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The Case Against Universal Basic Income

Authors:
policy network paper
The case against Universal Basic Income
Daniel Sage and Patrick Diamond
February 2017
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Europes New Social Reality
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About the Authors
Patrick is co-chair of Policy Network. He is lecturer in Public Policy at Queen Mary, University
of London, Gwilym Gibbon fellow at Nueld College, Oxford, and a visiting fellow in the
Department of Politics at the University of Oxford.
Daniel Sage is a research associate at Policy Network, and a senior lecturer in social sciences at
Edge Hill University.
Cover Photo Credit:
Russell Shaw Higgs
http://bit.ly/2kWcmvg
Acknowledgements
This paper would not have been possible without the continued generous support of the
Foundation for European Progressive Studies (FEPS). In particular, we would like to thank Ernst
Stetter and Ania Skrzypek, who provided intellectual inspiration as well as practical assistance.
This paper is a follow-up to a 2015 report published in partnership with FEPS: The Social
Reality of Europe After the Crisis, which can be found here: http://www.policy-network.net/
publications_detail.aspx?ID=4915
www.policy-network.net
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3 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
1. Introduction
In 2015, the Policy Network report The Social Reality of Europe After the Crisis identied the
growing social, economic and political divergence between the regions of Europe as one of the
most important consequences of the crisis, given the shared challenges of weak economic growth
and rising inequality. Since the report’s publication, new comparative data suggest that economic
recovery remains unevenly distributed across Europe, with particularly low growth in continental,
Nordic and southern European countries. Further, despite progress in increasing employment
participation, inequality has risen in most EU states since the 2015 report, while poverty levels have
barely shifted despite improved labour market performance. In this context, it is unsurprising that
left and right populism continues to thrive across Europe, with declining trust in existing democratic
institutions. Nowhere has the rejection of the centre and of established political parties been more
direct than in the UK, where a majority of voters chose to ignore the advice of the three main political
parties by deciding to leave the EU.
Amidst a political environment of stagnating living standards, rising inequality and pessimism
towards established political institutions, social democratic parties have struggled to respond with
convincing narratives and policy solutions. This has manifested itself in the rise of a new left in
Greece and Spain; across north-west Europe, populist radical right parties have honed an appeal to
working-class voters in the so-called social democratic ‘heartlands’. This is evident in the UK, where
many traditionally Labour-supporting areas in northern England voted to back the UK’s exit from
the EU. Labour’s malaise is representative of a wider challenge for European social democracy: how
to respond to social and economic changes which make many of its traditional supporters feel ‘left
behind’, while retaining the support of other groups in its historic coalition, namely liberal, urban,
middle-class and younger supporters.
In the search for a new strategy for the centre left, a growing number of policy-makers, politicians,
academics, campaigners and thinktanks have advocated the introduction of a universal basic
income (UBI): an unconditional, regular payment by the state to every citizen. Although a long-
standing idea, its supporters argue that UBI enables the left to oer a convincing analysis and
persuasive solution to some of the most fundamental challenges in modern societies. These include
furthering gender equality by providing all women with independent incomes; enabling people to
cope with the threat of unemployment and underemployment arising from automation; improving
the quality of jobs by empowering people at work to attain better work-life balance; and addressing
intergenerational inequality by providing young people with more economic security and power
over their futures.
As an idea, UBI has a powerful allure in the context of profound social and economic disruption,
a lack of alternative political visions, and public distrust towards the conventional welfare state.
However, this paper poses a question about the extent to which UBI is necessarily the solution to
these crises. It asks whether there are eective strategies and policies that could more credibly deal
with these challenges. Finally, the report scrutinises the claim that UBI is a panacea for the travails
of the centre left in its capacity to tackle the social challenges already identied. The structure of
the report is as follows. Chapter 2 reviews recent social and economic trends in Europe since the
2015 report. Chapter 3 outlines the challenges for social democracy and the emergence of UBI
as an apparently powerful remedy. Chapter 4 considers how UBI may eectively address some of
the most fundamental challenges to European societies. Chapter 5 sets out the social democratic
case against UBI and presents a series of policy case studies as alternatives. Chapter 6 draws the
arguments together, arguing that a more eective and convincing strategy for the centre left is to
strengthen, reform and revitalise welfare states and social policies. 1. Namely, Andrew Du CONV
234/02, 03-09-02 and Robert
Badinter CONV 317/02, 30-09-02.
2. A concept now enshrined in
Article 48(2) TEU.
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2. Economic and Social Trends in Europe
Economies and Labour Markets
The 2015 Social Reality report identied the divergence between Europe’s regions as the most
important consequence of the economic cr isis. T he weak prospect of economic growth was a shared
challenge across the EU. Recent data on GDP growth, however, shows that while some countries
continue to stagnate, others have been more successful. Relatively high growth has been seen in
Ireland, the UK 1 and east-central Europe, while in contrast Baltic, continental, Nordic and southern
countries have seen low average growth of between 1.2-1.6 per cent. This is shown in Figure 2.1,
demonstrating that a diverse range of states continue to struggle in the aftermath of the crisis.2
Figure 2.1 Changes in GDP growth 2014-15
The relative economic success of the east-central region is representative of a broader trend of
convergence between east and south Europe. Percentage rises in median incomes between 2013-
2014 were largest in the relatively poorer east European countries, including Bulgaria (14.5 per cent),
Latvia (13.6 per cent) and Estonia (7.4 per cent). In contrast, median incomes fell during the same
time period in Cyprus (-8.2 per cent), Greece (-4.8 per cent) and Spain (-0.4 per cent). The process of
convergence is demonstrated in Figure 2.2, which shows GDP per head for each region relative to
the EU average. In 2005, GDP per head in south Europe was 96 per cent of the European average; in
2015 this had fell to 85 per cent. Simultaneously, the relative position of the east-central region has
improved by 15 per cent, while the Baltic region has climbed 21 per cent closer to the EU average,
bringing both regions closer to south Europe.
0
1
2
3
4
5
6
GDP Gro wth R ate
EU Region
2014
2015
1. Tilford (2016) however warns
that relatively high growth in
the UK masks deeper economic
problems, including stagnant
wages, falling productivity, low
skills and weak investment in
infrastructure.
2. English-speaking (Ireland; UK);
continental (Austria; Belgium;
France; Germany; Luxembourg;
Netherlands); Nordic (Denmark;
Finland; Sweden); southern
(Cyprus; Italy; Greece; Malta;
Portugal; Spain); east-central
(Czech Republic; Hungary;
Poland; Slovakia; Slovenia); Baltic
(Estonia; Latvia; Lithuania); south-
east (Bulgaria; Croatia; Romania).
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Figure 2.2 GDP per head by European Union region 2005-15
The deteriorating labour market situation in Europe has been on e of the most important social issues
of the past ve years, with the 2015 report highlighting a schism between high performing countries
(predominantly in north-west Europe) and the crisis-hit states. Since that report, two additional
years of data show more positive employment trends. Between 2013 and 2015, employment rates
increased in every EU country except four, with unemployment declining in 23 states. Although
starting from low bases, countries like Portugal, Spain, Ireland and Greece have seen employment
growth of over 2 per cent and corresponding falls in joblessness. Employment growth has been
weakest in north-west Europe, with rising unemployment in France, Belgium, Luxembourg, Austria
and Finland.
Table 2.3 Changes in (1) employment and (2) unemployment rates 2013-15
HU PT BG LT ES IE HR EE MT PL SK CZ UK EL
(1) 5.9 3.7 3.6 3.5 3.4 3.3 3.3 3.1 3.0 2.9 2.7 2.3 2 .1 2.0
(2) -3.4 -3.8 -3.8 -2.7 -4.0 -3.7 -1.0 -2.4 -1.0 -2.8 -2.7 -1.9 -2. 3 -2.6
SI RO DK IT CY DE SE NL LV FR BE LU AT FI
(1) 1.9 1.3 0.9 0.8 0.8 0.7 0.7 0.5 0.3 0.1 0.0 -0.2 -0.3 -0.4
(2) -1.1 -0.3 -0.8 -0.2 -0.8 -0.6 -0.6 -0.4 -2.0 0.1 0.1 0.5 0.3 1.2
Source: Eurostat
The 2015 report also drew attention to a growing generational divide across Europe. The living
standards of older people have generally been protected, with rising employment, increased
incomes and growing pension expenditure across most countries. Simultaneously, opportunities
for young people have tended to deteriorate. Youth unemployment rates are almost universally
higher than other age groups and Europe is divided between those with low youth unemployment
and NEET rates (such as Austria, Denmark and Germany) and those with high rates (clustered around
east and south Europe). Since the previous report, there are tentative signs the generational divide
is narrowing. The relative incomes of older people have stagnated or declined in 17 countries, while
EU-28
English -speaking
Continental
Nordic
Southern
East-Central
Baltic
South-East
20
40
60
80
100
120
140
2005 2010 2015
GDP per head (Eu28=100)
Year
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youth unemployment and NEET rates have fallen in 26 and 19 countries respectively (see Figure 2.4).
Figure 2.4 Changes in NEET and youth unemployment in EU-28, 2014-15
Overly sanguine conclusions about Europe’s economic and labour market prospects should be
qualied however. Youth unemployment rates remain extraordinarily high in some countries and,
while youth joblessness is a long-term, struc tural problem for many EU states, there is overwhelming
evidence that in the short term young people continue to suer disproportionately from the
crisis (Bell and Blanchower, 2011). For example, although it has fallen recently, in 2015 youth
unemployment was 50 per cent in Greece, 48 per cent in Spain and 40 per cent in Italy. According
to Stiglitz (2016), the stagnant growth and disappointing labour market situation across much of
Europe originates in the inherent limitations of the euro and, in particular, its failure to account for
Europe’s economic diversity and the lack of accountability within its institutions for growth and
employment.
