A universal basic income won't increase inflation

But more than a utopia? - Because of Corona: The unconditional basic income is back

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The corona crisis gives an old idea new impetus. The unconditional basic income is being discussed again in Switzerland and Germany in times of crisis. Various scientific experiments are planned. Will this even make the basic income eligible for a majority?

A basic income could soon be introduced in the city of Zurich, but initially as a pilot experiment. This is what a committee made up of the SP, FDP, GLP and Juso politicians calls for. You want to investigate what a monthly basic income triggers in the population and have launched a popular initiative at the city level.

The experiment would be a novelty. Because so far all attempts in Switzerland to test the unconditional basic income have failed. In 2018, the Aargau filmmaker Rebecca Panian tried to test the unconditional basic income in the Zurich municipality of Rheinau, but unsuccessfully. There was no money.

The pilot attempt in Rheinau failed because of the money

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It would have been the country's first pilot attempt. He failed because of the money. The initiator of the project wanted to finance the experiment through crowdfunding. However, the crowdfunding campaign brought in only 150,000 instead of the required 6.1 million francs. The project therefore did not materialize. The Aargau filmmaker Rebecca Panian had the idea for the experiment. She wanted to document the project and find out what an unconditional basic income does to the village and the people. The project should have started at the beginning of 2019 and the participants would have received CHF 2,500 a month.

How the city should carry out the pilot test, the initiators want to leave the city. For example, it remains unclear how high the income will be and therefore also how much the experiment would cost. But it should not be below the social subsistence level. It is also clear that the city of Zurich will pay for the experiment and that at least 500 people should take part.

City council and economists are skeptical

In an online petition, the city council recently spoke out clearly against the idea of ​​an unconditional basic income. In his answer he wrote: "An unconditional basic income would not be expedient even under the changed economic framework conditions." The initiators had campaigned for a basic income during Corona.

How does the basic income work?

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According to the global network for an unconditional basic income BIEN, which wants to promote the idea with congresses, research and lobbying, the basic income is defined as follows:

The unconditional basic income is an income for all people,

  • that secures existence and enables social participation,
  • to which there is an individual legal claim,
  • that without means testing and
  • can be obtained without being forced to work or other consideration.

Not only the city council is skeptical about such experiments, but also the economist Thomas Straubhaar. The Swiss is professor for international economic relations at the University of Hamburg and has been writing about the unconditional basic income for years.

People behave differently when they know they are part of an experiment.
Author: Thomas StraubhaarSwiss economics professor at the University of Hamburg

Not only would people behave differently when they were part of an experiment, but they would also behave differently because the experiments were limited, according to Straubhaar. "Because the participants know that they will not receive the money until the end of their life, an unconditional basic income in this context has more of the effect of winning the lottery."

The unconditional basic income is also to be tested in Germany, where Thomas Straubhaar lives and lectures. A pilot test is to start in spring 2021, in which 120 participants will receive 1200 euros per month over three years, without consideration and regardless of their economic situation.

More about the project in Germany

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In a first step, the recipients should receive 1200 euros per month, regardless of their previous income. That means they get the basic income on top. Critics complain that this is the wrong approach for a project because firstly it would not be financially viable and secondly it would negate the effect of redistribution. However, if it turns out that the experiment has significant effects, a minimum income would be paid in a second step, counter the initiators. Then those who earn less than 1200 euros would have their income topped up to this amount. In a third step, the initiators want to work out a financing model for Germany.

With the experiment, the Berlin association “Mein Grundeinkommen”, together with economic and social researchers, would like to observe over a period of three years the effect of paying citizens an unconditional basic income. The experiment is financed by donations.

Will the idea be socially acceptable?

The idea of ​​an unconditional basic income has so far been primarily a theoretical one. There is a lack of scientific facts and empirical values. However, the corona crisis gives the discussion a new impetus and proponents want to use the fertile soil to collect experience and arguments.

Thomas Straubhaar is not surprised that the topic of unconditional basic income comes back on the table at a time when people fear for their jobs, sometimes for their existence. He himself drives the discussion about the unconditional basic income again and again, but in 2016 he voted no to the popular initiative for an unconditional basic income.

Popular initiative in 2016 clearly failed

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Switzerland made it into the headlines around the world with its referendum on an unconditional basic income. Not only was it the first country to vote on it, but it would also have been the first country with an unconditional basic income. However, the initiative was clearly rejected. Only around 23 percent of the electorate supported the idea of ​​an unconditional basic income. 77 percent said no.

Although the existential fears bring the discussion about the idea back on the table, Straubhaar does not believe that it has suddenly become a majority. But he believes that the discussion is still important. "Ultimately, the question is how do we want to live as a society in the future."

Young and women are interested in the topic

“In my lectures, I always notice that it is mainly young people and women who are interested in the topic,” says Straubhaar. They are aware that today's welfare state is not made for them. Straubhaar is addressing the pension system and automation that scares many boys.

Young and women are particularly interested in the topic. You know perfectly well that today's welfare state is primarily made for older, white men.
Author: Thomas Straubhaar, Professor of Economics, University of Hamburg

The renewed discussion about the unconditional basic income has to do not only with Corona, but with the fear of the future of many women and boys. “We have to take these fears seriously,” said the Swiss economics professor, and “use them as an opportunity to talk about how we want to live as a society in the future”.

Although Thomas Straubhaar sees the discussion above all as an opportunity to talk about a new social and welfare state, a new attempt by proponents for a second popular initiative cannot be ruled out. If not now, then when, can be heard from some supporters.

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  • Comment from Dimitri Stathis (Schreiner)
    The growth pressure of our economy prevents urgently needed improvements.
    Endless growth with limited resources results in massive losses.
    Competition, profit optimization, automation and robotization leave more and more losers behind and make full employment of the population impossible.
    The level of employment and purchasing power are saturating.
    The functionality of this system based on eternal growth is reaching its real limits.
    New ideas are needed!
    Agree agree to the comment
  • Comment from Nico Stäger (Nico Stäger)
    There are different BGEs. There are differences in
    a) Credit towards wages or "on top"
    b) The amount of the UBI on housing / food / health up to 2,500 or higher
    c) Target group only Swiss or permanent resident population
    d) financing models etc.
    If, in a lockdown, the economy cries out for billions in aid from citizens (taxes), then the economy should say how the “new normal” can be created without UBI. The virus mutates and remains. We (!) Have to adapt.
    Agree agree to the comment
  • Comment from Alex Schneider (Alex Schneider)
    With the unconditional basic income, there is a suspicion that there is not enough work. That is of course a mistake. There is enough meaningful work in the environmental, social, health, education and security areas. The integration into the work process is particularly important for the boys and should not be undermined by the suggestion "free lunch". Minimum wages are therefore more appropriate than the unconditional basic income.
    Agree agree to the comment

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