Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

How To Make Universal Basic Income A Reality

Stewart Lansley and Howard Reed 19th October 2016

Stewart Lansley

Stewart Lansley

Support for a universal basic income – the payment of a regular and guaranteed income to a country’s citizens as of right – is beginning to gather pace. Trials are being planned in several countries while Silicon Valley incubator Y Combinator is to test a scheme in California. In the UK, the idea is backed by the Green Party and the SNP, is being seriously examined by the Labour Party, and has support from the Royal Society of Arts and the pro-market think-tank, the Adam Smith Institute.

In the UK, growing interest is being driven by two deep-seated structural trends: the growing fragility of the jobs market and the inadequacies of the existing, increasingly punitive, intrusive, and patchy benefits system. With its built-in income guarantee, a universal basic income (UBI) would help relieve both problems. It would bring a more robust safety net in today’s much more precarious working environment while boosting the universal element of income support and reducing dependency on means-testing. A UBI also offers a way of providing income protection as the robotic revolution gathers pace and could be used to help ensure that the possible productivity gains from accelerated automation are evenly shared rather than being colonised by a small technological elite.

Howard Reed

Howard Reed

Despite these benefits, the idea remains highly controversial. Although support spans the political spectrum, the Right and the Left embrace very different visions of a UBI. Left supporters view such a scheme as part of a strong state, and a recognition that all citizens have the right to some minimal claim on national income. Supporters from the libertarian right, and some Silicon Valley enthusiasts, in contrast, favour a basic income as a way of achieving a smaller state.

Some critics view UBI supporters as utopian zealots for a new workless nirvana. Yet one of the central merits of a UBI is that it is non-prescriptive. It offers more choice between work, leisure (not idleness), and education, while providing greater opportunity for caring and community responsibilities. Under a UBI all lifestyle choices would be equally valued. It would value but not over-value work. A UBI would both acknowledge and provide financial support for the mass of unpaid work in childcare, care for the elderly, and voluntary help. By providing basic security it would offer workers more bargaining power in the labour market.

A UBI would, over time, change behaviour, and the results of the national pilots will provide important new evidence of the likely impact. Some might choose to work less, take longer breaks between jobs or be incentivised to start businesses. Some might reject low paid, insecure work leading to a healthy rebalancing of wage structures. Some might retrain or devote more time to personal care or community support, in many cases producing more value, if currently unrecognised, than paid work.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

The net effect is more likely to promote than weaken the incentive to work. Indeed, incentives will be stimulated by lowering dependency on means-testing while tackling poverty would become less dependent on the ‘work guarantee`.

An affordable model

But can a UBI be made to work? Critics claim that a UBI is simply not feasible because it would cost too much. Yet new evidence suggests that it could be made progressive and affordable. Our recent report for the think tank, Compass, modelled several different alternatives to see how affordable and feasible such a scheme might be. These simulations show that a full and generous scheme, one that swept away the existing system of income support in one go, would be either too expensive or create too many losers. This is because the current benefits system, partly because of its reliance on means testing, is able to deliver large sums to some groups.

However, our study also found that a ‘modified` scheme, one that still provided a universal and guaranteed income, albeit at a moderate level, and that initially left much of the existing system intact, would be feasible. Such a scheme – while not a silver bullet – would offer real and substantial gains: a sharp increase in average income amongst the poorest; a cut in child poverty of 45 per cent; and a modest reduction in inequality, all at a relatively modest cost of £8 billion. This model would also strengthen the universal element of the current benefit system, thus reducing the reliance on means-testing.

This approach is not utopian – it is grounded in reality. It offers an incremental approach to reform, not wholescale replacement. Such an approach reduces the risks of big bang reform, while offering flexibility for gradual improvements over time. It could, for example, start with a UBI for children. This is evolution, not revolution.

Far from encouraging idleness, a UBI also offers greater flexibility in how to balance work-life commitments in a much more uncertain world and the gradual casualisation of much of the workforce. And far from promoting the end of work, a UBI would aim to tackle the greater risks of a weakened labour market, not aim to replace work. With opportunities likely to become ever more fragile, it is time that policy makers gave much more serious consideration to how a UBI scheme could be made to work.

This article draws on the report by the authors – A Universal Basic Income: An idea whose time has come? – published by Compass, 2016. It was originally posted on the LSE blog and is reproduced here with permission.

Stewart Lansley and Howard Reed

Stewart Lansley is a visiting fellow at the University of Bristol and at City University. He is the co-author (with Howard Reed) of A Universal Basic Income: an idea whose time has come? published by Compass 2016, and of A Sharing Economy: how social wealth funds can reduce inequality and help balance the books, Policy Press, 2016. Howard Reed is Director of the Economic Research Consultancy, Landman Economics. He is also a trustee of the New Economics Foundation.

You are here: Home / Economy / How To Make Universal Basic Income A Reality

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic

Most Recent Posts

energy transition,Europe,wind and solar Europe’s energy transition starts to speed upDave Jones
equality bodies,gender equality Setting standards for national equality bodiesEvelyn Collins
Pakistan,flooding,floods Flooded Pakistan, symbol of climate injusticeZareen Zahid Qureshi
reality check,EU foreign policy,Russia Russia’s invasion of Ukraine: a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube