{"id":18102,"date":"2020-05-05T17:03:00","date_gmt":"2020-05-05T20:03:00","guid":{"rendered":"https:\/\/fundacaofhc.org.br\/?post_type=debate&#038;p=18102"},"modified":"2024-07-29T08:30:08","modified_gmt":"2024-07-29T11:30:08","slug":"has-the-time-come-for-universal-basic-income","status":"publish","type":"debate","link":"https:\/\/fundacaofhc.org.br\/en\/debate\/has-the-time-come-for-universal-basic-income\/","title":{"rendered":"Has the time come for Universal Basic Income?"},"content":{"rendered":"\n<p>Three factors point to the need for effective social protection mechanisms for the most vulnerable population to be created. They are: the advancement of automation and Artificial Intelligence eliminating jobs of low- and medium-skilled workers, which will produce higher structural unemployment and intensify the already growing social inequality; the likelihood of a severe environmental crisis as a result of climate change; and the possibility of other pandemics, a risk inherent to globalization, which is accentuated as climate change continues to unfold.<br><\/p>\n\n\n\n<p><strong>\u201cHence the necessity to have ongoing assistance mechanisms on hand for the neediest, they can be \u2018increased or reduced,\u2019 depending on the need, or a mix of both.\u201d<\/strong><br>Marcelo Medeiros, sociologist, and economist, and a visiting professor at Princeton University (USA).<\/p>\n\n\n\n<p><br><strong>\u201cIn the midst of a pandemic, a coalition is formed between different lines of social and economic thinking about the urgency of helping those who live paycheck to paycheck. Universal basic income (UBI) emerges as an axis of this economy with a humanistic view.\u201d<\/strong><br>Monica de Bolle, economist and a professor at the Johns Hopkins University School of Advanced International Studies (USA).<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"embed-responsive embed-responsive-16by9\"><iframe loading=\"lazy\" class=\"embed-responsive-item\"  title=\"Renda B\u00e1sica Universal - resumo do debate\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/_liAsL1uLI8?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<p>The two Brazilian academics reside in the USA and participated in the \u201c Has the time come for Universal Basic Income?\u201d webinar, at the invitation of the FHC Foundation. Spain, one of the countries hardest hit by the novel coronavirus and which has adopted stringent isolation measures to combat the pandemic, is considering adopting a UBI program as soon as possible, which has an annual budget that can reach hundreds of billions of euros.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u2018In Brazil, \u2154 of the population is vulnerable to poverty.\u2019<\/strong><\/h3>\n\n\n\n<p>According to Marcelo Medeiros, one of the leading Brazilian scholars on social inequality, about two-thirds of the country\u2019s population is vulnerable and can fall into poverty in times of crisis like the current one.&nbsp;<\/p>\n\n\n\n<p>\u201cPrograms like Bolsa Fam\u00edlia (Family Allowance, in English\u2014a social welfare program of the Government of Brazil), although insufficient, give some protection to the poorest 20%, while the richest 20% have better jobs, protected by labor laws, or have their own business, in addition to savings. But there is a hole between these two extremes: 30% to 40% of the Brazilian population that has little or no legal or financial protection and is very vulnerable to crises,\u201d he said.<\/p>\n\n\n\n<p>He cited household maids (common in Brazil), as an example, especially those who get paid per day, and construction workers who manage to have a reasonable quality of life in a normal situation, but can face great difficulties all of a sudden. \u201cAt least one-third of Brazilians need to be systematically protected, but another third also need support, even if not permanent,\u201d he said.<\/p>\n\n\n\n<p>According to the Brazilian Institute of Geography and Statistics (IBGE) data released on May 6, half of Brazilians survive on only 438 BRL per month. In other words, about 105 million people have less than 15 BRL per day to satisfy all their basic needs.<strong>&nbsp;<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u2018Brazil acted quickly, but aid will have to be extended.