Since 25th of September 2020, the European Union has been collecting signatures for the European Citizens’ Initiative “Start Unconditional Basic Incomes (UBI) throughout the EU”. By 25th of Jun 2022, the signatures of 1 million European Union citizens need to be collected in order to submit them to the European Commission. The aim is to establish the introduction of unconditional basic incomes throughout the EU which ensure every person’s material existence and opportunity to participate in society as part of its economic policy. The initiative to introduce unconditional basic income throughout the European Union can be signed at https://eci-ubi.eu/.
This is an introductory article to a series of articles on unconditional basic income. We plan to reflect the topic of unconditional basic income (UBI) from different points of view, looking through the prism of Latvia. Let’s start with an introductory article on what UBI is, what the purposes of UBI are, let’s give a brief history and the impact on what’s happening today.
Widely discussed topic in the field of social and human rights
Unconditional basic income has become one of the most debated social and human rights issues in Europe and worldwide in recent years. Philosophers, economists, doctors, representatives of education, security, various trades and arts, NGO activists, the United Nations, the World Economic Forum in Davos and the World Bank are making calculations. This idea is also supported by Pope Francis, who wrote about it in his book “Let us dream“. UBI is talked about both in castles and in huts. It is considered that the implementation of the UBI is only a matter of time. In order not to waste time and our competitiveness in case we have to compete with a country where UBI has already been introduced, it is time to talk about it in Latvia as well.
What is unconditional basic income?
Unconditional Basic Income is defined by the following four criteria:
- Universal: UBI is paid to all, without means test.
- Individual: Everyone – every woman, every man, and every child – has the right to UBI on an individual basis.
- Unconditional: As a human and legal right UBI shall not depend on any preconditions, whether an obligation to take paid employment, to demonstrate willingness-to-work, to be involved in community service, etc.
- High enough: The amount should provide for a decent standard of living, which meets society’s social and cultural standards in the country concerned.
Thus, unconditional basic income consists of periodic cash payments granted to all citizens (residents) without means-testing to ensure their standard of living above the poverty line until the end of their lives.
UBI is paid in cash, not in kind, leaving the beneficiaries free to spend it as they see fit. UBI pays everyone, not targets a specific population group, individually, not to the household.
The UBI does not include any work requirements, it is available to both those in paid employment and those who are not employees, have a representative in the creative industries (receiv honorarium), work as a volunteer, etc.
UBI should prevent material poverty and provide the opportunity to participate in society, UBI should be at least above the at-risk-of-poverty level according to EU standards, which corresponds to 60% of the so-called national median net equivalent income.
For example, in 2019, at-risk-of-poverty was 21.6% or 407 thousand people in Latvia. According to the Central Statistical Bureau, the equivalent disposable income of this population was below the at-risk-of-poverty threshold or 441 euros per month. Guaranteed minimum income (GMI) in Latvia is set at 20% of the median income.
In countries where the majority has low incomes, and therefore median income is low, an alternative benchmark (e.g. a basket of goods and services) should be used to determine the amount of the basic income, to guarantee a life in dignity, material security and full participation in society.
Initiators of the European Citizens’ Initiative ” Start Unconditional Basic Incomes (UBI) throughout the EU” request the EU Commission to make a proposal for unconditional basic incomes throughout the EU, which reduce regional disparities in order to strengthen the economic, social and territorial cohesion in the EU (Cohesion policy – a policy of equalization, reduction of disparities, better commitment; a set of policies and measures implemented by the European Union to balance the level of development of countries, thus achieving greater unity and commitment as a whole).
This shall achieve the goal set out in the 2017 Joint Statement of the Council of the European Union, the European Parliament and the European Commission that “ the EU and its member states will also support efficient, sustainable and equitable social protection systems to guarantee basic income” in order to combat inequality”.
An UBI is a central measure to reach the goals of human dignity, freedom and equality deployed in central documents of the European Union.
Number of signatures required
Article 3 (1) (b) of Regulation (EU) 2019/788 on the European Citizens ‘Initiative states that one of the conditions for the validity of a European Citizens’ Initiative is – in at least one quarter of the Member States, the number of signatories is at least equal to the minimum number set out in Annex I, corresponding to the number of the Members of the European Parliament elected in each Member State, multiplied by the total number of Members of the European Parliament, at the time of registration of the initiative. In the case of Latvia, these are 5640 signatures. However, according to the principle of proportionality, in order to be able to reach 1 million signatures throughout the EU, Latvia would have to collect 11,348 signatures. To date, the initiative has been signed in Latvia by slightly more than 3,295 Latvian citizens out of 5,640, which is 58.46% of the minimum number of signatures. Despite little information about this initiative in the media, our country ranks third in Europe in collecting signatures. In total, around 138240 signatures have been collected in the European Union, which is 13.82% of the 1 million.
