Basic Income Could Increase Poverty - Research by University of Antwerp
This headline was on the front page of just about every major Belgian newspaper. Some news outlets even went a little bit further, stating that basic income would spell disaster for our society. All of this news is based on one single study done by the University of Antwerp(U.A.). I would like to add some nuance to these claims, since there were a lot of assumptions being made on the basis of one single research simulation.
Explaining the Research
This research was done by U.A. in cooperation with a Dutch mutual fund (GAK). In this study, they simulated the distribution of a 700 euro basic income for all Dutch citizens between 18 and 64 years old. Minors would receive a monthly basic income of 165 euro. Mind that this basic income would not replace pensions.
The cost to fund this sort of basic income would be over 94 billion euro and would require cancelling various social benefits, such as unemployment benefits, childcare benefits and scholarships. Some services, such as disability benefits would remain in place. Taxes would have to be increased by 32 percent, in order to fund a basic income with these parameters.
The general conclusion of this research was that, while income equality would slightly improve, this would not be accompanied by a decrease in poverty rates. Due to the removal of various social benefits, more people would receive less money than they do under the current system.
Source: https://www.vrt.be/vrtnws/nl/2018/06/13/studie-basisinkomen/(Dutch)
My Criticism
My critique is actually not targeted at U.A. or any of the researchers, I definitely think it's good that this sort of research is being done, regardless of the outcome. That said, some of the reporting on this has been overly dramatic and sensation-seeking in my opinion. The scope of this particular research simply isn't big enough to make any sort of grand conclusions about all the different forms of basic income that could be implemented.
One of the only Belgian news newspapers can commend for their choice of title is HBLV, who went with a non-clickbait title 'Basic Income could increase poverty, according to research by U.A.'. Most other newspapers made direct claims that basic income would outright cause poverty.
As for as I know, this news hasn't been picked up yet by international news organizations. If they happen to do so, I hope people won't rise against the idea of basic income, all on the basis of one single research simulation and sensationalist headlines.
Not Every Basic Income is the Same
There's a variety of approaches to take on issuing a form of basic income to citizens. There's the option of issuing a conditional basic income for a particular subset of the population or alternative funding methods could be researched.
Here on Steemit, most of us have probably heard about crypto basic currency (cryptoUBI). We've all seen references to Mannabase and SteemBasicIncome. It's not that hard to imagine that similar initiatives could be set up by governments, which will help to lower costs.
Just because one research shows that implementation of an unconditional basic income, would cause an increase in poverty, does not mean that all other forms can be discounted. I was not able to find the original research paper, so I cannot comment on their methodology.
Basic Income via Cryptocurrency
I would love to see some more research done into basic income that is issued on the blockchain. There are more than 10 projects, which all have the goal of providing people around the world with a basic income, though none of these has succeeded yet.
I've recently become a moderator over at the CryptoUBI subreddit, which has over a 1000 members. There's currently not that much interest in crypto UBI, but this will certainly change in the future, as current projects mature. Check out the subreddit if you are interested in some additional discussion.
If you have any questions or want to give your opinion on this issue, don't hesitate to leave a comment!
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Thanks for pointing this out. A small area of Canada did an experiment with basic income many years ago. Analysis was years later and showed positive results on those receiving it, but it did not consider overall economic impact. I believe that the main reason for an unconditional basic income is to eliminate the costs of means testing. I do like the idea of using crypto currency for a basic income. Ultimately money is really just a mechanism for incentivizing behavior and a distributed signal on how to allocate scarce resources. Imagine if machines took care of all of basic needs and could be repaired and maintained by other machines. At that point, allocating basic income to all just allows each person to “vote” for the resources they desire. Some may want a small house with a pool, others might want to travel. Those desires send signals, through the use of the currency, on how to value the resources and how to use them.
There have been many experiments over the years, as far as I know in Alaska, Utrecht (Netherlands) and Finland.
The one in Alaska is quite interesting actually and has existed since 1982.
I hadn't thought about combining basic income with a voting system to allocate resources. I could totally see that being possible in the future. I think we might be experiencing a lack of available jobs relatively soon, due to automation.
The voting I was referring to above was voting with currency tokens. One person may decide to vote on a sports car by buying it with their basic income tokens, whereas another person may vote on public transportion by paying for it and then save more of their basic income to go on a trip. Someone else might give another person some of their tokens because they like hearing their jokes, etc. So the currency tokens are the votes that direct the robots and perhaps other humans on what is desired and what is valued such that we best price limited resources and know what to do with them. Giving a MBI in tokens would possibly reduce the human incentive to produce, but they would still create some of the same properties of a free market through the signals humans provide by buying things. However, even if robots take over most jobs, I still think there will be much for humans to do. For example, sometimes I enjoy purchasing things electronically without ever interacting with a human, but I also appreciate and desire businesses where I can get to know the owner and the employees. The personal touch by other humans is worth something to me.
Citizens income has the side effect of uniting a country. The idea being that all citizens get a higher dividend when the country does well and a lower dividend when it's not doing so well.
To me the study makes sense. Some people at the very bottom of the economic ladder that are already receiving government benefits might actually get less on a basic income scheme.
Slightly off topic but I personally think basic income is being pushed behind the scenes by the central bankers.
With all the money in circulation being issued through the creation of debt you end up reaching the mathematical limits of that system at some point when everyone is either unable or unwilling to borrow more money.
