Universal income: the British want a BRL 10,000 project – 07/12/2023 – Market

The British plan to test for the first time a universal basic income program worth 1,600 pounds (R$ 9,965). The experience should last two years, and participants will be monitored to measure the program’s effects on their physical and mental health.

Monthly, 30 people will be entitled to receive the fixed amount without conditioned on the type of expense that families may have, whether they are unemployed or working.

For this, two locations in England were selected: Jarrow, in the northeast of the country, and East Finchley, in the north of London.

Researchers from the think tank Autonomy, responsible for the project, estimate that, in addition to the 1.15 million pounds (R$ 7.17 million) in two years, the benefit payments should have additional costs of around 500 thousand pounds (R$ 3.11 million) with evaluation and research.

Autonomy’s trial is still seeking funding and has no start date. “While we welcome government support for the pilot, we currently expect funding to come from private investors,” the group told Sheet.

The project foresees that participants will be selected from a list of volunteers, and 20% of the places are for people with disabilities.

The experiment will also select a control group, with people who will not receive the benefit during the same period, in order to measure the effects that the extra income caused in the beneficiary families.

When presenting the project, the Director of Research at Autonomy, Will Stronge, highlighted the importance of the investment.

“All the evidence shows that this would directly alleviate poverty and increase people’s well-being. The potential benefits are too great to ignore.”

He says that with the coming decades filled with economic shocks from climate change and new forms of automation, basic income will be a crucial mechanism for securing livelihoods in the future.

Supporter of the initiative, the co-founder of Basic Income Conversation Cleo Goodman said she expects the project to give rise to other similar proposals in the country.

“Nobody should face poverty, having to choose between heating and eating, in one of the richest countries in the world. A basic income has the potential to simplify the welfare system and fight poverty in Britain.”

“I don’t have a lot of savings and I worry about the future. When we were getting benefits when my husband was sick [na pandemia], there was nothing to save. It would ease my anxiety. I have a pretty secure job, but you never know when that’s going to change,” one Jarrow resident told researchers.

Jarrow’s choice to test the model has symbolic weight. In 1936, a group of people marched from the northeast of England to London to deliver a petition for job creation. In 2011, activists remade the march, to pass on a similar document to the Prime Minister at the time, David Cameron.

Pilot projects of this nature are underway in other countries. In Wales, for example, there is also an income program of 1,600 pounds a month for two years and aimed at young people who have just turned 18.

Autonomy told the British press that its project would be different from previous government-led pilots in that it would be driven by the two communities and their unique circumstances.

Despite the benefit of 1,600 pounds being a considerable amount, one must consider the high cost of living in the country, especially in London. According to a ranking by ECA International, the capital of the United Kingdom was the fourth most expensive in the world – behind New York, Hong Kong and Geneva.

In May, inflation in the UK stopped falling and stood at 8.7%, according to official data. Economists estimate that the chances of the Bank of England raising interest rates have increased.

Currently, the minimum wage in the UK is £10.42 (£64.90) an hour for people aged 23 and over. According to the British government, 2.9 million workers receive the minimum wage.

To try to curb the increase in the cost of living in the country, the government maintained a program of energy price ceilings and extended the freeze on fuel taxes.

The universal income model has been the subject of debates in countries around the world as a way of taking pressure off social security systems and alleviating poverty.

Discussions about the need for universal aid have gained even more strength in recent years, during the Covid-19 pandemic, when millions of families found themselves unable to work safely. Economies with a strong service sector, such as the British, were badly hurt.

In a recent article published in SheetPedro Olinto, a senior economist at the World Bank, argues that programs that are focused, as is the case of Bolsa Família, have a lower cost, but require investments in the process of selecting beneficiaries, which ends up becoming a complicating factor, given that the work is increasingly volatile.

“By contrast, universal basic income provides a constant safety net that does not require activation with every acute economic downturn. Furthermore, it can become more focused if combined with a more progressive income tax.”

For Marcelo Neri, director of FGV Social (from the Getulio Vargas Foundation), a robust experiment is still lacking in Brazil, with the intention of investigating the effects of a program like the one proposed by the British. “Usually, we start by trying to get the scale of the program right, and even then without evidence to ascertain the effects.”

“But I still think that a more focused and conditional program, like Bolsa Família, is more suited to Brazil, where there is a lot of inequality. Throwing money ‘by helicopter’ may not be the best way.”