Now is the time for governments to take up an idea that has been around for some time – let’s give everyone a Universal Basic Income. Not a small paltry income, but one large enough to cover all their bills and all their needs. Every individual would receive this sum. It would be universal, unconditional and automatic.
But why? Because everyone benefits. It eliminates poverty in a single stroke and this improves health and wellbeing. Studies have shown that increased equality benefits everyone in society (1). And because it is so simple to administer, being a single payment, the elimination of bureaucracy reduces administration costs substantially, which goes part way to paying for it.
Why now? It has to be admitted that no one really knows what the consequences would be of such a scheme. It is undoubtedly expensive, which is the main argument against it. But then so is paying unemployment benefits and the salaries of all those on furlough because of Covid-19.
We need to test it and see
The universal payment would be made for exactly the same reasons as the current payments but would include everyone. Currently, the governments benefits are missing out at least five million single-person limited companies, while the current level of unemployment benefit (“Jobseeker’s Allowance”) of a paltry £72 a week (for a single person over 25) is totally insufficient for anyone to live off.
Some argue that a Universal Basic Income could increase inequality by giving money to those who already have it. It need not. There is a simple answer. Take it back through taxation, or at whatever fraction you so choose, from those who already have a high income or high wealth. This is easy. HMRC does it all the time.
Others worry that it would disincentivize work. It might, but so does very low pay. We won’t know the tradeoff until we try it. Yet others say this wouldn’t suffice for some with special needs, for example, the severely disabled who need carers. Okay – make this an exception and put the resources into meeting such exceptional needs – by paying carers to do the caring. Clever people could surely work out solutions. The key, though, is to keep things simple.
There are plenty of theories about the advantages of Universal Basic Income – but not enough experience. A few places have trialled it, in countries such as Finland and Canada. This is why the present moment is a once in a lifetime opportunity for the biggest possible trial. Let’s see whether the theorists are right or not.
There’s no safe way to ease the lockdown
This is the right time for many reasons. One that makes it most essential is the question of how we are going to keep the economy functioning during the pandemic. Currently, governments appear to be betting on getting everyone back to work sooner rather than later. This bet rides on the back of developing a vaccine in 12 to 18 months. There are huge costs to this strategy.
To make this happen, governments are going to let the infection rate rise again, albeit temporarily, before once more locking down when the mortality rate rises. This approach appears to be based on “flattening the curve” repeatedly, on a longer term basis – that is, keeping the number of deaths at any one time within “manageable limits”. This will need to be done time and time again – possibly over many years.The hope is that over time this will lead eventually to some level of herd immunity (this is how diseases eventually “burn themselves out” anyway, and is not just the woolly thinking of the British government). Governments intend to reach the point by ensuring our hospitals can cope with the numbers of those infected and seriously ill. Note that this doesn’t a) eliminate the disease any time soon, nor b) stop people dying in large numbers. It merely spreads the number of deaths due to Covid-19 over a much longer period.
This is not a bet I’d like to make. Governments are making this bet because they see no other way to keep their economies running while managing the consequences of the disease. They rightly do not wish to contemplate complete economic meltdown. However . . .
Improving everyone’s wellbeing could be one way to buy time
I agree with President Macron that we all need to think again. Planning for further deaths is unacceptable.
The alternative is for countries to buy time by staying in lockdown until a solution is found – a solution we haven’t thought of yet. However, people will not stay locked down when their livelihood is at risk. To the government’s credit, it has already understood this – and has introduced the concept of furlough, which guarantee’s 80% of employee’s salaries when they are not at work.
No one has yet thought of this as the long-term solution. To my mind, it might have to be. Universal Basic Income would make this possible, improving wellbeing and giving us time to find a way out of this problem.
As an aside, while it’s more likely that we can develop effective antivirals to help treat patients, these are cures not prevention. Cures will help disease management, but not eliminate the impact of the virus. They will at least make the jobs of our healthcare workers more rewarding, less distressing and more sustainable than at present. It must be truly awful to feel so helpless watching people die when they are trained to save lives.
The truth is that a solution could be a long time coming. Vaccines usually take many years to develop. Even if it proves possible to reduce the development time from the usual 10 years or more, which there is every sign that it might, it will nonetheless be an enormous stretch to condense the testing protocol in the human population sufficiently to meet the current aspirations now being reported in the media, of having a vaccine ready within 12 to 18 months. And even if this aspiration does prove attainable, it is still 12-18 months in the future. Not now.
Until then, easing the lockdown and going back to work, shopping, going to an event, inevitably means further spread of Covid-19 among the 97-98% of us not yet infected.
Let’s not be part of a much more dangerous experiment
Letting people go back to the work and then picking up the pieces after a second wave, and third wave, and a fourth ad infinitum is not a solution. . . It’s not only a callous and immoral leading to many more deaths but is unnecessarily expensive and ineffectual. We cannot allow this to happen – it’s completely unacceptable.
Nor can we let all commerce die – that would be completely unsustainable. This is why Universal Basic Income could prove so important. Yes, it’s untried, but if it will at least give us a way to ensure that the economy keeps ticking over until we find a solution, one which doesn’t lead it to more deaths. People would have security and money to spend, and this would create demand for goods and services.
True, it doesn’t solve every problem. Many businesses dependent on high footfall will not survive. For these services, the future looks bleak, unless some manage to convert to home delivery or find some ways to provide for physical distancing. The hard truth is that the economy is likely to change beyond all recognition, whatever we do. This is the stark reality of where we find ourselves. Hence, the propensity of governments to make wild bets.
Universal Basic Income will enable us to stay locked down for the many, many months it’s going to take to come to terms with the consequences of this virus. It will keep businesses going which otherwise would collapse. From where I stand, it now not only looks a more kindly approach but appears a much more effective one to managing this continued and ongoing catastrophe.
(1) Richard Wilkinson and Kate Pickett, The Spirit Level: Why Greater Equality Makes Societies Stronger, Bloomsbury, 2011.