Introduction

Universal Basic Income is an policy strategy that has the capacity to give a living income to all, albeit at a low level, and hence to reduce poverty, particularly among low income families with young children.

Then there is its simplicity, compared with category systems of income maintenance. It reduces the administrative expense of targeting income support, and removes the unjustified stigma and policing associated with some benefits. Poverty traps and incentive problems for underemployed people wanting to work more - or the over-employed to work less - would be removed or reduced, freeing up people’s decisions about what amounts of paid work they want to seek.

Other reasons for supporting UBI include its role as a ‘social dividend’ on publicly owned assets, and as compensation for the increasing concentration of wealth in fewer hands, as argued by Auckland economist Keith Rankin.

In my view, the primary rationale for a UBI - as well as reducing poverty - is the recognition it gives of citizenship, community, and interdependence of all members of society. Almost all adults and most children make, and want to make, valuable contributions to society in the form of unpaid household, caring, voluntary and community work, as well as the paid work of some. However, there is a big difference between UBI and the workfare mentality that insists people do voluntary work before they get a ‘hand-out’. The problems of organising workfare are massive, and the underlying philosophy of policing and enforcing work at all costs is punitive. UBI would foster an atmosphere of interdependence where useful activity is natural and encouraged, but not enforced.

Women do the bulk of the unpaid work, as recently results of the Time Use Survey show. Australia time use surveys pioneered calculations of the time input and value of household work, including child raising (Ironmonger 1989). From this it was calculated that including the work done in the household would double the Gross Domestic Product (GDP) (Ironmonger, 1996). My concern is not that GDP is an inadequate measure of economic activity, however.

My argument is that it is largely arbitrary what work is paid and what is unpaid. If less than half of all work is paid, it is absurd that most people’s prestige, status and claims on resources come so largely from paid employment. I also argue that earnings differentials within the standard economy are inequitably wide and only tenuously, if at all, related to productivity. Together these two issues shake the notion that market rewards and resulting income disparities/ standard of living inequalities are a matter of ‘just deserts’, with the tax/benefit/public expenditure system simply providing a safety net for the unlucky and/or undeserving. These two issues make the case for a universal basic income compelling, provided the issues of affordability can be dealt with - and I am convinced this is the case.

Interdependence and a universal basic income

Bringing up the next generation is one of the most important unpaid tasks in our society, which requires support from the community. The work is undertaken predominantly by women, whether in two-, one-parent or other households. It is vital work, as well as being for many a joy, and should not be just for the rich.

We are on the border line of only just reproducing ourselves with declining birth rates, with those on lower incomes barely able to afford children. The individualist position, ‘Why should I support your taste for having children?’ is mean-spirited and, if adopted collectively, is short-sighted for society as a whole.

UBI needs to include children, recognising the above arguments for collective responsibility for costs. Collective returns will result from this as an investment in the future. Children too are citizens, contributing both when young and later. Celia Briar has argued that under any UBI system that did not cover children, many women could be even worse off than they are now.

Of course, many elements of bringing up children are currently paid for collectively, as well as by parental contributions in money and time. First, the community collectively supports children directly through subsidies to health, early childhood care and education, through compulsory age education and through grants to voluntary sector organisations such as Plunket. Second, the Domestic Purposes Benefit is paid on the basis of dependents, largely children. Funding for all of these are under pressure. The argument that bringing up young children is not a real job and that adults should be in paid work is applied selectively. It is used to attack sole parents, taking the high moral ground on benefit ‘dependence’, with the aim of reducing public expenditure. Third, targeted Family Support assists low income households. However, there has been a major shift towards emphasising parental responsibility both in official rhetoric and in financial terms, although taxpayer support for parents is low by international standards, particularly for large families (Stephens, 1998).

This shift towards individual and family responsibility gives insufficient weight to the inevitability and desirability of the interdependence of all members of society. It is important to challenge the capture of the word ‘dependence’ by New Right orthodoxy to mean dependence on a welfare benefit. Patterns of dependence, independence, and interdependence are complex and varied over the life cycle and between groups. These are not just a matter of money. The New Right reduces it to that and denigrates those financially dependent on others - especially on the state.

But paid work is heavily dependent on all the household, caring, voluntary and community unpaid work that supports it, as well as being unequally distributed in society. Who is dependent on whom, practically and emotionally? Certainly Department of Social Welfare employees are the people most dependent on the welfare system, which would require significantly less bureaucracy in a universal basic income environment. Another example is ‘wealthfare’. In the United States, it has been estimated that handouts, subsidies and tax loopholes are worth 3.5 times the welfare budget. Bailouts of companies - such as Bank of New Zealand - are another example of public expenditure to help the better off.

Redefining dependence and interdependence in this way strengthens the case for a UBI.

