Pandemic encourages testing of universal basic income and job guarantees

Whether the increase in popularity and search will result in a wave of action is an open question. But some, like Jardine, see reasons for optimism.

The Crisis Catalyst

Throughout history, times of crisis have produced great changes in the role government plays in our lives. Out of the Great Depression was born former President Franklin Delano Roosevelt’s plan to distribute social security checks in the United States, for example, while the foundations for universal health care in Britain were laid during the Second World War.

Experts view the coronavirus pandemic as a world-changing event that could lead to a similar tectonic shift.

“Big political changes usually follow big upheavals,” said Daniel Nettle, a behavior specialist at Newcastle University.

Universal Basic Income, in its purest form, means giving money to everyone, regardless of income, so that they can have more freedom to move between jobs, train for new ones. positions, providing care or engaging in creative pursuits. Interest in the concept has grown in recent years, driven by fears that automation and the climate crisis will lead to a massive displacement of workers.

The rapid blow to the economy from the pandemic has also prompted policymakers to seek quick fixes, said Yannick Vanderborght, professor at the University of Saint-Louis in Brussels, specializing in universal basic income. The wide distribution of aid is therefore more attractive, as it can theoretically be deployed faster than more targeted measures.

“The problem is we need urgent economic support” for large groups of workers, said Vanderborght.

Start of pilot projects

As enthusiasm grows for such policies, researchers are taking further steps to study their effectiveness.

Germany’s Universal Basic Income trial – run by the German Institute for Economic Research Berlin (DIW) in partnership with the non-profit organization Mein Grundeinkommen – is now screening millions of applicants. Funded by around 150,000 private donors, the experimenters aim to start distributing money to 120 people from spring 2021.

The study will last three years. It will also track 1,380 people who do not receive extra money for comparison.

Participants will be asked to complete regular questionnaires during the study. Questions range from the number of working hours to inquiries about mental well-being, values ​​and trust in institutions, according to Jürgen Schupp, senior DIW researcher who manages the project. Those who receive € 1,200 per month will be asked to indicate how they are using the money.

There is no guarantee, of course, that the study will show that the universal basic income has broad benefits, although it has received considerable attention from supporters of the concept.

“We want to convert this commitment into basic science knowledge,” Schupp said.

The pilot job guarantee project in Austria began in October. It will also last three years.

The program, funded by a regional division of the Austrian public employment service, aims to provide long-term paid employment to around 150 inhabitants of Marienthal – the subject of a fundamental study on the effects of long-term unemployment in the 1930s – who are at unemployment for at least a year. Those who opt will enroll in a two-month training course before starting a job that matches their skills, from gardening to childcare or home improvement.

“The main goal is to provide social inclusion, meaning and a source of income for participants,” said Maximilian Kasy, professor at the University of Oxford, who co-designed the study. Participants will also be asked to complete regular assessments on their daily routine, personal health and involvement in the local community.

Sven Hergovich, director general of the employment service, started launching a job guarantee program for Marienthal before the pandemic struck. But the jobs crisis triggered by Covid-19 made it even more crucial, he said.

“It’s time to find new ways [to fight] long-term unemployment, ”Hergovich said.

Will there be action?

As researchers collect data from the pilot programs, political momentum for overhauling social safety nets is building.

But experts note that the loose coalition of Universal Basic Income supporters still contains significant divisions.

There is huge dissent, for example, over whether such programs should stem from spending deficit or from increasing taxes on the rich, as well as whether payments should only go to those in need – which would mean that they would not be truly universal.

Jardine, for example, believes the Universal Basic Income should replace the UK’s current welfare system, while also providing people such as caretakers and odd-job economy workers with regular injections of silver. But she is not convinced that payments should be made to those over a certain income threshold.

“When you have to turn it from interest to program, you start to see inconsistencies,” said Tim Vlandas, professor of comparative social policy at the University of Oxford.

And such ideas still have a lot of opponents. Boris Johnson’s Conservative government in the UK argues that the Universal Basic Income would be too expensive and reduce incentives to work, while failing to reach those who need help most. Chancellor Angela Merkel’s coalition government has also expressed fears that this could lead to lower employment.

Critics also raise concerns about the broader economic ramifications of these policies. Some fear, for example, that providing a universal basic income could cause inflation to spike.

Jardine, for her part, recognizes the uphill battle to convince her colleagues that Universal Basic Income is the way to go. But in his view, the pandemic presents an opportunity.

“Governments change – and they change their minds,” she said.