Arts and Culture Recovery Taskforce recommend Universal Basic Income trial

Posted on Friday, 20 November 2020
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The 'Life Worth Living' report of the Arts and Culture Recovery Taskforce has made just 10 recommendations.  It was quickly and unanimously agreed that establishment of a Pilot Universal Basic Income (UBI) scheme in the arts, culture, audiovisual and live performance and events sectors with a duration of three years was the central recommendation to be made by this Taskforce. The Programme for Government – Our Shared Future commits to the introduction of a universal basic income pilot in the lifetime of the Government.

Below is a summary of the Taskforce recommendation on the Universal Basic Income pilot:

Universal basic income is defined as an unconditional state payment that each citizen receives. The payment is designed to provide enough to cover the basic cost of living and provide a modicum of financial security. All other income would then be earned separately and subject to taxation. The scheme should be ‘opt in’ and other workers from these sectors who do not opt in can be used as a control group against which to measure the pilot.

The introduction of such a basic income pilot would create a more stable social protection mechanism to allow artists and events workers to sustain themselves during the pandemic and to take up work when it arises without losing existing social protection supports. It would keep the sector intact, minimising the loss of skills and contributing to its gradual regrowth, with ongoing benefits: social and economic, local and national. UBI encourages entrepreneurship, as people who are in receipt of it can take on work and earn additional taxable income on top of their UBI. Recent evidence from Finland suggests that recipients of UBI were not deterred from seeking employment to further improve their circumstances. The arts sector represents a very appropriate area for a UBI pilot scheme for the following reasons:

— it is characterised by low and precarious income

— it involves significant positive externalities

— it includes a broad mix of employment types

— it has been chosen for UBI pilots in other jurisdictions allowing for international comparisons to be drawn.

The proposed mechanism for rolling out the Universal Basic Income (UBI) could be through the establishment of a pilot project as envisaged in the Programme for Government which would last three years. The pilot could involve an unconditional state payment paid at the level of National Minimum wage (€10.20 per hour from January 2021). This payment would be in lieu of an alternative primary weekly social welfare payment. All other income would then be earned separately and subject to taxation at the marginal rate.

Secondary social welfare payments currently held on the basis of needs, e.g. rent supplement, or non-weekly payments (such as child benefit or domiciliary care allowance) would also be retained. The Scheme should be suitable for both employed and self-employed workers in the sector.

The scheme could be ‘opt-in’ and artists, creatives and other cultural workers who don’t opt in can be used as a control group against which to measure the pilot. There is evidence from existing statistics that artists on the Professional Artists Social Protection Scheme returned to work at a faster pace than workers on the general jobseekers payment.

The following are proposed as key features of the UBI:

— The setting of the level of payment at the level of the National Minimum Wage

— No means test requirement to take part in the pilot UBI

Cost: PUP figures at 22 October show 7,042 people claiming PUP in the category “Arts, entertainment and recreation” (this includes sports). These payments roughly break down as follows:

On this basis, we can assume a blended average PUP payment of some €276 per week. According to the Central Statistics Office (CSO), in Q2 2020, average weekly paid hours were 31.9. A UBI at the National Minimum Wage of €10.20 per hour for 31.9 hours, that yields a weekly payment of €325.38 per week. Average earnings in arts, entertainment and recreation are €584.84, so the UBI provides an average replacement rate of 55.6%. On average a UBI on these terms would be €49.38 per week higher than the average PUP payment for the sector, or an additional €2,567 pa. The UBI would cost an additional €2.5m per annum (over and above the current PUP cost) per 1,000 participants in the pilot.

Basic Income a key component of A New Social Contract

One of the key recommendations in Social Justice Ireland's recent publication 'A New Social Contract' is the introduction of a minimum floor of basic income and basic services, and we welcome the Arts and Culture Recovery Taskforce recommendation as a further step in the progression of this proposal.  As society moves further away from the economy of the mid-20th century (when the foundations of most of the welfare states of the western world were developed), it is increasingly important that the state set minimum floors of income and service access below which none of their citizens should fall.  Robust and well-funded public services set the floor which underpin the living standards of most people. Accessible healthcare, high-quality education, a well-regulated housing sector, subsidised public transport, and other important contributions to essential services, are things without which most citizens would have a significantly more difficult existence.

However, even in a situation where most or all of these things are cheap (or even free), individuals will have income needs to allow them to participate in society at a level considered the social norm. This is why Universal Basic Income and Universal Basic Services are complementary policies, essential to ensuring that everyone in society has sufficient income and sufficient access to public services to live life with dignity and experience living standards expected in a first world country. The current crisis and its impact on the economy and society mean that in the long-term we must reconceptualise the interaction of employment and work, taxation, and welfare and give serious consideration to policies such as a universal basic income.  

More details on Social Justice Ireland's Basic Income proposal is available here.