The over emphasis on paid work

Feminist analysis of the dependence of the market economy on women’s productive and reproductive work has made some impact. As Marilyn Warning (1988) has pointed out, all standard measures of national income, such as Gross Domestic Product, continue to exclude these ‘goods’, while including ‘bads’ such as pollution and defence industries. Despite greater recognition of environmentalist and feminist critiques of GDP as being totally inadequate as a measure of worthwhile economic activity, growth in GDP receives huge official and media attention as a measure of the nation’s health. Some amputations are made for unpaid labour, particularly in subsistence agriculture, but basically it is paid work figures alone which figure in these statistics. Increasingly even economists question the omission of unpaid work from national income statistics. The size and counter-cyclical nature of such work means that the impact of boom and recession, in aggregate and on individual households, is overstated. Time use surveys and calculations from household input-output tables throw light on household production including the raising of children. From these tables and a reassignment of the capital component of household activity, the household sector has been shown to comprise fully half the total economy, a much higher figure than previous estimated (Ironmonger, 1996)

Yet still overwhelmingly one’s prestige, status and claims on resources come from paid work and governments stigmatise those without paid work or independent wealth. In fact, it is largely arbitrary what work is paid and what unpaid. The boundaries of what work is done on a paid basis shift with time, space, class, technology, and convenience to employers. For example, deinstitutionalisation in the mental health field and shortening hospital stays after operations and childbirth puts more unpaid work onto family relatives. Techological and social advances may be part of the rationale for such changes, in addition to cost cutting, but a major result is a transfer to unpaid work. Similarly, self-service rather than home delivery of groceries, Pak’nSave, and use of mail order and Internet shopping have transferred over-time to voluntary unpaid labour - even if they cut prices, increase convenience and are welcomed by consumers.

More importantly for UBI, almost all jobs are at the same time undertaken by both paid and unpaid workers. This is true of almost all industries and occupations, from the obvious examples of caring work and home maintenance to management and agriculture. Similarly, voluntary workers operate alongside paid workers in the community sector in organisations from Citizens Advice Bureaux to Refuges, Meals-on-Wheels to Kohanga Reo, schools to hospitals. Valuing all such work properly does not mean paying for it all by the hour. Social cohesion depends on voluntary, gift work. Many people want to do it. Nor could the formal economy bear the costs of paying for it in that manner. But the desire and ability to do such work may be breaking down with the increasing requirements and financial necessity for almost all adults to be in paid work.

Only those with sufficient resources - the retired, those supported by other earners in the household - can afford voluntary work to be their main activity. Under current orthodoxy, this is okay because they do not require community support for their basic living costs. But it is not okay for those who need the unemployment benefit to spend time this way, because they should be looking for ‘proper’ work. Similarly, only those with spouses with adequate incomes are to be allowed to bring up children full time: Sole parents should become partnered and/or be in ‘proper’ work.

Then we have concerns over workfare - the probable displacement of ‘proper’ jobs (protected by minimum wages and conditions) by created ‘community work’ jobs, and a compulsion to ‘work for the dole’. This compulsion is resented. As it was well put at last year’s Beyond Poverty conference, ‘I’ll mow the old lady’s lawn, but not because you tell me I have to!’

Recognition of the total arbitrary nature of the paid/unpaid work distinction with a Universal Basic Income would alleviate many of these problems. A UBI may be the better way to get the lawn mown without policing or resentment.

While there is a vast amount of unpaid work/useful activity to be done, much of it not done at present, I would argue that it may not possible to restore full employment in the traditional sense. This is controversial. Previous waves of technological change may have created enough new types of jobs to compensate for those displaced. It may be, however, that this round of technology change is more labour displacing than creating. If so, and enterprises using the new technology are profitable, then there should be real output sufficient for all. The problems is more one of distributing the income than creating it.

Lack of sufficient paid employment is currently important in income terms. It is important psychologically, with the stigma of unemployment and the over-emphasis on status in paid work. It is also important in terms of providing a time framework, interests and communication with other adults. However, much dead end work can be boring and unsatisfying, undertaken almost entirely as an essential provider of earnings. Unemployment as the source of a variety of negative social consequences would be much reduced in the presence of a UBI. It would eliminate the stigma attached to benefits, and would place emphasis on alternative ways of using time in useful and interesting ways.

At present paid work is poorly shared out - over-work and under-employment occur simultaneously. The lengthy work hours (over-employment) now expected of many workers are socially and literally unhealthy, and are only possible for those without dependents or with other family members or the market fulfilling those responsibilities. UBI would encourage a better balance of paid and unpaid work, with more part-time work done by choice, rather than at the behest of the employer.

UBI and alternatives to the standard economy

Fast growing in New Zealand and overseas are a range of local economic and social initiatives which act as an alternative or supplement to the local economy. These include ethical investment schemes and local trading schemes, often with their own currencies. The main New Zealand term is Green Dollar schemes - Local Economic Trading Schemes (LETS) in Britain, and Time Dollars in the United States. In July 1997, New Zealand had 46 Green Dollar exchanges in operation from Alexandria to Whakatane. Part of the impetus for these schemes has been the failure of the conventional economy to deliver a decent standard of life for many.

In my view, green dollars, time dollars, barter and gifting - ball point pens are a gift economy in action! - are creating more important value than that on the market. Australian surveys indicate that the membership of LETS, especially newer ones established with a social equity agenda, have high membership among women, those not or no longer in employment, ‘green’ supporters, and people with low incomes. Most scheme coordinators believe they are ‘effective in helping the poor get by’ (Williams, 1997). But the values behind such schemes go beyond this to support the move back from individualism towards community and social responsibility. These aims are highly congruent with the objectives of UBI above. I see UBI as supporting, not as an alternative, to these initiatives.