Gary Murphy looks at the idea of a universal basic income and how it can be the remedy to a wavering social welfare system.
As the Department of Social Protection reached its 70th birthday in January, it could look back with pride at its achievements over the decades. Established in the dark, uncertain times of post-war Ireland, the then Department of Social Welfare did much to stabilise the incomes of the nation’s poorest, providing a floor below which the most vulnerable could not fall.
Europe’s emergence out of the ashes of the Second World War may not have been possible without this Herculean push against poverty. Social protection, social security, the dole; whatever you wish to call it, the system stands as one of the greatest achievements of modern times.
Yet cracks are showing in the structure; traps and pitfalls are forming in the floor. Welfare has waded through ups and downs, recessions and booms, without ever needing to undergo a major transformation; until now.
For the way we work has changed. No longer can you start in a job and realistically expect to be there for the remainder of your life. Advances in machine learning and artificial intelligence are the death knell for drivers and factory workers, forcing thousands to retrain and find new employment. Short-term contracts and self-employment are becoming ever more popular, two means of living with issues that the current system does not readily address.
Proposals have been floated around for quite some time about patching up the system to deal with contemporary working lives, but one idea aims to blow the whole thing out of the water and start with a clean slate.
Universal Basic Income (UBI) has been put forward as a solution that will work for everyone. Under the proposal, every citizen would receive a fixed, tax-free payment every week from the government regardless of their employment status. Any income gained from work would then be taxed at a flat rate of 40 per cent.
Proponents say that the advantage of receiving this income while also being able to work would eliminate one of the major downfalls of the current system, the “benefit trap”. Under modern levels of welfare payment, there can be little incentive to actively search for work, as low-end jobs often would cause a reduction in income when compared to staying on welfare.
Anne Ryan, Coordinator for Basic Income Ireland, feels this is one of the strong points of the UBI proposals. “Currently, people receiving welfare are badly served by the system. If they take paid work, especially low-paid or temporary, they often lose out financially. With basic income, there would always be a financial incentive for people to do paid work and earn a taxable income.”
The idea has been praised by business leaders, not for its incentive to work, but for its incentive to create. Investor Albert Wenger, a key early player in sites like Tumblr and Etsy, sees basic income as a freeing of the people, granting them time and funds to develop ideas rather than develop their survival.
“Right now, millions of people can't afford to be entrepreneurially active because they have no time or capacity to do so,” claims Wenger. “We know that innovation needs entrepreneurship. But entrepreneurship today is something of a privilege. A basic income is a question of freedom. We should now give people money to participate.”
Indeed, basic income could arrive at a perfect time for creators. YouTube in particular has exploded with independent content producers in recent years, projects that require time and money to build an audience. These lines of non-traditional employment, with truly global reach, will finally have a means of getting themselves off the ground and producing sustainable income through advertising.