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Opinion

Why universal basic income pilots haven’t led to policy change – despite their success

28 Jun 2022 5 minute read
Photo by Toa Heftiba on Unsplash

Chris Taylor

Academic Director, Cardiff University Social Sciences Research Park (SPARK), Cardiff University

Universal basic income – a tax-free, unconditional sum of money regularly given to everyone in a society – has repeatedly been shown to help the most vulnerable groups in society.

Numerous successful trials have found that basic income, whether given to everyone or specific groups or communities, improves health, life satisfaction, trust in others and employment opportunities among participants.

Many of the largest and most successful basic income schemes were from the 1960s and 1970s. Mincome, a basic income experiment in Manitoba that ran from 1974-1979, found an improvement in wages, psychological wellbeing and school and college attendance.

More recently, a nationwide experiment in Finland gave €560 (£430) per month to 2,000 randomly selected, unemployed people, again producing favourable outcomes.

The Welsh government is the latest to announce such a trial, giving £1,600 a month to every 18-year-old leaving the care system (about 500 young people) over a two-year period.

But none of the experiments have (so far) ended with the implementation of basic income as a policy, by keeping the pilot going or rolling it out to wider populations.

The International Public Policy Observatory, in collaboration with the Institute of Policy Research at the University of Bath, recently examined 38 experiments across Europe, North America and Asia (in countries that already had established welfare systems) and found three main reasons why the effort ended with the pilot.

Gaps in evidence

Supporters of universal basic income usually point to a wide range of benefits to those who receive the payment, their family and their wider community. But collecting evidence on all possible outcomes has been difficult to achieve.

The complex designs of basic income pilots have made it difficult to show whether improvements in people’s lives are due to the introduction of a basic income or other factors. No two basic income pilots look the same, so the outcomes of one pilot are rarely the same in another. Keeping pilots as simple as possible and identifying the criteria for success prior to their introduction would strengthen the case for keeping the schemes going.

Short-term thinking

We found that most basic income experiments were intended to be just that – experiments. Few, if any, schemes were launched with a clear understanding of how they would be fully implemented if deemed successful. Many schemes broke down because the necessary fiscal and legal requirements for further roll-out did not exist.

If those designing the experiments do not see the problem as long term and systemic, then they will inevitably take a short-term view about any experiment and what they hope to learn from it.

Future experiments should be designed so that if they are found to be successful they can continue to run.

This might mean designing a scheme that will only benefit a small, well-defined group for a short and specific period of time. The scheme for care leavers in Wales is a good example of this. It is designed to target a particular group of vulnerable young people at a key point in their life.

The resulting benefit is only for a short period (when they are 18-20 years old) but at a time in their lives when we might expect to see the most advantage for minimal cost. The scheme can continue to run for new cohorts of care leavers after the pilot without the overall costs increasing.

Money

Politics and public understanding

Despite the large number of pilots over the last 50 years, universal basic income is still highly controversial. Giving “free” money to people without conditions is very sensitive, particularly to people who work to earn money and pay their taxes.

Improving the public understanding and support of basic income remains a challenge. Pilots need to demonstrate how basic income benefits the whole of society, as well as those who receive the payment. Improving someone’s immediate wellbeing, for example, leads to less dependency on welfare benefits, lower levels of crime and reduced illness.

The public also needs to understand why people deserve to receive a basic income. Most basic income pilots are for the unemployed, and there is a fear that providing a guaranteed income will only continue their economic inactivity.

Evidence

Evidence from previous pilots on this specific issue is mixed. Some people who receive basic income continue to remain unemployed, but for others it provides the necessary foundations for getting employment.

Many pilots have shown a marginal benefit of increased employment. But the continued presence of unemployed people in receipt of basic income, however small in number, undermines the public’s confidence in such a policy.

One solution is to target basic income at other groups of vulnerable people, where perhaps the public’s understanding of the challenges they face are greater to begin with. Again, the Wales example is a good one. While young care leavers are likely to be unemployed, their participation in the scheme is not defined by this. The public is also likely to have greater empathy for young adults who experienced difficult childhoods.

This article was first published by The Conversation 
The Conversation


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Kerry Davies
Kerry Davies
1 month ago

The Finnish project was not that random, it was aimed at predominantly younger long-term unemployed people but excluded those who would have made best use of it by not including the self-employed or low paid part-timers. It did not measure well-being but did find that punitive benefit sanctions, as are the case in the UK, were shown to be counter-productive. As I wrote elsewhere, this group of young people are ideally suited as a test bed partly because they are already comprehensively studied. There are known statistical parameters against which effects could be measured. Let us hope the outcomes are… Read more »

Steve George
Steve George
1 month ago

Whatever this (or other schemes’) merits, it’s not a basic income scheme (or even trial). The point about basic income is that it would be universal and that everyone would get it, employed or unemployed, poor or rich. That would if course make it expensive (although not as exoensive as might be imagined as there would be savings from unemployment, pensions and other benefits – and from simpler administration). But that universality is the only way: 1. it can fairly be described as a “basic income”; and 2. help avoid the dog in a manger attitude of many who dislike… Read more »

cathayslien
cathayslien
1 month ago

there are plenty of conditions where welfare payments work, but universally they will fail because landlords and corporations will simply raise their prices. a UBI will be a massive injection of money from the public sector to the private sector. to do the good that UBI proponents want to do, we need to do something different – either UBS (Universal Basic Services) providing utilities, internet, food staples, public housing etc for free; or a massive increase in welfare payments and eligibility. that they dont want to do these things indicates the real reason behind UBI support is the support of… Read more »

cathayslien
cathayslien
1 month ago

its also worth pointing out that the cost of UBI in wales, according to the future generations commisioner (who supports it) would be approximate THREE times the current welsh budget. the only way to mitigate the cost would be to set up a welsh national bank, give everyone in wales a bank account automatically, and then you can spend without borrowing or taxing (as per Yanis Varoufakis). This won’t mitigate against landlords knowing that everyone has an extra thousand pounds a month and putting their prices up accordingly (because why wouldnt they).

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