A few months ago I started playing with the idea of an absolutely universal basic income. I deliberately have not read any of the literature on it (like Sally's book) so that I could work out the ramifications of this idea without being influenced (or discouraged) by previous thought on basic income.Univeral Basic IncomeBasic Income should be adequate and universal.
AdequacyAdequacy could be defined in terms of the poverty level--say 120 % of a nationally recognized poverty level. Alternatively it could be defined in terms of a market basket of food, shelter, transportation, etc. Minor children should be counted as an appropriate fraction of the adult BI, and the amount should be added to the income of the mother or custodial parent. Just as a starting point for Canada we could take the Low Income Cut Offs (LICO). For a single individual these range from $12,000 in rural areas to $18,000 in big cities. So let us take the midpoint, $15,000. The LICO's for increasingly large families seem to indicate a figure of about $3,000 per child. Thus Universal Basic Income should be about $15,000 for adults with $3,000 added for each dependent child. Some might be inclined to raise a difficulty over one point. Two can live almost as cheaply as one. The LICO figures indicate a differential of $3-4,000 between single persons and two-person families. In the low income group two-person families probably represent a blend of two-adult families and single parent with one child families. Nevertheless, it is clear that two adults living together with a combined income of $30,000 would enjoy a substantially higher standard of living than a single person with $15,000. It would be unwise, however, for many reasons to try to establish a lower basic income for couples:
UniversalityUniversality means everyone. Universality would mean making BI payments even to multimillionaires. UBI should go to mega-rich sociopaths like press baron Conrad Black, to coupon-clipping parasites, the scions of old money like the Bronfmans and the Bilouses, yea, even unto the sixth and seventh generations, and also to drastically overpaid CEO's like Michael Cowpland of Corel and to his ornamental wife.
Benefits of UniversalityA universal program is far cheaper to administer than a restricted program, particularly in an age of electronic fund transfers. (e.g., The American system of private health insurance has far greater administrative costs than the Canadian system of universal health care because an army of free enterprise gnomes is required to try to block access.) One universal form of income support will be far cheaper than a plethora of specialized programs for different groups lacking income, such as the unemployed, the disabled, the mentally ill, seniors, etc. We are proposing to replace employment insurance, welfare, Canada Pension Plan, seniors' benefit and a host of other programs with one single program. Additional support needed by special groups like the disabled or the mentally ill should be funded through universal health care. Note that switching from a multiplicity of income support programs to one Universal Basic Income inevitably means displacing a fairly large number of civil servants. At least the government can lay them off with a clear conscience knowing that UBI will provide them with a basic living even if they can never find another job. A universal basic income would end singling out people as welfare bums. Since we all get an equal amount from the government, no one could be criticized for receiving it. Any redneck who whines about supporting the poor in luxury while he works his ass off is perfectly free to quit his job and enjoy the same level of luxury. Universal basic income would encourage artistic creativity. There must be many people who have the talent and the discipline to make contributions but are disinclined to live through the penniless phase of many young artists or to put their families through it. I can think of a couple of cases of important novelists who only began writing later in life, after retiring from a regular job. UBI would also allow the underemployed to find more suitable jobs. There must be many people (I am one) who can no longer find work in the professions they were qualified for, but they cannot retrain for another because they have to go on earning a living. UBI would give them the freedom to retrain, and the jobs they held would then open up to the less skilled applicants whom they beat out. Community-enhancing volunteer work would certainly increase dramatically. Some people would prefer that to paid employment. Others would do it in between jobs rather than wasting hundreds of hours submitting applications without a hope just so that they can prove they have been seeking work.
Funding of UBIUniversality would be achieved by lowering all paid employment by the amount received in UBI. The sum of $15,000 I have proposed is approximately equal to $7.50 an hour in a permanent 40 hour a week job. The government would enable (but not require) employers to lower their wages by that amount and would then take that amount in corporate taxes above and beyond what is now paid. However, the employers would no longer be responsible for the current payroll taxes to fund Unemployment Insurance and Canada Pension Plan because these supports would be replaced by UBI. There would be one group of employers affected. For some to subtract UBI from their current wages would give a wage of zero or only a few pennies an hour. Obviously these employers would have to increase their wages enough to attract workers. This is in effect a healthy boost to the minimum wage. There are other potential sources of income to fund the UBI program and essential public services such as health and education.
On this last point the personal income tax could be set at a flat rate if this is necessary to reconcile the rich to their lot.
People Will Keep WorkingThe neoconservatives will pretend that people are going to stop working in droves and bring the economy to a halt. I think not. Very few auto workers who would be making $20.00 an hour on top of UBI are likely to quit. In fact most people are locked into living arrangements they would have trouble giving up, a mortgage, rent, car payments, etc. It must be remembered that every $1.00 an hour above UBI represents a before tax income of about $2,000 annually. Some people will prefer to simplify their lives by not working for the differential, but their jobs will be eagerly snapped up by others wanting a greater level of luxury than is afforded on UBI. |