All in all, the pace of economic growth remains unevenly distributed across Europe. While Ireland, th e
UK and most east European states have seen relatively high growth, low growth is the predominant
experience in many Eurozone countries, with most southern states failing to achieve the scale of
growth required given the magnitude of their recessions. These trends contribute to an ongoing
stagnation across much of Europe, as well as the apparently imminent convergence between parts
of the east and south.
Inequality and Poverty
The 2015 report identied rising inequality as a concern across the whole of Europe. This was
especially true of the Eurozone, where income inequality has grown signicantly since 2005. Trends
since 2013 indicate that the situation is deteriorating further. As Table 2.5 shows, between 2013
and 2014-15, inequality increased in 19 countries. Further, the scale with which inequality is rising is
-10
-8
-6
-4
-2
0
2
FI
LU
RO
FR
MT
SI
DK
AT
SK
DE
BE
EE
IT
NL
SE
HR
PL
CZ
IE
LT
UK
LV
PT
HU
ES
EL
BG
CY
Percentage Change in NEET Rate (2013-2015) and Youth
Unemployment (2014-2015)
NEETs
Youth Unemployment
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deeper than where it is falling. Among the countries where inequality increased, the average rise in
the Gini coecient was 1.23; where inequality fell, it was just 0.49.
Table 2.5 Change in Inequality (Gini coecient) 2013-2014/15
LT RO EE CY UK SK BG NL DE ES IE DK CZ SE
3.3 2.8 2.7 2.4 2.2 1.9 1.6 1. 3 1.0 0.9 0.8 0.6 0.5 0.5
BE LV AT PL SI HU EL MT PT FI IT HR FR LU
0.3 0.2 0.2 0.1 0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -0.4 -0.7 -0.9 -1.7
Source: Eurostat
Note: change is for 2013-2015 for all countries except following, where it is for 2013-2014: CZ, DE, EE, IE, FR, HR, IT, CY,
LU, MT, PL, SK , SE.
Alongside rising inequality, the 2015 report highlighted increased poverty as a major consequence
of the crisis. Since 2009, the number of people in poverty rose year-on-year up to 2013, when
there was a slight fall. The most recent data show a continued fall in poverty up to 2014 but of an
extremely modest 0.1 per cent. At present, 6 million more people are in poverty compared to 2009.
Meeting the Europe 2020 target3, which would require moving 24.7 million people out of poverty
by 2020, looks improbable.
Some countries however have made more notable progress on tackling poverty. The risk of poverty
has fallen in the English-speaking, east-central, Baltic and south-east regions while increasing in
Nordic, continental and southern Europe (see Figure 2.6). Poverty trends thus give further support
to evidence around the narrowing of the east-south divide. Given labour market improvements,
continued increases in poverty and deprivation in Greece and Spain are particularly salient, while
rising poverty in continental and Nordic countries shoul d concern policy-makers. Although economic
growth and rising employment indicate Europe has entered a tentative phase of economic stability,
there are fundamental doubts that this stability is conferring social advantages amid worrying
trends towards inequality and poverty.
Figure 2.6 Change in risk of poverty rate by European Union region 2013-14
3. The Europe 2020 strategy was
introduced in 2010 as a decade
long plan focused on ‘smart,
sustainable and inclusive growth’.
It includes ve objectives: (1)
employment rates of 75 per
cent among working-age adults;
(2) investment in research and
development of three per cent
of GDP; (3) environmental
targets related to greenhouse
gas emissions, renewable
energy and energy eciency;
(4) education targets related to
tertiary education (40 per cent)
and early school leavers (10 per
cent); and (5) 20 million fewer
people living in poverty. Member
states’ progress on the targets is
monitored during the European
Semester.
Nordic Continental
Southern
Baltic
English-speaking East Central
South-East
-3.5
-3
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
Percentage Change in At-Risk of Poverty Rate 2013-14
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Education and Health
Progress in education was a success identied in the previous report, with the EU taking year-on-
year steps towards the two Europe 2020 targets of 40 per cent of 30-34 year-olds completing ter tiar y
education and a 10 per cent early school-leaving rate. Two further years of data since the 2015 repor t
provide strong evidence that the EU is moving quickly towards meeting both education objectives.
The number of early school leavers fell from 11.9 per cent to 11 per cent, while those with tertiary
education increased by 1.6 percentage points to 38.7 per cent, just short of the 2020 target.
National-level analysis shows only four countries are experiencing falls in the proportion completing
tertiary education - Germany, Ireland, Spain and Luxembourg. These countries also fall short of
individual country-level targets. Although the EU-wide target is likely to be met by 2020, some
countries have larger steps to take in a relatively short period of time. Further, even in more
successful countries, the mass expansion of tertiary education should not be evaluated in isolation
from other economic and social trends; many of which, as the previous section showed, reect the
growing insecurity of young people across Europe and weaken the potential of tertiary education
to act as force for progress (Antonucci, 2016). There are more mixed results since 2013 on early
school leavers, with eight countries reporting increased early leaving rates. This could, however, be
associated with the improving labour market situation in Europe, with nearly every member state
reporting lower youth unemployment.
On health, the previous report observed a deep divide in life expectancy between east and west
Europe: a divide that shows little sign of narrowing. Recent life expectancy data show that, despite
large life expectancy gains in east-central countries, the four west European regions have seen
notable rises since 2013. During the same time period, male life expectancy barely rose in Baltic
countries, while male and female life expectancy declined in south-east countries (see Figure
2.7). The dierence in health outcomes between east and west Europe is highlighted in Table 2.8,
which shows the dierence in long-term illness rates between the poorest and richest fths of the
population. Health inequalities are starkest in east European countries, most notably in Latvia.
Health inequalities tend to be smallest in south Europe; in Italy for example, there is just a 1.6 per
cent dierence in long-term illness rates between the richest and poorest fths. Richer EU countries
are not immune from large health inequalities, with notable divides in Belgium, Germany, Finland
and the UK.
Figure 2.7 Change in life expectancy by European Union Region, 2013-15
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Table 2.8 Percentage Gap in Long-Term Illness Rate Between Richest and Poorest Fifths, 2014
LV LT EE CZ BE MT DE FI UK CY NL IE SI
29.3 26.9 26.9 25.8 20.2 20.1 19.0 18 .5 16.5 16.1 15. 4 14.2 14.1
SE PT SK AT DK PL FR BH HU LU EL ES IT
12.6 12.4 10.8 10.5 9.3 7.6 7.1 6.7 6.1 5.0 4.4 3.6 1.6
Source: Eurostat
Politics and Culture
The 2015 Social Realit y report argued that economic and social pressures had led to new political and
cultural tensions across Europe. These tensions, driven by the expansion of the EU, rising inequality,
diverging living standards and government bailouts, manifested themselves in the growth of
populism and decline of centrist parties . Since the previous rep ort, populists have continued to have
a profound impact on European politics (see Figure 2.9 for a timeline). Left-wing insurgents have
taken power in Greece and won signicant vote shares in Spain, Portugal and Ireland. Nationalist
right-wing parties have gained power in Poland and Finland, and came close to key victories in
French regional elections. The weakening of the centre is explicit in the UK, where the Eurosceptic
UKIP came third in the 2015 general election, Jeremy Corbyn was elected leader of the Labour party,
the Scottish National Party won a third term at Holyrood and a majority of voters opted to leave the
EU. Across Europe, coalition politics dominate government make-ups, reecting the fundamental
weaknesses of established centre-right and centre–left parties.
Figure 2.9 Political developments in the European Union 2015-16
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Europe’s splintering politics is evident in diverging levels of trust in democratic institutions. The
most recent Eurobarometer data show huge inequalities in trust between the Nordic, continental
and southern regions. While 83 per cent of people in Nordic countries are satised with how
democracy works, only 32 per cent are in southern member states. This ‘democratic breach’ in
south Europe is further reected in attitudes to EU organizations. As Figure 2.10 shows, trust levels
in the EU and its associated institutions are signicantly lower in southern counties compared to
Nordic and continental ones.4 Yet lack of trust does not necessarily translate into a desire for a
smaller, less powerful EU. Eurobarometer data show support for further EU enlargement is higher in
southern countries (43 per cent) than continental ones (29 per cent). Similarly, while 61 per cent of
people in southern countries agree that more decisions should be taken at the EU-level, only 28 per
cent of those in Nordic ones do. Overall, trust levels in historically pro-EU countries – such as Austria,
France and Luxembourg – have fallen by between 4-10 per cent since 2014, while support for further
enlargement fell notably in Poland (-7), Sweden (-6) and Portugal (-4).
Figure 2.10 trust in political institutions: Nordic, continental and southern Europe
Summary
The central argument of the 2015 Social Reality report was of a diverging Europe, driven by falling
living standards and employment in the south of Europe and apparent stability in the north-west.
A review of recent comparative data shows that while growth and labour market opportunities are
improving in the south of Europe, this is far from the scale required to close the gap created during
the crisis. Further, a long-term perspective appears to show a looming convergence between the
east and south of Europe, driven by the former’s rapid growth and the latter’s relative decline.
It would also be misleading to describe a wholly optimistic picture for the richer EU states. In
many north-west countries, growth is stubbornly low, inequality is rising and poverty rates are
only edging downwards. These trends feed into a range of more specic challenges for European
countries to be examined in this report, including persistent gender inequalities, the threats from
job automation, quality of life and labour market precariousness. A more immediate and obvious
challenge, highlighted in this chapter, is the political instability created by these long- and short-
term social problems. And perhaps the most immediate victims of this growing instability are
Europe’s social democratic parties, who are seemingly under threat from all ideological directions.
4. Nordic (DK; FI; SE); continental
(BE; DE; FR; LU; NL; AT); southern
(EL; ES; IT; PT).
