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Scotland Prepares to Experiment With Universal Basic Income

Scotland Prepares to Experiment With Universal Basic Income

Jed Oelbaum

 Scotland First Minister Nicola Sturgeon at the Scottish National Party's autumn conference. She's an enthusiastic supporter of universal basic income feasibility studies. Photo by Mark Runnacles/Getty Images News / Getty Images

Scotland First Minister Nicola Sturgeon at the Scottish National Party's autumn conference. She's an enthusiastic supporter of universal basic income feasibility studies. Photo by Mark Runnacles/Getty Images News / Getty Images

Scotland has become a testing ground for one of the world’s hottest policy ideas, as a tide of interest in universal basic income has swept the country over the last year. Glasgow and Edinburgh city councils, as well as the regional councils for Fife and North Ayrshire, have each begun developing experiments that track what citizens do when they receive no-strings-attached cash payments to supplement their incomes or replace their current social welfare benefits.

A radical departure from the need-based way most countries currently approach their social safety nets, universal basic income usually involves sending money to every citizen, rich and poor alike. This might sound counterintuitive, given that welfare systems all over the world are already straining to cover the needs of the poor and unemployed alone. But proponents believe building a sturdy, unconditional economic floor would not only fight poverty, but would also create stability in an increasingly volatile labor market. And by replacing complex welfare systems with a universal payment, the argument goes, overhead costs associated with distributing government money would be greatly reduced, helping to offset the expected high price tag on a basic income program.

Jamie Cooke, head of the Royal Society of Arts Scotland (RSA), which helped local councils develop basic income proposals, says his organization began producing research and lectures on the subject a couple years ago, “without necessarily thinking we'd be successful in pushing forward. But the idea stuck.” Now the RSA is working with authorities in cities like Glasgow to manage trial efforts and design on-the-ground tests.

Against the backdrop of the area’s struggles with poverty, a basic income “really addressed what Glasgow was trying to do as a city,” says Cooke. Overall, more than a million people in Scotland—a little less than a fifth of the population—and more than 25 percent of the country’s children live in relative poverty. And in GIasgow—even as Scotland’s largest city is praised for its inviting restaurants, galleries, and a “blossoming modern side”—many residents are barely scraping by. In fact, a confluence of poverty’s health and social tolls have led to scarily low life expectancies in some parts of the city, a phenomenon dubbed “the Glasgow Effect.”

Cooke says that once Glasgow decided to build a pilot project last February, “interest really started to build up in other cities.” But even more heartening, he says, “the Scottish government has been excited by the interest in the concept.” Adding to local momentum, Scottish First Minister Nicola Sturgeon has expressed support for the trials, telling members of Scottish Parliament in September that a country-wide basic income is “an idea that merits deeper consideration.”

Sturgeon made it clear she considered the local trials a way to gather information on the feasibility of bringing a basic income to all of Scotland. “The Scottish Government will work with interested local authorities to fund research into the concept and feasibility of a citizens’ basic income, to help inform Parliament’s thinking for the future,” she said.

In Scotland and other developed countries where UBI discussions are taking off, even as stock markets boom and productivity hits record highs, many workers still struggle to make ends meet in the face of foundering wages and rising living costs. Steady jobs, especially for young people, are growing more elusive as full-time salaried positions are replaced with part-time, short-term, and freelance posts. And from trucking to law practice, almost every industry is grappling with a new generation of artificial intelligence and automation technologies that could render whole job categories obsolete.

“The changing labor market is the most serious argument for us to consider universal basic income,” says Maria Nedeva, a Manchester Business School professor who studies the effects of policy-driven change, and speaks at conferences about basic income. Some jobs are just not coming back, she says, and we should expect that “a significant population will be underemployed and undersustained for at least some time in their lives.” In Scotland, like the rest of the U.K., says Nedeva, “we already have people who have been unemployed or underemployed for generations.”

But the current welfare order serving Scotland’s poor and unemployed locks them into a system where they spend a significant amount of time and effort just maintaining their benefits, says Nedeva. The onerous office visits, paperwork, and penalties could be disrupted with a basic income program, she says, which would clear the way for job training and greater economic participation. Many of those getting state assistance face a tipping point, where a given amount of income from part-time or temporary work would trigger the loss of their benefits; this creates a dilemma for participants, who must choose whether to gamble on a new job that may not even cover all their expenses, or stick with their steady government check. A basic income would allow people who might never have a full-time job—whether due to the fast spreading gig economy, mental or physical health limitations, or family care burdens—to at least do some work, without worrying about falling into such a trap. “I think within a rapidly changing world, watching opportunity itself changing, I think you have more context for allowing people to make their own decisions,” says Cooke.

With initial funding in place to plan the trials, Cooke says the four participating local authorities are crunching the numbers, figuring out what data to track, and studying other countries’ basic income projects for lessons.

