Andrew Yang
Imagining Trend 19 February Feb 2020 0700 19 February 2020

From Andrew Yang’s Freedom Dividend onward, the worldwide debate on universal income.

The candidate for the US democratic party primaries has made a proposal for the institution of a basic income of one thousand euros for each citizen, to bolster the economy and abolish inequality. The concept is not new and has already been tested in various parts of the world (including Italy). The results are, however, contradictory. Here is why.

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It’s been talked about for some time in Italy, so much so that the citizenship income wanted by Movimento Cinque Stelle is one of its smaller scale implementations. The fact is that the topic of universal income, tied to the risk of so-called “technological unemployment”, has fully entered the public debate, to the point of shaping the electoral campaigns of political candidates in various countries. In the American context, the most recent example is by Andrew Yang, entrepreneur and philanthropist for the democratic primaries, already founder of Venture for America, a no profit organization that aims to create jobs in the cities that are struggling to recover from the early 2000s recession.

Yang’s proposal is based on a simple assumption: already today about 40 million Americans live under the poverty line, a trend that will be heightened in the future by the loss of jobs due to the growing automation in manufacturing (McKinsey predicts that a third of workers in the USA will lose their jobs by 2030). “The ‘good’ jobs are becoming more and more scarce and Americans are already working more to have less and less”, Yang says. So we need to make sure people have a secure income that is not tied to contracts and working abilities. So here is the solution: a basic universal income of 1,000 dollars per month for each American over 18 years of age, independently from their job situation and any other factor. This would allow all Americans to pay bills, attend schools, start businesses, be more free and creative, keep healthy, move for work, spend time with their children, take care of their loved ones and have a better chance for their future.”

According to Yang, who made the principle of universal basic income(which he calls “Freedom Dividend”) his battle horse during the election campaign, the guarantee of such an income could lead to an economic growth between 12.56 and 13.10 percent (equal to 2.5 trillion dollars by 2025) and would increase the workforce by between 4.5 and 4.7 million units. “Giving money directly to people, making sure that that is where it stays, would give a continuous stimulus and a support to job market growth and the economy”, the democratic candidate pointed out.

Within two years, the universal income beneficiaries have reported feeling “happier and less worried”, despite the fact that employment rates in the country have not risen

The idea is definitely fascinating, so much so that in various parts of the world various entities have tried to touch down on it in different ways. To stay close to Italy, for example, Finland has experimented a similar principle for two years (the first country in Europe to do so): between January 2017 and December 2018, 2000 Finnish unemployed were payed 560 euros monthly. The object of the experiment, in the government’s intention, was to understand if the institution of a financial “safety net” for these people would help them find a job, or would at least have helped them if they were working in the unstable wealth of jobs offered by the gig economy. The results: in two years, the universal income recipients declared that they were “happier and less worried”, despite he fact that employment levels in the country have not grown. So the tests remained just tests, without turning into a new large scale paradigm. On the international scene, which has been watching the case intently, the first doubts on the effectiveness of the programs have started to arise: can a universal income really revolutionize the social security system, definitively shaking up the social stratification and giving everyone the conditions to actively contribute to the common good? Is it only a waste of resources?

Despite doubts, as mentioned, in some countries and contexts some varying lengths and size trials have been started: in a village in Kenya, for example, 22 dollars a month are being given to all adults for 12 years until 2028. While in Utrecht, in the Netherlands, the foundations of a test called “Weten Wat Werkt” (understanding what works), which ended in October,have been put down. The results produced so far have not properly change the basis of the economic and social set up, but it is nevertheless true that in the majority of cases these are spurious solutions, where the universal income has been given to only a small fraction of disadvantaged people compared to others (for example the unemployed). Other possible variants, for example, include the “universal basic services”, where instead of receiving an income, citizens can use a series of benefits, such as education, healthcare and transportation, completely for free.

In Italy, months after the start of the allocation, it’s not clear how many actually have found jobs.

In Italy, the launch of the citizenship income by the Movimento Cinque Stelle during the Conte government turned out some controversial results. In the meantime, as the average amount given has remained low, 484.44 euros per family (over 3 billion have been spent on almost 2.5 million people), but especially because, as the second phase of the measure is to find jobs for the recipients, two months after the start of the payments, it is still unclear how many people have found jobs. In particular, on a total of 700 thousand employable recipients, the statistics that were never confirmed by the Ministry for Labour vary a lot, from less to 1,000 to 18 thousand employed (3.63%).

In general, critics of the concept of universal income claim that the measure focuses too much on wealth and the individual’s spending power (more precisely, their lack), without acting to stop companies from wasting resources by producing more than people really need, and at the same time overworking their employees. The economist Grace Blakely has pointed out how “without the fundamental structural reforms to our economic system, universal income will be a band-aid that patches up the cracks” Another criticism that is often levied relates to inflation, that could increase irreparably due to the increase in demand of products and services. Other experts, such as French philosopher Bernard Stiegler, though not touching the topic of universal income directly, have recognized the crisis of the fordist and keynesian system of labour, underlining the general need to create new models that include payments outside of employment. It’s hard to foresee which formula could really work in the long run. What’s certain is that, considering that the idea of universal income itself is not new, but was already described 500 years ago by Tommaso Moro in his L’Utopia, the debate is far from over.

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