More thoughts on Basic Income
By Gaylene Middleton BINZ acting chair
Covid-19 has brought a hiatus into our lives with our economic landscape experiencing a cataclysmic seismic shift. We have been holed up in our separate bubble's, a discontinuity impacting on the future. What will be our new future? Jacinda Ardern has said we are in the 'waiting room of recovery'.
Grant Robinson has said 'stimulus of the economy is getting the timing right'. In New Zealand and worldwide the idea of Basic Income as a stimulus for a new economy is floating in the media 'ether'. Basic Income New Zealand (BINZ) is in firm agreement that now is the time for Basic Income.
Will our Labour led government announce a plan to introduce a Basic Income for all New Zealanders in this week's May 14 Budget?
Our Minister of Finance, Grant Robertson, in the early stages of the Covid-19 economic upheaval briefly commented that Basic Income was among measures on the table for consideration.
A Universal Basic Income (UBI) is among The Opportunities Party (TOP) policies released last week. (see comment later in this newsletter) There is a vast literature associated with Basic Income including contributions from New Zealanders supportive of Basic Income. Advocacy for Basic Income in New Zealand has occurred since the 1980's. BINZ is affiliated with BIEN, the Basic Income Earth Network, founded 34 years ago in 1986, by Professor Guy Standing, Philippe Van Parijs, and others. Guy Standing has spoken in New Zealand on various occasions including at the Labour Party Future of Work conference in 2016.
Most people understand that a Basic Income is a basic amount of money, paid unconditionally to all individual citizens at regular intervals. However, a Basic Income is more than this. Fundamental to Basic Income is the understanding of the distinction between work and labour. The ancient Greeks understood this distinction better than our own contemporary society. In Greek society those who 'laboured' were slaves who could never participate in the life of the polis-the body of citizens. Citizens did not labour, they indulged in work in and around the home with family and friends. Work was 'reproductive activity' done for its own sake, strengthening personal relationships, combined with public participation in the life of a person's community.
Over the centuries labour has gained a dominance at the expense of work. The 'work' of maintaining a home for a family or oneself, and fostering community networks has lost its value in the eyes of political and economic thinking. This 'work' of home and community is undervalued and unpaid. The worth of a person is now measured in their paid labour. We now define labour as 'work' and work as 'non-work'.
Basic Income is about addressing this imbalance, removing the arbitrary distinction between work and non-work and giving value to what is commonly seen as non-work.
Guy Standing's new book Battling Eight Giants, 2020, was released in mid-March just as the Covid-19 Pandemic was making itself felt. Guy's discussion is immensely applicable to the renewed interest in basic income as a solution to the economic turmoil that has erupted with the global lockdown.
The global effect of this Covid-19 Pandemic is akin to the disarray that engulfed the world with both World Wars and the Great Depression in-between.William Beveridge a British economist and a progressive and social reformer wrote a 1942 report- Social Insurance and Allied Services, which was the basis for the post World War II Welfare State put in place by the British Labour government. New Zealand developed its own Welfare State during the Labour Government of Michael Savage when it introduced the 1938 Social Security Act.
This Act emphasised that all New Zealanders had the right to a reasonable standard of living and equal opportunities to participate in society. These very words are now used today to advocate for a Basic Income.The post war challenge as seen by Beveridge was to slay five giants - disease, idleness, ignorance, squalor and want. This was also the hope of Michael Savage's 1935 Labour government.These five giants remain, but Guy Standing writes that 'today there are eight more giants stalking the land.' They are Inequality, Insecurity, Debt, Stress, Precarity, Automation, Populism, and Extinction. Just like the Welfare State 'battled the five', Basic Income 'battles these eight.'
Over the last twenty years punitive measures have been enacted and the Welfare State has fractured with many accounts of misjudgements of entitlements by WINZ staff. People who have found themselves out of work because of Covid-19 Lockdown measures are experiencing the full force of the New Zealand 'no longer fit for purpose' Welfare system. This system has become very intrusive in the lives of people whose circumstances, due to no fault of their own, have tipped them into the Welfare System.
