Guaranteed minimum income

Guaranteed minimum income (GMI) is a system^[1] of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by citizenship, a means test and either availability for the labour market or a willingness to perform community services. The primary goal of a guaranteed minimum income is to combat poverty. If citizenship is the only requirement, the system turns into a basic income guarantee.

Elements

A system of guaranteed minimum income can consist of several elements, most notably:

• a minimum wage, either set by the government or resulting from negotiations of employers or their organizations with trade unions;
• a calculation of the social minimum, usually below the minimum wage;
• a safety net, to help citizens or families without sufficient financial means survive at the social minimum. This may be a transfer or, in some cases, a loan, and is generally conditional to availability for work, performance of community services, some kind of social contract, or commitment to a reintegration trajectory;
• child support by the government;
• student grants and student loans;
• state pension for the elderly.

Basic income

Main article: Basic income

A basic income is granted independent of other income (including salaries) and wealth, with no other requirement than citizenship. This is a special case of GMI, based on additional ideologies and/or goals. While most modern countries have some form of guaranteed minimum income, a basic income is rare.

A basic income is a proposed system of social security, that periodically provides each citizen with a sum of money that is sufficient to live on. Except for citizenship, a basic income is entirely unconditional. There is no means test; the richest as well as the poorest citizens would receive it.

A basic income is often proposed in the form of a citizen's dividend (a transfer) or a negative income tax (a guarantee). A basic income less than the social minimum is referred to as a partial basic income. A worldwide basic income, typically including income redistribution between nations, is known as a global basic income.

Advocates

The idea of guaranteed minimum income is not new, as witnessed in this vintage cartoon.

American revolutionary Thomas Paine advocated a basic income guarantee to all US citizens as compensation for "loss of his or her natural inheritance, by the introduction of the system of landed property" (Agrarian Justice, 1795).

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' (Herold, 1955).

In 1963, Robert Theobald published the book Free Men and Free Markets, in which he advocated a guaranteed minimum income (the origin of the modern version of the phrase).

In his final book Where Do We Go from Here: Chaos or Community? (1967) Martin Luther King Jr. wrote^[2]

I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.

—from the chapter entitled "Where We Are Going"

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.^[3]

In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income in which he advocated for the Guaranteed Minimum Income and discussed Richard Nixon's GAI 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.^[4]

Modern advocates include Hans-Werner Sinn (Germany) and Ayşe Buğra (Turkey).^{[citation needed]}

Funding

Many different sources of funding have been suggested for a guaranteed minimum income:

• Income taxes
• Sales taxes
• Capital gains taxes
• Inheritance taxes
• Wealth taxes, e.g. property tax
• Luxury taxes
• Elimination of current income support programs and tax deductions
• Repayment of the grant at death or retirement
• Land and natural resource taxes
• Pollution taxes
• Fees from government created monopolies (such as the broadcast spectrum and utilities)
• Collective ownership
• Universal stock ownership
• A National Mutual Fund
• Money creation or seignorage
• Tariffs, the lottery, or sin taxes
• Technology Taxes
• Tobin Tax

See also

• Basic Income
• Basic Income Earth Network
• Citizen's dividend
• Constitutional economics
• Guaranteed Income Supplement
• Guaranteed Minimum Pension
• Homelessness in the United States
• Minimum wage
• Revenu minimum d'insertion
• Social Credit
• Social welfare provision
• Wage slavery

References

1. ^ History of Basic Income, Basic Income Earth Network (BIEN), retrieved on 18 June 2009
2. ^ Martin Luther King jr., Where Do We Go from Here: Chaos or Community? (New York: Harper & Row, 1967)
3. ^ Economists' Statement on Guaranteed Annual Income, 1/15/1968-4/18/1969 folder, General Correspondence Series, Papers of John Kenneth Galbraith, John F. Kennedy Presidential Library. Cited in: Jyotsna Sreenivasan, "Poverty and the Government in America: A Historical Encyclopedia." (Santa Barbara: ABC-CLIO, 2009), page 269
4. ^ "New Zealand Is Jolted By a Speedy Decontrol", Seth Mydans, The New York Times (24 February 1988)

External links

• Basic income for all-Philipp van Parijs, Boston Review
• "Social minimum" in the Stanford Encyclopedia of Philosophy
• Guaranteed Basic Income Studies: How it could be organised, Different Suggestions
• About a Guaranteed Basic Income: History