to think we could solve poverty by simply giving everyone money?

[aufaniae]

This article makes a compelling argument for giving everyone a "mincome".

Why we should give free money to everyone

The basic idea is that poverty costs society money, and that it's cheaper, and of great benefit to society if everyone has a basic income, no questions asked - so no one ever drops below the poverty line. The intro says.

"We tend to think that simply giving people money makes them lazy. Yet a wealth of scientific research proves the contrary: free money helps. It is time for a radical reform of the welfare state."

They actually did a study in Canada where a whole town was on a mincome for some years, and it seems it was a great success.

I must say I find the idea compelling. What do you think?

(Please have a look at the article before responding if you can, there's some surprising and thought provoking stuff there).

Fusedog other people living in poverty already costs you money through taxes to pay for poverty-related illness and poor mental health, through higher insurance premiums because of crime, through taxes to keep people in prison who wouldn't have committed those crimes if poverty had not been a factor, through the lost income from taxes through people who did not reach their potential because of deprivation.

The John Rowntree Foundation, in its 2008 report on Estimating the costs of child poverty wrote:

"Public spending to deal with the fallout of child poverty is about £12 billion a year, about 60 per cent of which goes on personal social services, school education and police and criminal justice.

The annual cost of below-average employment rates and earnings levels among adults who grew up in poverty is about £13 billion, of which £5 billion represents extra benefit payments and lower tax revenues; the remaining £8 billion is lost earnings to individuals, affecting gross domestic product (GDP).

The conclusion is that child poverty costs the country at least £25 billion a year, including £17 billion that could accrue to the Exchequer if child poverty were eradicated. Moving all families above the poverty line would not instantly produce this sum. But in the long term, huge amounts would be saved from not having to pick up the pieces of child poverty and associated social ills."

Have you read the article yet btw?

"But what about if you don't work do you then get nothing who was please explain because I am confused "

Fusedog, this will explain

I think your assertion that you'd read and understood the thread is somewhat suspect then fusedog.

However, the idea is that everyone gets a flat cash allowance that would pay for the essentials of life (although there are huge practical problems if that includes housing as I noted above). Any earnings above that would be taxed (fairly heavily, but would not remove your entitlement to the mincome. Minimum wage legislation would probably be removed.

There would indeed still be relative poverty, but, in theory, no absolute poverty.

Oh, sorry I see you have. Yes, if you don't work you still get the Mincome, It's no strings attached.

Fusedog, benefits are not "no strings attached". The only exception was child benefit, as it was given to everyone, but even that is now means tested.

Benefits have loads of strings attached to them. People are means tested, and have to comply with loads of rules, e.g. about availability for work, who lives with them, restrictions on travel, etc etc.

There woud be no such restrictions with a Mincome (except, presumably, being resident in the country).

The whole point of the article is that people think that a Mincome would make people sit on their arses doing nothing, but in the real world, studies show that, that that's not what actually happens.

(Are you sure you read the article? It does explain this stuff).

It's a very interesting idea... Thanks for linking it.
It's a principle I fundamentally believe in: a universal benefit, whereby everyone has a 'flat rate' paid to them which provides a basic living standard, and then they are motivated to get decent jobs by getting to keep what they earn on top.

I've said on MN for many years that one of the biggest problems is the current system we have in that it acts as a disincentive. Some one on benefits starts working, and realises they are hardly any better off as they lose benefits as soon as their wages come in. Others may find that they can drop working hours, and earn overall almost as much working half the week because they get topped up to almost the same as if they work full time. Others may be working hard but have little incentive to go for even higher level jobs with masses of responsibility because they'll be taxed to buggery!

So, in theory this sounds like a great idea.

I'm not sure how certain issues would be solved though... The housing market is a really big one. A universal benefit to provide a basic level of living is NOT going to be the same in London as in Newcastle. Therefore you're already having to apply weightings to try to put people in the UK on an equal footing.

What happens to the people who do fuck up? Ok there may be fewer of them with this system, but there will still be people who piss the money away, spend it on booze, fags, run up debts etc... Do we leave them and their children without food? Or will these people end up getting more money handed to them?

The thing about trying to apply a fair system, is that it assumes that everyone is equal. I'm not talking here about people with disabilities, or illnesses, because clearly there are some people who can't live independently, or need a higher level of income to meet their basic needs if they have mobility issues etc. What i mean is you could take two people with similar levels of intelligence, from a similar educational and social background, and they won't necessarily have the same outcomes, not because one has had better life chances than the other, but simply because people are all different. Some people are prepared to work harder, take more risks, push themselves out of their comfort zone etc.

My other reservation is less clearly defined in my mind, but I have a lurking feeling that this could have an unintended outcome of reducing the role of women in the workplace and society. It would be a retrograde step if fewer women held positions of responsibility.

Overall though, surely it's got to be better than the current system, which just seems to shaft people who try to play by the rules. If you get yourself qualified and trained, and get a decent job, you see people around you who are paid not much less who may be not working at all, or working very part time hours and being topped up. The more hours you work and the higher you rise in the workplace, the more any benefits are stripped so you end up only marginally better off. There is definitely not a big enough differential between those who work and those who don't, in terms of finances.
Alongside that you have couples who remain together being shafted: eg - their adult children aren't allowed full maintenance loans at higher education, whereas a couple can split up and continue earning the same income but their children will be entitled to more loans and bursaries.

It's become a very crazy messed up place economically, this country. Surely it's about time systemic changes were seriously considered.

The article repeatedly refers to no strings attached meaning spending it on whatever they like. With a few notable exceptions, UK benefits can currently be spent on whatever the recipient chooses.

V good post janey.

