Felix Fitzroy and Jim Jin, both of the University of St Andrews have recently written a paper ‘Basic Income and a Public Job Offer: Complementary Policies to Reduce Poverty and Unemployment.’
I see the title is a little unambitious – I would have thought a basic income could not only reduce poverty but also change society. Still we have to start somewhere and the report is intriguingly unusual in proposing what most would refer to as a universal basic income (UBI) as well as a Job Guarantee although they go on to explain why they prefer the less prescriptive term Job Offer.
They start with an outline of both the problems of austerity and the problems in the Labour market. These are likely to be familiar to most Progressive Pulse readers: underemployment if not unemployment, insecure jobs often contracted on a zero hours basis and self employment which is at pay rates that are below the minimum wage. It transpires that even in Europe’s economic engine house, Germany, labour (if we take that to mean the bottom 40% of earners) has experienced no real growth in wages since 1991. So the problem is actually widespread.
It is at this stage that I see why the report’s ambition is rather lacking – they are still in the tax and spend scenario so are at pains to cost their recommendations all of which of course need to be ‘affordable’. They manage to demonstrate that their ‘modest’ Basic Income measures of £4000 per head per annum could be funded simply by abolishing the personal allowance without other tax increases – though at this low level the simplicity of the system would be augmented by other benefits for housing and disability in particular. They also admit that the current £15 billion of unclaimed benefits would be more likely to be taken up in a more open system.
The report says that Universal Basic Income as unearned income, fails to provide the much cited ‘dignity of work’. They, in turn, fail to acknowledge that this dignity might be of rather less importance when everyone has unearned income – indeed an income which is both unearned and received as of right.
The authors suggest that, with the rise of “non-standard employment”, the appeal of the Job Guarantee has tended to be less attractive than the Universal Basic Income, which they prefer to call the Basic Income (BI). They refer to (the economist and MMT exponent), Tcherneva’s review of the Argentinean Plan Jefes, which during the economic crisis was a form of Job Guarantee, and which is seen as strikingly successful.
The report remains convinced that “BI without the conditionality and limited duration of most current benefits would doubtless improve welfare but is unlikely to remove the stigma of unemployment.” They mention that studies have shown that very few lottery winners give up work altogether (which I’m bearing in mind next time I buy a ticket). This may be the case but this smacks of a pervasive Conservative mantra. Before the Thatcherite idea that the poor were feckless, we never bothered that the Beatles probably composed some of their songs when unemployed. (Allegedly rock and roll as rhyming slang for the dole was a consequence.) JK Rowling definitely did some of her writing whilst unemployed. Stigma is really not necessary – simply an optional extra.
When the report continues that “most proponents of either BI or JG when they treat their preferred policy choice as exclusive, neglect problems with sole reliance on this option and ignore the potential gains from complementary [choices]” they are on firmer ground.
If I’ve understood correctly the idea for the Basic Income and a Job Offer seems to have been inspired by the book ‘Basic Income: A Radical Proposal for a Free Society and a Sane Economy’ by the Belgian academics, Philippe van Parijs and Yannick Vanderborght.
This inspiration makes for real substance. It is important that the Job Guarantee becomes the Job Offer. The Job Guarantee implies some coercion – “The Job Guarantee (JG) implies the right to be employed and paid [without] reciprocal obligation on employees to perform tasks to any required standard. So only a qualified JG or Job Offer for those who are able and willing to work, would be feasible.”
Training, apprenticeships and career progression would be inherent to the JO. That is something we don’t hear of in the JG and that really helps to justify the JO – it’s an offer in the marketplace and has to be sold – it is not compulsory but the choice of the prospective employee – so these additions to a basic JG provide encouragement for acceptance and are likely to improve the perception of any JO.
The report identifies home caring and public works as the two main areas for JO since they provide a set of tasks that are in pervasive need into today’s society and encompass areas where most people have something to offer, as well as a basic ability which is capable of upskill.
Indeed our old friend the ‘Green New Deal’ gets a mention which the report thinks the Job Offer programme could probably help to provide at a lower cost. And of course by helping to create a significant public sector which provides reasonable wages and good conditions – and, even flexible work times – it would put pressure on the private sector to compete. This should be good for working conditions.
They conclude by indicating that “modest levels of both BI and JO could bring almost everyone into employment and above the poverty level with only moderate tax rises” and go on to give examples (whist confirming eligibilty restrictions would be required especially if the UK remains in the EU) – with costings.
Because UBI would transform the concept of worth – both personal and financial, membership of society, and eventually even where money comes from, so fundamentally, I think the writers are decidedly timid in deciding they cannot propose a fully fledged UBI. But as politics has to be the art of the possible a Job Offer together with a Basic Income is a half way house and would make an ideal transitional measure that could be used as a method of acclimatising the political outlook to embrace a full UBI.
Perhaps I’m being too harsh – perhaps Basic Income and a Job Offer is radical enough for one paper without upsetting the received wisdom on where our money comes from as well. And perhaps, in the current environment meeker proposals are more likely to be generally acceptable.
The authors rightly propose that trials should be undertaken, though giving out money should not be that difficult (unless you are trying to cut down on previous amounts on offer – as for the misleadingly named ‘Universal Credit’) and so it seems clear that most of the trialling will be required for the Job Offer (whose ultimate real purpose is surely gently to imbue acceptance of the principle of a Basic Income).
So the report is a worthwhile step in the discussion on how, as jobs become more and more insecure as well as scarce, we are all going to acquire the resources to live. But the report falls down on where money comes from, and on the idea of ‘avoiding subsidising idleness’ which is the nineteenth century Protestant work ethic writ large. Yet it certainly outlines what would be a worthy and workable scheme as it stands – but also and all the better, an expedient method of transition towards UBI, which I see as nothing less than inevitable in the long run. There is nothing to lose by letting the Job Offer trials begin immediately….
It is unfortunate that the report so often suggests that money for nothing has a moral hazard attached and it is particularly bizarre when every single recipient – that is every citizen – would have it. And when in any case the rich have, for a very long time, been earning money ‘in their sleep’ (as John Stuart Mill put it) and we don’t round them up to put them in workhouses.
Unless of course that is the Prime Minister’s next big idea.