He Works Hard (But Not Always For The Money)

University of London economist Guy Standing has championed universal basic income since the 80’s. In Basic Income:  A Guide For the Open-Minded (2017), he tackles the argument that UBI is flawed because recipients don’t work for it.

“A remarkable number of commentators and social scientists lose their common sense when it comes to talking or writing about work. While every age throughout history has drawn arbitrary distinctions between what counts as work and what does not, ours may be the most perverse.

“Only in the twentieth century did most work that was not paid labour become non-work. Labour statistics persist in this travesty. ‘Work’ is counted only if it is for pay, in the marketplace.”

For example, he says, it’s the same work to walk the dog whether you do it yourself  or pay someone else to do it, but the former doesn’t count. If it did, it would add up to a lot:

“In the U,K. — and it is similar in other countries — the unremunerated economy (caring for children and the elderly, housework, voluntary work in the community, and so on) is estimated to be worth well over half the size of the money economy.”

Juha Järvinen, one of 2,000 Finns selected for a two-year UBI test does work that counts and work that doesn’t; either way, he works hard:

“In a speck of a village deep in the Finnish countryside, a man gets money for free. Each month, almost €560 [about $640] is dropped into his bank account, with no strings attached.

“He’s a human lab rat in an experiment that could help to shape the future of the west.

“Until this year … he was trapped in a “humiliating” system that gave him barely enough to feed himself … The Finnish [workfare system] was always on his case about job applications and training.

“[He was in the same position as] an unemployed Finn called Christian [who] was caught carving and selling wooden guitar plectrums [picks]. It was more pastime than business, earning him a little more than €2,000 in a year. But the sum was not what angered the authorities, it was the thought that each plectrum had taken up time that could have been spent on official hoop-jumping.

“Ideas flow out of Järvinen as easily as water from a tap, yet he could exercise none of his initiative for fear of arousing bureaucratic scrutiny.

“So what accounted for his change? Certainly not the UBI money. In Finland, €560 is less than a fifth of average private-sector income. “You have to be a magician to survive on such money,” Järvinen says. Over and over, he baldly describes himself as ‘poor.’

“Ask Järvinen what difference money for nothing has made to his life, and you are marched over to his workshop. Inside is film-making equipment, a blackboard on which is scrawled plans for an artists’ version of Airbnb, and an entire little room where he makes shaman drums that sell for up to €900. All this while helping to bring up six children.

“All those free euros have driven him to work harder than ever.”

Compare his situation to that of Florian Dou, one of France’s “yellow vest” protesters, who has no UBI safety net:

“At the bare bottom of Florian Dou’s shopping cart at the discount supermarket, there was a packet of $6 sausages and not much else… “My salary and my wife’s have been gone for 10 days,” he lamented.

“How to survive those days between when the money runs out and when his paycheck arrives for his work as a warehouse handler has become a monthly challenge. The same is true for so many others in Guéret, a grim provincial town in south-central France.

“In places like these, a quiet fear gnaws at households: What happens when the money runs out around the 20th? What do I put in the refrigerator with nothing left in the account and the electricity bill to pay? Which meal should I skip today? How do I tell my wife again there is no going out this weekend?”

That last comment — “going out this weekend” — is a moralistic hot button among UBI foes. Again from Guy Standing:

“More generally, there is a moralistic presumption that poor people, especially those receiving benefits, should not be spending money on anything but the bare essentials, denying themselves even the smallest ‘luxury’ that might make their lives less miserable. As Marx pointed out in 1844, ‘every luxury of the worker seems to be reprehensible, and everything that goes beyond the most abstract need seems a luxury.’”

Standing also exposes a related presumption:

“It is often claimed that giving cash to those in need is misguided because people will spend it on alcohol, cigarettes, and other ‘bads’ rather than on their children and essentials such as food, clothes, and heating.

“Obviously, this is a thoroughly paternalistic line of attack. Where to draw a line between ‘good’ and ‘bad’? Why should a rich person have the freedom to buy and consume whatever the state bureaucracy deems a ‘bad,” but not a poor person?”

Good vs.bad, work that counts vs. work that doesn’t, necessities vs. luxuries…  the UBI debate is littered with polarities and prejudices. Suppose the cultural pendulum swings all the way to a state of “total work” — what would that be like? We’ll find out next time.

The Success Delusion

poverty snareHow did the social safety net turn into a poverty trap? It was a victim of the success of the job as an economic force.