0
10
20
30
40
50
60
70
Tend to tru st EU Tend to trust EU Parliament Tend to trust European
Commission
Tend to tru st ECB
Percentage
Nordic
Continental
Southern
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3. Social Challenges, Social Democracy and the Search for New Ideas
The ‘Crisis’ of the Left
One of the most notable political fall-outs in pos t-crisis Europe is that social demo cratic par ties are at
historically low levels of support. Figure 3.1 shows the share of the popular vote in national elections
since the late 1980s/early 1990s for nine of the most inuential and successful social democratic
parties in Europe during the post-war era.5 Since the mid-1990s, vote shares have universally
declined across all nine parties. This is dramatic in some instances, with PASOK’s 44 per cent in 2010
plummeting to 6 per cent in 2015. Even beyond the extreme Greek case, social democratic support
has fallen deeply and widely. Labour lost 13 per cent between 1997 and 2015; the Austrian SPÖ shed
16 per cent between 1990 and 2013; and the German SPD fell from a recent high of 41 per cent in
1998 to 26 per cent in 2013. Only three of the nine parties were able to command over 30 per cent
of the vote in the most recent elections (PS (32.3); SAP (30.7); Labour (30.5)). Social democrats are
seemingly regressing towards an average of a quarter of the vote in many countries.
Figure 3.1 Electoral performance of European centre left parties 1987-2016
That Europe’s social democratic parties have had a ‘bad crisis’ is widely acknowledged. During a
major crisis of capitalism, voters tended to trust conservative parties or, alternatively, shift their
votes to populists on the left or the right. While social democracy may have been perennially ‘in
crisis’ since the 1970s, there is now a sense that, without major new thinking and a fresh appeal,
irreversible decline is underway. Europe’s social democratic parties are unlikely to disappear; rather,
their ‘core vote’ will be signicantly diminished. Dominant parties do not have an automatic right to
go on dominating and when the ‘facts’ change, so must political parties.
5. Germany (SPD) 1990-2015;
Denmark (SD) 1990-2015; Greece
(PASOK) 1990-2015; Spain (PSOE)
1989-2016; Netherlands (PvdA)
1989-2012; Austria (SPÖ) 1990-
2013; Portugal (PS) 1987-2015;
Sweden (SAP) 1988-2014; UK
(Labour) 1987-2015.
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There are clear short-term explanations for the social democratic malaise. In the UK, Diamond
and Radice (2015) identify three immediate causes of Labour’s 2015 defeat: leadership credibility,
economic distrust, and the perception of Labour as ‘out-of-touch’ on issues like immigration and
the welfare state. More broadly, credibility on the economy and immigration is a European-wide
issue for social democrats. Austerity is seen as a job more suited to conservatives, while the rupture
between centre-left parties and segments of its traditional base on immigration policy is felt across
northern Europe.
Yet throughout the past decade, the more fundamental ‘fac ts’ surrounding economies, societies and
welfare states have changed. Kelly and Pearce (2016) point to four major long-term changes that have
derailed parties of the centre left. First, ageing European societies have increased the centrality of
older voters’ more conservative-oriented claims in political debates. Second, technological change
threatens to transform economies and labour markets. Third, unequal societies are likely to grow
even more unequal into the 2020s, challenging the centre left to develop a coherent and persuasive
strategy to tackle inequality. Fourth, social democrats must deal with cultural tensions between
metropolitan, liberal voters and more conservative, working-class voters.
While Kelly and Pearce identify genuine obstacles, this is not the rst time that the left has faced
seemingly insurmountable structural challenges. Political, economic and social trends in the 1990s,
such as the end of the Cold War and labour market transformations such as deindustrialization
and employment exibility, presented social democrats with huge electoral hurdles. Yet in many
countries the centre left had a successful decade: adapting to these trends, revising their arguments
and, consequently, winning power.
The solutions for social democratic parties this time however, as the declining vote shares in Figure
3.1 indicate, are far from obvious. Observing the success of the Attlee, Wilson and Blair leaderships
in the UK, Kelly and Pearce (2016) lament how “nothing remotely similar is being developed today”.
New ideas have not been entirely absent: the former Labour leader, Ed Miliband attempted to
develop an ambitious narrative around the need to restructure British capitalism. Similarly, new
ideas and policies overow outside formal political parties. These include debates surrounding the
revival of the contributory principle (Bell and G aney, 2012), a more communitarian social democr acy
(Cruddas, 2015) and the strategy of ‘predistribution’ (Chwalisz and Diamond, 2015): creating a more
egalitarian pre-market income distribution.
Universal Basic Income
Amidst the range of proposed solutions, one policy stands out as acquiring new followers and
mounting support during the past two years: a universal basic income (UBI). Although present in
social policy debates on the left and right for many decades, rising and falling in popularity, UBI has
recently emerged as a purported solution to the social democratic crisis. Dened as a universal,
unconditional payment by the state to every citizen, UBI has unique advantages over other ideas
it competes against: it is simple to understand, radical, wide-ranging in its appeal and supposedly
holds the capacity to remedy an extensive list of social and economic ills.
Historically UBI has been restricted to a radical range of views: from those on the left who view it as
a way of redistributing commonly held wealth and assets, to radical libertarians striving to prune the
size of the state. UBI also has a long-term anity with anti-work theorists who support a reduction
in the social and economic centrality of paid work. Given its diverse and radical provenance, the
rise of UBI in more pragmatic political circles, such as the RSA (2014), is surprising. Yet in an age of
disruption and transformation, previously radical policies can take on an unexpected persuasion.
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In this context, UBI has become increasingly appealing to the centre left despite, as van Parijs (2016)
argues, having few historical roots in social democracy. Rather, social democrats have preferred
the universal or insurance-based welfare state alongside well-funded public services. Instead of
enthusiastically engaging with UBI debates, they have often been hostile in defence of the systems
they helped to build. Nevertheless, van Parijs (2016) argues that the scale of social and economic
change requires urgent re-thinking:
This [tradition of hostility to UBI] does not exempt social democrats from urgently updating their
doctrine in order to better address the demands of our century: a century in which both the
desirability and possibility of indenite growth have lost for good the obviousness social democrats
were banking on in the previous century, a century in which full-time lif e-long waged labour will only
be possible and desirable for a minority, a century in which the left cannot let the right monopolize
the theme of freedom.
The case for UBI has recently gained momentum in numerous countries. Experiments are currently
being undertaken in Utrecht, the Netherlands, and are planned across Finland, where participants
will receive unconditional incomes in the region of €600 per month. UBI has also attracted interest
in Scotland, where it has been backed by the governing Scottish National Party and where talks have
been held in Fife over conducting trials. In Switzerland, a national referendum on basic income was
held in June 2016, although it was eventually defeated comfortably. Outside of Europe, in Ontario,
Canada, a pilot project is scheduled for 2017, while interest in UBI has attracted enthusiastic support
from Silicon Valley.
Given its wide appeal across the political spectrum, the problems that UBI will solve often appear
breathtaking in range. Yet the case for UBI on the centre left has been strengthened by some of the
social and economic challenges identied in this report and its predecessor. In particular, rising
social and economic insecurity across Europe has highlighted the inadequacy of welfare states
in providing adequate social security. In the English-speaking welfare states, the benets system
is derided as stigmatizing, punitive and overly complex, while the continental insurance-based
systems have been criticized for preserving ‘insider’ and ‘outsider’ labour market divisions. Since it
is universal and unconditional, UBI could solve these problems, ensuring all citizens have sucient
income without subjection to means tests or sanctions. UBI would also replace what Opielka (2008)
calls the “increasing irrelevance of the work-centred welfare state” that characterizes continental
European systems.
More specically, there are four arguments for UBI that are particularly pertinent for its advocates
given the nature of the challenges European societies face. These are the arguments that UBI
will (a) further gender equality, (b) provide a solution to the labour market disruption that will be
caused by automation, (c) will promote better work-life balance and (d) will address intensifying
precariousness, especially for young people. The next section of this report examines these four
challenges, and the case for UBI, in more depth.
policy network paper
14 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
4. The Case for Universal Basic Income: Four Arguments
Gender equality
There is evidence from European-wide measures that gender inequalities have narrowed since the
crisis. In 2006 there was a 14.3 per cent dierence in the employment rates of men and women; by
2015 this had narrowed to 10.5 per cent. The unemployment gap has also narrowed from 1.4 to 0.2
per cent during the same time period.6
Yet rather than representing genuine progress for women, the narrowing of labour market
inequalities largely represents the relative worsening of men’s position. For example, male
employment rates dropped by 2 per cent between 2009 and 2012 and have barely recovered since.
One cause of the dierential experience of men and women is labour market segregation, with men
often over-represented in harder-hit industries such as manufacturing and construction. As Bettio
et al (2012) argue, the narrowing of gender inequalities at work represents a ‘levelling down’ rather
than a ‘levelling up’.
On a country-by-country basis, the scale of progress is more mixed than the EU-level analysis
suggests. Although the overall EU female employment rate rose by 1.5 per cent between 2008
and 2015, female labour market participation has slowed down or fallen in many countries since
the crisis. Figure 4.1 shows the percentage change in female employment between (a) 2000-2008
and (b) 2008-2015. In the rst period, every EU country (with the exception of Romania) saw female
employment rise, while in the second, post-crisis period female employment fell in 11 member
states. Further, the number of countries achieving a female employment rate of over 65 per cent
rose from 2 to 7 up to 2008; since 2008, only 3 additional countries have reached 65 per cent female
employment. Although the relative position of women has improved, overall progress in female
labour market participation has slowed down in most parts of the EU.
Figure 4.1 Change in female employment in EU-28, 2000-08 and 2008-15
6. In 2006, 71.5 per cent of men
were employed compared to 57.2
per cent of women. By 2015 the
respective gures were 70.9 per
cent for men and 60.4 per cent for
women. 7.6 per cent of men were
unemployed in 2006 compared
to 9 per cent of women. By
2015 9.3 per cent of men were
unemployed and 9.5 per cent of
women were (Eurostat, 2016).
-10 -5 0 5 10 15 20
MT
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Percentage Change in Female Employment 15-64 Year-Old s
2008-2015
2000-2008
policy network paper
15 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
A similar conclusion can be made in relation to the gender pay gap (see Figure 4.2). The gender pay
gap narrowed across the EU between 2006-2010 yet it rose, albeit slowly, between 2010 and 2014.
