Universal basic income

Forward-thinking or wrong-headed?

Text by Justin McCurry / Illustration by Guillaume Babusiaux

Imagine if every citizen, regardless of age or employment status, received a modest, yet guaranteed, income from the state — no strings attached. It sounds like a pipedream, but universal basic income is becoming a reality in parts of Europe, and has sparked a debate among experts in Japan.

While basic income schemes differ in scope — from blanket coverage to payments targeted at specific groups — the aim is the same: to use taxpayers’ money to cut through the red tape associated with means-tested benefits, encourage job-seeking, and tackle poverty. In short, this radical idea could be a cure-all for an unwieldy, expensive, and increasingly ineffective, welfare state.

Supporters say basic income would help those who lose out the most under the current social security arrangements, such as people who have to juggle work with care-giving responsibilities at home, and unemployed youths with no incentive to take low-paying jobs for fear of losing their benefits.

Nesta, a UK-based innovation think tank, goes further, claiming that basic income is far more than just a streamlined safety net for the unemployed and for those making a low wage. “It can enable citizens to make greater unpaid contributions to their communities, strengthening the fabric of social relations and reduce the burden of professional care,” Nesta has written, “And the reduction in poverty brought about by a basic income can provide children with a much better start to life.”

Over the past year, basic income has moved out of the theoretical realm to become a reality in two European countries.

Last year, Utrecht in the Netherlands launched a trial in which its citizens were divided into different groups, with some people receiving conventional welfare payments, while others were given a basic income. In September, the Dutch parliament was reportedly planning to hold its first debate on basic income, in preparation for similar schemes involving people living on welfare.

Finland, too, is about to embark on its own experiment applying a limited basic income. According to the Finnish government, a guaranteed income will encourage people to take lower-paying jobs that today wouldn’t allow them to earn enough to replace the benefits they receive under existing welfare programmes.

Other countries will be watching closely how the pilot scheme fares in Finland, where about 8,000 people aged 25-58 who are out of work will receive a guaranteed, nontaxable €560 a month, instead of their welfare benefits. Crucially, the payments will keep coming indefinitely even after the recipients find work.

Not everyone is sold on the idea, however. In June this year, voters in Switzerland chose overwhelmingly to reject a proposal to introduce a universal basic income. Although tens of thousands of supporters forced a parliamentary vote on the measure under Switzerland’s popular initiative system, 77% of its citizens who voted rejected the introduction of a basic income for adults, with only 23% in favour.

This outcome does not mean that basic income is dead in the water in Switzerland, according to Karl Widerquist, an associate professor at Georgetown University’s School of Foreign Service in Qatar. “The Swiss referendum was no setback,” says Widerquist, who has written extensively on basic income. “No one expected it to pass its first time; Swiss referendums seldom do. This drive was the first step in a long-term project.”

In its purest and most comprehensive form, basic income covers every citizen, including pensioners and children, with payments either partly or wholly replacing pensions, unemployment insurance, child benefits and other forms of social security provisions.

Japanese proponents of basic income formed a network in 2007, and several Japanese Diet members, including those from the ruling Liberal Democratic Party’s junior coalition partner Komeito, have expressed an interest. The idea, though, has not gained much traction since the LDP returned to power by a landslide victory in late 2012.

In many ways, Japan should be fertile ground for new approaches to dealing with rising poverty levels created by dramatic changes to the labour market. The country has some of the worst wealth inequality statistics and the highest child poverty rates among developed nations, coming 34th out of 41 OECD and European Union countries, according to a recent UNICEF report.

Dr Junko Yamashita, a senior lecturer in politics and international studies at Bristol University, says Japan’s current social security system is wedded to the outmoded assumption that workers are in full-time regular employment, and it does not extend protection to irregular workers, who now make up more than a third of the workforce.

But Yamashita acknowledges that basic income lacks political support in Japan. “Basic income still is probably a utopian solution, as it is difficult to envisage how to build up the political resources,” she says. “I’m not aware of anyone inside the current Japanese government who’s expressed a positive opinion about basic income.”

The changing nature of the work place, coupled with concern about rising poverty levels, could be the catalyst for a more serious discussion about the potential benefits of a basic income, according to some experts.

In Japan, as in other advanced industrial nations, technology and the rising use of robots is depriving more workers of the hours they need to make a living wage. Last year, Nomura Research Institute predicted that nearly half of all jobs in the country could be performed by robots by 2035.

Basic income could help Japan address arguably its biggest economic challenge of the next century: caring for its growing population of elderly people. A guaranteed income would make it easier for people with responsibilities towards elderly relatives, for example, to take time off work, safe in the knowledge that their income and job security would not suffer as a result.

Toru Yamamori, an economics professor at Doshisha University and Japan’s most visible advocate of basic income, believes the individual rewards would have a positive knock-on effect beyond the work place.

“Many people in Japan are forced to engage in wage labour for incredibly long hours,” he says. “The negative consequence of it is that people don’t have the time or energy for unpaid work, either in the community or within their family.”

Having a partial or full basic income, he adds, would give them the freedom to contribute more to their families and society in general.

The idea of a basic income beginning to take root in Japan will depend on how the Netherlands and Finland fare with their pilot programmes.

Yannick Vanderborght, a professor of political science at Université Saint-Louis in Brussels, believes Japan would make an ideal testing ground for a third major experiment with basic income.

The bureaucracy required to apply for social assistance in Japan had resulted in a very low take-up rate of only 20% to 30% — an anomaly that the Democratic Party of Japan (DPJ) administration of 2009–2012 tried to address with the introduction of the child allowance legislation.

“But it also had to face fierce opposition from the LDP and the bureaucracy, especially after the LDP’s defeat in the 2010 upper house election,” Vanderborght says. “The short period of DPJ [now the Democratic Party] rule shows that reforms are possible, but that the weakness of Japanese social democracy is also a significant obstacle to the introduction of new income guarantees. The very strong work ethic makes the idea of an unconditional basic income an oddity in the Japanese context.”

But he is still hopeful. “The Finnish case shows that even a right-wing government believes that basic income can offer a promising way of reforming the welfare state. Perhaps it could inspire the LDP government.”  •