Time for a universal basic income: using the Covid-19 pandemic as impetus for welfare policy change
Money to Burn, Victor Dubreuil (1893)
Source: Wikimedia Commons
Katie Sperring argues that the impact of coronavirus has strengthened the case for a universal basic income.
The idea of a universal basic income (UBI) is not at all new. As early as 1516, Thomas More posited the idea of periodically giving every citizen an unconditional payment, independent of means tests or employment status. UBI has been a recurrent suggestion since then and support for it has been confined to neither one end of the political spectrum nor one economic ideology. Proponents have ranged from neoclassicals like Milton Friedman to those on the left today like John McDonnell and Yanis Varoufakis. Those in the technology industry, like Tim Berners-Lee and Elon Musk, have also supported the idea as a response to automation, given that robots are increasingly likely to replace humans in the workplace. Given this coalescence of support that transcends any one political or economic leaning, the debate about the implementation of universal basic income is really one of justice and specifically addressing injustice. This does not, however, detract from the fact that decisive political action is required if we are to move towards implementation of a universal basic income system. The Covid-19 pandemic could provide the impetus for that decisive political action.
This pandemic has made and will continue to make even more salient the vulnerability of the poorest in our society. The Trussell Trust network of food banks saw an 81% increase in demand for emergency food parcels in the last two weeks of March 2020. Unfortunately, this is likely to worsen. The government’s furlough scheme may have delayed an imminent rise in unemployment but the eventual withdrawal of this governmental support will force firms to make redundancies; the investment bank Nomura foresee unemployment rising to 8% in the April to June quarter and 8.5% thereafter. This amounts to an additional 1.4 million people being unemployed. This significant deterioration in the economic situation of many of the most vulnerable demands government action. Rather than making short-term investments into the Universal Credit scheme, the crisis presents an opportunity to reflect upon the state of welfare policy more broadly and consider whether it might be time for more radical ideas, like a universal basic income.
I spoke to Professor Adam Swift, Professor of Political Theory and Political Philosophy at UCL, about the situation and he pointed to the immediate necessity of ensuring that those already detrimentally impacted by the government’s austerity measures of the preceding years do not fall into greater poverty as a result of the Covid-19 pandemic. That the living standards of the poor in society are not worsened must be the priority. With regard to policy, Swift notes that whether measures like UBI are implemented “depends on whether a plausible political coalition can be formed around this kind of policy. Perhaps the sense of how much we collectively rely on those in poorly paid jobs, as well as the greater vulnerability of those living in deprivation, will become so salient that our priorities will change and a political movement or party will be able to crystallise that sense into a policy agenda analogous to the Labour government’s after the Second World War. That’s what we have to hope for and work towards.”
As Swift notes, this is a flashpoint comparable to World War Two with regard to the potential to create a decisive policy agenda that could significantly reform welfare policy. Whether this does occur “will depend a lot on how political movements and parties respond to the situation”. Hopefully, the virus will prompt a response that truly recognises the injustice of inequality. Being a health crisis makes this even more evident; it is a stark indication of unjust deprivation and inequality when economic status influences vulnerability to the virus. The poorer in society are frequently in jobs that involve more exposure to the virus. Thus, there is a twofold problem: the further deterioration economically of the poor and their greater exposure to the virus due to their economic position. This should be sufficiently salient to heighten demands for more radical change such as UBI.
A universal basic income facilitates a host of benefits with regard to the aforementioned problems. Swift’s call to prevent the living standards of the poor from worsening would be aided by a basic payment to assist people still pressed to pay rent, bills, and other living costs in the absence of their usual income or any adequate government support. These are people working in retail or hospitality, whose employment is likely to be affected at least until the end of the year, as shops and restaurants will continue to be somewhat restricted in their operations, or those working in the gig economy. Of course, this is costly, but so is the government’s furlough scheme, which is likely to cause a belated spike in unemployment when it is withdrawn that will subsequently put even more pressure on the government’s welfare system. A universal income is costly but may be more sustainable and successful in creating the necessary safety net for the vulnerable.
UBI could also aid the wellbeing of the more vulnerable with regard to perceived financial security and thus mental health, which has only worsened in the stress-inducing context of this pandemic. This has been proven by the results in Finland, who have been experimenting with giving unemployed people a basic income, in which those who received the payment reported more positive perceptions of financial security, less stress, better general health and greater confidence about their financial futures than those that didn’t. It is unjust that individuals should be vulnerable to relatively worse mental health as a result of their economic position. A policy that can help this, like UBI, should be implemented.
In the longer-term, too, UBI is beneficial. The welfare trap persists under the current benefits system; the unemployed might refrain from entering lower-paid work as the subsequent loss of social security payments actually leaves them worse off. An unconditional basic payment creates a more robust position from which the unemployed can seek work, without concern about further deterioration in their economic position.
Finally, this pandemic may delay but will not stop burgeoning automation. It is imperative that as the work landscape changes and more occupations (especially those formerly occupied by lower-skilled workers) are automated that we secure citizens with a basic income that supports a reasonable standard of living. Individuals are then freer to retrain for post-automation employment opportunities or pursue more experimental work knowing their basic income is guaranteed. A welfare state based upon UBI will be sufficiently robust to cope with automation’s redefining of the work landscape.
There are multiple factors that suggest the time is right for a universal basic income. Most urgently, UBI would prevent the pandemic sending the most vulnerable in our society further into poverty, but subsequently securing their basic standard of living so that they can more confidently seek to improve their occupational and mental wellbeing in the face of other forces like automation. We must be hopeful that this pandemic acts as a flashpoint for sufficient coalescence in support of this kind of decisive policy change.
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