Guaranteed minimum income
Guaranteed minimum income, also called minimum income, is a social-welfare system that guarantees all citizens or families an income sufficient to live on, provided that certain eligibility conditions are met, typically: citizenship and that the person in question does not already receive a minimum level of income to live on.
The primary goal of a guaranteed minimum income is reduction of poverty. Under more unconditional requirements, when citizenship is the sole qualification, the program becomes a universal basic income. Unlike a guaranteed minimum income, UBI does not typically take into account what a recipient already earns before receiving a UBI. A form of guaranteed minimum income that considers income as a criterion is the negative income tax. In this system, only individuals earning below a certain threshold receive subsidies.
Elements
A system of guaranteed minimum income can consist of several elements, most notably:- Social safety net that helps those without sufficient financial means survive through payments
- State child support, student loans and grants
- State pensions or social pensions for the elderly
- Disability pensions for those who physically can not work
History
Pre-modern antecedents
Persian monarch Cyrus the Great, whose government used a regulated minimum wage, also provided special rations to families when a child was born.Cash assistance GMI was first documented by the third century BCE Greek philosopher, Aristotle, in his review of the Athenian Constitution. The modern equivalent would be a safety net program for people with less than $1,000 USD in savings to receive $20 USD per day.
The Roman Republic and Empire offered the Cura Annonae, a regular distribution of free or subsidized grain or bread to poorer residents. The grain subsidy was first introduced by Gaius Gracchus in 123 B.C., then further institutionalized by Julius Caesar and Augustus Caesar.
The first Sunni Muslim Caliph Abu Bakr, who came to power in 632 C.E., introduced a guaranteed minimum standard of income, granting each man, woman and child ten dirhams annually. This was later increased to twenty dirhams.
17th to 19th century
In 1662, English demographer John Graunt included in his book, Natural and Political Observations Made Upon the Bills of Mortality, an argument for GMI based on statistics collected from Bills of mortality. According to the historian of statistics Ian Hacking, this was a new method of argument for an already widespread proposal, and that advocacy for a GMI began at least thirty years before that.In 1795, American revolutionary Thomas Paine advocated a citizen's dividend to all United States citizens as compensation for "loss of his or her natural inheritance, by the introduction of the system of landed property".
In the 19th century, French Emperor Napoleon Bonaparte echoed Paine's sentiments and commented that 'man is entitled by birthright to a share of the Earth's produce sufficient to fill the needs of his existence'. The American economist Henry George advocated for a dividend paid to all citizens from the revenue generated by a land value tax.
20th century
1960s
In 1963, Robert Theobald published the book Free Men and Free Markets, in which he advocated a guaranteed minimum income.In 1966, the Cloward–Piven strategy advocated "overloading" the US welfare system to force its collapse in the hopes that it would be replaced by "a guaranteed annual income and thus an end to poverty".
In his final book Where Do We Go from Here: Chaos or Community?, Martin Luther King Jr. wrote
In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.
In 1969, President Richard Nixon's Family Assistance Plan would have paid a minimum income to poor families. The proposal by Nixon passed in the House but never made it out of committee in the Senate.
Other
American economist Milton Friedman began advocating a basic income in the form of a negative income tax in the early 1940s. He discusses the proposal his 1962 book Capitalism and Freedom and his 1980 book Free to Choose.In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income, in which he advocated the guaranteed minimum income and discussed Richard Nixon's Guaranteed Annual Income proposal.
In 1987, New Zealand's Labour Finance Minister Roger Douglas announced a Guaranteed Minimum Family Income Scheme to accompany a new flat tax. Both were quashed by then Prime Minister David Lange, who sacked Douglas.
In his 1994 "autobiographical dialog", classical liberal Friedrich Hayek stated: "I have always said that I am in favor of a minimum income for every person in the country".
21st century
In 2013, the Equal Life Foundation published the Living Income Guaranteed Proposal, illustrating a practical way to implement and fund a minimum guaranteed income.In 2017, Harry A. Shamir published the book Consumerism, or Capitalism Without Crises, in which the concept was promoted by another label, as a way to enable our civilization to survive in an era of automation and computerization and large scale unemployment. The book also innovates a method to fund the process, tapping into the underground economy and volunteerism.
Other modern advocates include Ayşe Buğra, The Green Economics Institute, and Andrew Coyne.
Funding
Tax revenues would fund the majority of GMI proposals. As most GMI proposals seek to create an earnings floor close to or above poverty lines amongst all citizens, the fiscal burden would require equally broad tax sources, such as income taxes or VATs. To varying degrees, a GMI might be funded through the reduction or elimination of other social security programs, such as unemployment insurance.By country
Australia
As of 2022, the Australian Greens support a Liveable Income Guarantee of $88 per day; meaning all those who do not have an income of at least this figure would be raised to this amount. This would raise all Australians above the Henderson poverty line.Austria
Social assistance is the last social safety net provided by the state. Social assistance is only granted if people cannot secure their livelihood either through their own efforts or through family assistance or on the basis of a social insurance or other benefit entitlement. Due to other existing benefits in Austria, many people are not dependent on social assistance.Brazil
Minimum income has been increasingly accepted by the Brazilian government. In 2004, President Lula da Silva signed into law a bill to establish a universal basic income. This law is primarily implemented through the Bolsa Família program. Under this program, poorer families receive a direct cash payment via a government issued debit card. Bolsa Família is a conditional cash transfer program, meaning that beneficiaries receive their aid if they accomplish certain actions. Families who receive the aid must put their children in school and participate in vaccination programs. If they do not meet these requirements, they are cut off from aid. The program has been criticised as vote-buying, trading productive individuals' earning for the votes of welfare recipients As of 2011, approximately 50 million people, or a quarter of Brazil's population, were participating in Bolsa Família.Canada
Canada has experimented with minimum income trials. During the Mincome experiment in Manitoba in the 1970s, Mincome provided lower-income families with cash transfers to keep them out of poverty. The trial was eventually ended but this was due to budget shortfalls and a change in government.The province of Ontario began a minimum income experiment in 2017. Approximately 4000 citizens began to receive a stipend based on their family situation and income. Recipients of this program could receive upwards of $10,000 per year. Government researchers used this pilot as a way of testing to see if a minimum income can help people meet their basic needs. On 31 August 2018, following a change in government, incoming Premier Doug Ford announced that the pilot would be cancelled at the end of the current fiscal year.