Podcast Center
Video Center
Webcasts
Resource Center
Events
June 06, 2016 at 10:51 AM
(Bloomberg View) – Nobody expected the conservative Swiss to approve the idea of a hefty monthly payout to everyone in the country without exception. The proposal for a universal basic income (UBI) — a monthly payout of 2,500 francs ($2,560) — was rejected by 77 percent of Swiss voters in Sunday’s referendum, just as their government recommended.
That’s a shame, because the idea of a UBI is not necessarily utopian; it just may be a bit before its time. With a less hasty, radical approach, it might still gain traction.
See also: Universal basic income should be the next big thing
The issue is now politically dead in Switzerland for many years to come, and its opponents want to put the idea to rest for good. “The organizers wanted a vote of principle,” Socialist politician Jean Chistophe Schwaab tweeted after the results came in. “So it’s the principle of UBI that has been summarily rejected.”
QuickTake universal basic income
That may be, but the Swiss initiative wasn’t a good test of the idea to begin with. For the average Swiss — with the highest income in Europe, not counting the tiny principality of Liechtenstein next door — voting against the universal basic income was a no-brainer.
The Swiss government had made clear that the scheme would be financially unfeasible. It would have required 153 billion francs ($157.3 billion) in additional taxes, a number comparable with three months’ economic output.
As Pierre Novello pointed out in the Swiss weekly L’Hebdo, “It may not have been reasonable to put such an upheaval of the nation’s entire social security system to a popular vote without any testing and at such a high cost.”
The basic income campaigners tried to sell their proposal as insurance for those who might be displaced by technology. Switzerland, however, is one of the worst countries in the world for this kind of argument. Its unemployment rate, at 3.5 percent, is evidence that nobody is being displaced, at least not yet. Even if it starts happening anytime soon, Switzerland’s hedonic goods — the cheese, the chocolate, the watches — are likely to survive any tech disruption. And the country’s biggest export sectors (its chemical and pharmaceutical industries) are already using far more intellectual than manual inputs.
The temptation for UBI activists to put the matter to a vote in Switzerland was understandable: No other country provides its citizens with such easy access to direct democracy. Grumbling is already heard about the need to make calling a referendum more difficult.
Last Sunday, a total of five measures were roundly defeated, including a bizarre proposal to run state companies as nonprofits, slashing executive pay. It’s a piece of cake to gather the requisite 100,000 signatures and put any badly thought-out proposal on the ballot.
There are better ways to put the UBI idea on the agenda. They are being tried out in some Dutch cities this year, and Finland and the Canadian province of Ontario are planning trials soon. The major obstacle to popular approval of UBI is the worry that many people would simply stop working — or even stop looking for work — if they started receiving regular checks from the government.
There’s no way to dispel that worry without running well-designed trial schemes. And even then voters may only be convinced if the tests take place in their own country. Few people in the developed world will be convinced by an experiment in Kenya; the social systems and living standards there are too different.
It also makes sense to start relatively small in terms of the UBI’s size and its cost to taxpayers. A recent paper by British economists Howard Reed and Stewart Lansley, which piqued the interest of the U.K. Labour Party, proposes an income of 71 pounds a week ($102) to every working-age adult (less for children and retirees, who’d get to keep their pensions) at the net cost of 8.2 billion pounds.