Psychologists call it “the success delusion.” You do something and get a result you like, so you keep doing it, expecting more of the same. It keeps working until one day it doesn’t. Do you try something new? No, you double down — it worked before, surely it will work again. You keep doubling down until you’ve made a mess.

You’re a victim of your own success. If you could listen, hindsight would tell you that there was more to it than what you were doing, that a lot of what happened was you being in the right place at the right time. You might believe that or not, but what matters now is that the times changed and you didn’t.

That’s what happened to social welfare. 40 years of post-WWII economic success positioned the steady job as the cornerstone of economic prosperity and upward mobility. Then, in the 80’s and 90’s, about the time the job was starting to lose its economic vitality, policy-makers doubled down on it:  work had raised the welfare of the whole world since the days of the telegraph and railroad, and surely it was still the best route out of poverty. So now we had workfare instead of welfare, and, as we saw last time, social welfare became “a system of suspicion and shame.”

get-a-job

Standin’ in line marking time
Waiting for the welfare dime
‘Cause they can’t buy a job
The man in the silk suit hurries by
As he catches the poor old lady’s eyes
Just for fun he says, “Get a job.”

That’s The Way It Is”
Bruce Hornsby and the Range

Rutger Bregman sums it up this way:

“We’re saddled with a welfare state from a bygone era when the breadwinners were still mostly men and people spent their whole lives working at the same company. The pension system and employment protection rules are still keyed to those fortunate to have a steady job, public assistance is rooted in the misconception that we can rely on the economy to generate enough jobs, and welfare benefits are often not a trampoline, but a trap.”

Utopia for Realists (2017)

Guy Standing explains it this way:

“The period from the nineteenth century to the 1970’s saw what Karl Polanyi, in his famous 1944 book, dubbed “The Great Transformation.”

“The essence of labourism was that labour rights — more correctly , entitlements — should be provided to those (mostly men) who performed labour and to their spouses and children.

“Those in full-time jobs obtained rising real wages, a growing array of ‘contributory’ non-wage benefits, and entitlements to social security for themselves and their family. As workers previously had little security, this was a progressive step.

“Labourism promoted the view that the more labour people did, the more privileged they should be, and the less they did the less privileged they should be. The ultimate fetishism was Lenin’s dictate, enshrined in the Soviet constitution, that anybody who did not labour should not eat.

“The labourist model frayed in the 1980’s, as labour markets became more flexible and increasing numbers of people moved from job to job and in and of employment.

“To defend labour-based welfare, social democratic governments turned to means testing, targeting benefits on those deemed the deserving poor.

“The shift to means testing was fatal. As previous generations of social democrats had understood, benefits designed only for the poor are invariably poor benefits and stand to lose support among the rest of society.

“Ironically, it was mainly social democratic parties that shifted policy towards workfare, requiring the unemployed to apply for non-existent or unsuitable jobs, or to do menial, dead-end jobs or phony training courses  in return for increasingly meagre benefits.

“Today, we are living in a Second Gilded Age — with one significant difference. In the first, which ended in the Great Crash of 1929, inequality grew sharply but wages on average rose as well. The Second Gilded Age has also involved growing inequality, but this time real wages on average have stagnated or fallen. Meanwhile, those relying on state benefits have fallen further behind, many pushed into homelessness, penury and dependence on inadequate private charity.

“Since the 1980s, the share of income going to labour has shrunk, globally and in most countries of economic significance… The labour share fell in the USA from 53 per cent in 1970 to 43.5 per cent in 2013. Most dramatically, it slid by over twenty percentage points in China and also dropped steeply in the rising industrial giant of South Korea.

“Besides falling wages, there has been an increase in wage differentials and a less-documented decline in the share of people receiving non-wage benefits, such as occupational pensions, paid holidays, sick leave or medical coverage. Thus worker compensation, in terms of ‘social income,’ has fallen by more than revealed by wages alone.

“As a consequence of these developments, ‘in-work poverty’ has rocketed. In some OECD [Organisation for Economic Cooperation and Development — 34 industrialized member countries], including Britain, the USA, Spain and Poland, a majority of those in poverty live in households where at least one person has a job.

“The mantra that ‘work is the best route out of poverty’ is simply false.”

The Corruption of Capitalism (2017)

Not only are jobs doing a poor job at social welfare — for both employed and unemployed alike — but they are themselves an endangered species. More to come…