Unconditional basic income – Only a matter of time

OPINION: Switzerland held a referendum on whether to establish an unconditional basic income.

Over last weekend Switzerland held a referendum on whether to establish an unconditional basic income. The proposal was rejected; no real surprise given the plan was somewhat ambitious in scale. However, the really interesting result is the number of people who expect this issue to stick around. Europeans are starting to view a move to an unconditional basic income as only a matter of time.

The results
With just under half of voters turning out, about 23% voted for the proposal and 77% against. In total, some 569,000 people voted for an unconditional basic income across the country. In some areas the total was much higher – for example 36% voted for the proposal in the canton of Jura.

The failure of the proposal is no surprise given its ambitious nature. The plan was to give all citizens a basic income of 2500 Swiss francs ($NZ3700 a month, $NZ44,400 a year); that is a hell of a lot of money even in the relatively expensive country of Switzerland. The proposal also contained no consideration of how to pay for the basic income. Clearly, both of these are major issues that needed to be worked through before any such proposal could proceed. These are both issues that we considered in the book, The Big Kahuna, and we even had independent consultants: NZIER check our calculations.

It may sound like a resounding defeat but the referendum has done incredible things for the profile of the unconditional basic income in Europe. In fact, by spending time to debate the pros and cons, it seems that many now believe the unconditional basic income is the way of the future.

Is UBI the future of Switzerland?
The debate about the unconditional basic income has clearly had some wins. People now understand that about half of the work done in most modern societies is unpaid – something an unconditional basic income can rectify. The UBI is also seen by 72% of the Swiss population as a useful response to automation and the risk to job security in the modern economy.

All in all, the debate has clearly just begun. Some 69% of Swiss voters expect another referendum on the unconditional basic income. That figure rises to 80% if you only count the people under 39 years old. Two-thirds believe an unconditional basic income will be introduced within two decades.

After all this debate and the referendum, 77% of Swiss people want the unconditional basic income to be tested in an area, to see what actually happens. Watch this space.

The rest of Europe
These sorts of tests are already happening in the rest of Europe.  Finland and the Netherlands already have plans to test the idea. Even the UK Labour Party is taking a close look at the UBI. The results of these trials will add to the evidence we have from experiments in Canada and the US in the 1970s.

The big concern with an unconditional basic income (other than the cost) is the fear that everyone will stop working. Of course, no one thinks they would stop working with an unconditional basic income; they just think everyone else would. It is an irrational fear that wasn’t borne out in the trials of the 1970s. Back then, the only people who worked less were young men in training (who went on to earn more as a result) or parents wanting to look after their children. Hardly an employment apocalypse.

In the next few years we will see the results of these new trials emerge and these concerns will be put to bed. After the debate in Switzerland, there is a growing recognition that it is only a matter of time before we have an unconditional basic income. It is increasingly looking like a question of when, not if.

Geoff Simmons is an economist working for the Morgan Foundation. This post first appeared on Gareth's World.

Tune into NBR Radio’s Sunday Business with Andrew Patterson on Sunday morning, for analysis and feature-length interviews.

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