The pandemic is encouraging tests of universal basic income and job guarantees

Whether the spike in popularity and research will translate into a wave of action is an open question. But some, like Jardine, see reason for optimism.

The crisis catalyst

Throughout history, times of crisis have produced large changes in the role government plays in our lives. Out of the Great Depression came former President Franklin Delano Roosevelt’s plan to distribute social security checks in the United States, for example, while the foundations of universal health care in Britain were laid during World War II.

Experts see the coronavirus pandemic as a world-changing event that could result in a similar tectonic shift.

“Big political changes generally do follow big upheaval events,” said Daniel Nettle, a behavioral scientist at Newcastle University.

Universal basic income, in its purest form, means giving money to everyone, regardless of how much they earn, so they can have greater freedom to move between jobs, train for new positions, provide care or engage in creative pursuits. Interest in the concept has risen in recent years, driven by concerns that automation and the climate crisis would lead to a mass displacement of workers.

The rapid blow to the economy dealt by the pandemic has also left policymakers scrambling for quick solutions, said Yannick Vanderborght, a professor at Université Saint-Louis in Brussels, who specializes in universal basic income. The broad distribution of aid therefore has greater appeal, since it can theoretically be rolled out faster than more targeted measures.

“The problem is we need urgent economic support” for large groups of workers, Vanderborght said.

Pilot projects begin

As enthusiasm grows for such policies, researchers are taking new steps to study their effectiveness.

The trial of universal basic income in Germany — run by the German Institute for Economic Research in Berlin (DIW) in partnership with the nonprofit Mein Grundeinkommen — is now sorting through millions of applicants. Financed by roughly 150,000 private donors, experimenters aim to begin distributing money to 120 individuals starting in spring 2021.

The study will last for three years. It will also track 1,380 people who do not receive the extra cash as a point of comparison.

Participants will be asked to complete regular questionnaires during the study. Questions will range from how many hours they’re working to inquiries about mental wellbeing, values and trust in institutions, according to Jürgen Schupp, a senior DIW research fellow who is managing the project. Those who receive €1,200 each month will be asked to disclose how they’re using the money.

There’s no guarantee, of course, that the study will show that universal basic income has broad benefits, even though it’s generated significant attention from supporters of the concept.

“We want to convert this engagement into basic scientific knowledge,” Schupp said.

The job guarantee pilot in Austria, meanwhile, kicked off in October. It will also last for three years.

The program, which is funded by a regional division of Austria’s public employment service, aims to provide paid, long-term jobs to roughly 150 residents of Marienthal — the subject of a seminal study on the effects of long-term unemployment in the 1930s — who have been unemployed for at least a year. Those who opt in will enroll in a two-month training course before starting a job that matches their skillset, from gardening to child care or home renovations.

“The primary goal is to provide social inclusion, meaning and a source of income to the participants,” said University of Oxford professor Maximilian Kasy, who co-designed the study. Participants will also be asked to fill out regular assessments on their daily routine, personal health and involvement in the local community.

Sven Hergovich, managing director of the employment service, started pitching a job guarantee program for Marienthal before the pandemic hit. But the employment crisis sparked by Covid-19 has made it even more crucial, he said.

“It is time to find new ways [to fight] long-term unemployment,” Hergovich said.

Will there be action?

As researchers gather data from the pilot programs, political momentum for overhauling social safety nets is building.

But experts note that the loose coalition of universal basic income supporters still contains major divisions.

There’s huge dissent, for example, on whether such programs should stem from deficit spending or higher taxes on the wealthy, as well as whether payments should only go to those in need — which would mean they wouldn’t be truly universal.

Jardine, for example, thinks universal basic income should replace the current UK welfare system, while also providing people such as caretakers and gig economy workers with regular infusions of cash. But she isn’t convinced that payments should be made to those above a certain income threshold.

“When you have to turn it from an interest to a program, you start to see some inconsistencies,” said Tim Vlandas, a University of Oxford professor of comparative social policy.

And such ideas still have plenty of opponents. The Conservative government under Boris Johnson in the United Kingdom maintains that universal basic income would be too expensive and reduce incentives to work, while failing to reach those who most need help. Chancellor Angela Merkel’s coalition government has also expressed concerns it could lead to a decline in employment.

Critics also raise fears about the broader economic ramifications of such policies. Some worry, for example, that providing a universal basic income could lead to a spike in inflation.

Jardine, for her part, acknowledges the uphill battle in convincing colleagues that universal basic income is the way forward. But in her view, the pandemic presents an opportunity.

“Governments do change — and they change their minds,” she said.