February 1, 2015


Paying everyone a basic income would kill off low-paid menial jobs (Paul Mason, 2/01/15, The Guardian)

The "unconditional basic income" has a long history in economic thinking, with proponents on both the left and the right. For conservatives it is a way of radically cutting the administrative costs of means-tested benefits, and subsidising low-paid work. For those on the left, who embraced it after the 1960s, it is seen as a way to alleviate inequality. But if the basic income has any relevance to today's economy, it is as a solution to a much bigger problem: the disappearance of work itself.

In 2013, researchers at the Oxford Martin School predicted that in the next two decades 47% of US jobs would be in danger of being lost to automation. McKinsey Global Institute research suggests that 140 million knowledge workers worldwide are at risk of the same fate. Most policymakers do not even want to think about the prospect of mass automation, because it is unlike any change we have seen before.

In every previous technological upsurge, deskilling and job destruction went alongside the creation of new, high value jobs and a higher-wage consumption culture. But automation disrupts that pattern: it reduces the need for work in one sector without necessarily creating it in another. [...]

If you paid every adult in Britain - including pensioners - say, £6,000 a year, with no requirement to seek work and no means test, it would cost around £290bn a year.

You would abolish the basic state pension (currently around £6,000) and basic unemployment benefits, keeping only benefits targeted to extra needs such as child support or disability, which come to around £30bn now, so the overall cost might come to £320bn a year.

That is a huge amount of money. The current welfare bill in Britain is £167bn - of which two- thirds goes to pensioners. Its eats around 23% of government spending. A true, subsistence level basic income would close to double that. But it is imaginable, in the short to medium term, if you factor in the benefits.

Posted by at February 1, 2015 3:52 PM

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