Finland and the Netherlands Experiment With Basic Income

Finland became the first country in Europe to announce plans for the implementation of a basic income program, according to the Basic Income Earth Network (BIEN). (To recap: a basic income is a universal, unconditional form of payment to individuals that covers their living costs. It allow people to choose to work more flexible hours and devote more time to non-work related activities, from caregiving and volunteering, to studying and leisure.)

The commitment consists of one line: ‘Implement a Basic Income experiment’, in the ‘Health and Welfare’ section of the programme.

The main party of government, the Centre Party and the new Prime Minister Juha Sipilä, are known to be supportive of Basic Income, but his new government partners, the populist Finns Party and conservative NCP have not spoken publicly on the issue. The scant reference to Basic Income raises some doubts about the government’s commitment to the policy.

So while it is far from a done deal — especially as the government has yet to release any further details, including a timeframe — it is nonetheless a big step, as few other countries, even in socially progressive Europe, have ever made such a formal, nationwide commitment.

Meanwhile, the fourth largest city in the Netherlands, another country that has been mulling over a basic income, is set to implement a plan of its own. The intention is not only to determine if a basic income will help people in absolute terms, but to see how its efficiency compares to the status quo of welfare payments. From The Independent:

University College Utrecht has paired with the city to place people on welfare on a living income, to see if a system of welfare without requirements will be successful.

Alderman for Work and Income Victor Everhardt told DeStad Utrecht: “One group is will have compensation and consideration for an allowance, another group with a basic income without rules and of course a control group which adhere to the current rules.”

“Our data shows that less than 1.5 percent abuse the welfare, but, before we get into all kinds of principled debate about whether we should or should not enter, we need to first examine if basic income even really works.

“What happens if someone gets a monthly amount without rules and controls? Will someone sitting passively at home or do people develop themselves and provide a meaningful contribution to our society?”

It is not surprising that the Dutch would lead the way in this experiment, given that they already have a well-established fondness for less traditional work environments — 46.1 percent of the labor force works part-time, the highest proportion in the European Union, and the nation is nonetheless broadly prosperous, with a high rate of life satisfaction. This is a country that already leads the way in work-life balance, so it would be interesting to see how this endeavor goes and whether it will catch on elsewhere in the country or beyond.

Finland and the Netherlands are the first developed nations to experiment with a guaranteed basic income since the 1970s, when Canada conducted a pilot project dubbed “Mincome” in a small town, with great results. Other experiments have been performed more recently in India, Namibia and Brazil, each one of them reporting measurable, positive outcomes in everything from poverty reduction to healthcare and general wellness.

As BIEN notes, there is an increasing interest in Basic Income worldwide, as well there should be: from mounting inequality to a dearth of well-paying and sustainable jobs, there are plenty of good reasons to consider at least trying out this streamlined and promising approach to alleviating poverty and improving quality of life.

The Countries With the Greatest Well-Being

According to the most recent Gallup-Healthways Well-Being Index, Panama once again takes the top spot in the number of people reporting high personal well-being, followed by Costa Rica in second place and Puerto Rico in third.

In fourth place was Switzerland, the top European country, which along with Austria (in ninth place) was the only non-Latin American country in the top ten.

The United States came in at No. 23, one spot behind Israel and one ahead of Canada.

This is the second time the report has been compiled (see the first one’s results here). It looks at how more than 146,000 randomly selected adults, spanning 145 countries and areas, respond to questions about five areas related to their well-being: purpose; social; financial; community; and physical. Here are the specific questions, courtesy of NPR. Continue reading

What If Students Stopped Paying Back Their Loans?

That is the provocative question posed by Vice to Professor Andrew Ross, who teaches Social and Cultural Analysis at New York University. As one of the founders of debt resistance groups like Occupy Student Debt and Strike Debt; a member of the Debt Collective; an advocate for the rights of debtors; and an author of Creditocracy and the Case for Debt Refusalhe is clearly something of an expert on the subject. His answer?

A strike of any kind is a tactic. It’s not a solution. It’s a tactic towards a goal, and the goal here ultimately is for the US to join the long list of industrialized countries around the world that make it their business to offer a free public higher education system. None of these other countries are as affluent as the US; there’s no question that this country could afford to do so. In fact, we produced an estimate not that long ago about how cheap it would be for the federal government to cover tuition at all two and four-year colleges. There are several estimates in circulation, and a few years ago that kind of proposal was dismissed out of hand. But now we’re beginning to see it pop up on Capitol Hill in various forms. It’s a proposal that’s part of Bernie Sanders’ campaign for president. It’s a proposal that pushed President Obama in the direction of making community colleges free, at least for two years. It’s becoming a little more respectable to talk about [solutions for student debt], on Capitol Hill and in the public sphere in general. None of that would have happened without a student debt resistance.

