To combat the coronavirus pandemic a Universal Basic Income must be introduced to give people the financial security needed for them to self isolate effectively – argue Paul Harnett and Laura Bannister of campaign group World Basic Income.
We are already seeing radical attempts across the world to lift people out of poverty so that self-isolation against coronavirus is a viable option for those living in poverty. The question is – What is the best investment we can make to prevent further infection?
The Labour Party leadership contender Rebecca Long Bailey, MP for Salford and Eccles, is the latest UK MP to call for a Universal Basic Income (UBI) – a no questions asked regular payment to all – to support workers. This would benefit those employed in 6 million small businesses in the UK as well as employees of even larger businesses such as Virgin Atlantic who are asking for unpaid leave from their workers. In addition there are five million self-employed workers and millions of renters who cannot afford not to work.
Others arguing for something similar include Ed Milliband and John McDonnell for Labour, Caroline Lucas (Green Party) and Ian Blackford (SNP). Even Boris Johnson has been reported as considering it as a response to the pandemic. On 16 March 63 MPS from all major parties in the UK (barring the Tories) have supported an early day motion asking “That this House calls on the Government to introduce a temporary universal basic income or an emergency measure to help freelancers and the self-employed effected by the Covid-19 outbreak.” For context, £1,000 per person per month would cost the government about £66bn a month — a fraction of the nearly £500bn bailout the UK needed to stay afloat during the 2008 financial crisis. A UBI would give people the security needed to be able to self-isolate without the fear of not being able to pay the bills, put food on the table or losing their home.
Incredibly, Trump in the USA has looked at a policy from one of the unsuccessful democratic presidential candidates, Andrew Yang, and is considering $1000 payments to US citizens. Republican Senators Mitt Romney and Tom Cotton and Democrats Ilhan Omar and Joe Kennedy III, are currently introducing legislation to establish an emergency cash stimulus that goes directly to Americans, and on Tuesday Treasury Secretary Steve Mnuchin said the administration was “looking at sending checks to Americans immediately,” beginning as early as two weeks from now. The House Finance Committee, on 19 March, approved a proposal to deliver $2,000 per adult and $1000 per child to everybody in USA every month until the pandemic is over.
Many other countries are also looking at the introduction of a basic income now. India has been considering such a scheme for years and the PM’s office is considering such an intervention. An international group of over 500 academics and other experts from all continents have published a letter calling for a basic income.
Given that current knowledge of the spread of the virus suggests it will almost certainly be international it now begs the question of why a world basic income is not considered. After all, the populations most at risk are those with weak health systems and high rates of poverty. This is a watershed moment for the world. Eradicating world poverty gives us all a better chance of surviving this pandemic and any future pandemics. Already we are seeing novel forms of cooperation across the world, from Street Whatsapp groups in Gtr. Manchester keeping an eye on the vulnerable, to singing from balconies in Italy to keep spirits up. The majority of the human race’s first instinct is primarily to help each other, though some billionaires are jetting off to secure bunkers.
Crises provide an opportunity for both the rich to get richer as well as a realigning of society to caring for the majority. The 2008 financial crash saw the biggest transfer of wealth from the poor to the rich internationally ever, but other situations saw radical attempts to redistribute wealth to the poor such as the creation of welfare states in Europe after WWII.
The current Covid-19 crisis provides another opportunity for either the wealthy or the poor to benefit. Already we have calls for the unquestionably rich airline, cruise and fracking industries (amongst others) to receive bailouts. In the UK, the suspension of National Insurance payments may benefit firms in the short run but could also provide another opportunity to dismantle our welfare state as tax receipts fall.
On the other hand, it is apparent that low rates and coverage of sick pay, high unemployment and underemployment and those in the “gig” economy require some level of financial security if we are to overcome this virus. A Basic Income is precisely that – an income to cover the basics when earnings cannot provide.