\u2019<\/strong><\/h3>\n\n\n\n<p>For Monica de Bolle, Brazil acted quickly in approving emergency aid to the neediest population in the amount of 600 BRL for three months. However, the healthcare and economic crises will not disappear fast and, to prevent the most vulnerable population from suffering even more from doubts and uncertainties, it is necessary not only to ensure that everyone entitled to the benefit receives it but also to extend the aid for at least six months as soon as possible.<\/p>\n\n\n\n<p>Researchers at the University of S\u00e3o Paulo estimate that 32 million workers\u2019 jobs and income are threatened due to the paralysis of economic activity and they will not be able to receive the emergency 600 BRL, either because they have a formal employment relationship or because of the restrictions of the law that created the aid, limited to two beneficiaries per household.&nbsp;<\/p>\n\n\n\n<p>\u201cIn the medium-term, the question is whether emergency aid for the poorest will become constant. One possibility is to establish a permanent basic income of a lower amount, which can be increased in times of emergency,\u201d proposed the senior researcher at the Peterson Institute for International Economics.&nbsp;<\/p>\n\n\n\n<p>According to Bolle, one conceptual difference between UBI programs (studied and proposed for decades, but not yet applied on a large scale for a more extended period) and income transfer (such as Bolsa Fam\u00edlia) is that, in principle, the former is not conditional, they have no counterpart, nor are they exclusively focused on the poorest. The Bolsa Fam\u00edlia Program (originating from Bolsa Escola) requires that the children of the beneficiary families attend school and undergo regular monitoring at the health clinic.&nbsp;<\/p>\n\n\n\n<p>The economist downplayed the idea, often raised by critics of these programs that transferring income to the most vulnerable parts of the population on a more permanent basis would result in discouraging the motive to work: \u201cThe human being has a need to be productive and play a role in society. Receiving a basic income will not provoke this natural incentive to disappear.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Who will pay the bill?<\/strong><\/h3>\n\n\n\n<p>\u201cThe answer is moral and political: Brazil\u2019s Federal Government has the margin to spend less resources on the richest and more on the poorest segment of the population,\u201d said Medeiros. Both agreed that the ideal is for UBI programs to be \u201cfiscally neutral,\u201d in other words, not to produce permanent Treasury deficits. Its adoption must be offset by a cut in other expenses and\/or an increase in the tax burden.&nbsp;<\/p>\n\n\n\n<p>The researcher from IPEA (Institute of Applied Economic Research) cited several subsidies or special lines of credit granted over time to specific sectors of the economy and society as an example of possible expense cuts, which end up benefiting mainly business owners, shareholders, and senior corporate employees. \u201cWith one hand, the Brazilian State helps the poorest, with the other it shakes hands with the richest,\u201d he said.&nbsp;<\/p>\n\n\n\n<p>Yet, according to the sociologist, the fundamental thing is \u201cto invert the Brazilian tax pyramid to relieve consumption, production, and labor, and to encumber income and wealth.\u201d<\/p>\n\n\n\n<p>The speaker also criticized pejotiza\u00e7\u00e3o, or PJ, (when companies encourage a worker to operate as a private entity and invoice the company as a client like a separate business would do) in the working world. \u201cIn Brazil, it is a terrible idea to be a CLT-registered worker (due to the high discounts on the paycheck) and a great advantage to become a Legal Entity (whose burden of taxes and contributions is much lower). It is no wonder that more and more lawyers, doctors, consultants, and other types of professionals migrate to the PJ model, with losses to public treasuries, including the corrosion of the pension budget,\u201d he explained.<\/p>\n\n\n\n<p>Also according to the economist, the Bolsa Fam\u00edlia program, which consumes just over 1% of Brazilian GDP, \u201cis outdated and well below the country\u2019s means, as we should spend at least 3% of GDP on a comprehensive program to guarantee a minimum income to all those who are really in need.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Part of the program would be able to be \u2018self-financed\u2019<\/strong><\/h3>\n\n\n\n<p>Although some proponents of UBI suggest that it should be universal, that is, include all citizens of the country, even the wealthiest, Bolle proposes that, in Brazil, it should be aimed at the almost 80 million Brazilians enrolled in the Single Registry for Social Programs.