Madamecastafiore no I didn't mean to be patronising, sorry if that's how it came across.

You said "You are aware that you cannot just print money aren't you?" and while I'm not saying that a Mincome should be funded by printing money, I wondered if you knew that actually, they do effectively just "print" more money.

"With a few notable exceptions, UK benefits can currently be spent on whatever the recipient chooses."

Yes, but the key difference is that there are loads of rules you have to comply with to get that money (as mentioned above) such as restrictions on who can live with you, your freedom to travel, how you spend your time, etc etc

Ps- that was a long post but I also want to emphasise the point others have made that its relative poverty which is a massive problem in the UK- and that would still exist. We aren't talking absolute poverty here. And in fact, even just 50 years ago, people would be staggered by what in 2014 is considered 'normal'. Lots of people lived in cold houses with no decent heating systems, didnt have access to all the things which people nowadays expect as a right

This mincome system would see people very quickly rise above the minimum because they would want a higher standard of living. Some families would choose for both parents to work , pushing them higher still. I suspect in reality, many people at the bottom of the pile on the mincome alone, would quickly be complaining about being 'poor'- even though they would be getting enough money to live. I think it's human nature to judge ourselves in relation to those around us, and I don't see how you change that

Janey68 I don't think I would reduce the roles of women in the workplace. It might allow women that don't want to work shit minimum wage jobs paying almost as much in childcare as they earn to stay at home and make say pension contribution out of their own pocket. Or for me it would mean I could employ some at home care for DS and maybe study full time instead of part time which would increase my potential to return to the work force.

So who'd be daft enough to get up in the morning and go to work when they could stay at home and get free money

Me.

I do it when ever I can. I have done it when I was actually worse of than I had been on benefits.

I'm not alone.

Again janey, exactly right. We've had lots of threads about relative vs absolute poverty here. I'm not sure that studies about eg Malawi etc are relevant to the UK, as we are discussing two entirely different kinds of poverty.

We have free healthcare, education, clean water, etc etc etc. We still have vast inequality but very few people live in absolute poverty.

I would too. I like working, DH does too. We'd also have enough money for childcare I'm happy with such as an au pair (currently not possible because our house is too small rather than money per se). And it would be nice to have extra - £1200 sounds like a lot but it's not going to be enough to have serious luxuries like foreign holidays, a big house, or starting any big personal projects etc.

Hazchem, if you read the various back to work threads, the women struggling with the decisions about what to do are by no means always in minimum wage dead end jobs. A load of very meaningful jobs with potential career progression hang in the balance in those first five years.

MorrisZapp interesting!

You seem to be disagreeing with the principle of mincome, but then say that Janey's first post is "v good".

I agree it's a great post - but then I read her post as broadly agreeing that it would be a good idea, while sensibly pointing out some logistical challenges that would need to be tackled.

Is that not what how it reads to you?

Incidentally, the article talks about a successful study in Canada, as mentioned earlier, not just developing countries, do you acknowledge that?

A lot of people are talking about housing costs and how it would be more expensive to live in London so a mincome would not cover those cost there but might be OK in a cheaper place.

Well a mincome solves that problem. By removing all other benefits including housing benefit then people could choose to work in an expensive place but demand a higher wage to cover their housing costs or move out and commute but demand a wage that covered travel costs plus their time of travelling in or just move away from London completely to work in a lower wage job but face much lower housing costs to compensate for that.

Housing benefit in London is a huge distortion. There is a massive shortage of housing in the booming economy of London and yet we 'pay' people housing benefit to live in houses and flats even though they dont work - which forces up the cost of housing for those that do work.

A mincome would give people more choices and more incentives and force employers to pay wages that truely covered the cost of housing.

No one would live and work in London if their wages did not cover their living costs - wages in London would have to rise and house prices and rents fall to a sensible economic level. No national minimum wage is required as employers would just have to pay the market rate to retain staff who would never come to work for less than their true cost of living.

I'm a liberal who has always supported higher taxes to fund social spending, and have said so on the thread. I agree with janey that it's a great principle but with too many practical drawbacks.

The vast majority of the UK electorate do not want to pay higher taxes. This is despite many of them having quite sophisticated knowledge of how tax and spending works.

Also - veering of the topic slightly - the current housing crisis could be solved by introducing a modern system of social housing, along the principles which the first council housing was introduced - i.e. it should be available to all who want it, not seen as a benefit to those in need.

Properly administered, this would actually create profit for the public purse (through rents) not cost us a penny.

It would also make private rents more affordable through supply and demand. There would be losers - namely private landlords, because to make a profit form rent investors would have to play a long game, but this is how it works in other countries where rents aren't so ridiculous, it would be different kind of investors who saw being a landlord as an attractive proposition.

Yes I read the Canada bit. But it was one unfinished study in a small part of Canada, forty years ago. It just doesn't seem strong enough evidence to me.

MoreBeta, very few people get to 'demand a wage' though do they? Most people are paid what their employers are willing to pay. It's a buyers market, apart from in some niche areas.

Also people don't really choose where to live in any meaningful sense. People have families, roots etc and usually don't just catch a train to where there is affordable housing and set up all over again.

Right, must actually parent my DCs for a bit! (DS has turned the living room into his camp and baby DD is now on a whirlwind path of chaos and destruction!)

Here are some interesting links I found this morning.

People are already doing research into a Mincome in this country

Calculate your Mincome

Joseph Rowntree Foundation - some interesting work on poverty here

OECD Better Life Index

" People have families, roots etc and usually don't just catch a train to where there is affordable housing and set up all over again."

People move all over the UK for work. (We did, and will probably move again). People live where they can afford.