Though basic income is not a new concept, the last few years have seen an explosion of experiments and pilot projects that aim to find out if it could work in the real world. Finland, for example, is in the midst of a wide-ranging trial to see if people become happier and more productive when their unemployment benefits are switched to a basic income model. A pilot in Western Kenya, recently kicked off by nonprofit GiveDirectly, will see residents of a single village receive a basic income for 12 years, and will act as the first step of a larger study that will eventually include 26,000 people. In Canada, 4,000 low-income Ontario residents are participating in a three-year program, and 20 Dutch cities are all giving some form of basic income a try. Even in the United States, Silicon Valley startup accelerator Y Combinator has already funded one small program and recently announced plans for an expanded pilot across two states. “We're working closely with folks involved in the pilots in Finland and Canada,” says Cooke.

Cooke explains there are two common approaches to basic income tests. One focuses on individual demographic groups across different areas—like Finland targeting the unemployed— to get an idea of how that people in those specific groups will react to the introduction of unconditional benefits. The other approach targets a geographic area, he says. “like a neighborhood in a city like Glasgow or a small town in Fife, for example. And basic income is provided to everyone in that area, so you're cutting across different social demographics.” The latter option is “the approach that's more favored to try in Scotland,” says Cooke.

 Glasgow. Image by  John Lindie  via Wikimedia Commons

Glasgow. Image by John Lindie via Wikimedia Commons

Not only would a geographic strategy illuminate how basic income impacted a region in aggregate, but it would provide the kind of class-spanning data Cooke thinks is needed to support a serious, national-level basic income conversation. Unfortunately, focusing on an area is also the more expensive option because it’s more comprehensive and requires more administrative overhead; Cooke thinks the trials will likely have to hybridize the two approaches, or at least alternate approaches between cities to gather the most overall data.

But in projects like Scotland’s, “we have to be very upfront about what we can and cannot test for within the process,” says Cooke. “I mean, I think one of the frustrating things with basic income is that some of the key aspects are due to longevity. You can make decisions about how you live your life if you know you're going to receive a payment every month in perpetuity. If, say, you'll be part of an experiment for two or three years, you know your work concerns are going to continue after that time.”

The amount of money each citizen should receive is also a key factor; if it’s too much, the incentive to work suffers and a basic income project could become overwhelmingly expensive to implement. And if the amount is too low, the basic income will not provide the kind of security it’s intended to and fail. A proposal by the Scottish Green Party, which has supported a basic income in Scotland for decades, suggested that in a national program, adults could be given £100 per week, pensioners would get £150, and children under 16 would receive £50.

Nedeva points out that even if the trials go well, there’s no particular clear path to enacting a basic income on a Scottish national level, despite the First Minister's support for exploring the idea. “If they decide to introduce it as proper universal basic income, for the whole of Scotland, legally the Scottish ministers don't have full discretion over the welfare and tax systems of the U.K. They would have to somehow negotiate with Westminster”—that is, of course, unless Scotland one day breaks away from the U.K.

A 2014 independence referendum failed, but Nedeva believes a basic income scheme would be popular among Scots, and for Sturgeon and the SNP, “may be one of the things that sways opinion in Scotland back to voting for independence.” (Sturgeon maintains that Scotland will leave the U.K. within a decade.)

For now, most of the opposition to the idea of a Scottish basic income comes from concern over the high potential cost of such a program, and the significant tax increase it would require (though most lower and middle-income people would ideally have any tax increase negated by their basic income payments.) And estimates for the cost of a program in Scotland, from both supporters and critics, are all over the place, ranging from £7.8 billion to £12.3 billion to £28 billion, depending on how generous payments would be and which social services would be replaced. After a critical civil service report on basic income was made public in October, Adam Tomkins, the Scotland Conservatives' social security spokesman told the Telegraph, “Nicola Sturgeon and her finance team were told in no uncertain terms that a scheme for citizen’s basic income would be utterly unaffordable and not remotely sustainable.”

Yet, the concept still draws interest from all over the ideological spectrum. Cooke says he’s seen support among Scottish conservatives on the local level, especially in Fife. “We find a lot of interest from the right on basic income in Scotland around ideas of entrepreneurial behavior, how it would support people to start new businesses and create new opportunity,” says Cooke.

Though for the most part, “We're coming at it fundamentally from a social justice and fairness perspective so far,” says Cooke. “It's around the idea of having a society that actually does something about the massive inequality that we see, that tries to share opportunity better.”

Cooke talks about the experiments in Scotland not only as local projects, or even a step toward a Scottish national program, but also as a conscious attempt to complement those tests going on in other countries. Whether Scotland eventually adopts a universal basic income or not, the information gleaned from these pilots could help local governments navigate growing poverty and a precarious economic future. Nedeva, for example, thinks these policies are the only way to avoid eventual widespread social unrest. Basic income, says Cooke, “responds to the social challenges that we face now, but also starts to prepare a base foundation for the kind of world we'll be moving into.”

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