Colette Sheridan: Free money - a license for sloth or positive mental health?

A UNIVERSAL Basic Income (UBI) is to be tested here at some time over the next five years.

It would see adults being given an automatic payment from the State that is not means tested and is granted regardless of whether or not you have a job. It would be an alternative to in-work tax credits and core social welfare payments.

Is this something to be welcomed (‘free money’ is not something to be sniffed at) or is it a license for sloth?

In the current economic climate, with Covid-19 decimating jobs and unsettling our sense of security at every level, a UBI sounds like just what the doctor might order.

Interestingly, in the city of Stockton, California, a UBI pilot programme, providing an unconditional sum of $500 (€421) per month, saw participants spending a lot of the money on food, while the amount spent on recreation dropped to under 2% during the pandemic.

Money tends to come with a moral imperative, as exemplified in the fuss over recipients of the Pandemic Unemployment Payment (PUP) in this country having the nerve to take a holiday.

As if it is intrinsically wrong to use money given by the State (but surely stemming from tax contributions) for enjoyment purposes. As if out of work actors, writers and artists, for example, should be making themselves available for work at McDonalds or somewhere equally unsuitable for their skills.

In Stockton, which is historically the foreclosure capital of the U.S with 20% of residents falling below the poverty line, the basic income pilot, known as SEED (Stockton Economic Empowerment Demonstration) will be extended through January, 2021, because of the economic strain caused by the pandemic.

“Covid-19 has put the focus on the fact that a lot of Americans live in constant moments of economic disruption because the fundamentals of the economy haven’t been working,” said Stockton’s mayor, Michael Tubbs, speaking to the New Yorker.

Astonishingly, around 40% of Americans can’t afford a $400 emergency expense. So, an unexpected need to go to a dentist, for example, becomes a major problem. So much for the American dream where, by dint of hard work, citizens could enjoy gilded lives.

The reality for many Americans is having to work second and third jobs to keep the home fires burning.

Thanks to the SEED payment, people in Stockton have been able to cut back on work. But they’re not succumbing to idleness or drunkenness (always the fear of the well-heeled, who think they’re intrinsically better people than the poor).

Alcohol and tobacco have accounted for less than 1% of spending per month by the SEED recipients.

The basic income programme in Stockton set out to prove that it could “lead to reductions in monthly income volatility and provide income sufficiency, which will in turn lead to reduced psychological stress and improved physical functioning”.

For the pilot, which was given a million-dollar grant by the Economic Security Project, there are 125 participants. Around 40% of those chosen report being employed either full or part-time. Some 10% are carers, a sector that often fails to qualify for unemployment benefits.

The mayor of Stockton says he doesn’t regard a basic income as particularly radical but instead sees it as “this generation’s extension of the safety net” following on from social security, child labour laws, work-free weekends and collective bargaining.

Mayor Michael Tubbs first came across the concept of a universal basic income while a student over ten years ago in a course at Stanford University that covered Martin Luther King Jr’s advocacy for the idea late in his life.

The devastation wreaked by Covid-19, with jobs wiped out for many, has heightened the need to look at alternative ways of supporting citizens during the crisis and into an uncertain future.

Here, the Green Party has said that a UBI “represents a significant realignment of our current economic commitments” and it proposed to move towards a system of UBI “through gradual reform of the tax and welfare system”. It also says that UBI “is non-means tested and does not increase or decrease as someone’s income changes”.

While the system improves the wellbeing of citizens, those who argue against it say it’s not sustainable for boosting employment levels or encouraging the unemployed to find work.

In Finland, where there was a recent UBI trial involving people who were already unemployed, it resulted in happier citizens but failed to increase employment levels. There had been a desired job market stimulus. While that didn’t happen, participants reported being more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness.

And how bad? Robust mental health is worth a lot, even monetarily, given that mental health services are costly. So roll on the UBI. Although I’d baulk at, say, Ryanair’s Micheal O’Leary receiving it!