Excerpted from Francine Mestrum:
“Why is the BI not on the agenda of the left if it is so interesting? If the advantages are so clear and irrefutable, and if it even can erode capitalism, why not organize a huge campaign in order to promote it? Why not support the citizens’ initiative?
A first doubt emerges because neoliberals are among the advocates of the BI. The Belgian example of the political party Vivant is clear in that respect. The BI is not a leftwing project. What is the neoliberal objective? To lower labour costs? To eradicate poverty? To give everyone a minimum income with which one can survive?
It is within this liberal framework that many countries already have a ‘negative income tax’: when your income falls below a certain level, the state will pay you the missing amount. Of course, this is different from what the advocates of the BI defend today, but one should never forget that a minimum income is perfectly acceptable in a neoliberal context, whereas a minimum wage is refused for distorting markets.
A second doubt arises concerning the freedom to participate or not in labour markets. Assuming that all people want to give meaning to their life with some form of work or activity, it is perfectly possible nevertheless that some people prefer to do nothing. We have to wonder then who will be prepared to do the burdensome and difficult tasks that remain to be done when there is no serious wage to compensate for it? Or, put differently, do we accept a right to laziness? Or do we think that all socially necessary and useful work has to be distributed fairly and that no one should be allowed to escape? From working in mines to picking fruit or garbage collection, there are some tasks that no one will be prepared to do willingly, out of conviction and with enthusiasm.
The BI exempts the State from doing anything for people above and next to the BI. Even if today’s social protection systems are not meant to fight inequality, they do rise peoples’ incomes and limit inequality. The best tool in the fight against inequality is a fair tax system and this can be maintained when a BI system is introduced. But the responsibility of the State stops when the minimum floor of BI is reached. Social progress through higher incomes stops to be a task of governments and income inequalities can rise.
Questions can also be put concerning the feasibility and the desirability of unconditionality. The freedom given to people is very important, but what if the BI is used for gambling or drinking? Is the State responsible for people who fall off the wayside of minimal protection? And if so, how are governments to justify this help to those who behave ‘correctly’? If not, is it possible to let people just die from hunger? Can conditionality not also be seen as reciprocity? It would mean that people have to behave correctly if they do not want their BI be withdrawn, whereas public authorities are committed to provide people with good quality social services. Or a decent labour market policy. Benefits rarely are totally unconditional and this is probably a good thing. Citizenship is based on a relationship between citizens and the state. It is an implicit agreement on rights and duties for all.
By eliminating non wage labour costs, labour will become far more cheaper for employers. The advantage for them is much more important than for workers who still will have to fight for decent labour conditions. In whatever way the BI is being financed, it will always be some kind of tax to be paid by everyone. And that means that labour costs which are now paid by workers and employers as part of the wage cost, will have to be paid by the whole of society, possibly through a higher VAT rate. It thus comes down to a shift from labour costs to costs for society. It is obvious that trade unions are not very keen on such a system. It will become much more difficult to negotiate good labour conditions, certainly when the BI is not high enough to live on. If workers do not only want to survive, but also want a car or a holiday abroad, it will become difficult to put pressure on employers. It is clear that trade unions will lose much of their power. The freedom not to work is very relative and is only valid when one is satisfied with a life in relative poverty. Chances are real that wages above the BI will remain very limited. An unconditional income outside of the labour market cannot influence that labour market. Contrary to the thesis that capitalism is being eroded, it is possible that one ends up with a capitalism without a labour market and that employers pass on as many costs as possible to the whole of society.
Finally the main questions concern the amount of the BI.
How much? How to finance?
In Vivant Europe’s proposal the idea is to have a BI amounting to 50 % of the guaranteed minimum wage. Children up to 18 years old would receive 25 % of this amount, young people between 18 and 25 years old would receive 75 %, whereas aged people above 65 years would receive 150%.
For Belgium this would mean 700 Euro per month and the system would cost around 24 % of GDP. This is more or less the share now taken by social expenditures.
Pensions, unemployment benefits, family allowances and costs for sabbaticals would disappear. Huge savings are possible on defence, police and cultural policies (because non wage labour costs disappear). The costs for health care would be halved because doctors would not to have pay social security costs.
Vivant also proposes a lowering of company taxes to 15 %, whereas all incomes beneath 1500 Euro per month would be exempted from income tax. Above 1500 Euro per month the tax rate would be 50 %.
The BI is financed through the savings on the current social expenditures and a substantial rise of VAT. The idea is that net wages would remain unchanged.
Apart from the clearly liberal ideology behind Vivant’s proposal – speaking about ‘taxes’ on labour instead of social contributions as being part of wages and on a ‘society of welfare recipients’, this proposal gives rise to serious doubts.
This contribution cannot analyse the detailed amounts, but a first look at the proposals does raise questions about their feasibility and adequacy. It is very improbable that net wages would remain unchanged. It would mean that workers would really gain with these proposals and pensioners would seriously loose.
It is clear that a ‘decent life’ is not possible with 700 Euro per month. Those who work can raise their income. But is it possible to chose not to work if it means you have to live with 700 Euro a month? Is it possible for an aged person to live with 1050 Euro a month, let alone to enjoy your old age?
Many of the arguments in favour of the BI disappear rapidly when translated into concrete amounts. In the European citizens’ initiative it is stated one wants to shift from a ‘compensatory’ system towards an ‘emancipatory’ system, but 700 Euro a month can hardly be said to be sufficient to achieve this.
The amounts for other countries are not any better. In Bulgaria the BI would only cost 5,45 % of GDP but the amount would not rise above 37 Euro per month. Bulgarians will not be too happy.
The current proposals for Germany, Spain and Finland all mention amounts around this same floor as in Belgium[5]. No one proposes an amount up to the poverty line (for Belgium: 1000 Euro per month). Apparently this is too optimistic and this means the BI would not be sufficient to really eradicate poverty.”