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Unconditional Basic Income – Only a Matter of Time

Geoff SimmonsTax and Welfare

Over the weekend Switzerland held a referendum on whether to put in place an unconditional basic income. The proposal was rejected; no real surprise given the plan was somewhat ambitious in scale. However, the really interesting result is the number of people that expect this issue to stick around. Europeans are starting to view a move to an Unconditional Basic Income as only a matter of time.

The Results

With just under half of voters turning out, around 23% voted for the proposal, and 77% against. In total, some 569,000 people voted for an Unconditional Basic Income across the country. In some areas the total was much higher – for example 36% voted for the proposal in the canton of Jura.

The failure of the proposal is no surprise given its ambitious nature. The plan was to give all citizens a basic income of around $NZ3,700 per month ($NZ44,400 per year); that is a hell of a lot of money even in the relatively expensive country of Switzerland. The proposal also contained no consideration of how to pay for the basic income. Clearly both of these are major issues that needed to be worked through before any such proposal could proceed. These are both issues that we considered in the book the Big Kahuna, and we even had independent consultants NZIER check our calculations.

It may sound like a resounding defeat but the referendum has done incredible things for the profile of the Unconditional Basic Income in Europe. In fact, by spending time to debate the pros and cons, it seems that many now believe that the Unconditional Basic Income is the way of the future.

Is UBI the Future of Switzerland?

The debate about the Unconditional Basic Income has clearly had some wins. People now understand that around half of the work done in most modern societies is unpaid – something that an Unconditional Basic Income can rectify. The UBI is also seen by 72% of the Swiss population as a useful response to automation and the risk to job security in the modern economy.

All in all, the debate has clearly just begun. Some 69% of Swiss voters expect another referendum on the Unconditional Basic Income. That figure rises to 80% if you only count the people under 39 years of age. Two thirds believe an Unconditional Basic Income will be introduced within two decades.

After all this debate and the referendum, 77% of Swiss people want the Unconditional Basic Income to be tested in an area, to see what actually happens. Watch this space.

The Rest of Europe

These sorts of tests are already happening in the rest of Europe. As we have seen Finland and the Netherlands already have plans in place to test the idea. Even the UK Labour Party is taking a close look at the UBI. The results of these trials will add to the evidence we have from experiments in Canada and the United States in the 1970s.

The big concern with an Unconditional Basic Income (other than the cost) is the fear that everyone will stop working. Of course no one thinks that they would stop working with an Unconditional Basic Income, they just think everyone else would. It is an irrational fear that wasn’t borne out in the trials of the 1970s. Back then, the only people that worked less were young men in training (who went on to earn more as a result) or parents wanting to look after their children. Hardly an employment apocalypse.

In the next few years we will see the results of these new trials emerge and these concerns will be put to bed. After the debate in Switzerland, there is a growing recognition that it is only a matter of time before we have an Unconditional Basic Income. It is increasingly looking like a question of when, not if.


Unconditional Basic Income – Only a Matter of Time was last modified: June 14th, 2016 by Geoff Simmons
About the Author

Geoff Simmons

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Geoff Simmons is an economist working for the Morgan Foundation. Geoff has an Honours degree from Auckland University and over ten years experience working for NZ Treasury and as a manager in the UK civil service. Geoff has co-authored three books alongside Gareth.