UBI and the pandemic: all or nothing changed?

Reposted with permission of Social Europe

The economic impact of the coronavirus crisis has brought renewed attention to universal basic income but its politics remain challenging.

Brian Nolan

The pandemic has focused minds not just on how to address the many immediate challenges but also on what sort of world we want to see beyond it. In that context calls for a universal basic income (UBI), already prominent before the crisis, are being advanced with new urgency—by, for example, the World Economic Forum.

The idea appears to resonate with the public: a survey across European Union countries has been reported by Timothy Garton Ash of Oxford University as finding that ‘71 per cent of Europeans now support basic income’. At the same time, the report on Finland’s large-scale basic-income experiment has indicated some positive results, in terms of the mental and economic wellbeing of recipients, without reducing employment.

David Weisstanner

The arguments for and against basic income had already been exhaustively rehearsed. But what implications does the current crisis have for the case for UBI and the likelihood that it will gain real political traction in the rich countries?

Economic shock

The shock in terms of economic activity and employment has been unprecedented, a dramatic illustration of the vulnerability of household incomes. Not only those in precarious jobs but also households across much of the income distribution have needed support, and the psychological stresses associated with income insecurity are being felt more widely than ever.

If such crises were to recur, a guaranteed basic income at an adequate level could provide a base safety net to which temporary exceptional supports could be added. Leaving that possibility to one side, are incomes likely to be more vulnerable and will the need for a guaranteed income be more pressing in the aftermath of the pandemic?

How long recovery will take is extremely uncertain, but the more fundamental question is whether incomes in the rich world will be more or less insecure post-recovery. As far as employment is concerned, some sectors may be negatively affected long-term, and costs may be increased by strategic responses of firms and governments to minimise risks they previously ignored but now appreciate. Unwinding of global supply chains and ‘re-shoring’ may however support some types of employment, interest rates may remain at historically low levels and increased infrastructural spending may also be a feature of longer-term policy.

A much wider awareness of the precarity of specific employment relationships and that experienced by ‘essential workers’ more broadly has been a striking aspect of the crisis. That may generate momentum to improve their pay and security through regulation and legislation—possibly through UBI but more likely involving arrangements within existing welfare-state institutions. At the same time, the overhang of government debt will be seen by many as militating against radical, expensive policy initiatives, and significant energy may have to go into arguing against renewed austerity, the case for which will undoubtedly be advanced.

Political challenge

But while the economic rationale to address income insecurity may be changing, the politics behind UBI remain as challenging as before. The problems are not merely technical and they go beyond finding occasional majorities for UBI expressed in opinion surveys. To get policy implemented requires broad-based support from different parties and groups. But it is striking how deeply divided even supporters of the welfare state are about UBI.

Support is high among young adults with degrees—who are not necessarily most severely affected by the pandemic. Since they are not materially dependent upon UBI, their motivation is mainly ideological or value-based, derived from the idea of a truly universalistic entitlement without any work requirements.

On the flip side, some traditionally strong supporters of the welfare state, such as elderly adults with less formal education, remain sceptical about UBI. They clearly prefer traditional redistributive and social-insurance programmes. Trade union members are lukewarm about UBI at best and support for it is lower in countries with more generous welfare states.

Broad coalitions

Given these divisions, even with headlines about temporarily favourable opinions about UBI, such support could fade quite quickly. Significant shares of ‘essential workers’ in the current crisis would undoubtedly gain economic security from some form of basic income. We also know that if people are confronted with their preferred design of UBI they generally tend to favour more generous versions. Yet as soon as trade-offs are introduced—with respect to generosity, eligibility, financing and the relationship to existing welfare programmes—the lack of unity in the support for UBI and the absence of a strong political rationale show the limitations of the supporting coalition, at least compared with more deep-seated backing for established welfare policies.

Introducing new welfare programmes, history shows, has generally depended on finding broad and viable coalitions among diverse political groups. It was hardly ever sufficient to have the support only of those who would be the net beneficiaries. In the case of UBI, however, the missing support among some more disadvantaged groups, who otherwise support redistribution and the welfare state in general, deserves more attention in what has been a ‘top down’ discussion. How to bring together both groups—those who support UBI for mainly ideological reasons and those who would benefit in terms of material self-interest—remains an unanswered challenge.

Brian Nolan is professor of social policy at the Department of Social Policy and Intervention, director of the employment, equity and growth programme at the Institute for New Economic Thinking and senior research fellow at Nuffield College, University of Oxford. David Weisstanner is a postdoctoral researcher at the Department of Social Policy and Intervention and the Institute for New Economic Thinking and an associate member of Nuffield College.
Our thanks to Social Europe (https://www.socialeurope.eu/ubi-and-the-pandemic-all-or-nothing-changed)

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