Even in politics, the viability of the Universal Basic Income (UBI) is being taken seriously. It provides everyone of working age a basic income. It should be a basic income to cover basic needs. That way anyone who does not want to work can at least have enough money to buy food.
People should receive UBI even when they work, paid for by the employer as a part of wages. This way not only is the employer not out of pocket but the government is paying money to people who would otherwise be claiming welfare for being out of work; except there is now no longer a need to process certain benefits or employ staff to bully people into jobs they do not want to do. There are no punitive sanctions, no square pegs in round holes, no time wasting job interviews for people forced to make applications and no stress. UBI is not more expensive, it is actually cheaper, if the level of UBI is pegged against current welfare benefits.
The whole of UBI is paid via the tax service. There can be no fraud. Even self employed can expect UBI to come out of their income, and if we head towards a cashless society, there can be no cash in hand, or off the cards.
It all sounds great but is it realistic? Can there really be a UBI that meets the basic needs of people?
In the light of the COVID-19 pandemic, where the need for everyone who could not work to be compensated in some way, the UBI would have been a perfect safety net to ensure everyone was at least able to buy food.
But in the 21st Century, we should perhaps evaluate what constitutes a basic income. Food and water is obviously top of the tree in terms of need. Next is shelter and warmth. In many affluent countries, shelter is supported through a welfare system, especially where people rent places to live. Under the old system of unemployment, people had to demonstrate that they were looking for work to be entitled. If this entitlement was established there would be an automatic entitlement to housing benefit. In the UK, this did not stop local authorities from changing the amount of housing benefit they were willing to pay and started to ‘cap’ how much they would give to those who rent. Once again the stress to demand people look for work that they are unsuited to, could be invoked to cover housing; the benefit to UBI thereby diminished.
Warmth, a need that is met currently through heating utility companies, is paid for according to how much is used. If a person in receipt of UBI is not employed, they will have to find room in their basic income to pay for it.
Receiving money for food, housing and utilities is not a theoretical concept. People in receipt of benefit for being unemployed, receive a nominal amount of money each week to pay for everything except a certain percentage of rent (paid by a government housing department). Invariably it is not enough and does not account for people who smoke or drink alcohol, neither of which are basic needs but the reality of today is that smokers will prioritise smoking at the top of the tree of needs and drinkers will prioritise drink.
So being brutal and ignoring these unnecessary lifestyle choices, it brings us to what actually constitutes ‘basic needs’.
I worked for the Department of Work and Pensions for many years. I got to understand (and apply) systems, procedures and the way that government benefit works. I got to understand the conditions of entitlement and who would be entitled to receive what benefit. Although many years have now passed and the welfare system has undergone changes, the basic principles remain.
There was a letter that every benefit recipient received, telling them how much money they would be entitled to. The declaration included a statement that informed them that the amount awarded was the ‘lowest amount’ a person could afford to live on. What it did not say is how the government arrived at that figure and how it was calculated year on year? Despite several attempts to acquire the ‘formula’ I received no response from the Department of Work and Pensions; not even an acknowledgement. Therefore I concluded that there was no formula and some government in the past had simply made it up. The welfare benefit weekly amount was, in fact, not enough to live on.
So while the UBI is a great idea, there is no point in simply swapping what amounts to a personal benefit for UBI, because personal benefits no longer cover the basic needs, even more so as the cost of living increase over decades have far outstripped the increases in personal benefit.
‘Basic needs’ is one of those wide sweeping terms that mean different things to different people. No two people are likely to agree on what constitutes a basic need; any smoker or drinker will prove that point. However, the world of the 21st century contains some basic functional necessities that did not even exist in the 1980s. The formula for personal benefit was calculated well before then. Reform is long overdue but how that reform takes shape must come back to answering the question I asked many times. What is the formula that decides the lowest amount of money a person can live on?
Food
Right at the top of the tree, this is by no means easy to calculate. People on low incomes do not eat healthy food, not necessarily because it is too expensive but because there are cheaper alternatives that allows them to afford other ‘basic needs’. This is not a case of having caviar taste with fish finger income, it is more a fish finger taste with tea and toast income.
Of course there are people in the world who, with no income, would love tea and toast. But the government, if they value the safety and security of the people, would surely want those people to be healthy. With levels of human displacement and war, the argument for UBI has to begin where the concept is at least viable.
The other side of the argument is for people not to rely on handouts but to get a job, then they can eat healthily. This is not the case. Those in low paid jobs will come away from benefit but will still need a top up to pay for rent. The so-called minimum wage also does not cover the basics.
It has been established during the COVID-19 pandemic that some of our essential key workers are cleaners, refuse collectors, retail shelf fillers and delivery drivers, many of whom are paid low wages. We do not need overpaid lawyers, sports people, actors, stock brokers, bankers, chief executives and so on to make sure we have access to good healthy food.
Warmth
Utility companies are for-profit companies. They get paid their profit up front before repairing a single pipe or wire. They also determine what the charge to the customer will be before lifting a finger to earn it. You can switch companies as much as you like but the the deference between the lowest and highest charging companies is pennies. Worse still, if you find it difficult to pay, they slap an insurance onto your tariff that makes your energy even more expensive.
People on low incomes struggle to keep on top of their heating bills. Most on low incomes end up with a ‘key meter’ to buy energy in advance. Once the money is spent the energy stops, be it half way through cooking dinner or in the middle of a sub zero temperature winter. This is a brutal system.
Utilities is another item that must be paid for with a personal benefit. If you add the additional rent that must also be paid for by the benefit, there is not much left for anything else.
Communication
Everything nowadays is going on line, from applying for benefits, shopping, news, job hunting and price comparisons to entertainment, social media and education. So if you need to apply for benefits you have to go on line. If you need to apply for a job you have to go on line. The world is geared to internet based working, without which some needs to access it will cost elsewhere via internet cafes. Whether you use a computer (if you could even afford one) or a smart phone (contract required) you need to have an on line presence to function in the world today. Governments have talked about making sure that entire countries are networked with internet. If it is that important to them it must surely be a basic need. Mobile phone contracts cost alarmingly, even the most basic of contracts will cost around 5% of the personal benefit. Internet at home is considerably more and beyond the reach of most low income households.
One also has to consider how basic need includes health be it physical, emotional or psychological. Humans need to interact and socialise. Without connectivity, people will start to become dysfunctional and well being is disregarded as a choice rather than a basic need.
In conclusion, the UBI sounds great in principle but it counts for nothing unless governments look honestly at the lowest end of the food table. In the same way that the lowest amount someone is supposed to live on is an uncalculated and arbitrary figure, likewise is the so-called minimum wage, which is designed to force employers to pay a certain amount. The minimum wage does in no way constitute a living wage. In the UK there is a working tax credit for low paid workers. This is nothing more than a subsidy to the employer, paid for by the tax payer and therefore an unnecessary welfare cost. But it also means that the minimum wage cannot be a living wage, otherwise the working tax credit would cease to exist.
The UBI needs to be costed properly according to basic need, otherwise it is not a basic income at all but just the same unexplained figure with no ability to calculate necessary increases into the future.
No comments:
Post a Comment