Figure 4.2 shows large falls in the gender pay gap up to 2010 in countries like the Netherlands and
the UK. Since 2010 however, fewer countries have achieved reduced gender pay gaps and, where
the gap has narrowed, this has been at a signicantly lower rate.
Figure 4.2 Change in gender pay gap in EU-28, 2006-10 and 2010-14
Progress has also been stunted in policy inter ventions that support and promote female employment.
The 2002 Barcelona targets set EU-wide benchmarks for the number of children in childcare, with
objectives of 33 per cent of under-3s and 90 per cent of those aged 3 up to the mandatory school
age in formal childcare arrangements. The rationale behind the Barcelona targets was that a lack
of access to formal childcare presents one of the most signicant barriers to female labour market
participation which is, in turn, a strong protection against child poverty and disadvantage (Mills et
al, 2014).
-8 -6 -4 -2 0 2 4 6 8
SI
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Average
Change in Gender Pay Gap
2010-2014
2006-2010
policy network paper
16 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
Figure 4.3 7 shows a country-level analysis of how EU states compare on both Barcelona childcare
targets. The horizontal and vertical lines indicate the 33 and 90 per cent thresholds:
• Countriesthatfallinthetop-rightquadranthaveachievedbothtargets(Belgium,Denmark,
Spain, France, Slovenia and Sweden).
• Countriesinthebottom-rightquadranthaveachievedthe33percentunder-3target
(Luxembourg, the Netherlands, Portugal and Finland).
• Countriesinthetop-leftquadranthaveachievedthe90percentover-3target
(Estonia, Italy and Malta).
• Countriesinthebottomleftquadranthaveachievednotargets(Bulgaria,CzechRepublic,
Germany, Ireland, Greece, Croatia, Cyprus, Latvia, Lithuania, Hungary, Austria, Poland, Slovakia
and the UK).
Figure 4.3 EU-28 performance in relation to Barcelona childcare targets, 2014
Figure 4.3 demonstrates that a majority of European countries have to take signicant strides if
they are to meet the Barcelona targets, especially those that fail on both objectives. Further, some
countries continue to rely heavily on part-time care. In the Netherlands, although 45 per cent of
under-3s are in childcare, only 6 per cent receive over 30 hours per week. Progress has also stalled
since the crisis. Between 2008 and 2014, the proportion of under-3s in childcare fell in eight
countries, while the number of over-3s in childcare fell in 10.8 Figure 4.4 demonstrates why the
Barcelona targets continue to be so important. Maternal employment is strongly correlated with
the proportion of under-3s in formal childcare; countries with high female employment rates tend
to be those with the largest proportions of under-3s in formal childcare.
7. Figures include children in
formal childcare arrangements
between 1 to 30+ hours per week.
8. The proportion of under-3s
in childcare fell between 2008-
2014 in Denmark (-3), Spain
(-1), Italy (-4), Cyprus (-3), the
Netherlands (-2), Romania (-6),
Finland (-2) and the UK (-6). The
proportion of children aged over
3 in childcare fell in Bulgaria (-5),
Czech Republic (-4), Denmark
(-2), Germany (-1), Greece (-12),
Spain (-2), Luxembourg (-3), the
Netherlands (-2), Romania (-2)
and the UK (-17).
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90% 3+ TARGET
33% UNDER-3 TARGET
0
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010 20 30 40 50 60 70 80 90 100
Percentage of childen in childcare aged 3+ 2014
Percentage of children in formal childcare aged under-3 2014
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17 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
Figure 4.4 EU-28 Maternal employment and percentage of under-3s in formal childcare
This slow progress gives credence to Bettio et al’s (2012) view that gender equality measures are
predominantly seen as policies for ‘good times’, and presents a challenge for how gender equality
can be genuinely achieved. In this context, the attraction of UBI is fuelled as a remedy for stagnating
gender equality. According to some supporters (e.g. Christensen, 2002; McClean, 2016), a universal
payment to all citizens could support gender equality by:
• Enhancingincentivesforwomentoenterthelabourmarketandenhancingchoicearound
which jobs to take.
• Recognisingthevalueandcontributionofunpaidcarework.
• Providingwomenwithmorenancialindependencewithinthefamily.
• Promotingamoreequaldivisionofcarewithinhouseholds.
• Reducingpoverty,whichwoulddisproportionatelybenetwomen.
Both Christensen (2002) and McClean (2016) argue that UBI could achieve two broad aims for
women. First, it could promote equality with men at work by providing greater incentives for
women to participate in the labour market. Second, it would equally provide women with more
independence outside of work, by guaranteeing a non-labour income, promoting the freedom
to care and establishing a more equal balance of household work. UBI could reconcile two long-
standing policy objectives, often seen as mutually exclusive: the promotion of female employment
and the recognition of care.
Countries that have gone furthest in achieving these dual goals are the Nordic states. Yet, despite
progress on employment and the provision of quality care, inequality in household work is still high
and the gender pay gaps in Denmark (15.8), Finland (18.0) an Sweden (14.6) are all close to the EU
average of 16.1. Standing (2011) additionally argues that women have taken an unequal share of
IE
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RO SI
SK
FI
SE
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R² = 0.35745
30
40
50
60
70
80
90
010 20 30 40 50 60 70 80
Maternal Employment Rate
Percentage of Under-3s in Formal Childcare
policy network paper
18 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
the growth in precarious jobs, leading to the ‘triple burden’ of childcare, low-paid work and elderly
care. These trends lead Christensen (2008) to the conclusion that the policy framework of the
Nordic countries – centred on generous parental leave and the provision of aordable, high-quality
childcare – is limited and a new solution is required. UBI, which would simultaneously promote
more women in paid work and lead to the more equal participation of men in the home, could be
this solution.
Automation
A second challenge facing European societies is the potential for technological change – namely
work automation - to disrupt labour markets and threaten the very institution of paid employment.
Debates around automation have raged since the start of the Industrial Revolution, as the Luddites
smashed new machines in their workplaces. Yet the vast majority of people have continued to be
employed despite the emergence of more labour saving technologies. This leads some (e.g. Autor,
2015) to argue that present concerns with automation are, as in the past, exaggerated, and that
new technology may well replace existing jobs but ultimately create replacement industries that
demand new skills.
For others however (e.g. Brynolfsson and McAfee, 2014) the argument is that this time is dierent. A
large part of their contention is that automation now threatens a much wider range of jobs than it
has historically, advancing beyond the routine and into occupations requiring previously ‘machine-
proof’ skills. These concerns are supported by recent studies, such as Frey and Osborne’s (2013),
which argue that jobs will only be immune from automation if they combine dierent elements of
tasks that require perception, manipulation and/or creative and social intelligence. In analysing 702
jobs in the US labour market, Frey and Osborne conclude that as many as 47 per cent of occupations
are at a ‘high risk’ of automation, meaning a 70 per cent or more chance they will be automated in
the future. While psychologists and dentists have a less than 1 per cent chance of being replaced
by technology, there is an over a 90 per cent chance that retail sales workers, paralegals and cashiers
will be.
Applying Frey and Osborne’s (2014) methodology to European labour market s, the thinktank Bruegel
(Bowles, 2014) nds an even more daunting future in the EU, with an estimation that 53 per cent of
EU jobs are at a high risk of automation.9 This analysis is especially concerning for less economically
advanced EU countries, where the higher reliance on low-skilled occupations increases the risk of
automation, such as in Romania (61.9 per cent) and Portugal (58.9 per cent). Northern EU states are
at a signicantly lower risk; nevertheless, the Bruegel estimates put the lowest risks of automation
at, a still high, 46.7 per cent in Sweden and 47.2 per cent in the UK.
9. No data provided for Cyprus.
policy network paper
19 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
Figure 4.5 Jobs at risk of automation in EU-28
Beyond predictions, Brynolfsson and McAfee (2014) argue there is already hard evidence that
automation is aecting labour market conditions. They cite rising ine qualities across many advanced
economies as evidence that automation is taking root; since more wealth can be created with fewer
workers, there are greater rewards for those at the top. Additionally, changes in the occupational
structure of labour markets are also cited as evidence for the impact of automation. Figure 4.6
shows the change in employment across six occupational sectors between 1992 and 2015 for the
EU’s four largest economies. Employment growth was universal across professional, technical and
service occupations, while either stagnant or falling in clerical, craft and plant/machine operating
occupations.
Figure 4.6 Change in employment 1992-2015, selected occupational sectors and countries
010 20 30 40 50 60 70
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Percentage of jobs at high risk of automation
-3000 -2000 -1000 01000 2000 3000 4000
Professiona l
Technicians
Services/Sale s
Clerical Support
Craft and Related Trades
Plant and Machine Operators and Assesmblers
Change in Employment (Thousands) 1992-2015
Occupation
UK
Italy
France
Germany
policy network paper
20 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
This is important vis-à-vis automation, as Figure 4.6 illustr ates the growth in non-routine occupations,
found in both cognitive (e.g. healthcare, education, science) and non-cognitive jobs (e.g. care
services). Similarly, routine occupations that are both cognitive (e.g. clerical) and non-cognitive (e.g.
construction) have been in decline across the four major EU economies. Although a range of factors,
such as oshoring, explains the decline in routine occupations, one other plausible determinant is
automation (Dvorkin, 2016). This is because, as Frey and Osborne (2013) argue, jobs that require
explicitly human, non-routinized skills are far more immune to automation compared to those that
do not. Hence, it is unsurprising that more routine jobs have been in such steady decline.
