As I mentioned in my last post, recent weeks have seen a lot of criticism from the left about basic income. Here, I offer some short responses to a few of the concerns I’ve come across.
Basic income lets employers off the hook for paying decent wages.
I see two problems with this complaint. First, it implies (without argument) that employers ought to be “on the hook” for paying decent wages, in the sense that employers’ obligation to pay decent wages absolves the state of the responsibility to ensure that everyone has a decent income. Second, it implies that employers (qua employers) are generally motivated to pay decent wages because they’re concerned about poverty; otherwise it’s not clear why ending poverty would make employers less likely to pay decent wages.
Regarding the first problem, one of the defining features of left politics is a commitment to guaranteeing a basic standard of material security for everyone — we often talk about rights to adequate health care, housing, nutrition, for example. Moreover, when we talk about these guarantees, we usually imagine that the state ought to have a major role in delivering them. Support for universal health care, as it is understood on the left, means support for publicly funded health care, and support for the right to adequate housing means support for public housing — at least for those who cannot secure adequate housing through the private market. Against this background, the idea that employers bear sole responsibility for ensuring decent incomes seems incongruous. A decent income is obviously an important part of material security, just like health care and housing. It is also the best way to secure other elements of material security, like access to adequate nutrition. As I argued last time:
From a social democratic perspective, there is a deep affinity between the justification for a basic income program and the justification for other elements of the welfare state. We grant that the market economy is very good for some things, but it’s not good for everything. The free market fails to deliver such things as effective universal access to comprehensive health care, high-quality basic education, and protection from natural and human-caused threats to our health and safety. Quite sensibly, therefore, we have government-funded health insurance and service provision, public school systems, and emergency services. For all its virtues, the market has proven equally incapable of ensuring that no one will end up in poverty. The natural conclusion is that the government ought to assume responsibility for what the market is incapable of doing, and implement a basic income scheme or something very much like it.
Viewed through this lens, saying that basic income lets employers off the hook for ensuring decent incomes is like saying that it would be more progressive to scrap programs like public health insurance in favour of employer-linked private insurance plans, because universal health care lets employers off the hook for ensuring that everyone has access to adequate health care. The double standard here makes no sense to me.
Coming to the second point, that’s not to say that employers should not also pay decent wages. But it shouldn’t be necessary to explain to anyone on the left that decent wages tend to come from collective action, not charity. Collective bargaining and legislated wage floors should be sufficient to ensure that employers pay decent wages; threatening those at risk of unemployment with economic ruin clearly is not.
A targeted basic income subjects recipients to intrusive means testing and other indignities.
The basic income being trialed in Ontario targets the poorest individuals for the greatest amount of aid without requiring any kind of intrusion beyond the requirement to file an ordinary tax return, which people have to do anyway. While it is no doubt possible to design a targeted basic income scheme that inflicts various indignities on recipients, this is equally true of any other public policy.
Basic income takes poverty for granted.
In a column at the Toronto Star, Thomas Walkom claims that the government’s interest in basic income represents acceptance of poverty as an inevitable consequence of a trend in the labour market toward low-wage, insecure temporary employment (the “gig economy”). I don’t follow this at all. The point of basic income is that poverty is not inevitable, because once you pay out the basic income, poor people are suddenly no longer poor. True, they would be poor if they did not receive the basic income payments, but this is trivial; it’s like saying that a CEO is poor because they would be poor if they had no employment income. If we take the counterfactual to be relevant in assessing whether basic income recipients are poor, it’s not clear what grounds we have to say that the counterfactual is irrelevant in assessing whether a high-earning CEO is poor. And if we bite the bullet, accept the relevance of the counterfactual in both cases, and say that both the basic income recipient and the CEO are poor — an absurd proposition in itself — it’s hard to see how any kind of policy could affect the poverty rate. We would be forced to accept that poverty is inevitable for 100% of the population. The very concept of poverty would become practically meaningless. Walkom’s complaint makes a punchy soundbite, but there is no substance to it.
Assessing need by household income entrenches oppressive family structures.
When administering a basic income, need can be assessed for each person on an individual basis, or on the basis of family status. Assessing need on the basis of family status is more cost-effective, because it takes into account the ways that cohabitation can make a given quantity of money go further. Thus, the Ontario pilot model pays out less to a married couple than it would to two unmarried individuals. Pam Frache argues that a disadvantage of assessing need this way is that it can support abusive behaviour in the household. If family members do not each receive a full payment, they may feel trapped in an abusive situation for fear of falling into poverty. However, this is equally true if we are relying on employment income to lift households out of poverty. Moreover, basic income still has the edge over an employment-based strategy because an adult family member knows that they can expect to begin receiving a basic income after leaving the household. Immediately after leaving, the adult victim of abuse is indeed likely to be without the means of supporting themselves. But considering the trauma caused by domestic abuse, it seems unlikely that any kind of income guarantee (employment-based or not) would obviate the need for emergency shelters, transitional housing and other means of assistance for persons who have just fled from abuse. Services like these will have to pick up the slack, and their funding should be increased accordingly. Frache’s point brings home the fact that no single policy measure can solve all social problems, and this gives us good reason to reject claims that basic income is some kind of panacea, but it does not give us reason to reject basic income itself.
A maximum income will be more effective at fighting poverty.
Anti-poverty activists quoted in this article at Torontoist argue that the obvious solution to poverty is to impose a maximum income, rather than a minimum income. It is not entirely clear whether this is a serious proposal, because although activists presented the proposal in a way that satirizes the Ontario Liberal government’s approach to policymaking, quotes from the activists also sound pretty earnest. One activist is quoted as saying that a maximum income (above which a marginal tax rate of 100% would be applied) would raise the large revenues needed to finance something like a basic income as well as other measures intended to reduce or eradicate poverty. However, it’s not clear how a maximum income could raise any additional revenue at all — at least not from the rich. Imposing an income ceiling might boost tax revenue if the savings that would otherwise go to outrageous salaries and bonuses were redistributed to employees lower down the ladder (increasing the taxable income of low and middle earners), used to hire new workers (to the extent that overall employment is increased), or profitably invested. But if every dollar above the threshold is taxed away, then every dollar paid out above the threshold would essentially just be a donation to the government. The idea that a maximum income would raise a lot of new revenue from the rich boils down to the idea that depending on voluntary donations from the rich would raise a lot of revenue. If the rich were so eager to contribute voluntarily to government programs, an income ceiling imposed by government would be unnecessary. There may be good reasons to adopt “leveling down” measures like a maximum income, but it is doubtful that this would be of much benefit to government revenues or poor individuals’ pocketbooks.