Basic Welfare: Can We Stop Defending Labour?

A colleague recently asked me to review a collection of Australasian essays on the universal basic income (UBI). Showing the cross disciplinary interest in UBI, we had both considered a guaranteed minimum income in our doctoral dissertations – hers on labour law, and mine on taxation.

The idea underpinning UBI is compelling: every citizen is entitled to a minimum share in the social product simply because they are a citizen. A typical UBI proposal sets a guaranteed minimum level of income. People below the minimum receive a transfer payment; those above receive the minimum as a tax-free allowance.

The essays under review were invariably excellent but the arguments presented were mostly familiar; some decades old, others new variations on old themes. This is unsurprising since the origins of the UBI can be traced to radical thinkers of the nineteenth century, perhaps beyond. Certainly, the United Kingdom’s Beveridge committee, which reported in the 1940s, considered arguments for and against a UBI which remain pertinent today.

Politicians and thinkers across the political spectrum have proposed various versions of UBI. The media regularly report stories of proposed experiments. In fact, the most comprehensive trial in a Western country, which was conducted in Dauphin, Manitoba in the 1970s, demonstrated that the UBI had the beneficial socio-economic effects predicted for it.

With such widespread support for so long, why aren’t national UBI schemes normal?

Certainly, technical difficulties must be overcome, many of which are seen in China’s Minimum Living Standard Guarantee or dibao. (This is a UBI in synonym but, because it is means tested, cannot be considered universal.) Tapering rates are needed to prevent hardship at the margin as a person moves from receiving a negative income tax benefit to paying tax on earned income. Highly graduated income tax rates do not fit well with politically attractive wide tax bands and their illusion of simplicity. Affordability and sufficiency are other problems often glossed over by proponents.

It is also commonly assumed that a UBI would act as a disincentive to labour. The Dauphin experiment refutes that assumption. Nevertheless, work does lie at the root of the unwillingness of national governments (unlike opposition politicians) to espouse the UBI. But it is the cultural construction of work that matters, rather than an economic conception of labour.

Following Francis Castles’s well-known classification, Australasian welfare was modelled on labour defence, as distinct from Scandinavian structural welfare. Labour defence enables workers to be robust market participants, whereas structural welfare shelters citizens from the vicissitudes of the market.

We have, of course, moved a long way from the comprehensive unionisation, compulsory arbitral awards of living wages, and immigration controls on competitive labour which defended the Australasian working man in the market for much of the twentieth century. But neoliberal welfare is also premised on the social virtue of in-market work; this is why unemployed beneficiaries are ‘activated’ for the market and recast as ‘job seekers’. The cultural privileging of paid employment comes at the expense of other forms of work, notably out-of-market child and elderly care. If we don’t pay women (who predominantly provide unpaid care) for these socially essential services, it would take a tectonic shift in mind-set before we might think of paying a UBI to people for doing things that the market simply doesn’t recognise, such as writing amateur poetry.

The cultural dominance of in-market work in the English-speaking world is, perhaps unwittingly, demonstrated by Paul Mason in his book Postcapitalism. Mason predicts technologically induced job retrenchment will lead to a utopian society in which a UBI is inevitable. Nevertheless, he argues that the guaranteed minimum should be pegged as a proportion of the average wage so as not to disincentivise in-market labour. The employee would therefore retain a superior status to the unemployed citizen.

As André Gorz argues, a UBI would simply subsidise employers unless sufficient to enable a citizen to live a dignified life outside the market. In the situation of sufficiency, the UBI would become an emancipatory mechanism. Whatever the impending technological advances, I am not convinced we are closer to that cultural shift than society was in the 1980s when Gorz wrote on the first wave of robotic redundancy or in the 1930s when John Maynard Keynes predicted a world for his generation’s grandchildren where wealth would be shared equitably and work demands would be minimal.

Despite the retrenchments intimated by the robotics revolution, in-market work, of any kind, continues to provide a social status superior to that of mere job seeker. Significantly, in-work income tax credits ensure children of the unemployed are, in effect, socially and economically inferior to the children of the working poor.

Rather than towards an emancipatory UBI, our reverence for in-market work seems more likely to lead to greater reliance on in-work income tax benefits for workers paid sub-market rates to do demeaning work. China’s dibao system, despite its deep flaws, is based on social membership, rather than status. If we could stop defending outmoded concepts of labour and instead focus on inclusive citizenship, welfare might become recalibrated towards membership, rather than employment status, and a path for a future UBI might be established.