Oz Blog News Commentary

UBI, work and unions

January 2, 2018 - 16:02 -- Admin

I’m working with Troy Henderson on a book chapter looking at union responses to the idea of a universal basic income (UBI),which have covered a range from supportive to strongly hostile, with the latter view predominant in Australia. Here’s a draft of my section of the chapter. Comments much appreciated.

UBI, work and unions

The concept of a universal basic income (UBI), has been advanced in a number of different forms, notably including guaranteed minimum income (GMI) and negative income tax (NIT). Although these policies are essentially equivalent, they have been put forward in support of radically different political agendas, ranging from a libertarian desire to eliminate the welfare state to a utopian vision of a post-scarcity society. 

As a result, the idea of a UBI has acquired a highly disparate group of supporters, and also a disparate group of opponents. In particular, trade unions have often been critical or suspicious of the concept.  It’s important for progressive advocates of a UBI to consider the grounds for this criticism and to show how a UBI policy can serve the interests of workers. 

As I’ve argued elsewhere, the most promising model to focus on is that of a  GMI, achieved by reducing and ultimately eliminating the conditionality of existing unemployment and disability benefits. as well as raising these benefits to a level consistent with a decent long-term standard of living. 

Most existing experiments with UBI-style schemes are in line with this approach: that is, participation is limited to people who are unemployed, at least at the start of the scheme. 

An unconditional GMI means that people can live decently without paid work and without being required to search for work.  However, this leaves open a crucial question: can people choose whether or not to work?

Much recent advocacy of GMI-style schemes takes it for granted that this choice is already unavailable to many, and will become unavailable to most people in the future.  The central idea, simply put is that ‘robots will take your job’. More complex and realistic versions of this argument take account of the interaction between technology and labour markets that produces the ‘gig economy’.  In this context, a GMI may be seen as easing the path of adjustment towards the replacement of paid work by involuntary unemployment.

An alternative interpretation of technological progress is that it provides us, as a society, with the resources to allow everyone a meaningful choice between paid employment and other activities, including unpaid contributions to society and creative use of leisure. To make such a choice a reality, it is necessary to combine a GMI with some form of employment guarantee and to maintain minimum wages at a level significantly higher than the GMI.

Benefits for workers and unions

The combination of a GMI and a Jobs Guarantee would greatly improve the bargaining position of workers relative to employers, both individually and in aggregate. For the individual worker, the Jobs Guarantee weaken the ability of any individual employer to threaten unemployment. Moreover, the GMI would provide an ‘outside’ option that could be taken if employers attempted to cut costs through work intensification, removal of working conditions and so on. At the aggregate level, the power of employers as a class depends, to a critical extent, on the belief that ‘business confidence’ is essential to economic prosperity.

These points imply substantial benefits to unions. The capacity of employers to resist unionisation will be reduced, and the bargaining power of unions will increase.

The closest approximation to the conditions of a combined GMI and Jobs Guarantee was the thirty-year period of near full employment during and after World War II, which also saw the establishment of most of the elements of the modern welfare state, including easy access to unemployment and disability benefits for workers (the process varied from country to country – Australia introduced unemployment benefits in 1945). During this period, workers and unions did very well, and the distribution of market income became much less unequal.

Reasons for union opposition

* Even an ideal UBI/GMI, with a Jobs Guarantee implies a fundamental transformation of society in a way in which makes paid work less central to life.  Since unions are concerned with representing people in their capacity as paid workers, this gives them a more marginal role than they had in the 20th century industrial economy.

* Unions are organized on an occupational or industry basis, and therefore have a natural tendency to resist changes that would result in the decline of their particular occupation or industry.  In this sense, there is a natural tendency to technological conservatism, sometimes reflected in the idea that long-established types of work (particularly manual work) represent ‘real jobs’ while newer jobs are not.  By contrast, the  movement towards UBI/GMI is characterized by an embrace of technological change and a focus on work associated with the 21st century digital economy.