Universal guaranteed income

by Elfren S. Cruz (The Philippine Star), 7 May 2020

A universal basic income (UBI) is a guaranteed income sufficient to meet a person’s basic needs. While there may be different versions, the basic features would be that it is unconditional, automatic, non-withdrawable, individual, and is a right.

When I first wrote about this a few years ago, this was still considered as a “leftist,” extremely radical idea. It started being included in mainstream political debates a few years ago when articles and debates started appearing regarding the potential effects of artificial intelligence (AI) on the future of work. It was predicted that the number of available jobs would be significantly reduced. Many types of jobs would also disappear. For example, automated vehicles will not require drivers and lead to the elimination of many types of jobs such as those of truck drivers and taxi drivers.

The coronavirus pandemic has, however, made guaranteed income a necessary economic tool for countries all over the world, including the Philippines. The COVID-19 has forced governments to lockdown entire economies for public health purposes. The result is that the harsh truth about the gap between the very few rich and the vast majority of the middle class and the poor has been publicly revealed. We now realize that literally most people live on a day to day basis – construction workers, tricycle drivers, sidewalk vendors, farm laborers, janitors, retail store clerks and so on. Even the middle class cannot afford to be unemployed beyond a few weeks – teachers, office clerks, small business owners, small farm owners, and so on. The failure to earn a living even just for a few days would be disastrous for them and their families.

Governments all over the world were forced to resort to a program that was condemned as radically socialist just a year ago. Even countries like the Philippines whose economic experts said could not afford these programs had to keep quiet and accept the inevitable. Without a guaranteed income of some sort, there would be widespread hunger and social unrest. Money had to be found and was found to finance this program. In the Philippines the result was a combination of relief goods and guaranteed income of P5,000 to P10,000. There was no means of testing, which meant every household was recipient of the program, whether someone in the household was working or not.

This pandemic also exposed the fact that millions of people live in the informal sector without any protection or any benefits. The stories at the checkpoints revealed their depressing plight. There is the story of a woman in her eighties who makes a broom every day and walks to the town center every day to sell the broom and earn enough to buy food for one meal.

In a letter to the World Meeting of Popular Movements published last Sunday, Pope Francis wrote about these types of workers:

“This may be the time to consider a universal basic wage to acknowledge and dignify the noble, essential tasks and to achieve the ideal of no worker without rights.

Many of you live from day to day without any type of legal guarantee to protect you …street vendors, recyclers, carnies, small farmers, construction workers, dressmakers, the different kinds of caregivers: you who are informal, working on your own or in the grassroots economy, you have no steady income to get you through this hard time ….”

The COVID-19 exposed the severe income inequalities in our country. A guaranteed basic income is one way to address these inequalities. This lockdown shows that the means can be found if the leadership is ready and willing to seriously eliminate poverty.

Living wage

After watching all those social media videos of families pleading for them to be allowed to work just to earn a few pesos a day, and seeing their living conditions is another issue to be addressed immediately. After people were told to practice distancing, I saw on social media a mother explaining that in their small single room shack there were two families living together. Her family stayed on the ground floor and the other family stay on what could be described only as a platform right below the roof.

A living wage is the wage level that allows a family of five to live a decent life. According to Secretary Pernia when he was still NEDA head, in the Philippines a living wage would be P42,000 a month. In a 2011 ADB study, their estimates show that 87 percent of the workers in Thailand are earning at least the living wage rate. In Vietnam and Sri Lanka it is 71 percent and 56 percent respectively. It is less than half of the workers in India, Nepal, Pakistan and the Philippines that reach the living wage rate. That is why I have never agreed with the justification by local businessmen to keep minimum here low to remain competitive. If that is true, then why are we not competitive with Thailand and Vietnam where a higher percentage of workers earn a living wage.

Catholic Social Teaching is the Catholic doctrine embodied mainly in the papal encyclicals on matters of human dignity and the common good. For over a century, Catholic Social Teachings have pushed for a living wage. This is based on the belief that people who work full time should not have to raise their families in poverty as millions now do.

For those who believe that the Philippines’ minimum wage is a just and living wage, I dare them to try and live on the wage level for just one month.