Standing writes: 'The first giant blocking the road to a Good Society is inequality.' In New Zealand inequality is clearly seen in child poverty rates:In the year ended June 2019, about one in seven New Zealand children (168,500) lived in households with less than 50 percent of the median equivalised disposable household income before housing costs are deducted. After housing costs have been deducted, the number of children living in New Zealand in relative poverty rises to one in five children (235,400). In the year ended June 2019, about one in five Maori children (55,000) lived in households with less than 50 percent of the median equivalised disposable household income before housing costs are deducted. After housing costs have been deducted, the number of Maori children living in New Zealand in relative poverty rises to about one in four children (69,100).
Designed properly a Basic Income provides a base income floor. The individual can then determine for themselves how best to use this income. The payment of basic income allows additional supplements to cover the special needs of some individuals such as invalids
The giant of insecurity sits alongside inequality. Basic security is a fundamental human need. One person having security does not deprive others of their security. Our modern insecurity is also associated with chronic uncertainty. Basic security has not been given priority by governments and economic models. A Basic Income would change this.
Debt is the third Giant. It is also hidden inequality. In response to the job losses in the hospitality and tourism sector, where New Zealand students find employment to finance their studies, the Government has offered increased student loans. This will increase student debt. A Basic Income would not eradicate debt but would help to give people more control of their finances. Basic Income pilots have shown that even a small basic income results in less indebtedness.
Fourthly stress. We have the Covid-19 Pandemic now, yet in our society we have been experiencing a growing quiet pandemic of stress. Stress, reduces the capacity to think clearly and long term. Along with money concerns, fulfilling the conditions when applying for a New Zealand Welfare benefit compounds stress. Stress and insecurity lead to a lowering of short-term IQ with more focus on short term choices rather than longer-term strategic thinking.
Precarity is the fifth giant. The 'precariat' is a developing class in society where people lack a secure work-based identity. People in the precariat are forced to ask for assistance. The use of Food banks is increasing in New Zealand and has soared in the weeks of the Covid-19 Lockdown. A Basic Income will allow a person to feel more in control and able to exert greater freedom of choice. The New Zealand Welfare System controls disadvantaged people's lives. Introducing a Basic Income will empower the disadvantaged.
Automation is another justification for Basic Income. Basic Income may be a policy for a future where there are fewer jobs as AI is developed to perform more and more tasks. A Basic Income would enable people to do fewer hours of paid work per week as we adjust to life with automation.
Climate change and global warming is confronting every individual as the ecological crisis of Extinction looms. Our reliance on economic growth is in need of re-examination. A Basic Income could change society thinking that only paid work counts. A Basic Income rewards and encourages unpaid work both in the home and in the community. The coming ecological crisis may become the decisive justification for Basic Income.
Finally, the eighth giant Populism is concerning. Recent elections in a number of countries epitomise this final giant. The definition is vague but populism includes aggressive nationalism, is anti-migration and will tolerate authoritarianism and anti-democratic policies. Populism is a looking back to an imagined gilded past where there is a falsely remembered security and well-being. A basic income system by lessening insecurity, precarity, debt and inequality could reverse this populism drift.Guy Standing concludes 'that a basic income and an income distribution system in which it is an anchor would help to weaken the threat posed by all eight of the modern giants blocking our route to a good society.'
Basic Income with Standing's analysis is more than solely a response to one issue such as increasing unemployment, poverty or automation.BINZ is strongly supportive of the introduction of a Basic Income for New Zealand.
Will our Labour led government take the courageous step with the 2020 Budget and introduce a Basic Income for all New Zealanders?
Note: An extensive discussion of these eight giants is found in Guy Standing's book Battling Eight Giants 2020The themes of the book Battling Eight Giants can also be read in an article written January 2019: How a basic income can battle the eight giants of a faltering economy. https://www.weforum.org/agenda/2019/01/battling-eight-giants-with-basic-income/