&nbsp;<\/p>\n\n\n\n<p>The economist did what she called a \u201cbaker\u2019s account\u201d: for 80 million to receive a monthly income of up to 500 BRL, around 500 billion BRL would be needed annually or approximately 8% of the GDP (the 2019 GDP was 7.3 trillion BRL, but there should be a contraction this year). \u201cIt would be very costly, but in the end, it is a question of distribution to be arbitrated by the political system\u2014the Executive and Legislative. It involves unified spending on other income transfer programs, cutting expenses for other areas, eliminating subsidies and waste, and reviewing the tax structure,\u201d he said.&nbsp;<\/p>\n\n\n\n<p>According to the economist, part of these resources would be self-financing. \u201cLower-income people generally consume everything they are paid. The increase in consumption by this portion of the population would benefit both production and services, impacting economic growth and revenue. This factor has to be taken into account,\u201d he said.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u2018Compatible with capitalism\u2019<\/strong><\/h3>\n\n\n\n<p>In addition to basic income, both speakers defended the importance of quality public healthcare and educational systems. For them, the market economy and capitalism itself are absolutely compatible with this social tripod.&nbsp;<\/p>\n\n\n\n<p>\u201cCapitalism is strong enough. The time has come for this secular wealth-producing system to be fit into new terms and conditions and be more just and supportive,\u201d said Bolle.<\/p>\n\n\n\n<p>\u201cThere is no doubt that the capture of resources by more privileged sectors of society \u2013 whether due to unbalanced income distribution, injustices in the tax system, or as a result of undue protection and advantages \u2013 undermines how the economy functions and ends up undermining capitalism,\u201d said Medeiros.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u2018Opportunity to rethink reform\u2019<\/strong><\/h3>\n\n\n\n<p>For Bolle and Medeiros, once the critical point of the pandemic has passed, it will be necessary to resume the structural reform agenda, but with a more balanced approach. \u201cThe ups and downs experienced by Brazil in the last decade taught us that fiscal responsibility must come together with social responsibility and vice versa. One cannot stand without the other,\u201d said the Princeton professor.&nbsp;<\/p>\n\n\n\n<p>\u201cWith everything that is happening in Brazil and the world, we have the opportunity to think about the more in-depth reforms that Brazil undoubtedly needs, to unite the social and fiscal axes,\u201d concluded Bolle.<\/p>\n\n\n\n<p><br><em>Ot\u00e1vio Dias, journalist, specialized in politics and international affairs, former correspondent for Folha in London and editor of the estadao.com.br website. He is currently a content editor at Funda\u00e7\u00e3o FHC.&nbsp;<\/em><\/p>\n\n\n\n<p><em>Portuguese to English translation by Melissa Harkin &amp; Todd Harkin (<a href=\"http:\/\/harkintranslations.com\/contact\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Harkin Translations<\/strong><\/a>)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Three factors point to the need for effective social protection mechanisms for the most vulnerable population to be created. They are: the advancement of automation and Artificial Intelligence eliminating jobs of low- and medium-skilled workers, which will produce higher structural unemployment and intensify the already growing social inequality; the likelihood of a severe environmental crisis&#8230;<\/p>\n","protected":false},"featured_media":18103,"template":"","tags":[532,537],"plataforma-democratica":[],"tema":[470],"tipo-debate":[],"class_list":["post-18102","debate","type-debate","status-publish","has-post-thumbnail","hentry","tag-politics-en","tag-economy-en","tema-development-and-sustainability"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Has the time come for Universal Basic Income? | Funda\u00e7\u00e3o FHC<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fundacaofhc.org.br\/en\/debate\/has-the-time-come-for-universal-basic-income\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Has the time come for Universal Basic Income? | Funda\u00e7\u00e3o FHC\" \/>\n<meta property=\"og:description\" content=\"Three factors point to the need for effective social protection mechanisms for the most vulnerable population to be created. 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