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From: The Socialist issue 1087, 20 May 2020: Rich get handouts - workers get pay cuts

Search site for keywords: Benefits - Poverty - Capitalism - Wealth - Minimum wage - Coronavirus - Covid

Universal Basic Income: not a solution to insecurity and poverty under capitalism

Universal income in a market system would subsidise wage cuts and disguise benefit cuts, photo taxrebate.org.uk/CC

Universal income in a market system would subsidise wage cuts and disguise benefit cuts, photo taxrebate.org.uk/CC   (Click to enlarge)

Tessa Warrington, Leicester Socialist Party

Few could have imagined when the Tories won the 2019 general election that five months later they would be carrying through measures of state intervention beyond the scale even of Jeremy Corbyn's Labour manifesto.

With tens of millions now pushed into insecurity overnight by the Covid-19 lockdown, Chancellor Rishi Sunak's furlough scheme has effectively already seen the government take the step of temporarily 'nationalising' 7.5 million wages.

Following on from this, the spectre of a wave of deep, protracted global economic recession coming hot on the heels of lockdown has led to some discussion in the mainstream media on the possible value of a Universal Basic Income (UBI). Even the Pope in his Easter address suggested that "this may be the time to consider a universal basic wage"!

UBI is the idea of an unconditional, tax-free, regular payment, regardless of work status or home situation, which would replace the benefits system.

An 'Eupinions' survey showed 71% of EU and UK citizens in favour of introducing UBI, and over 100 MPs and peers across seven parties (none of them Tories) signed a letter in April by the think-tank Compass calling for a "recovery basic income" that would be "sufficient to provide economic security".

A parliamentary Early Day Motion discussing the issue also gained support from almost 100 MPs.

Many people have already fallen through the cracks of the government's present schemes and are unable to get financial help.

Beyond that, receiving 80% of a wage is simply insufficient, especially for the low paid.

While opinion polls currently show high approval ratings for the government's actions, largely due to the furlough payments, the scheme is under the control of employers, not workers, and big business is desperate to restart the economy.

UBI importantly raises the idea of a fundamental right of everyone to have an income that meets their basic needs. But would it do this?

The millions claiming Universal Credit and the soaring demand on food banks are just two indicators of the mounting social crisis and anger it is creating.

Socialists would support any improvements in living standards for the poorest in society - and for the overwhelming majority.

But internationally, none of the schemes with elements of UBI provide a decent level of income for the recipients.

Neither are many of them 'universal'; for instance, a scheme being planned in Spain wouldn't even apply to every household that is in poverty.

A genuine UBI of a decent level isn't on the agenda of any of the mainstream pro-capitalist parties because it would cost a great deal more than a targeted benefits system. So most capitalist representatives oppose the idea, including Sunak.

Blairite Labour and Tory governments have over the years moved in the opposite direction, reducing the level of present benefits.

Child benefit - previously a fixed standard payment for parents - became means-tested, with its value falling in real terms.

People were squeezed off their benefits by arbitrary changes to Work Capability Assessments.

Some UBI advocates argue that a form of UBI would be more effective than the complex system of schemes devised by Sunak.

However, the huge drop in pay swallowed by many workers under lockdown conditions, and the drops that are still to come through businesses closing or downsizing, would not be compensated for by a UBI.

Rather, we must demand that there are no job losses, the available work is shared between workers, and all workers stay on 100% of their previous pay.

Along with those measures, benefits should be increased to the level of the national minimum wage, and there should be no delay in paying them.

Proposals for variants of UBI can be found among supporters of right-wing ideology, as well as from some on the left.

A UBI test study under a right-wing coalition government in Finland, led one of the study's researchers to say: "Some found the guaranteed income increased the possibility for them to do things like providing informal care for their family or their neighbours".

Clearly, the bosses could see UBI as a means to push the burden of domestic labour even more onto working-class people.

Among other dangers is that UBI could really be welfare for capitalists rather than workers. In free-market capitalism employers would have less incentive to pay their workers a wage they could live on if they knew those workers were being paid a UBI.

Ultimately, if welfare remains in the dominion of the capitalist state then it will continue to be used to service the interests of the capitalist classes and their governments, ie the transfer of wealth from the poorest to the richest in society.

A socialist programme, on the other hand, calls for every person's needs to be met through taking the major industries and services into public ownership under democratic workers' control and management.

This would allow for the collective planning of the economy and use of the vast wealth currently hoarded in private hands, to meet the needs of all.

Automation could be used to reduce working hours without loss of pay.

Necessary work could be shared out among everyone who is able to do it, and the wealth created could then be used to provide a good standard of living for all - including those unable to work, studying or retired.

The coronavirus crisis may have exploded the level of insecurity in our society, but the underlying conditions flow from capitalism itself.

Without building a working-class movement to break with this system of profit, inequality and oppression, then it will not be possible to solve the problems faced by the millions struggling against poverty and destitution.

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The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

Inevitably, during the crisis we have not been able to sell the Socialist and raise funds in the ways we normally would.

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Article dated 20 May 2020

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Thurrock council workers striking against pay cuts, photo by Dave Murray

Thurrock council workers striking against pay cuts, photo Dave Murray

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