Thompson (2015) cites three further reasons why automation is already having labour market
eects. First, there is a weakening association between employment and economic growth. In
Karabarbounis and Neiman’s (2014) inuential study, the authors argue this is made possible because
companies have automated so many positions; hence, economic growth can be maintained despite
fewer workers. Second, unemployment and inactivity has been steadily increasing among groups
that are more likely to be aected by automation. This is illustrated in Figure 4.7, which shows large
increases in the number of inactive men in the EU-15 who explain their inactivity because they
think ‘no work is available’.10 In 1996, just 2.4 per cent of men were inactive because they thought
no work was available; by 2015, this had more than trebled to 8.8 per cent. Although a large part
of this increase occurred after the crisis, employment pessimism among inactive men was rising
signicantly in the early 2000s. Third, Thompson (2015) argues that unlike in the past, emerging
technology will be so suciently advanced that it will be able to encroach on hitherto unimaginable
areas of work.
Figure 4.7 Male economic inactivity rates in EU-15, 1996-2015
As with gender inequalities, UBI is advocated as a solution to the potential labour market disruption
associated with automation. While few seriously argue that all jobs will disappear, or that many
in the short-term will feel the eects of automation, there is a growing body of evidence and
expectation that advances in automation will exacerbate technological unemployment. This will
create, as Corlett (2016: 3) describes, a “bleak future [with] an ever-growing group of have-nots, [and]
with profound consequences for over-burdened welfare states”. For many people, the role that
work will play in their lives could be marginal; jobs may become an uncommon, periodic part of life
or, more dramatically, there will be no expectation of work at all.
0
1
2
3
4
5
6
7
8
9
10
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Proporrtion of Inactive 25-59 Year-Old Men Not Seeking Employment
Because "Think No Work Available"
Year
10. Austria, Belgium, Denmark,
Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain,
Sweden and the UK.
policy network paper
21 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
There are three reasons why UBI is cited as a tonic to this ‘bleak future’. First, in a society where
unemployment is consistently higher and more commonly experienced, UBI provides a means to
maintain demand and consumption, something that a means-tested and punitive social security
system would not. Second, UBI would give people a platform of security with which to train for
and nd new forms of non-automated work as they emerge; if people are going to be required to
switch jobs more regularly, UBI eases the pain of ever-increasing labour market exibility (Painter
and Thoung, 2015: 9). Third, as many forms of work disappear, UBI will enable people to choose
paths that are dened by non-work activities: it will ease the transition into a ‘post-work’ society. In
this sense, UBI is an alternative to any attempt at suspending technological advances to preserve
existing labour market arrangements.
Work-life balance
A third important challenge aecting European societies is the struggle for many citizens to strike
a balance between work and private life. This is important for numerous reasons. Demographic
changes have increased caring pressures for many people, both for older relatives as a result of
ageing, and for children as a consequence of rising female employment. Better ‘work-life balance’
is also advocated by environmentalists as a way of challenging assumptions about constant growth
and mass production. Finally, despite consistent falls in full-time working hours, trends across
many European labour markets work against improvements in work-life balance, such as lower
job security and heightened expectations of exibility. Skidelsky and Skidelsky (2012) argue that
a major challenge for rich countries is to enable their citizens to rediscover the ‘good life’. This will
involve a shift away from the obsession with work and economic growth and policies that enable a
better balance with family, education, care, leisure and creativity.
One method of tracking changes in work-life balance is the extent to which people are working in
what would traditionally be considered leisure or family time: shifts, weekends, evenings and night.
While atypical working hours may suit some people (e.g. students), for others they can represent
the only available working arrangements given available opportunities. While there have been
minimal changes in the proportion of EU citizens working Saturdays and nights since the mid-1990s,
Figure 4.8 shows notable increases in those working shifts, Sundays and evenings. This suggests
that a by-product of labour market exibility is in the increased expectation on some employees to
work unsocial hours.
Figure 4.8 A-typical working hours, EU citizens 1995-2015
0
5
10
15
20
25
30
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Portion of Employees Who Report Working Atypcal Hours
Shi fts
Saturdays
Sundays
Nights
Evenings
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22 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
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Furthermore, attitudinal data indicates that dissatisfaction with work-life balance is a signicant
minority issue. In 2014, 19 per cent of 2014 Eurobarometer respondents said they were ‘dissatised
with working hours”’. From these respondents, the main reasons for dissatisfaction were the dem ands
made by work, including excessive hours (48 per cent), shift work (28 per cent) and lack of control
over working hours (28 per cent). Only 8 per cent of those dissatised stated they wanted more
hours of work. Young people and the self-employed most commonly mentioned excessive working
hours, a worrying trend given the rise in self-employment in some countries.11 More specically, a
quarter of 2014 Eurobarometer respondents were dissatised with the work-life balance provided
by their job. The most dissatised age group were 25-39 year-olds, the group most likely to have
small children, where over a third (38 per cent) reported that their employers oered no exible
working arrangements. How much people work appears to be related to how happy they are; Figure
4.9 shows that people tend to be more satised with their lives in countries where they work fewer
hours on average.
Figure 4.9 Life satisfaction and average weekly hours among EU citizens, 2013
UBI has long been advocated as a policy to give people more power and autonomy outside of
work. It is most commonly associated with the post-work left, who see the reduction – or even
disappearance – of paid work as emancipatory (Frayne, 2015; Srnicek and Williams, 2015). Yet these
kinds of arguments have now moved into mainstream policy analysis. The inuential RSA report
Creative Citizen, Creative State: The Principled and Pragmatic Case for a Universal Basic Income, puts
work-life balance as a key justication in its argument. The report’s authors (Painter and Thoung,
2015) argue that a modest UBI of £3692 per year (£71 per week) for 25-64 year-olds has capacity to
give people more control, power and autonomy over their lives outside of work. One reason for this
is the inuence UBI could have on spurring individual creativity. In a labour market situation where
fewer people have access to careers that provide space for autonomy, as well as jobs that are more
demanding on people’s time, Painter and Thoung argue that UBI could empower people to choose
more creative and fullling paths, such as education, volunteering or entrepreneurship.
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R² = 0.41376
4
4.5
5
5.5
6
6.5
7
7.5
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8.5
9
28 30 32 34 36 38 40 42 44
Average Life Satisfaction 2013
Average Weekly Hours 2013
11. Some countries have seen
signicant shifts in the number of
people becoming self-employed.
In the UK for example, the
number of self-employed people
increased from 3m in 2000 to
4.1m in 2015.
policy network paper
23 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
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A second reason relates to demographic pressures that lead to conicts between work and private
life. Painter and Thoung (2015: 11) argue that with UBI, people would be empowered to “take time
o, reduce their hours, or take short career breaks to care for an elderly, disabled or otherwise
vulnerable person”. This contrasts favourably with the existing system of carers’ benets, which is
overly bureaucratic, complex and, as such, under-claimed. Children with families would also receive
additional payments, making it easier to balance the competing demands of work and parenthood.
Responding to objections that focus on the lack of contribution inherent to UBI, Painter and Thoung
argue that their examples of creativity and care show that UBI could spur valuable forms of social
contribution, “dened beyond narrow cash terms”.
Youth precariousness
A nal challenge facing European societies is intensied precariousness for young people (Sage,
2016). As the previous Social Reality report showed, youth unemployment rates are almost
universally and signicantly higher than rates for other groups. Further, young people’s post-crisis
incomes have recovered more slowly compared to other age groups. Figure 4.10 shows median
incomes for 18-24, 25-49 and 50-64 year-olds in the EU-15 between 2005 and 2014. While all age
groups suered income losses post-2007, the recovery has been markedly slower for 18-24 year-
olds. In 2005, there was a 2609 (PPS 12) gap between the oldest and youngest age groups; by 2014
this had expanded to 4065 (PPS).
Figure 4.10 EU-15 Median incomes by age group, 2005-14
Further, as Figure 4.11 shows, this pattern holds for nearly every country in the EU-15. Although
some countries (e.g. Greece and Ireland) have experienced falling or stagnant incomes and others
(e.g. Belgium and Sweden) have enjoyed large income growth across age groups, in most countries
older groups have done better than younger ones irrespective of the broader income trend. Thus
in Greece income fell for all age groups but most sharply for young people, while in Sweden there
were signicant rises for all but much larger ones for 50-64 year-olds (PPS 7231) compared to 18-24
year-olds (PPS 4901).
14000
15000
16000
17000
18000
19000
20000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Median Equivalized Net Income (PPS)
18-24
25-49
50-64
12. Purchasing power standard
(PPS): an articial currency used
to adjust for dierent price levels
between countries.
policy network paper
24 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
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Figure 4.11 Change in median income by age group in EU-15, 2005-14
The sociologist Guy Standing (2011) places young people at the centre of what he describes as a
new social class: the ‘precariat’. While young people have always begun their working lives with
a degree of uncertainty, Standing argues that insecurity often stretches way beyond what should
be considered reasonable. The increasing number of young people – burdened by debt, falling
real incomes and rising housing costs – choosing to live with family is testament to growing youth
precariousness. In the UK, the number of 20-34 year-olds living with parents rose by over half a
million since 2008 (ONS, 2016), while similar trends have occurred throughout Europe.13
The potential for UBI, in contrast to existing welfare state arrangements, to tackle poverty, social
exclusion and precariousness among young people is a further argument employed by supporters.
Standing (2014) argues that for young members of the ‘precariat’ - excluded from secure jobs
- traditional welfare states and in-work benets oer little hope for securing adequate incomes.
Post-war welfare systems, often linked to contributions, would be ‘folly’ for young people cycling in
between poorly-paid jobs. This links to the Skidelsky (2016) argument for UBI: that the two pillars
which historically guaranteed sucient incomes for most people – work and welfare – no longer
do. In these ‘liquid’ economic conditions, UBI would empower young people with more economic
security and increased autonomy over the jobs they choose. For Standing, UBI is part of a new
welfare paradigm: one more realistically aligned to the reality of globalization and the aspirations of
young people than conventional welfare states.
-4000 -2000 02000 4000 6000 8000
BE
DK
DE
IE
EL
ES
FR
IT
LU
NL
AT
PT
FI
SE
UK
Change in Median Income 2005-2014 (PPS)
50-64
25-49
18-24
13. For example, between
2006 and 2015, the number of
20-29 year-olds living at home
increased in: Belgium (4.1
per cent), Denmark, (1.9 per
cent), Spain, (7.4 per cent), the
Netherlands (3.7 per cent) and
Portugal (5.5 per cent) (Eurostat,
2016).