Read the rest of this illuminating interview here. Given the mounting economic and social consequences of this issue, one can expect the public debate about student debt and the cost of higher education to only intensify.

The 800th Anniversary of Magna Carta

Widely considered to have been a watershed in the conception of political rights and the rule of law, the 800-year old Magna Carta — Latin for The Great Charter — is credited with having introduced proto-democratic principles to the United Kingdom and beyond, inspiring even the seminal U.S. Constitution and Bill of Rights many centuries later. To this day, the 13th century document — drafted to make peace between rebellious nobles and their unpopular king — is subsequently revered by lawmakers, scholars, and jurists across the world (especially in the Anglosphere).

Among the many then-radical concepts Magna Carta introduced was the promise for the protection of church rights, the prohibition of illegal imprisonment of barons, the provision of formal justice, and limitations on feudal payments to the Crown. Though it applied only to a very small percentage of the population — the notion of civil rights for all humans was still a long way off — for its time, limiting the arbitrary power of the monarch was a pretty big deal.

Or so the myth of Magna Carta would suggest. As The New York Times reports amid many commemorations of the document, many scholars believe the Great Charter’s legacy is overblown. Continue reading

The Lasting Damage of High Inequality

In my previous post, I shared the grim results of a recent OECD study that found a consistent rise in wealth and income inequality across much of the developed world, with the U.S. taking the lead among the richest countries (though comparatively less wealthy countries Chile, Mexico, and Turkey were ahead).

Reporting on the same survey, the New York Times delved further and explored the impact that this worsening inequality is already having on societies: Continue reading

Income Inequality Growing Across The World

The Organization for Economic Cooperation and Development (OECD), a group of 34 mostly wealthy countries, has published the results of a study finding that income inequality is “at its highest since records began”, with the with the United States ranking among the highest on the spectrum.

More from Al Jazeera:

The United States was near the high end of the inequality spectrum, followed by Israel, the United Kingdom and Greece. Only Turkey, Mexico and Chile were found to have higher levels of income inequality than the U.S.

Denmark was the least unequal country according to the report, as measured using the Gini index, a common measure of income distribution. Slovenia, the Slovak Republic and Norway also ranked near the low end of the spectrum.

Overall wealth is even more unevenly distributed than income, according to the report. Across all 34 countries studied, the bottom 40 percent of households were found to possess 3 percent of all wealth. In contrast, the top 10 percent laid claim to half of all wealth, and the top one percent held almost 20 percent of all wealth.

Gurría said the report’s findings demonstrate that inequality slows down economic growth. He urged OECD member countries to adopt more redistributive policies, saying that redirecting wealth flows would benefit not just low-income households but the economy as a whole.

“Well-designed, prudent redistribution does not harm growth”, he said. “In fact, it goes hand-in-hand with growth”.

In addition to tax transfers, the OECD report recommends more investment in education, policies that promote remunerative employment, and measures that “remove barriers to female employment and career progression”. Bringing more women into the workforce and narrowing the pay gap was found to have a mitigating effect on income inequality.

In recent years, global elites have become increasingly concerned about income inequality. Last November, the World Economic Forum, which hosts the annual gathering of political and economic leaders in Davos, Switzerland, put out a report identifying income inequality as the number one trend to watch in 2015.

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How An Iron Fish Can Help Millions of People

Anemia, caused mostly by iron deficiency, is one of the most widespread and consequential health afflictions in the world, impacting 30 percent of the world’s population, mainly children, teens, and young mothers. From constant fatigue and headaches, to potentially deadly hemorrhaging, it literally weakens entire communities and makes the already laborious lives of the poor even more miserable.

It is easy to take for granted the prevalence of iron in most developed-world diets. But for most people living in the developing world, such as in Cambodia, it can be difficult to grow or access iron-rich food, let alone take expensive and equally unavailable iron tablets. It is one of those problems that should not be so widespread and intractable, indicative of the pervasive neglect and inequality of many economic and political systems (and indeed the world).