The first lucky ones
In order for EU citizens to try out what it means to receive UBI on a regular basis, the initiators, together with their supporters from the non-governmental organization UBI4ALL, held the first EU unconditional basic income raffle on 16 June, 2020 – € 800 per month, which can be received every month for one year (€ 800 for 12 months is € 9,600 per year). Since June 17, EU citizens can apply for the second UBI raffle. Those who registered for the first one are automatically eligible for the second UBI raffle. It is open to any citizen of the European Union who has reached the age of 16. The raffle is funded solely from citizen donations through crowd funding. It is necessary to collect € 9,600 to finance the basic income of one citizen. At the time of writing of this article, 16,281 citizens have applied for the second raffle, and € 688 have been donated so far, but lucky winner of the first raffle is Lucy from France. The website where you can apply for the UBI raffle is https://ubi4all.eu. You too can be one of the first lucky ones.
Little is known and spoken in Latvia
What has made unconditional basic income such an actual topic and why is so little known about it in Latvia? The world experience is extensive enough – a number of experiments, studies and data analysis have been carried out, which prove that the payment of basic income has a positive economic and social effects. Therefore, this topic is currently widely discussed abroad.
Unfortunately, Latvia avoids talking about everything that draws attention to the social system. The first negative argument is usually misunderstanding – how can money be paid for nothing? But UBI is not money for nothing; it is a dividend on our every investment from ancient times to the present day. We all live in a society in which we participate. Society forms the state, and states form unions of states. It is just fair that we get back a small part from our contribution.
It must be borne in mind that the time of occupation has had a very negative effect on our way of thinking, so we often do not dare to think more broadly or out of box. All the more so if the Minister of Finance immediately argues that it is too expensive. The question arises; can the population become too expensive for the country? This is the case with UBI throughout the European Union, not just in one of the Member States. Countries benefit because the costs of providing various functions can be reduced because their people are involved in providing these functions (more on this in one of the following articles).
As for the world experience, it must be said that it is very extensive.
Visit https://basicincome.stanford.edu/experiments-map/ to learn more about each past, present or planned basic income experiment worldwide. In this map you will find detailed information about the location of the experiments, time, number of participants, responsible authorities of the experiment, the amount of basic income, etc. important information, including links to project websites.
It should be noted that not all guaranteed income experiments have paid an unconditional basic income. The most common universal income is applied. What is the difference? If the unconditional basic income includes all four of the above criteria (general, individual, it is paid unconditionally and is high enough), then one of the criteria may be missing for the universal basic income. An example is the Finnish experiment, which selected people who had registered as unemployed. So the condition was applied – the unemployed (universal group of people).
The Bolsa Família social program in Brazil targets families in poverty or extreme poverty, not every individual, so this type of basic income is also universal. However, the pilot experiments in Namibia and India were performed according to all criteria for unconditional basic income; also UBI experiment in Germany called Mein Grundainkommen that is happening now.
Positive results speak for themselves. For example, in the SEED project in Stockton, USA, where 125 city residents received $ 500 a month for two years, they recorded that:
- Guaranteed income reduced income volatility, or the month-to-month income fluctuations that households face, only 25% of recipients would pay for an unexpected expense with cash or a cash equivalent. One year in, 52% of those in the treatment group would pay for an unexpected expense with cash or a cash equivalent;
- guaranteed income allowed beneficiaries to find a full-time job – in February 2019, 28% of recipients had full-time employment, one year later 40% of recipients were employed full-time;
- recipients of guaranteed income were healthier, showing less depression and anxiety and enhanced wellbeing;
- The guaranteed income alleviated financial scarcity creating new opportunities for self-determination, choice, goal-setting, and risk-taking.
In 2018, The New Leaf project in Canada used innovative strategies: 50 homeless people who had lost their homes relatively recently, were given one-off cash payment of CAD 7,500 (approximately EUR 5,103). The participants of the experiment were able to spend this money as they liked. The results were amazing! On average, cash recipients spent 52 % of their money on food and rent, 15 per % on other items such as medications and bills, and 16 % on transportation and clothes. In comparison, spending on alcohol, cigarettes and drugs went down, on average, by 39 %. According to study data, during the year the project saved the shelter system approximately CAD 8,100 (approximately 5,511 EUR) per person. The results of this experiment lead to rethinking the efficiency of the existing social system.