Many countries can afford to provide a Universal Basic Income, and should provide one immediately to their residents. However, to truly address both Covid-19 and the human impact of this international crisis, we need to think beyond borders.
Imagine you work in a gold mine in Ghana, or a t-shirt factory in Bangladesh. Conditions are cramped, and hand-washing facilities are minimal. You are coughing – but that is not unusual in this dusty environment. Do you stay at home? You don’t want to spread the virus to others, and you know your country’s health system is already stretched beyond capacity. But how will you live without wages? Your whole extended family may be relying on your income, and you need it to pay for your own rent and food. The risks of infection are serious, but with your family struggling to eat if you don’t earn, the risks of stopping work are greater and closer to home.
Ideally, your government would support you. But can they and will they? Public funds are already deeply stretched, and the country has less ability to conjure up billions in new money compared to rich countries with strong currencies. And sadly, not every government really cares about its workers and lower-income citizens. A few countries in the world don’t even have functioning governments. Many more millions of people worldwide are refugees, official and unofficial, already living on the edges of society in countries where they can claim few rights.
As in all crises, it is these people who will suffer the most. If they can’t work through illness, or their work disappears because of global recession, they will be tipped from poverty to famine, and from precarity to total destitution. There is also the risk that these groups, through their inability to get treatment or to properly self-isolate, could incubate the virus and keep reintroducing it to elsewhere in the world even after it starts to die down.
The people of the world therefore have a choice. We can ignore this problem, leave people to suffer and die, and throw up ever higher barriers to try and prevent them reinfecting people in luckier countries. Or we can step up international co-operation to new levels, and expand the basic income idea to make it truly universal.
A worldwide basic income would look something like this. A global body like the UN would create a fund, using international taxation – for instance on carbon extraction, financial transactions or data flows. Or in emergency times such as these, funds could be created through currency creation – as happens within nations, and indeed in private banks.
A fund of $1 trillion, or 1.2% of world GDP, would be enough to provide everyone worldwide (including children) with $10 a month – a top up that would stave off the most extreme starvation. $3 trillion would provide $30 a month, which is around half the amount needed to reach the extreme poverty line. For most poor families worldwide, an extra $30 a month for every household member would be transformative. A household of two adults and three kids would have an extra $150, enough to cover rent on a tiny home (in some places), and enough rice and beans and other staples to ensure no one goes hungry. $100 a month per person – or around 12% of global GDP – would completely wipe out extreme poverty, and bring people everywhere to a decent minimum standard of living.
Getting this money to people would be relatively simple, thanks to recent developments in technology. People with bank accounts could register online, and get payments immediately. In countries where bank accounts are less common, many people use mobile phone-based banking, where they can receive and spend money using an old-style (non-smart) mobile phone, and through a network of local cashiers who operate as human ATMs. People without either could be issued with payment cards, to which the money could be transferred each month so they could withdraw it or spend it directly. These technologies are already used to give cash payments to citizens all over the world, including in precarious situations such as refugee camps.
The idea of world basic income is also well-researched, based on experimental basic incomes in countries like India and Namibia, and financial modelling of global taxation potential. The organisation World Basic Income co-ordinates a network of experts from Africa, South Asia, Latin America and elsewhere to analyse the potential and push towards implementation. These proposals could be quickly worked up to provide a real solution to the current crisis.
Alongside global support for free healthcare systems and national basic income schemes, a worldwide basic income is a vital way forward. By providing a secure basic income at a global level, we will ensure that people everywhere can stay safe, do the right thing, and feed their families while they do it.
Paul Harnett and Laura Bannister
Harnett and Bannister are members of World Basic Income, a campaigning organisation based in Manchester. It is the only international organisation calling for a basic income to be provided to the entire world’s people.
World Basic Income on Twitter and Facebook
Feature image: Quote from Martin Luther King Jr.’s last book ‘Where Do We Go From Here: Chaos or Community’, 1967.