This article is a (possible? viable?) response to one of the few criticisms against UBI that actually holds water. My training is not as an economist and so this intended...
Last july 26th, Cyprus unveiled a plan for the implementation of a “guaranteed minimum income” by the summer of 2014. While the proposal looks attractive at first sight, it differs in many aspects to the idea of the universal basic income that we defend. Here is why.
While the country is trying to gets back on its feets after a dramatic bailout plan that shook the island’s tiny economy, the Cypriot President Nicos Anastasiades made a surprising announcement regarding the implementation of a “guaranteed minimum income”. The President promised that the plan should be in effect by June 2014.
In principle, the plan looks good. “Beneficiaries will be all our fellow citizens who have an income below that which can assure them a dignified living, irrespective of age, class or professional situation,” Anastasiades said.
The plan also includes measures that rationalize the welfare system in Cyprus: “The Guaranteed Minimum Income will… be financed by a large number of allowances that have until now been un-targeted and often given arbitrarily by different ministries and different services of the state.” the Cyprus Mail details.
Some basic income supporters got enthusiastic about the news. “If the program goes into effect as described, it will be the world’s first full “Basic Income Guarantee” (BIG) as defined by the U.S. Basic income Guarantee Network”. This was an impassioned statement that came from the website Basic Income News. Consequently, this article went quite viral on social networks.
However, a further quote from Anastasiades in the Cyprus Mail article got less attention:
“The single but absolutely necessary precondition is that they don’t refuse to accept offers for employment and to participate in the policies of continuous employment that are determined by the state”
Therefore, what seemed to be a great step towards a universal basic income turns out to be a workfare-minded proposal and to have in fact nothing to do with the principle of unconditionality attached to a basic income as defined by the Basic Income Earth Network:
A basic income is an income unconditionally granted to all on an individual basis, without means test or work requirement. It is a form of minimum income guarantee that differs from those that now exist in various European countries in three important ways: 1. it is being paid to individuals rather than households; 2.it is paid irrespective of any income from other sources; 3. it is paid without requiring the performance of any work or the willingness to accept a job if offered.
While reckoning that the proposal was “a brave step in the right direction”, the Greek Basic Income initiative also points out the pitfalls of the proposed minimum income, and notably the stigma and poverty trap effect that such means-tested income support schemes usually imply:
Typically, if the beneficiaries have to prove that they are ‘poor enough’ to merit the income support, it creates a barrier in their efforts to get out of the benefit scheme.
Also worth mentioning, the implementation of a minimum income in Cyprus was actually part of the memorandum of understanding between Cyprus and the troika: “The planned reform of public assistance should ensure that social assistance serves as a safety net to ensure a minimum income for those unable to support a basic standard of living, while safeguarding incentives to take up work, ensuring consistency with the reform of the welfare system”..
All in all, it appears clear that the guaranteed minimum income in question is a very different proposal than that which would qualify as basic income, even though this is a topic that basic income proponents should watch closely. The emergence of a wider debate on basic income can only be facilitated by this sort of proposal. To be continued!
Picture credit: Free Grunge Textures