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5. The Case Against Universal Basic Income
Supporters of UBI point to four structural challenges that confront European societies: reducing
gender inequalities, managing the disruptions threatened by job automation, enabling people to
better balance work and private life and dealing with the increased precariousness many young
people face. It is important to note that this list is far from exhaustive. As argued above, the scope
of problems that UBI can allegedly solve is wide in scope, and there is not the space here to examine
every stated goal of UBI. Rather, the argument of the report is that, given the evidence and trends
cited above, these four challenges are where the case for UBI is strongest.
As social democratic par ties and pro gressives face up to these challenges, and consider the potential
of UBI as a solution, its potential ought to be seriously interrogated. Despite claims by some that it
constitutes a pragmatic reform of the welfare state, it can equally be seen as a major restructuring
of tax and social security, requiring a reorientation of public attitudes and as having the potential
to cause signicant behavioural change. To test UBI’s potential, three questions are posed in this
report. First, could the agenda win public support? Second, would it have a transformative impact
on the problems its supporters identify and seek to change? And third, what would the impact of
UBI be on existing and alternative programmes? This chapter examines the potential of UBI when
set against these three key tests.
Public Support
Even to UBI’s most ardent supporters, it is clear that the UBI proposal will only succeed following
a serious political and public debate. This is partly due to the signicant cost of UBI and the
requirement to convince people of the desirability of higher taxes and a larger state. Hirsch (2015)
estimates that even by abolishing most existing benets, an extra £34 billion would need to be
raised each year. UBI would involve, as Hirsch (2015: 14) argues, a “very dierent tax settlement to
the present one”.
There are two further reasons why winning a public debate on UBI will be dicult. The rst is that
for many people, a fundamental principle of welfare state provision is deservingness (Van Oorschot,
2006) which, in turn, is tied to notions of contribution and reciprocity: a ‘something-for-something’
society. Need is also a key principle of deservingness: that benets and services should, to some
extent, be targeted at those who require them the most. In the UK, people are far more likely to
support extra social security spending for pensioners, children and disabled people compared to
groups like the unemployed (Baumberg, 2015). Arguably, this is because these groups satisfy the
core criteria of deservingness – contribution and/or need – more so than the unemployed.
For those like the unemployed, who often fall short of people’s perceptions of deservingness, there
is an equally strong expectation that they should provide evidence of searching for work in order to
qualify for benets. In 2011, the British Social Attitudes (BSA) survey asked respondents what should
happen to an unemployed person who fails to prove they are actively searching for work. Only 6
per cent of respondents stated that benets should not be aected. 54 per cent stated that benets
should be reduced, with 40 per cent stating they should be stopped completely. Entitlement to the
benets is strongly related to perceptions of desert, demonstrated via contribution, need or work
eort.
The second reason relates to attitudes to work: namely, the belief in the importance of work as
a social institution, and that a key function of welfare should be to promote employment. One
explanation for the unpopularity of unemployment benets is the widespread belief that they
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26 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
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discourage work. Since the early 2000s, over half of respondents to the BSA series have stated
that unemployment benets are ‘too high and discourage work’ (Baumberg, 2015). Across Europe,
support of work as an institution remains a strong majority view. According to World Values Survey
data, Europeans are overwhelmingly likely to believe that work is important in life, while signicant
numbers would consider it a ‘bad thing’ if less importance was placed on work in the future.14
These are three signicant challenges for UBI in terms of its capacity to win public support. First, can
UBI convince people of such a signicant increase in public spending and taxation? Second, does it
comply with public opinion on deservingness and the welfare state? And third, does it accord with
social norms on work? Crucially, there are strong arguments that UBI fails on all three counts.
Public support for higher spending
One positive for supporters of UBI is that many people are not overtly hostile to higher taxes being
used to fund more services. In the UK, around a third or more of BSA respondents consistently state
agreement with increasing taxes to spend more on the welfare state. Support for lower taxes to
nance a smaller welfare state is an overwhelmingly minority position in the UK, with no more than
9 per cent of people ever agreeing with this option since 1983. This position is broadly repeated
across Europe, with most countries favouring, albeit only slightly, higher taxes and better funded
services.15
There are however two question marks around whether this kind of sentiment could be exploited in
support of UBI. Th e rst is that in post-crisis Europe, with its slow economic growth and relatively high
unemployment, the freedom for social democratic parties to propose large new spending projects
is limited. In countries like the UK, the centre left continues to be punished for the perception that
over-spending contributed to the crisis. Where the centre left is in power, as in France, austerity
policies have not been avoided. While there is a sizeable anti-austerity movement across Europe, in
most countries it has failed to make signicant inroads into mainstream public opinion. There may
be a time when public mood shifts towards an abandonment of austerity and the need for more
spending, but is not obvious that this time is now.
The second question mark is around the relationship bet ween support for higher spendin g and actual
behaviour. This has been strongly noted in the UK, where the public show a desire for ‘Scandinavian
social policies with American taxes’. In the UK, support for higher taxes and spending soared in
the late 1980s and early 1990s to over 60 per cent of the population, yet a Conservative majority
was comfortably returned in 1992. More recently, the UK electorate has elected Conservative-led
governments committed to austerity, despite over 80 per cent support for either maintaining or
increasing present spending and service levels and only minority support for lower taxes and lower
spending. When confronted with a real choice around paying higher taxes, it is far from the case
that general principles translate into real voting behaviour. This is deeply problematic for UBI.
Deservingness and the welfare state
Second, numerous critics point to the incompatibility of UBI with social norms surrounding public
spending and welfare provision. In particular, where there is support for higher spending, this
tends to be concentrated on specic forms of spending that comply with norms around which
groups of people should receive which kinds of benets. As Diamond and Lodge (2013) argue,
support for public spending is strongest in relation to ‘traditional’ welfare state institutions, like
education, healthcare and pensions. Public support is far weaker in relation to policies designed
to tackle ‘new social risks’, like gender inequality and labour market change. Further, support for
14. Belief that work is very/rather
important in life: CY (92%), EE
(82%), DE (80%), NL (79%), PL
(89%), RO (90%), SI (88%), ES
(85%), SE (85%). Belief that it
would be a bad thing for less
importance to be placed on work
in the future: CY (40%), EE (58%),
DE (38%), NL (27%), PL (52%),
RO (72%), SI (68%), ES (47%), SE
(36%). All data from World Values
Survey wave 2010-2014.
15. The European Social Survey
(ESS) 2008 wave asks respondents
whether governments should
increase taxes and spend more
on social benets and services
or decrease taxes and spend
less. Fifteen countries show a
preference for more spending on
average (BE, CH, CY, CZ, DK, EE, EL,
ES, FI, IE, NL, NO, SE, SI, UK), while
only eight show a preference for
less on average (BG, DE, HR, HU,
LV, PL, PT, RO).
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extra spending remains tightly wedded to policies linked to either need or contribution. Support
for more universalistic principles is often signicantly lower, while many support the reduction of
benets for those with higher incomes. In this context, UBI may be best placed to succeed where
welfare norms are more strongly tied to universalistic principles, as in the Nordic countries. Where
claims to welfare are primarily seen as emerging from contribution or need, there is less chance of
winning the debate.
Social norms around work
Third, while some supporters claim UBI would increase labour market incentives, there is a real
possibility that an unconditional UBI would increase unemploym ent for some groups. Ganey (2015)
uses the example of lone parents who, prior to the extension of conditionality in 2008, received a
guaranteed, unconditional income, with tax credits acting as an incentive to nd work. This is how a
UBI would essentially work: acting as a guaranteed income and as an incentive to work. In the case
of lone parents however, employment growth only increased signicantly after the imposition of
work obligations in 2008. Ganey argues that this shows how ‘making work pay’ was insucient,
on its own, to raise employment. Without conditionality, some lone parents forewent employment
despite good economic incentives to work.
Further, from the small number of studies of basic income type programmes and trials, similar
conclusions can be made to Ganey’s lone parent example. Evelyn Forget (2008) argues that
guaranteed income programmes, when trialled in parts of Canada and the US in the 1970s, showed
signicant, downward eects on the working hours of secondary earners. Given the well-known
and consistent eects of unemployment on health and well-being (see McKee-Ryan et al., 2005), the
prospect that UBI might increase worklessness should not be taken lightly.
Beyond any hypothesized labour supply eects, there should also be concerns around the moral
messages that UBI omits around the value of work and how these could be interpreted by the
public. As, although some supporters highlight improved work incentives (Lansley and Reed, 2016),
others celebrate UBI because it could reduce the numbers in work, and see UBI as a means to a
future with far less work. For Cruddas and Kibasi (2016), this is the root of UBI’s problems; it would
sanction lifestyles of non-work and of non-contribution. Whether worklessness actually increased
en masse or not is, in this analysis, irrelevant; UBI legitimises worklessness as a life choice that, for
Cruddas and Kibasi, is “antithetical to the values of most British people, who believe in work; in the
dignity that comes with self-suciency; in the pride that comes up with purposeful activity”. For
these reasons, the likelihood of UBI acquiring signicant levels of public support remains slim and,
as such, declaring support for UBI is a major political risk.
Transformative Potential
Supporters of UBI commonly cite its transformative potential as one of its major advantages. Yet
there is a simultaneous case to be made that it does not seek to be transformative enough: that
it oers people the way society is – unequal and precarious – with added compensation. For
someone with an insecure job, cycling between low-paid work and unemployment and living in
poor housing, UBI oers little substantive change to their circumstances. It would do little to oer
them signicantly greater power over their lives; it would not oer them better conditions and more
autonomy at work. UBI is open to the accusation that it sees present inequalities in power and
economic structures as inevitable and, as Navarro (2016) argues, leaves such structures ‘untouched’.
