Spain, Finland, France… universal income is gaining ground in Europe

A specter haunts Europe, the specter of universal income. Faced with the economic crisis caused by the Covid-19 pandemic, the idea of ​​a basic income paid to all citizens is gaining ground to respond to the serious recession that many predict.

Friday, May 29, Spain, one of the European countries with the highest poverty rate, took its first step towards this. The Spanish government has approved the creation of a minimum living income to be paid to the poorest. The issue of a universal income was at the heart of the coalition agreement between the Socialists and the radical left party, Podemos.

"A new social right is born today in Spain", welcomed Pablo Iglesias, vice-president of the government and leader of Podemos, after the Council of Ministers, stressing that the crisis had "accelerated entry in force "from this first step towards a universal income.

Nace el #IngresoMinimoVital, que permitirá que millones de personas miren al futuro sin miedo. Es el mayor is advancing in social development in España desde la Ley de Dependencia from 2006. pic.twitter.com/9n1ks3XRsh

For its defenders, a basic income has the advantage of protecting the most vulnerable in the face of economic uncertainties of which the current health crisis is an example while stimulating consumption. It also helps support those who are excluded from current safety nets such as self-employed workers, part-time employees or workers in the informal sector.

The idea is advancing in Europe

Spanish thinking is far from an isolated case in Europe. In Scotland, Prime Minister Nicola Sturgeon spoke publicly about it during a coronavirus briefing in Edinburgh: "The time has come for basic universal income," she said. She said that she had "constructive discussions" with the British government on the subject, with Scotland not yet having authority over the issue.

In Italy, the 5 Star Movement, in power since 2018, had campaigned on the establishment of a universal basic income of a substantial amount for all Italians. Faced with the state of Italian finances, she opted for a "citizenship income", an allowance to help the poorest.

In France, the question of universal income had entered the political debate, brought by Benoît Hamon during the socialist primary and then the presidential election of 2017. If the disastrous scores of the former deputy could have helped to bury the idea, it continues to be defended.  

The Jean-Jaurès foundation, a think tank with ideas close to the socialist party, has reworked the idea and brings out the proposal as protection against the economic crisis: it offers an unconditional income, automatic from the age of majority, declining and a amount between 725 and 1000 euros per month. On the other hand, 80 political and civil personalities signed, on May 4, a call for the establishment of a "citizen base". Corsica wants to experience it on its territory.

Oxford University study shows that 70% of Europeans support the concept of basic universal income.

And outside the old continent, the idea is starting to take hold. Pope Francis himself defended the idea in a letter to his "brothers and sisters of the popular movements" on April 12. In the United States, to keep the economy on a drip, the Republican administration of Donald Trump has included direct cash payments of up to $ 3,000 per family.

These experiments are not stricto sensu of the basic universal incomes, insofar as they are exclusively aimed at workers or poor households and that they are temporary or punctual at the moment. However, by reducing the weight of controls under beneficiaries, these experiments reinforce the idea of ​​a feasibility of the basic universal income.

Finnish experiment not repeated

Finland is undoubtedly the country where the experiment has gone the furthest. From June 1, 2017 to December 31, 2018, 2,000 unemployed workers received 560 euros each month without any compensation. This income could be combined with family allowances and wages in the event of resumption of employment.

Finnish social security made its findings on May 6, comparing with a control group of unemployed who did not benefit. The benefits of the Finnish basic income are more psychological than economic: 55% of the participants in the experiment declared that they felt in good or very good health, compared to 46% in the control group. Beneficiaries also had lower stress levels than those in the control group. However, the effect was less on returning to work: 43.7% of beneficiaries found a job, compared to 42.8% in the control group. A result which nevertheless defuses the classic and short-sighted criticism of an unemployed person sinking into assistantship with this new income.

Despite these encouraging results, the Finnish government has chosen not to perpetuate the initiative because of the too weak effect on the reduction in unemployment and fearing an increase in the deficit in the event of its generalization.

Money, the nerve of the war for universal income

It is with money that the shoe pinches. The establishment of a basic universal income, like all social benefits, requires an investment on the part of governments.

"In the crisis scenario that is emerging before us, I do not see how a government would embark on a logic of universal income, with the pressure of financial markets, banks and international financial organizations on the budgets of countries", regretted Joan Cortinas-Munoz, researcher at the Center for Sociology of Organizations at Sciences Po Paris and specialist in social policies in Spain, interviewed in April by France 24

In 2017, the OECD had thus estimated that for a universal income not to weigh on public finances, its amount should amount to 527 euros for Finland, 158 euros in Italy, or 456 euros in France. Far, however, from the respective poverty lines of these countries.

Not all critics come from supporters of liberalism. For part of the left, universal income constitutes a Trojan horse for a liberal vision of society. Universal income could be used to further liberalize the job market: as society provides a minimum income, employers would take advantage of it to lower wages. For these critics, universal income is a deviation from social security.

"In its liberal conception, universal income is supposed to replace social protection (health insurance, housing allowance, etc.). However, this is essential as so many safety nets to avoid falling into extreme poverty", notes ATD Quart World.

The idea remains hopeful for its supporters. If the Covid epidemic shaking the planet gives birth to a "next world", then universal income may well be the first germ.

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