π Economics
Has the pandemic revived debate over universal basic income?

Would universal income eliminate ‘bulls**t’ jobs?

Richard Robert, Journalist and Author
On October 13th, 2021 |
4 mins reading time
Would universal income eliminate ‘bulls**t’ jobs?
Philippe Van Parijs
Philippe Van Parijs
Guest professor at the Universities of Louvain and Leuven
Key takeaways
  • The idea of a universal minimum income gained momentum in 2016 thanks to an experiment in Finland, a Swiss referendum and French presidential candidate Benoît Hamon.
  • Then, in 2020, during the pandemic it became a much less outrageous idea to pay everyone – albeit temporarily – an individual income.
  • For Philippe Van Parijes, a modest basic income that would not entirely replace pre-existing social welfare schemes could largely fund itself.
  • Moreover, he believes that an unconditional universal income could help to eliminate so-called ‘bulls**t’ jobs and encourage occupations that pay little or irregularly but are meaningful in themselves.

The rise of the uni­ver­sal basic income (UBI) con­cept has sur­prised even its advo­cates. It is a rad­i­cal and dis­rup­tive, yet pos­si­ble, inno­va­tion that could rein­vent the labour market.

The con­cept of UBI was con­sid­ered utopi­an for a long time but is now tak­en seri­ous­ly in pub­lic debate. How do you explain this development? 

Philippe Van Par­i­js. In the 1980s, the idea of an uncon­di­tion­al basic income (UBI) aroused the curios­i­ty of a few philoso­phers but received lit­tle inter­est from pol­i­cy­mak­ers. The con­cept has since spread grad­u­al­ly, and more quick­ly in 2016 with the announce­ment of the exper­i­ment in Fin­land, the Swiss ref­er­en­dum, and the vic­to­ry of Benoît Hamon dur­ing the pri­ma­ry elec­tions of the French left. Soon after, there was the cam­paign of Andrew Yang for the Demo­c­ra­t­ic Par­ty pres­i­den­tial nom­i­na­tion in the Unit­ed States and more-or-less spe­cif­ic and thought­ful state­ments from var­i­ous per­son­al­i­ties such as Mark Zucker­berg, Yanis Varo­ufakis, Beppe Gril­lo and even more recent­ly, Pope Francis.

So, where is this grow­ing pop­u­lar­i­ty com­ing from? Fun­da­men­tal­ly, from the fact that peo­ple no longer believe that the accel­er­a­tion of growth can pro­vide a struc­tur­al solu­tion to solve the prob­lem of unem­ploy­ment and pover­ty. As peo­ple get wor­ried about the health of our plan­et and the well­be­ing of its inhab­i­tants, the dis­arm­ing­ly sim­ple idea of pay­ing each and every one of us an uncon­di­tion­al basic income seems all the more promis­ing. It could free us both from the employ­ment trap and from the unem­ploy­ment trap. Then the Covid-19 pan­dem­ic hap­pened, cre­at­ing a sit­u­a­tion where pay­ing each cit­i­zen an income with­out any con­di­tions or require­ments was no longer con­sid­ered so shock­ing after all – even in Trump’s Amer­i­ca!  Many peo­ple all over the world realised that with the floor pro­vid­ed by such an income, our soci­eties and our economies would be bet­ter equipped to face this shock and those that lie ahead.

You insist on the nec­es­sary dis­tinc­tion between exist­ing social ben­e­fits and a uni­ver­sal basic income (UBI). Can we com­pare their amounts and the pro­por­tions of GDP that they represent?