Cruddas (Analysis, 2016) claims it is a defeatist proposal, absolving governments of constructing
solutions to and politically contesting the social problems its supporters identify. The limited
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potential of UBI to seriously transform societ y can clearly be seen in three of the four areas identied
above.
Gender inequality
The argument that UBI in insuciently transformative is particularly compelling from a gendered
perspective. One of UBI’s proposed strengths is its neutrality; it does not seek to impose a vision
of the good life, instead leaving it for individuals to choose their own ends. Yet in a society that is
not neutral, most obviously on gender grounds, UBI will not be neutral either. People’s behaviour,
decisions and choices will continue to be structured by existing inequalities, institutions and social
norms. This is Robeyns’ (2001) powerful critique of basic income. If UBI is implemented in a context
of gendered inequalities – such as ’gender-related constraints on choice’ and the ‘gender division
of labour’ – it will do little to tackle these problems and most likely reinforce them. The constraints
on free and autonomous choice for women, argues Robeyns, are so ingrained, multi-faceted and
complex that UBI alone cannot solve them and would, arguably, embed inequalities further.
This translates into two particular concerns for feminist critics of UBI. First, a UBI could lead to more
women dropping out of the labour market or reducing their number of hours at work. McLean
(2016), despite supporting UBI on gender equality grounds, recognizes the potential dilemma
that women, who have generally weaker attachment to employment, will have larger incentives
than men to reduce the number of hours they work. Second, in conjunction with its downward
labour market eects, UBI could cement gendered social norms around care and domestic work. As
women would be more likely to reduce their labour market par ticipation, they would simultaneously
be more likely to take on added domestic duties. Robeyns (2001) argues that these eects could
damage all women, even those whose labour market behaviour remains unchanged, as wider social
norms around the behaviour of men and women are reinforced. UBI could weaken hard-fought and
long-term advances in gender equality on two fronts: at home and at work.
Forget’s (2011) study of MINCOME, the Canadian basic income scheme trialled in Manitoba in the
1970s, provides evidence for both these claims: that female employment rates could suer under
any guaranteed income scheme and that gendered norms around care could be reinforced. In
Manitoba, the number of working hours fell by 13 per cent because two groups tended to reduce
their working hours: (a) adolescents, who were more likely to stay on in education and (b) secondary
earners, most likely to be married women. Importantly, this was especially the case for women with
children and new-borns, who used UBI to extend maternity leave. In the Canadian experiments,
women not only worked less but also cared more. Forget notes how these trends were replicated in
the US guaranteed income trials around the same time: secondary, predominantly female, earners
reduced their working hours and spent more time at home.
The evidence from Canada and the US exemplies the main critique of UBI from a gendered
perspective. This is not to say it is inevitable that UBI would have downward pressures on female
employment. Rather, that in a labour market context where women are dominant among secondar y
household earners, the evidence from North America - that secondary earners are the most likely to
reduce their working hours in favour of more domestic work when in receipt of a UBI - is problematic
for its claims to target gender inequality. UBI may not eradicate existing inequalities but, rather,
entrench them: both at home and at work.
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Automation
UBI is also vulnerable to the contention it would insuciently address the fall-out from automation.
First, UBI would not confront the labour market inequalities that would arise from a more automated
labour market. A more automated labour market could consist of three groups: (a) high-skilled,
high-waged non-automated workers (e.g. doctors), (b) low-skilled, low-waged non-automated
workers (e.g. carers) and (c) routine workers now unemployed. As Cruddas and Kibasi (2016) argue,
as a solution to these inequalities, UBI is weak and even counter-productive. It would leave these
inequalities in tact, creating an uneasy, fragile social division between those with jobs and those
compensated for technological unemployment via UBI.
Second, UBI oers no specic direction or platform for the losers from automation. Even if many
types of occupation are automated in the coming decades, not all jobs will be and employment
as an institution will persist. Any ‘post-work’ future is a long way ahead, and so the losers from
automation will continue to be subjected to social norms and pressures around paid work . While paid
work retains this social value and importance, those without it will likely experience worklessness
in much the same way the unemployed do today: social isolation, poor health and low wellbeing.
Supporters of UBI foresee an unleashing of creativity and meaning, but while paid work persists, UBI
oers only compensation for the losers of automation, not a social transformation in attitudes and
beliefs around paid work.
Third, UBI does not address questions around the ownership of technology. This is crucial; as the
previous section argued, the ownership of new technologies is often cited as a driving force behind
rising inequality. UBI is a redistributive, compensatory response to the unequal labour market and
economic outcomes arising from new technologies, not a challenge to the ownership of these
technologies. This is the reason, Tarno (2016) argues, why so many tech entrepreneurs are keen
on the idea of UBI; through subsidies, it enables people to survive the era of automation while
sidestepping critical questions of ownership.
Precariousness
Finally, there are deep doubts about the potential of UBI to hold back the spread of precariousness,
especially for young people. Ikebe (2016) makes this point, arguing that a modest UBI – or a ‘non-
liveable basic income”’ – would have minimally transformative eects. Existing models of UBI are,
in a desire to demonstrate aordability and viability, understandably modest. But the amounts
cited – in the region of £70 per week – would continue to leave people powerfully reliant on the
labour market. Critically, UBI oers no solution of transforming the labour market. On the contrary,
it could give license to employers to oer lower wages and less secure conditions; the burden and
expectation for employers to provide a decent wage would be weakened if everyone had another
source of income.
A further problem is that precariousness is not only about a lack of money. As Navarro contends,
precariousness is also about the absence of control and power over one’s life and the demand for
the provision of opportunities and choices to escape precarious circumstances. UBI alone does not
provide such opportunities for the ‘precariat’ to escape insecurity and poverty. As Navarro (2016)
argues, to believe UBI is the solution to the growth of precariousness is to “ignore the active causes
of the deterioration of the labour market, causes that remain untouched with UBI measures”. As with
gender inequality and automation, UBI could fail to transform the root causes of the problems its
advocates identify: acting at best as a form of compensation and at worst as an enforcer of existing
inequalities.
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Impact on Existing and Alternative Programmes
The third and nal argument against UBI concerns its potential impact on existing and alternative
social policies. This argument can be reduced to two prime contentions. First, the introduction of
UBI would likely leave less expenditure, as well as less public will, for maintaining and expanding
existing social policies and developing new ones. Second, this smaller scope for policy expansion
and development is problematic; alternatives to UBI have a more credible and evidence-based
foundation with which to tackle the same social problems UBI hopes to. This section sets out these
two arguments, before oering plausible policy alternatives to UBI.
Impact on Existing and Alternative Social Policies
One of the most profound concerns around UBI is the impact it could have on diminishing the scope
of existing social policies and the potential for new p rogrammes. Most modest models of UBI – which
oer guaranteed payments at relatively low levels – account for the withdrawal of many existing
benets and allowances, often with the exception of housing and disability payments. As Figure
5.1 shows, the RSA’s model – drawing upon prior work by the Citizen’s Income Trust – proposes the
abolition £272 billion worth of existing UK programmes and allowances. Thus in order to nance
a very modest UBI, many existing structures of the welfare state would still have to be swept away.
Figure 5.1 RSA proposed welfare savings with introduction of basic income
As well as necessitating the abolition of many existing welfare payments, there is the prospect that
UBI could eventually lead to the dismantling of further welfare state institutions. This is an objective
of some liberal and conservative UBI supporters, who see UBI as a long-term means of diminishing
the ambition of the state and the scope of social programmes. The conservative sociologist
Charles Murray (2008) sees UBI as a “replacement for the welfare state”, while more market-oriented
advocates envision a future where people use UBI to ‘purchase’ goods presently provided by the
state: healthcare, education, pensions, unemployment insurance, childcare and so on.
Even if UBI failed to lead to the marketization of existing public services, there is the further risk that
its introduction would make it more dicult to introduce new policies and expand on existing ones.
UBI would be an extremely costly policy, limiting the funding available for other policy areas, while
the necessity of raising taxes may dampen public appetite for further increases in public spending
010 20 30 40 50 60 70 80 90 100
Student Grants/Loans Written Off
Working Tax Credits
Administrative Savings/Tax Credits Written Off
Higher Rate Relief on Pension Contributions
NI Primary Threshold and Self-Employed Reliefs
Working-Age Benefits (e.g. Income Support, JSA)
Child Benefit and Child Tax Credits
Abolition Income Tax Personal Allowance
Pens ions (State, SE RPS, S2P, PC, MIG)
Savings (£ Billions Per Year)
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to expand services. This weakened potential for social policy expansion is especially problematic in
countries where gaping holes in provision exist, such as in childcare, elderly care, disability support
and housing provision. As long as such holes remain, it is unclear whether UBI would be the best
use of the spoils in a hypothetical victory around the desirability of raising taxes to improve services.
UBI thus leads to three social policy risks: rst, existing social programmes and benets are rolled
back to nance basic income; second, services are marketized under the logic that UBI should and
could be used to purchase them; third, the political will and public feasibility for more expansive,
generous and new social policies, arguably better placed to tackle social problems, is weakened.
While supporters of basic income may warn against such scenarios, it is unclear how existing social
policies and potential future ones could be protected in the hands of governments intent on rolling
them back.
Policy Alternatives
The third social policy risk identied above – the limited scope for new programmes – is arguably
the most dangerous one. As an alternative to UBI, the social problems and inequalities identied
in this report could equally, and arguably more eectively, be tackled by explicitly designed and
explicitly targeted social policies. On its own, UBI constitutes a signicant risk: it aims to achieve a
wide range of objectives via a single intervention. This yields a further, uniquely political danger:
that any failure will set its proponents back for decades, while leaving inequalities unchanged.
A powerful, alternative social policy strategy is to strengthen, reform and expand social policy
structures and welfare states. Supporters of UBI are right to contend that a basic income is not
mutually exclusive to other forms of social policy expansion; yet for the reasons outlined above, it is
unlikely that UBI could be introduced alongside other major reforms of the welfare state. There is
thus a choice to be made between basic income or alternative social policy reforms.
