We bailed out the banks — and now we must bail out the people
Emergency Covid-19 payments have shown the time has come for a Universal Basic Income, writes Willie O’Dea
‘You get the payment direct, no signing on, no queueing up’
DURING the global financial crash of 2008, governments across the globe scrambled desperately to bail out their crumbling banking systems. The goal was to protect national economies from collapse, with the public footing the bill.
Having bailed out the banks in 2008, we will need to bail out the people post-coronavirus: people who have lost their jobs; people who have endured considerable personal sacrifice; people in frontline services who have put themselves at considerable risk for modest wages.
There are many ways we can do this. One, an idea whose time I believe has come, is for countries across the globe — including Ireland — to move speedily to introducing Universal Basic Income (UBI).
Even before the arrival of Covid-19, welfare systems were failing to cope. The growth of the gig economy, workplace automation and technology and the numbers in insecure work or bogus self-employment were leaving more and more workers at risk of receiving no benefits or waiting months for benefits to be paid.
Our special Covid-19 payments are a crude form of UBI, but they are just temporary measures. The fact we needed to bring in a layer of special extra payments on top of the social protection bureaucracy is proof the old system has had its day.
Other countries are seeing this and using this crisis to introduce radical change. In the last week we have seen Spain moving to put some sort of basic income “in place as soon as possible”.
The calls for a UBI scheme in Britain come from across the political spectrum with the idea getting support from Labour, the SNP, the SDLP and several Tories. Even the DUP backs the plan and no one would describe them as bastions of progressive socialism.
A few weeks back, the UK group Open Democracy published a letter signed by a range of senior academics and politicians supporting it.
The letter acknowledged the improvements made to the UK welfare system, which is broadly similar to ours, had gone part of the way to having a de facto
UBI, but forcefully made the point that there were still major gaps.
The same is true here.
The denial of the emergency Covid-19 pandemic unemployment payment to people aged over 66 who lost their jobs due to the coronavirus crisis is blatantly discriminatory. It just reinforces the point that all traditional social security policies leave gaps.
The UBI concept is not a new idea. It has been around for centuries and has been advocated by economists and thinkers from both the left and right.
The concept is very straightforward. Under UBI, every adult citizen receives a regular payment on an unconditional basis. There are no means tests. The rate is set to cover basic needs. You get the payment direct, no signing on, no queueing up.
To do that, you merge revenue and welfare into one system which replaces social welfare and income tax credits. This enables you to design a cost-neutral system which reduces inequity, is cheaper to run and less open to exploitation.
The problem with social protection models designed as safety nets is that nets have holes. Over time, even the best-intentioned reforms have only succeeded in adding layers of complexity.
Over the decades, our social welfare system has evolved way beyond its original goal of proving a safety net for those temporarily out of work. An elaborate set of rules have developed around it which are often applied in an arbitrary fashion. Claimants increasingly find themselves inadvertently setting off sanction tripwires, especially when trying to get off welfare and re-engage with the economy.
What began as a system of reciprocal altruism has now become inhumane, highly complex and highly intrusive. Moving to UBI would eliminate the defects in the current system, the arbitrary punishment, constant state interference and perpetual insecurity. It would provide a much stronger underpinning for creativity and personal freedom.
If you work more, you earn more — the system positively encourages you to do that but, if circumstances dictate you cannot work, you at least have a guaranteed and dependable income. It does away with the welfare trap.
A 2002 Irish government green paper concluded that UBI “would give an independent income for all, including those who are not in the paid workforce, such as people working in the home who do not have an individual income”.
That was before the global financial crash.
The Ireland of 2020 is very different to the 2002 one and the post Covid-19 Ireland will be an even more different place.
The time to prepare for UBI is now.