Craig’s Story of the Year - The German UBI study

This is Common Weal’s last working week before we take a break until next year. So we’re doing something a little different with our Daily Briefing for the next few days with one of our staffers offering up their “Story of the Year”, looking back at something impactful that they’ve featured in one of our briefings or in one of their magazine articles.

First up, Head of Policy and Research, Craig Dalzell looks back to April and the publication of a German study of Universal Basic Income.

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I’ve been a proponent of a Universal Basic Income for essentially as long as I’ve been involved in politics. It was one of the ideas that really cemented in my mind that Scottish Independence wasn’t the goal in itself, but a means of achieving that goal - of social justice, equality, sustainability and a society that works for the common weal. One of Common Weal’s (with capitals) first policy papers - published before we were an independent think tank and before I was formally involved, but which certainly drew me towards the organisation - was on UBI and its potential to improve lives simply by removing the anxiety that comes from living in poverty or living with the potential of being just one mistake away from poverty.

The principle of Universal Basic Income is a simple one. Everyone in the country receives a certain amount of income in the same way that we currently do in a means tested way for some people (e.g. Universal Credit or the State Pension). The core tenants is that everyone receives the payment themselves (i.e. it’s not paid to the “head of the household” so it cannot be used coercively), that it is truly universal (even the wealthy get it despite it likely being taxed back off them - this simplifies administration, ensures that people still have a safety net should they lose their job or even let them take risks like starting a new business), and that it is sufficient to meet one’s “basic” needs.

It was a radical idea back then - almost too radical to be believable.

Which was why I was honoured in 2017 to follow up that report with one of the first costed studies of UBI in Scotland. I admit now that at the time, the main purpose of this paper was more about showing that a Scottish UBI was possible at all and to lay the groundwork for it to expand later. The version in this paper scarcely met the definition of “basic” as it was set to the UK’s own too-meagre levels of the then Job Seeker’s Allowance (£73.10 per week in 2017, £107.50 per week adjusted for inflation to 2025, a little lower than Universal Credit is now). But that paper was part of the shift that has changed the debate in Scotland. While we still don’t have a UBI and one likely isn’t possible under devolution, there is - right now - technically a Parliamentary majority in favour of one given that the SNP, Greens and Lib Dems all, at least on paper, support one (Scottish Labour support a weaker Minimum Income Guarantee that I also talked about here).

That brings me to my Story of the Year. A major study by the German Institute for Economic Research, lasting several years, looked at the impact of a UBI on people - not just on things like their poverty level or their rate of working (one of the accusations laid by detractors of UBI - and of the welfare state more generally - is that “free money” makes people too lazy to work - something that has been shown to be false in almost every UBI study to date).

I wrote about the study in our magazine but took a bit of a flipped approach to it. I imagined a world where instead of granting people a basic income and then studying the effects, we withdrew someone’s already extant basic income to see what happened to them - essentially reversing the real study’s findings.

In essence, the study found all kinds of interesting impacts. Those with a UBI worked just as much as those without but often took on jobs that they enjoyed more or that led to better study and training opportunities. They worked better and had better health outcomes (chronic stress does massive harm to the body and mind). They spent more time having fun - going on holiday, socialising, seeing family, or even just sleeping more etc - despite having the same number of hours outwith work than their non-UBI counterparts. All in, their lives were just better. UBI really does replace anxiety with almost no downsides.

I also like to couple this study with another from the EU that modelled the costs of a UBI sufficient to eliminate (not reduce) poverty across the continent. It turned out that it’s possible to design a UBI that would cost LESS than the costs currently being paid to fix or mitigate against poverty. Think of the health impacts of poverty, or the cost of social work and crisis services, or homelessness, as well as the lost productivity from work or the stunted opportunities of children who grow up in poverty. All of these impacts have a measurable cash value and summing them comes out to more than the cost to a few generally wealthier taxpayers to pay for a Basic Income that they are already paying more for because of the lack of one. This is why I’ve taken to describing UBI now as a moral imperative. It’s no longer a radical idea. It’s no longer a “nice to have” policy. It’s one that is measurably better than the world we have right now without one.

I like to say that in politics “everything seems impossible until the moment it becomes inevitable”. I’ve seen UBI cross that tipping point over the course of the past decade or so. The data is in and now very difficult to justifiably argue against. All it will take now is a few brave politicians to make it happen.

That’s why this study is my Story of the Year. If a UBI wasn’t inevitable before it, surely it must be now?