This is the inuential case made by the American economist Barbara Bergmann (2004), who argues
that most governments do not have the capacity to provide both a UBI and a generous welfare
state. Given this dilemma, the debate hinges on whether UBI or expanded social policies should
be prioritized. Bergmann is clear that the latter option is the preferable one for progressives, given
the success of the more advanced Nordic welfare states in meeting a wide range of human needs.
Further, many welfare states presently fail to provide high-quality services, like childcare and
training, essential to meeting such needs. With a UBI, people who currently lack access to these
services would continue to go without.
Consequently, the rst aim for societies with weaker welfare states and less developed services
should be to establish more eective and generous welfare policies that meet human needs. To
do otherwise, argues Bergmann, is to put the ‘cart before the horse”’. Bergman also argues that
expanding existing social policy structures is more politically feasible than introducing an entirely
new, expensive and untested basic income programme. A more generous welfare state trumps UBI
on these three counts: (a) ecacy in reducing inequalities, (b) meeting human needs and (c) the
probability of winning public support.
Still, the capacity to introduce more generous social policies is not only about winning support for
greater public investment. A more pressing question is how to fund generous interventions in an
age of low economic growth, an age that Larry Summers has argued is dened by the rebirth of
‘secular stagnation’. In these dicult economic conditions, social democrats will have to explore
how to generate alternative sources of revenue, such as taxation of capital and land, as well as new
methods for achieving social protection. In that context, asset-based welfare – in which citizens
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are supported by the state to build up assets in the form, for example, of child development funds,
savings investments, and housing – warrant more serious attention.
Progressives in Europe’s more insecure, unequal societies have, however, been particularly drawn
towards the basic income proposal. Motivated by the impact of austerity and cuts to benets and
public services in already weak welfare states, a basic income oers the prospect of a speedy road
to a better society. Yet broader social policy should not become a lost cause for the centre left and
there are plausible, alternative policies to a UBI that are outlined below. While not as elegant or
seductive, as a basic income, they are based on recognition of UBI’s limitations, and the pitfalls of
trusting in a single, simple solution to a complex set of economic and social challenges.
6. Conclusions
Policy 1 – Gender Equality at Work and at Home
While UBI is backed by some supporters as one solution to gender inequality, it has
been strongly critiqued by feminist critics as having the potential to damage some
of the progress made in recent decades. Robeyns (2001) argues that basic income
could lead to women working fewer hours, with low-paid women the most likely
to withdraw from employment altogether. This could roll back the gains made by
women in the labour market and reinforce gender stereotypes at home and at work.
Robeyns (2001) proceeds to argue that alternative social policy measures are
essential in order to eectively tackle gender inequalities. Existing policies, in place
in some countries and absent in others, are proven successes in narrowing gender
inequalities. A key example is well-funded childcare. Bergmann (2004) argues that
many countries have inadequate childcare provision and investing in childcare is a
more attractive proposal than introducing UBI. In some countries, childcare costs
remain prohibitively high; a barrier that prevents many women from returning to full-
time employment or paid work altogether. Countries that provide more aordable
childcare tend to see more mothers return to work after giving birth.
Yet when it comes to narrowing gender inequalities, it is equally important for
social policies to focus on the home as well as the workplace. This is why Sweden’s
reforms of parental leave, in which both parents are given non-transferable, three-
month periods of paid leave, are so important. While Sweden once experienced the
same inequalities as many other countries – with mothers doing the vast majority
of childcare – the introduction of non-transferable periods of paid parental leave
has transformed the division of labour in the home (Duvander et al, 2005). While
mothers still do the majority of early childcare, Swedish fathers take on average 96
days of leave to spend with young children. Countries like the UK have introduced
shared parental leave, yet without the nancial incentives inherent to the Swedish
model, very few fathers have taken this option. Policy reforms around aordable
childcare and well-funded shared parental leave could work towards the narrowing
of gender inequalities in the domestic sphere an d in the labo ur market. B asic income,
meanwhile, could achieve neither.
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Policy 2 – New Activation Models in an Age of Automation
UBI is proposed by some as a mechanism for dealing with the p otential unemployment
caused by the mass automation of jobs. This is in the sense of either enabling people
to enjoy a minimum standard of living outside the labour market or to ease the
transition between jobs, which could become more common. Sam Bowman of the
Adam Smith Institute argues that UBI would be a means of compensating for and
easing the economic disruptions caused by more frequent bouts of unemployment
(Analysis, 2016).
There are however alternative strategies for dealing with technological
unemployment that could more eectively empower people to cope with a more
turbulent labour market. Such an approach was typical of the post-war Swedish
Rehn-Meidner model, where companies that failed to keep up with wage rises were
allowed to fail. Unemployed workers were compensated in the form of active labour
market programmes (ALMPs), through which they would be retrained into more
productive sectors of the labour market.
It is plausible to imagine a Rehn-Meidner model for the age of automation, in which
the losers from technological unemployment are oered high quality retraining
programmes in order to equip them with new, in-demand skills. Coupling eective,
better-designed ALMPs with unemployment insurance would achieve dual
objectives: economic security and human capital development. Alternatively, UBI
oers security but has no aim of promoting the development of new skills, all at a
higher relative cost than more investment in ALMPs.
The basis of this argument is that automation will not eliminate demand for all skills.
According to Corlett (2016), routineness is strongly associated with lost working
hours in recent decades and thus retraining people, so they have non-routine skills,
is a plausible solution. Automation will redene, not remove, the kinds of skills
workers need to supply: in all likelihood towards cognitive, social, caring and creative
skills. This provides an opportunity for active labour market programmes, as well as
educational policy (Meyer, 2015), to be reformed around the provision of in-demand
skills and anticipated future ones (Duell et al, 2016).
Finally, much of the reality and impact of automation continues to rest in the realm of
prediction. Corlet t (2016) suggests the risks are exaggerated, arguing that the impact
of automation on an economy like the UK’s could be limited due to the diversity of
skills across the labour market. It will be more prudent for governments to respond
as the situation becomes clearer, rather than pre-empt scenarios that may not come
to pass.
policy network paper
34 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
Policy 3 – Power Over Work
A principle argument made by the RSA (Painter and Thoung, 2015) in favour of UBI is
its capacity to give peop le greater fre edoms outside of work: to care, create and learn.
This is a worthy objective given the intensied demands felt by many in work and the
increasing necessity of balancing work with care. Yet despite the growing demands
of work, employment continues to be associated with good health, wellbeing and a
sense of identity and purpose. Rather than enabling people to abandon paid work
altogether, and lose the benets work can bring about, an alternative solution is to
more eectively empower people to balance work with life, leisure and care. Making
this balance more viable for people could also avoid a potential social conict:
between those who use UBI to leave the labour market and those who continue to
work.
In this light, Meyer (2015) advocates the ‘reallocation’ of work: incentivizing people
to work fewer hours and encouraging the division of jobs among a greater number
of people, giving individuals greater freedom and more time outside the labour
market. More radically, a shorter working week is surely only as ‘utopian’ as the ve-
day working week once seemed. Recent, well-publicized experiments in Sweden
with six-hour working days demonstrate the political feasibility of reducing working
hours.
In the short-term, Bell and Ganey’s (2012) proposal for ‘time credits’, based on a
Belgian social policy, oers a more achievable strategy for promoting work-life
balance. In return for higher social insurance payments, people would gain the
entitlement to take paid periods of leave from work with the right to return to their
jobs. Such sabbaticals could be used to full a range of dierent needs: caring for
young children and elderly relatives, further education or simply recharging away
from work. Time credits would provide people with the exibility to exit the labour
market, while maintaining their connection to paid work.
policy network paper
35 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
6. Conclusions
The member states of the European Union face some of the most profound challenges of the post-
war era. With the exception of a handful of countries, the legacy of the economic crisis persists in
the form of weak economic growth, high youth unemployment, and rising inequality. This legacy,
along with increasingly explicit continental imbalances and public concern over immigration, has
plunged the EU into a state of political anxiety and disruption. Political earthquakes – like Brexit,
Syriza and the rise of a nationalist, populist right across much of northern Europe – have ended the
old certainties of the post-war political order. Europe’s progressive parties have been the biggest
losers from these earthquakes and, in many countries, face a battle to survive, let alone win.
In this climate of political and social disruption, advocates of an old idea, universal basic income,
have argued it is a model solution for the new times of uncertainty. Supporters of a basic income
ask the right questions in many instances. What can be done to redress the rise of precarious work
and economic insecurity? How will governments respond to the potential hollowing out of the
labour market as the automation of work intensies? How can equality between men and women
be achieved at both work and at home? And in an age of uncertainty, how can the welfare state
deliver a greater sense of autonomy, freedom and choice?
Yet although these are questions that need to, and should be, addressed, it is not clear that UBI
is the answer. The idea of an unconditional income, paid to all irrespective of means, contradicts
many people’s notions of deservingness, and who should get what and why. And as the economic
competence of the centre left is questioned throughout Europe, a policy that requires signicant
additional expenditure is unlikely to restore social democracy’s economic reputation. There are
also serious question marks over whether a basic income is best placed to reverse the problems its
supporters identify or whether it would merely compensate, or at worst cement, the inequalities it
seeks to correct.
At a time when few have ready solutions to the deep-seated problems facing European societies,
and when the left appears to be in a political crisis like no other, the attraction of a basic income as a
totemic policy idea is obvious. Yet while the idea may have found its’ time, we are not convinced that
the basic income proposal addresses the economic and social challenges facing European societies.
Alternative policies for the left exist that have a stronger claim to both winning public support,
and transforming our societies and economies for the long-term. But this is merely the start of the
challenge facing social democratic and centre-left parties. They must not only arm themselves
with policy solutions, but also construct a persuasive political narrative that understands – and is
equipped to respond to – the new problems and challenges facing European societies in the new
century.
policy network paper
36 | Europe’s New Social Reality | The case against Universal Basic Income | February 2017
www.policy-network.net
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