Andrew Harrop and Cameron Tait, Universal Basic Income and the Future of Work, Fabian Society, 2017, free to download here
This report was commissioned by the TUC, and it addresses issues likely to be of interest to trades unions and their members. After outlining familiar arguments for and against Citizen’s Basic Income, the report gets into its stride by outlining the increasing job insecurity, stagnant pay, skills and jobs dislocations, rising inequality, and insufficient employment, from which the employment market is suffering; and it then asks about the advantages and disadvantages of Citizen’s Basic Income in relation to these risks.
The report suggests that Citizen’s Basic Income could ‘increase the numbers in precarious work, at the same time as making their lives a little less precarious’; a Citizen’s Basic Income funded by taxes on profits or wealth could fill the gap created by the labour share of GDP declining over the longer term, but a scheme funded by Income Tax could reduce net incomes for median earners ( – understandably a concern for trades unions, many of whose members will be earning incomes around the median); a Citizen’s Basic Income could increase employment incentives and enable people to retrain, but it could also result in long-term joblessness; a well-funded Citizen’s Basic Income could reduce inequality, but some modelled schemes would increase poverty and inequality; and a Citizen’s Basic Income would not respond to the problem of hours of work becoming more unevenly distributed.
The report suggests that Universal Credit responds better than Citizen’s Basic Income to inequality, pay stagnation, and insufficient work; and that relaxing eligibility conditions for contributory benefits could be a solution to insecure employment. The report also suggests increasing Child Benefit, establishing a means-tested ‘learning allowance’, and implementing ‘tax-free allowances’ that would turn into something a bit like a Citizen’s Basic Income but with an administrative method that looks rather complicated.
Alternative perspectives are of course possible.
The financial security that a Citizen’s Basic Income would provide would give to workers a greater ability to say no to undesirable employment, to take on short term contracts if that’s what might suit them, and to start their own businesses if they wished to do so ( – it is no surprise that a report commissioned by the TUC is rather more interested in employment than it is in self-employment). It is perfectly feasible to construct a Citizen’s Basic Income scheme that increases the net incomes of median earners. [1] So-called ‘activation’ policies in fact achieve the opposite of activation, [2] whereas a Citizen’s Basic Income would enhance the employment incentives for lots of households even if means-tested benefits remained in place. It is perfectly feasible to construct revenue neutral Citizen’s Basic Income schemes that reduce both poverty and inequality. [3] And a Citizen’s Basic Income would provide workers with more choice in relation to household employment configuration, meaning that the employment market could become more like a classical market, enabling demand and supply of employment hours to match more closely than they do now.
The report recognises neither the considerable administrative and other problems that will continue to afflict Universal Credit, nor the radical simplicity of a Citizen’s Basic Income; and its suggestion of additional universal provision will of course lead the reader to ask whether the report’s arguments against Citizen’s Basic Income might at least in part be motivated by trades unions’ recognition that to provide every worker with a secure financial foundation might dilute their need for trades unions to negotiate over their employment wages.
In their conclusions, the authors suggest that a ‘pure’ or ‘fully fledged’ Citizen’s Basic Income is not a ‘silver bullet for our future labour market’. That is perfectly true. They also recommend
multi-layered reforms to our tax and social security system with tiers of financial support working in combination: universal as well as means-tested; unconditional as well as conditional; non-contributory as well as contributory. Along the way, these reforms should embrace elements of the UBI idea – and modest, partial basic incomes may have their place in the eventual toolkit.
Quite so.
An important conclusion is that proponents and opponents of Citizen’s Basic Income are not necessarily that far apart when it comes to practical policy steps. The alternative arguments contained in this review are offered in that spirit.
This is a useful report, and trades unionists would benefit from reading both the report and this review of it.
Notes
[1] Malcolm Torry (2017) A variety of indicators evaluated for two implementation methods for a Citizen’s Basic Income, Euromod working paper 12/17, Colchester: Institute for Social and Economic Research,
[2] Welfare Reform Team, Oxford City Council (2016) Evaluation of European Social Fund Pilot Project 2014–2015, Oxford: Oxford City Council,
[3] Malcolm Torry (2017) A variety of indicators evaluated for two implementation methods for a Citizen’s Basic Income