Unless you change the rules to allow for the addition of even more debt. Mass immigration would be one way. Borrowing money to give everyone free money every month would be another.
Borrowing is a trap. Be the lender.
I'm starting to get more and more into the idea of the negative income tax, as opposed to universal basic income. They're really not that particularly different, but negative income tax would be easier (at least in the US) to implement.
I'm no economist but I damn sure agree that one study isn't enough to draw any firm conclusions from, it might also help to know who funded that study. We all pretty much know that when you follow the money trail you can usually get a pretty good idea on how the results ended up as they do.
They media is what is , sensationalizing headlines is their specialty no matter what country you are in. Thanks for pointing out that at least one outfit gave the headline a fair shake,
Yeah it was funded by a Dutch fund, couldn't get much more information. They researched just one form of basic income, I wouldn't say that the results are all that conclusive.
It is an interesting study. I would agree with you that the reporting of an otherwise worhtwhile study makes it sound completely out of context. However, this is really the way of all reporting at the moment (via all channels, not just traditional media, but also social and otherwise). People grab onto sensational headline claims and ignore the nuance that most scientists are often making.
Wish I could read the actual study, instead of just the reporting around it. No luck finding it through Google Scholar though and don't have any paid subscriptions anymore from uni : )
As far as I understood, it was a presentation at a symposium? So, maybe the paper is coming soon.
The parts of the reporting that I did read, was that the modelling was done for economies that simulated Netherlands and Belgium. So countries with a decent welfare net in place. Perhaps in third world countries (like America, haha!) it would have a larger and positive effect.
Do the humanities also have a preprint equivalent like arkiv?
Ik vind het ontzettend moeilijk te bepalen of het wel of geen goed idee is. Mijn eerste gevoel zegt.... laten we het doen. Maar dan denk ik aan gezinnen die dan alsnog een uitkering nodig hebben voor hun bestaan. Aan de andere kant, worden ze misschien gestimuleerd om parttime te werken om aan het minimum inkomen te komen. Een alleenstaande heeft in ieder geval geen uitkering meer nodig als ie werkloos raakt of is.
Eigenlijk zijn er geen nadelen ;-)
Het blijft een moeilijke discussie. Er wordt hier en daar al wel door gemeenten in NL geexpirimenteerd heb ik begrepen, maar ik volg het eigenlijk niet, dus ik weet ook de uitkomsten niet, maar het zou me niets verrassen als het financiële gat tussen armoede en middenstand een stukje kleiner wordt hierdoor.
Ja, zo lang er niet geraakt wordt aan bijvoorbeeld ziekte en invaliditeitsuitkeringen zou het best goed kunnen zijn. Nuja, het kan ook niet de bedoeling zijn dat belastingen erdoor omhoog gaan.
Zitten mensen met een ziekte uitkering sowieso niet op het minimum? Dan is bijvoorbeeld 1000 euro basisinkomen misschien hoger. Ligt aan de gezinssamenstelling. Én...... de bijkomende 'kosten' die vergoed worden mogen er natuurlijk ook niet af.
Het is een complexe materie, maar wat ik al schreef, er zijn al scenario's.
Dankjewel hè Daan voor je vote !!
Another reason to disregard much of the media, as they tend to serve out fear to attract more views and make money. UBI is certainly not a simple thing, though I think that's because the way it'll work will be complex. Each person will be part of many systems that provide liquidity so the individual has purchasing power. If you combine UBI with the increasing wave of off-grid self-sufficiency, humans wont need money for as many things in the coming decade. I'll check out that subreddit, and thanks for your thoughts :)
Well @daan in South Africa the government has recently legalized a basic income salary across the country! We have a severe un-employment problem and in order to rectify this, the basic income is meant to reduce poverty. The general comment from the public is that many businesses and home owners would not afford to pay this basic income and that it would lead to increased un-employment. We will have to wait and see! I personally feel that a basic income model could be a great idea, provided that side effects are carefully considered! Blessings and upvoted!
I'm also in favor of a basic income, if it wouldn't mean that taxes get raised. I do think it's possible to implement one without that.
How much is this basic income in South Africa? Is it a sum that you could live on?
A sovereign wealth fund can produce a dividend. It's quite easy to do without having to rely on taxes.
There is really a lot of diverse opinions about basic income implementation my own view on this issue is that basic income will certainly reduces poverty in the land and bridge the gap between the rich and the poor in our society . If there is an even distribution of basic income the citizens with respect to their status and earning , with the poorest receiving more income then followed by the middle class with a reduce tax .
I believe with such methodology the scheme will be successful thereby reducing poverty and providing more income for the poor @daan
Thanks for sharing your though, in you opinion, what king of basic income could work?
On my side I think at least some social program must be replaced for administrative cost to go down and easy access for everyone be allowed.
Considering near futur automatisation of many jobs, we will have to consider a path where a basic income need to be provided to ensure a minimum decent living for a growing group of poor otherwise like in Brazil, violence will raise which bring lot of fees and costs to the society.
After, I think decent life standard shouldn't be too high so that bigger contribution to the society is encouraged.
But it would allow startup creators to have a living while they create their company, parents to choose to work less to raise their children, someone to realign his career while going back to school or some people to choose a modest and less stressfull live, while contributing in other ways (benovol implication, community implication, developping their passions, ...).
So we must not just consider economic impact, but also impact on children education, stress, health issues, happyness which have indirect impact on the economy.
An hard question, but sometimes, it's better to set your values and objectives and then work towards achieving these objectives.