We can, but the rel­e­vance of such a numer­i­cal exer­cise is lim­it­ed if we are to dis­cuss the eco­nom­ic or polit­i­cal fea­si­bil­i­ty of UBI. The share of GDP required to pay every indi­vid­ual a giv­en amount is, of course, a mul­ti­ple of the GDP share need­ed to sup­ple­ment insuf­fi­cient pri­ma­ry incomes up to that amount. But this gross cost is not the most impor­tant thing. Rather, in a devel­oped social and fis­cal state, UBI would replace both low­er social incomes as well as the low­er brack­et of all high­er social incomes on the one hand, and tax exemp­tion of the low­er brack­ets of all per­son­al income on the oth­er. For these two rea­sons, a mod­est UBI – let’s say €600 –, which could not entire­ly replace con­di­tion­al social wel­fare, would be large­ly self-financed. Since some house­holds stand to gain, in par­tic­u­lar part-time work­ers, there would be a net cost to be cov­ered by increas­ing some tax­es. But this net cost is very low com­pared to gross cost. In the case of France, this type of cal­cu­la­tion was done by Marc de Basquiat, for example.

Against the back­ground of this pure­ly sta­t­ic exer­cise, we can spec­u­late about the impact of the mea­sure on the behav­iour of eco­nom­ic agents and there­by on GDP: the pos­si­ble real eco­nom­ic cost. The cru­cial issue is not labour sup­ply but human cap­i­tal. While intro­duc­ing UBI cuts effec­tive tax rates on very low incomes, it nec­es­sar­i­ly increas­es them in high­er brack­ets, and it can there­fore be sup­posed to decrease the finan­cial return of addi­tion­al edu­ca­tion. How­ev­er, it would also facil­i­tate the flow in and out of employ­ment, unpaid work (espe­cial­ly parental duties) and edu­ca­tion, through­out life. How will this impact human cap­i­tal? It is impos­si­ble to say, with­out know­ing how our edu­ca­tion sys­tems will adapt to the demands of the 21st century.

The con­cept of UBI opens a breach in rep­re­sen­ta­tion where­by our income cor­rect­ly reflects our wealth or social assets that we pro­duce as indi­vid­u­als. This change of rep­re­sen­ta­tion which recog­nis­es the “col­lec­tive” share in pro­duc­tion is inspir­ing. But do we have the means to quan­ti­fy it?

We do not and we nev­er will. Wealth today is the com­bined prod­uct of mate­r­i­al resources pro­vid­ed by nature or cre­at­ed by our pre­de­ces­sors, tech­nolo­gies devel­oped over time, knowl­edge and skills trans­mit­ted through edu­ca­tion and the work we pro­vide. It is not only empir­i­cal­ly but also con­cep­tu­al­ly impos­si­ble to assign a pre­cise pro­por­tion of the final prod­uct to each of these fac­tors. How­ev­er, it is not dif­fi­cult to realise that the share of our income which we can claim to ful­ly deserve because it is attrib­uted sole­ly to our work is very mod­est at best. As the Nobel Prize win­ner Her­bert Simon not­ed, When we com­pare the poor­est with the rich­est nations, it is hard to con­clude that social cap­i­tal (tech­nol­o­gy, and espe­cial­ly orga­ni­za­tion­al and gov­ern­men­tal skills) can pro­duce less than about 90 per­cent of income in wealthy soci­eties » It fol­lows, he wrote, that, if we estab­lished a 70% lin­ear tax to fund a uni­ver­sal basic income and all oth­er pub­lic expen­di­tures, “this would gen­er­ous­ly leave with the orig­i­nal recip­i­ents of the income about three times what, accord­ing to my rough guess, they had earned”.

One of the argu­ments often pushed for­ward against UBI is the “dis­in­cen­tive” to work. Have we iden­ti­fied in our soci­eties an amount above which the desire to work drops abrupt­ly? We have not and we won’t. The incen­tive to work cer­tain­ly does not depend sole­ly on the amount of mon­ey we have aside from work. It also depends on mar­gin­al income. And it depends even more on the mean­ing that labour can have for work­ers. The uni­ver­sal basic income is a tool that the mar­ket can use to elim­i­nate so-called ‘bulls**t’ jobs. On the oth­er hand, there are occu­pa­tions with such an intrin­sic qual­i­ty that very or irreg­u­lar mod­est salaries suf­fice to attract many work­ers even if they have the means to pro­vide for their needs inde­pen­dent­ly. These are the jobs that are sys­tem­at­i­cal­ly pro­mot­ed by a UBI.