The BBC highlights a promising solution by Canadian scientist Dr. Christopher Charles so simple and cost-effective that there can be no excuse for not implementing it.  Continue reading

College Grads Still Have It Rough In Post-Recession America

College graduates are spending more and more years — and money — to get worse and worse entry-level jobs. That is the grim conclusion from this recent report from The Atlantic:

The majority of young people aren’t graduating from a four-year university. Rather they are dropping out of high school, graduating from high school and not going to college, or dropping out of college. Millennial is often used, in the media, as a synonym for “bachelor-degree-holding young person”, but about 60 percent of this generation doesn’t have a bachelor’s degree.

And how are they doing, as a group? Young people don’t seem to have a jobs problem—their jobless rate is a bit elevated, but not alarmingly so. Rather they have a money problem. The jobs they’re getting don’t pay much and their wages aren’t growing. A recent analysis of the Current Population Survey last year found that the median income for people between 25 and 34 has fallen in every major industry but healthcare since the Great Recession began.

Again, it is not that young degree-holders are having a hard time getting employed — on the contrary, they still have a better chance of finding a job than those of any age without degrees. It is that the quality of their work — in terms of pay, growth prospects, treatment, etc. — is poor and not corresponding to their skills and investment in education. It is under-employment rather than unemployment that is the big issue. Continue reading

The Need To Re-Think Capitalism

Hedge fund manager and philanthropist Paul Tudor Jones II challenges American businesses to incorporate “justness” and ethics into their corporate model. A self-described lover of capitalism, he believes that the economic system has lost its way and is becoming corrupted by greed and a lack of social responsibility — hardly a novel observation, but definitely an interesting one to hear from a wealthy beneficiary of said system.

His ten minute TED Talk below is highly informative and dense with charts and data showing just how much the nation’s business elites have become out of touch and self-serving.

Jones II’s message appeals to both self-interest and compassion: his contention is not only that it is more ethical to utilize vast profits to do more social good — through corporate charity, better wages, etc. — but that making capitalism fairer and more beneficial to society is the only way to prevent less desirable (to capitalists) alternative means to that end — namely higher taxes, revolution, and war (implicitly socialism or some other Leftist movement would be a threat, but it would allegedly operate through any or all of those). Continue reading

Survey Finds Majority of Americans Face Near-Poverty

CBS News reports on a recent poll that found what most us no doubt know well: that the average American is teetering on the brink of poverty and hardship:

Four out of five U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

The report classifies “economic insecurity” as a year or more of periodic joblessness, reliance on government aid such as food stamps, or income below 150 percent of the poverty line. When all races are taken into account, the risk of succumbing to one or all of these incidents rises to an incredible 79 percent.

The breakdown by race is particularly telling, as it signifies just how broad the impact of economic inequality and stagnation has been:

While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in the government’s poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.

Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones.

Nationwide, the count of America’s poor remains stuck at a record number: 46.2 million, or 15 percent of the population, due in part to lingering high unemployment following the recession. While poverty rates for blacks and Hispanics are nearly three times higher, by absolute numbers the predominant face of the poor is white.

More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation’s destitute, nearly double the number of poor blacks.

Sometimes termed “the invisible poor” by demographers, lower-income whites generally are dispersed in suburbs as well as small rural towns, where more than 60 percent of the poor are white. Concentrated in Appalachia in the East, they are numerous in the industrial Midwest and spread across America’s heartland, from Missouri, Arkansas and Oklahoma up through the Great Plains.

Buchanan County, in southwest Virginia, is among the nation’s most destitute based on median income, with poverty hovering at 24 percent. The county is mostly white, as are 99 percent of its poor.

There is no ignoring the racial dimension to poverty, and the roles played by both social and institutionalized racism. But class is increasingly becoming a determining factor, as those lacking the resources and connections needed to advance in the post-industrial economy — the vast majority of Americans — enjoy less of the country’s vast economic potential.

The U.S. remains the richest country in the world by a significant margin, and its economy has continued to grow rather healthily by global standards. There is no reason why so much of its population remains immiserated or, at best, hanging on by a thread. The capital and resources are there, but they are not being allocated and invested properly.

More corporate profits are going to shareholders and upper management, rather than in workers’ pay and benefits. More public revenue is being siphoned off by the military or through tax breaks and subsidies for the wealthy and big business. The political economy is woefully inefficient and tapping into the potential of the American public, whether through the provision of affordable education and job training, or by rewarding hard work through reasonable, liveable wages.

How we fix that is a whole different conversation for another day.