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Guaranteed income

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  7 Jun 2016 12:00 AM GMT

A very bold social experiment was proposed and voted upon in Switzerland recently, possible only because of that country’s system of direct democracy. Voters pondered over a profound question: ‘What would you do if your income was secure?’. The proposal was rejected but the question is now firmly in the public domain. Countries like Finland, Netherlands and Cada are said to be mulling over similar proposals of a guaranteed basic income for all citizens. This thinking about a new economics in Europe and North America is hardly surprising, considering the far-reaching changes technology has wrought upon their societies and economies. If people there can work from home, have flexible work timings, link up with office colleagues through real time IT link – they can also think about what will happen when increasing automation takes away their jobs. Aging populations and rising cost of social security lends further urgency to such questions. Thus it was that when a Swiss businessman from Basel put up a proposal supported by over 100,000 people – about a guaranteed monthly income for all citizens at 2,500 Swiss francs (2,563 US dollars) per adult and 625 Swiss francs per child under 18 years – a referendum had to be held.

In the end, nearly 77 percent voters said no, but the campaign threw up several interesting issues. Supporters of the proposal asked what will the government do if more and more citizens get replaced by robots at the workplace, how will these people eat and buy basic necessities if they have no scope to earn. Others pointed out that economics, as it is now, does not monetarily reward around half the work done that is socially useful, if not vital. Homemakers bringing up children, people looking after elderly or handicapped relatives and several types of community work continue to be unpaid under the prevailing market system. Many women have to do such difficult work full time; those who still mage to hold down jobs have to give as many hours to the office as male colleagues. How will society recognize and reward such work? Another section of supporters took the idealistic view that a universal basic income will liberate people from working to merely survive, thereby freeing their energies for creative pursuits.

However, the entire Swiss political establishment strongly opposed what it termed this ‘money for nothing’ proposal – arguing that it was unrealistic and would cost too much, that it would kill the country’s generous social welfare system, and that it would attract hordes of poor immigrants if it was ever to materialize. Switzerland is an advanced welfare state; its social security net already supports people who cannot pay for their survival. Less than 7 percent of its population is poor; only around 3.5 percent are unemployed. A guaranteed basic income system would cost the country 208 billion Swiss francs a year, the government warned. This would be 25 billion more than what the present system of social benefits is costing, so the extra money will have to be raised through more taxes or cutting expenditures. Most Swiss voters heeded this warning while others invoked conservative work ethic to reject the proposal. But the questions are likely to be taken up again elsewhere, sooner or later. Would it actually cost less to replace social security, medicare and all forms of subsidies and welfare payments with a universal basic income system? Is it feasible to pay a minimum amount (adjusted to the current cost of living) into every citizen’s bank account, while allowing them to earn additiolly as much as they wish? This will surely force a re-examition of why people work and how work should be valued.

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