Another well-known one is the Mincome experiment in Canada, which took place in the 1970s. Analyzing its results, health economist Evelyn Forget revealed that the health of the project participants had significantly improved in four years. There was an 8.5% decline in hospitalisations and a reduction in visits to family physicians – there were fewer alcohol-related accidents and hospitalisations due to mental health issues.
“I wanted to see whether doing something about poverty has an impact on people’s health and these results are really interesting. An 8.5% reduction over four years is pretty dramatic”, admits E. Forget.
Thus, it is a matter of relieving the health system from patients (and thus also reducing the expenses of the health system), whose health condition improved due to regular guaranteed income, which in turn promoted the choice of a healthier lifestyle.
Stress, malnutrition and unhealthy diet can lead to various types of illness. Modern lifestyle and income level in Latvia place a huge burden on the health system. In 2019, more than 26% of the Latvian population had fallen below the at-risk-of-poverty threshold. Covid-19 pandemic ensued with all its consequences in 2020.
The € 109 GMI is four times smaller then the at-risk-of-poverty threshold. It drives many to a deadlock from which it is impossible to get out without outside help. Latvia is also among the countries where people live in a stressful situation for a long time, more than a quarter of the country’s population cannot afford healthy food, not to mention other household things.
Unconditional basic income stimulates people’s involvement in improving their lives. The UBI experiments performed so far allow concluding that the benefits significantly exceed the resources invested in the social system. People use the paid basic income more efficiently than the state social insurance system can provide. With the introduction of UBI, we will not only be able to recover more quickly from the effects of Covid-19, but we will also be able to prepare for various changes. One of them is related to automation and robotization.
Automation, robotization and work
The website futurism.com contains information on the professions at risk of robotics and artificial intelligence (AI), as well as the countries most at risk. For example, at the risk of robotics and AI are 99% of insurance workers, 97% of agricultural workers, 88% of construction workers, 97% of fast food workers, 79% of drivers and 68% of postal workers – all of them may lose their jobs as a result of automation, robotics and AI.
Every day we feel impact of robotics more and more often, for example, supermarket self-service checkouts. Everyone of us who uses self-service checkouts does not receive a discount on products of course. Such automation of work benefits only shopkeepers – there is no need to hire an employee, no paid leave, no need to stimulate their employees to perform their duties better, do not get sick and do not demand better working conditions or higher wages. An automated workplace does not require social security contributions and can also be used 24/7 – all you need is regular maintenance. Robots have become especially in demand right now, when precautions must be taken to avoid getting sick during a pandemic.
According to the European Commission’s website, 45%-60% of all workers in Europe could see themselves replaced by automation before 2030. People need both time and money to learn a new profession or acquire new skills. Latvia’s experience shows that an employer most often chooses an already trained employee. Employee training takes time, which means – money for the entrepreneur.
According to the data of Central Statistical Bureau of Latvia, the actual unemployment rate in Latvia in May this year was 7.9%, which means that employees with the necessary skills could be found. At the same time, we need to remember the potential for automation and robotisation, which will make many unemployed. Unconditional basic income as an alternative would provide financial security and also opportunities to be flexible – to acquire new skills when looking for job vacancies.
Probably many will argue that if an unconditional basic income is received, people will not work. Yes, people will not work, but only with a bad employer who pays inadequately low wages or does not follow labor laws and morals. According to Jaanus Nurmoja, coordinator of the Estonian European Citizens’ Initiative “Start Unconditional Basic Incomes (UBI) throughout the EU”, no one will work as a prostitute anymore, and such a scenario could come true.
Evidence from pilot projects shows that people work more than before receiving UBI. The work was stopped by young mothers who want to raise their children for longer, children who are forced to work instead of going to school due to lack of money. Young people stopped working who want to fully indulge in studying. Around 2-3% of all basic income recipients drop out due to the above reasons. Ask yourself, what would you do if you received UBI every month? Wouldn’t you work anymore? May be you will continue to work even at a relatively low wage, if it is your heart’s job, if you are valued in the workplace, if you are satisfied with the work. Basic income will provide the necessary stability.
