Pay without work, a good idea?
A couple of years ago, when thinking about my study options, I had a really difficult choice to make. My dilemma, and I think a dilemma for a lot of fellow students, was about the choice between passion and money. For me in particular it was a decision between my creative, passionate theatre side, and the serious, theoretical ‘reading heavy books’ side. The consequence of choosing the first side, which I would probably really enjoy, is that I would have to accept an insecure existence with no certainty of a stable income. The second side, which perhaps would be a bit boring, should provide me with more money and life security. Security won the competition, and to go with the completely safe option, I applied for a bachelor’s in Economics and Business. But what would have happened if there was a system in place with a certain security for everyone? What would happen if everybody got a fixed amount on his or her bank accounts every month, in the form of a basic income? To what extent would it affect the choices people make in their daily life? And especially, how would it change students’ choices?
The first ideas about the concept of basic income go all the way back to the 18th century. Thomas Paine was a political activist, philosopher, political theorist and revolutionary who believed that the government was the solution to most of our problems. He composed social programs to reduce poverty. Two centuries later several influential economists, philosophers, activists and even Nobel Prize winners, like Martin Luther King, Milton Friedman and Friedrich Hayek followed his ideas about the solution for poverty, the free money concept. As you can see, a concept that was supported by people both on the left- and right-wings of politics.
a concept that was supported by people both on the left- and right-wings of politics
What is basic income?
Basic income is a fixed amount of money supplied by the government, which each citizen of a country will get in his or her bank account. It is a monthly allowance in addition to any income received elsewhere, just enough to live a modest life. Two important aspects related to basic income are the following: basic income is both ‘universal’ and ‘unconditional’. It doesn’t matter if you’re poor or rich, working or not working, young or old, a man or a woman; it is not a favour but a human right for every citizen. Everybody will get the same amount each month.
Why is it a relevant topic today?
Not only physical labour is gradually being taken over by machines. In the future robots and algorithms will start doing middle-class work too. Examples of those middle-class jobs are those of lawyers, accountants, office workers and engineers. All those people will be obliged to find other jobs that don’t exist. The unemployment rate will rise and the gap between rich and poor will broaden widely. Our current social system with many different forms of subsidies like unemployment benefits, healthcare allowances and housing benefits (80% of the Dutch households gets some form of a benefit!), really has to change. A basic income could be the solution for these problems.
In the 1970’s there were several experiments with basic income in North America and Canada. The basic income project in the village Dauphin in Canada was called the Mincome Project and ran for four years. The main fear of the implementation of a basic income is that people will stop working. Indeed, the working hours dropped in Dauphin, but by a negligible rate. Men’s working hours dropped by 1 per cent, those of married women dropped by 3 per cent, and those of unmarried women by 5 per cent. Women mostly used the basic income for a longer pregnancy leave and students for a longer studying time, which resulted in more graduations. A lot of male teenagers chose to study instead of working right away. But the biggest outcome was a staggering 8.5 per cent reduction in hospital visits. If similar results would be achieved with basic income in the Netherlands, that would lead to an enormous cut in healthcare costs! Additionally, there was a reduction in domestic abuse and psychological problems. Sounds all very positive right?
the biggest outcome was a staggering 8.5 per cent reduction in hospital visits
What would really happen?
The longest experiment with basic income was four years. But is four years enough to really say something about the outcomes? What would actually change after a permanent implementation of basic income? Which choices in daily life would be different within this system? Will there be important changes anyway? And to return to my original question, what would be different for students?
First of all, the number of students would be expected to grow significantly. Currently, and especially with the abolition of ‘studiefinanciering’, there will be a proportion of teenagers who can’t afford to study. They don’t want to start their life with a loan and for that reason will not study at all. With a basic income, everybody is able to study, and has an equal opportunity to do so.
Secondly, it is reasonable to assume that more students will choose a subject they really enjoy in a system with basic income. A great number of students nowadays choose the ‘safe’ way and study subjects like law, economics, business or psychology. But what would happen if students don’t feel the urge to a job directly after they have finished their education? Likely there will be more time to find a suitable job that people would really enjoy. They don’t have to hurry and are not forced to accept a job just for the money. This will probably result in more prosperity and less absence due to sickness.
But a less positive consequence will be the likelihood that students will take forever to finish their education with a system of basic income. If we are all honest, we know that we are not in our most productive stage of our life. If there is absolutely no urgency to finish it in a set amount of time, it could be possible that the average graduation period would be fifteen years instead of five. Hence, there has to be some set of restrictions in place to prevent this from escalating.
A fourth important consequence will probably be the reduction in working hours for students. If basic income will be implemented, it is likely that the amount of the basic income will be around a thousand euros each month. For students that amount is like winning the jackpot! One thousand euros each month, how awesome would that be?! But why should we still work if we already have twice the amount we were used to having? There will be a lot of students who will quit their waiter or waitress jobs, because their lives are already busy enough; shopping, hanging out with friends, partying… And of course studying! But if you think about this consequence, it could be really problematic. Who will make your coffee at CoffeeCompany each morning, who will serve your bagel at the Bagels and Beans for lunch, who will sell you a film ticket at Kriterion, and who will tap your beer at the Roeter? Yes, all those employees are students, students who want to earn some extra money for an extra beer or extra shoes, but if they already have that extra money with the basic income, why would they still do those shitty jobs?
if they already have that extra money with the basic income, why would they still do those shitty jobs?
There will be important changes…
One thing is sure; the implementation of a basic income will have an enormous effect on our society. The fact that we don’t know yet what exactly will change and how we have to pay for it is a frightening idea. But we’re at a point in time that we really have to look at other options to plan our society. Maybe it is unimaginable to think that in 50 years robots will do your bookkeeping or arrange your divorce, or possibly do our lousy waiters jobs, but it is reality. I think we have to take responsibility for the next generation to let people get used to ideas about radical changes. But we also have to organize more experiments. Those outcomes in Dauphin were fantastic, but we have to think about a more realistic set-up. An experiment where the money for the program comes from the citizens itself and not from a bag of money for research. It is also important to test for longer periods of time, so we could see what would happen with people in different life stages. We don’t have to hurry things up, but it is definitely good to consider our options and don’t wait to experiment until it’s too late.