is unclear how it could be financed in the first place). In today’s world, a lot of work takes place within more or less hierarchical structures (companies, public bureaucracies, etc.) that have certain advantages with regard to efficiency, but raise real concerns concerning the equal standing of citizens, I would hold. One question about an UBI is how it would affect power relations at work. On paper, it would provide an “exit option” for employees, because they could “afford” to lose a job without having to go hungry. But realistically, most employees would probably still want to continue their lifestyle, which they design while they have their UBI AND their wage, so that the loss of the wage would still seem quite threatening to them. So I’m not quite sure what to think about this argument, but it seems that it is an important dimension of changes that an UBI could potentially bring (depending on how it is designed) that matters IN ADDITION to distributive concerns. Any thoughts?
How is this different from the BIEN program at the ILO?
Hi Julia, thanks for a very interesting post. While I’m very sympathetic to your argument, I have a question about how you conceive of people’s needs and how they’re covered by UBI. It seems that you take a “Rawlsian” approach, focusing on basic goods. That is, it’s implicitly assumed that people need a certain amount of goods, and that amount doesn’t change much from person to person.
But a common complaint against UBI is that people don’t all need the same. On the capabilities approach, what matters is that people have the capabilities necessary to live a decent life, which may require different amounts of money. Some people need medical treatment or help in the home. Some have children with special needs. Some areas of the country are more expensive to live in than others. Moreover, the UBI seems, at least in part, to be premised on the idea that people should be able to survive, but not necessarily live a comfortable life without also working. But a person with a physical or mental handicap might not be able to work at all. In that case we may think they should get more. This presents two problems for UBI, one philosophical and one practical. Philosophically, does UBI follow the right conception of justice and what it means to be equal in society? And in terms of implementation, one of the advantages you allude to in one of your answers to a comment is that it will be easier and cheaper to implement than the current welfare system. But that might not necessarily be the case if it needs to take account of individual circumstances. In that case it might be supplementary to the current welfare system, but cannot replace it. Do you think these are fair objections?
I’m reading this post way too late, but I’d like to make a few comments. First of all, thanks Julia for introducing this discussion. My view is that the best way of defending UBI is to focus on practicalities and see how it compares to current welfare systems. Arguments starting from justice are more difficult to make because the main attractions of UBI are practical. Besides the radical simplification it introduces compared with a system aimed at distinguishing between the deserving and undeserving poor, the UBI system has one major efficiency attraction: the removal of the unemployment trap. Under current systems, when you are unemployed and start working again, you lose your welfare benefits. If you only have access to the minimum wage, you might move from a situation where you receive 1000 €/month without toil to a situation where you get 1200 €/month for a full time (probably not fulfilling) job. Psychologically, it’s like being paid 1.5€/hour. Or, to put it differently, it’s like being taxed at a 100% rate on the first 130 hours of your month. Now, if you believe that it is just for the unemployed to receive (at least) 1000€/month, UBI clearly appears as a better way of granting this, as it removes the unemployment trap. The wage is added to the basic income. Every worked hour pays.
Besides, three short comments on previous discussions.
1) To Julia and Doug: the cost of labour would not necessarily increase. For some jobs that no one wants to take, it certainly would, and this is to be praised from a justice perspective. But for (many) other jobs, companies will be able to lower wages. Part of the cost of labour will move from companies’ shoulders to the state’s. This is why many people from the right support UBI. But it should not worry those from the left, because people would have more power to reject undesirable job offers, as mentioned by Lisa.
2) To Lisa: this power will increase with the amount of the UBI, but also comes from its unconditionality. All current welfare benefits are conditional (you need to show your willingness to work), which forces people into exploitative jobs. Unconditionality would, by itself, alter power relations between the unemployed and employers.
3) To Jesper: UBI is certainly not incompatible with services (health, education, transports) which would be provided according to specific needs. Neither is it incompatible with other cash transfers targeting specific needs (for the handicapped, or the elderly). It is only a common basis, supposed to cover the needs that we all have, but not supposing that those are the only needs people can have.
Pierre-Etienne : I couldn’t disagree with you more.
Any well designed benefits system will want to avoid the poverty trap – that is economics 101. But this is MUCH harder to achieve with a basic income. After all, if everyone is being given the basic income to do nothing then they have a lot more to lose by going into work. Furthermore, if you are providing the basic income to all and not tapering it away then either earners higher up the scale will have to be taxed a lot more to maintain government revenues OR a huge amount of revenue will have to diverted towards the basic income payments.
You mention “the radical simplification it introduces compared with a system aimed at distinguishing between the deserving and undeserving poor” but then you accept that many people would qualify for extra payments
So the only saving is in not means testing for job-seeking behaviour. Surely we can work out how much this costs and divide it by the number of people in society.
A quick back of the envelope calculation would be that in the UK current spending on unemployment benefits and administration (£5bn) divided by the number of people in the country (65m) would give each person the grand sum of £75 per year. A much more favourable quick calculation (excluding children and the elderly and assuming that the UBI replaces various tax credits as well) still only provides £1,175 per year for each working age adult.
So you would have to take money from somewhere else to fund the basic income.
I fully agree with you in your point 1) – I have a tax and benefit system proposal (http://dougstaxappeal.blogspot.co.uk/2014/08/what-is-hourly-averaging.html) which would radically change costs and prices and improve the bargaining position of labourers for unpopular jobs. So you don’t need a UBI to do this.
Thank you Doug for pursuing the discussion.
I don’t understand your statement that “if everyone is being given the basic income to do nothing then they have a lot more to lose by going into work”. You have nothing to lose by going into work under the UBI system. What is true is that you have nothing to win by accepting exploitative working conditions, which I take as good news. But in the case of suitable working conditions, you win additional money and all the other goods mentioned by Lisa and Anca (http://justice-everywhere.org/distribution/on-what-we-should-get-out-of-work-other-than-money/).
It is clear for me that a UBI should be financed by a much higher taxation (of capital, as much as possible, but also of labour). People at the top of the income scale will just see their basic income absorbed by their taxes. I don’t see why we could not assume, on a blog devoted to the question of justice, that higher taxation is possible (especially if it’s for financing a policy from which most citizens would benefit).
Your tax and benefit system seems really interesting. I would have technical questions to ask. Therefore I suggest a blog note on this (or have you done it already?)
I agree with Pierre-Etienne and most things have been said by now. Let me just add a few points. I know the critique of a UBI that refers to those with special needs, but I don’t agree with it. UBI cannot replace all existing welfare schemes, and it needs not. In addition to the UBI, people in need of extra ressources for medical treatment etc. will receive them. Dealing with such requests requires some bureaucracy, but we would still have far less of that than prior to implementing the UBI.
I agree that practical reasons in favour of UBI have a far more prominent role in the debate than reasons of justice, but I believe that it is very important to reflect on UBI from the perspective of justice – otherwise I wouldn’t have written the post in the first place. There are good reasons for assuming that not only practical considerations, but also justice recommends introducing a UBI.
Regarding Lisa’s point, I agree with Pierre-Etienne that the effects would be positive. Power relations would be altered in a positive way. Yet I also think that this effect should not be overestimated because indeed, as Lisa said, having one’s income reduced to the amount of the UBI would also be threatening for many, though certainly not nearly as threatening as not having enough money to fulfil ones basic needs.