Balances different relationships
UBI balances different relationships because it enables each individual to take an equal position. For example, the opportunity to say ‘no’ to a bad employer and violent relationships. It provides a basis for us to also develop the country’s internal market. Many of us would buy a product made in Latvia, if it were not too expensive for our wallets. Many of us who were forced to leave to make money would return to life in Latvia. Many would start their own small business; learn something new, and so on. Many would start their own small business; learn something new, etc. We would help each other, would be generous and humane, because that is human nature. And even tax payments to the state budget would increase because there would be more cash flow.
Wages are stagnant for a long time and the state maintains this stagnation by setting a low minimum wage. Why pay more if the law allows you to be employed for a salary of 500 euros plus social security contributions of about 170 euros, despite the fact that the salary on hand falls below the at-risk-of-poverty threshold. If you want to survive, you will work even for the minimum wage. But it is not a life worthy of a person – to be a working poor. Such a situation prevails not only in Latvia. Humanity is looking for its way to stay. That is why so many Europeans are now talking about introducing an unconditional basic income throughout the EU.
Everything is interconnected. With an unconditional basic income, we could shoot multiple bunnies with a single shot. With the payment of the UBI, the state benefits to a very large extent, as part of its functions will be performed by the citizens themselves. For example, the upbringing of orphans in institutions will no longer be needed, as there would be enough foster parents who could afford to raise several children. Or another example, if we had UBI, we could buy environmentally friendly products. We could focus on working in different societies and associations, solving various problems.
And, yes, democracy could flourish, because we would have enough money to buy newspapers and magazines, high-quality journalism would develop, because the press would not depend on economic groups and advertisements, but people living in Latvia would buy them.
UBI is also a matter of national security. Those in need are more likely to commit crimes. People in poverty are more likely to follow extremist calls and populists, to be willing to vote for money or some promised benefits, their lose faith in the state and the media, and more likly to believe in various fake news and conspiracy theories. It is important to us that this does not happen.
A brief look at the history of basic income
As mentioned at site https://basicincome.org/history/, the idea of unconditional basic income was first articulated by Thomas Spence in the late 18th century and by Joseph Charlier in the mid-19th century. Basic income was the subject of a temporary national debate in England around 1920 and in the United States around 1970 (also introducing a basic income experiment such as Mincome). Around 1980, the debate resumed in Western Europe and spread slowly, but since 2016 it has gained worldwide popularity.
Andrew Yang, the candidate for the U.S. presidential election in 2020, had proposed the introduction of a basic income of $ 1,000 for every U.S. citizen over the age of 18 reffering to economic efficienc as his pre-election platform. It is estimated that paying such an amount to adults in the United States could boost the economy by $ 2.48 trillion and increase GDP by 12.56% in eight years.
However, before the idea of an unconditional basic income, there has been talk of a guaranteed minimum income. It is believed that Joannes Ludovicus Vives (1492-1540), a close friend and humanist of Thomas More (1478-1535), was the first to argue for basic income and developed a detailed scheme based on both theological and pragmatic considerations. He can be seen as the true father of the idea of a state-run minimum income scheme and the forerunner of many modern state aid schemes.
In a booklet dedicated to the Mayor of Bruges in 1526 under the title De Subventione Pauperum (On the Assistance to the Poor), J. L. Vives proposed that the municipal government should be given the responsibility of securing a subsistence minimum to all its residents, not on grounds of justice but for the sake of a more effective exercise of morally required charity.
Vives’ arguments probably inspired the leaders of the Flemish city of Ypres, as it introduced a similar scheme a few years later. It encouraged thinking and acting in a different way to support the poor. Vives’ tract is the first systematic expression of a long tradition of social thinking and institutional reform, and shows public sympathy. Despite the difficulties and doubts, thinkers of the time made public assistance an essential function of the government.
In his book L’Esprit des Lois (1748), Montesquieu writes: “The State owes all its citizens a secure subsistence, food, suitable clothes and a way of life that does not damage their health”.
This line of thought eventually led to the setting up of comprehensive, nationally-funded guaranteed minimum income schemes in a growing number of countries, most recently, Italy’s reddito di cittadinanza (2019) and Spain’s ingreso minimo vital (2020).
This information has been prepared with the support of “Active Citizens Fund” – program of European Economic Area (EEA) and Norway Finance Mechanism. The content of the publication is the responsibility of the implementers of the project “Introduction of Unconditional Basic Income throughout the EU” in Latvia” – Association “Vecdaugavieši”; project number: AIF/202/R/31.
First published 10.07.2021 on https://www.latviesi.com/jaunumi/kas-ir-eiropas-pilsonu-iniciativa-sakt-beznosacijuma-pamatienakumu-visa-es