Alan Milburn’s social mobility report: a case for a basic income?

The  Government will publish today a report prepared by former Labour cabinet minister Alan Milburn into social mobility.  It’s widely trailed that it will make sobering reading for the coalition:   In particular, it is likely to highlight the fact that the biggest victims of austerity economics are the working poor – something we really all know, but makes a mockery of the inflated Tory conference rhetoric about hard-working families.  Milburn’s review adds rather more weight to Labour’s emphasis on the cost of living.  As the Guardian coverage rightly points out, this will intensify the arguments over whether the coalition’s tax-cutting agenda will help those in work – as I’ve blogged before, I think there’s no real evidence that it will.

But the problem of the working poor – of the fact that millions of people are paid less than a living wage, and that real wages continue to fall relentlessly while the costs of basics rise – is a difficult one for Labour too.  “Predistribution” was the buzzword for a while, but the problem with predistribution is exactly what it means.  There are steps that can be taken to drive up pay – for example through public sector procurement (although there’s a nagging voice at the back of my mind as to whether this would survive a challenge under EU procurement rules) but it’s not obvious that the effect would be more than marginal.

The fact remains that a very substantial number of people – millions – who are in work are simply unable to survive without in-work benefits, and when these benefits are cut the pain is enormous.  And to cut these benefits while repeating mantras of hard work and using narratives of strivers and shirkers is offensive and cruel.  It is perhaps a tribute to the stoicism of the English that, when trust-fund Tories tell the poor to work harder, there are no riots on the streets; perhaps we’re just too demoralised to care any more .

Moreover, the Milburn report looks likely to focus on education as a key route to better social mobility. Fine; nobody could seriously argue that better education and training will support both individuals and the economy more generally.  But there’s a subtext here about “mobility” that is unsettling – at one level the term implies that those from poorer or more troubled backgrounds must take on the habits and mentality of the entitled in order to play a full part in society.  There’s a rather sinister class narrative here that feeds back to more atavistic narratives about lifestyle choices that those arguing for genuine equality need to tread around quite carefully.

So where does this leave us?  The simple question is that millions of people are doing useful, important jobs that do not pay a living wage, and the social security system is spending billions of pounds in supporting those people to lead a basic existence.  We continue to respond to the argument that hard work pays: an comparison of the working day of, say, a nurse with that of a banker might offer a clue, but there’s more rigorous evidence from the New Economics Foundation that pay and added value are very different things.  All of this looks very much like a basic failing of capitalism – and on a superficial reading looks a lot like the conditions that Marx wrote would lead to capitalism’s demise.

There is a vigorous debate going on between advocates of a jobs guarantee (which is broadly speaking Labour’s policy in the UK) and supporters of a basic income.  It’s a fascinating debate, with big issues to overcome on either side.  Those who advocate a job guarantee need to ensure that it is not just another version of workfare, in which the benefits system effectively provides free labour for big business; the advocates of a basic income paid by the state need to explain how to gain acceptance for a system that is seen as providing something for nothing (although, as Chris Dillow points out, in a situation where there is a massive surplus of labour especially for less skilled work, it may be the only really rational solution).  Jobs guarantee advocates need to demonstrate how those jobs will really pay a living wage (predistribution again) and basic income advocates need to show how the value of that income is to be maintained and does not simply become a rationale for cutting other state provision.  There is plenty of scope for the basic income to be hi-jacked by the neoliberal right.

My own preference is for a basic income – for the reasons advocated by Chris Dillow here and here, and Frances Coppola here, which focus on the question on whether market capitalism is fundamentally capable of generating decently-paid work for everone – but I am also aware of the case for a jobs guarantee as set out at length by Bill Mitchell here.  I am inclined to believe that we need fundamentally to rethink the whole idea of work and its economic and social role – in which context imagine the social revolution that would follow if the threat to dismiss was elminated as a rationale for exploitation.  But the publication of the Milburn report – pointing to serious problems for which we urgently needs solutions – will hopefully lead to a serious debate about how we deal with the problems of work and endemic low pay.  And that means cutting through some of the ideology about work and entitlement that prevents us from having a rational debate.

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2 thoughts on “Alan Milburn’s social mobility report: a case for a basic income?

  1. I believe that the effects of automation and computerisation predicted over the coming decades make a strong case for the basic income. There are innumerable professions which simply cannot be subsumed by automation and computerisation, but there are a sizeable number of professions which will be lost. In this environment, the traditional socioeconomic orthodoxy of aspiring to full employment will become untenable.

    We can embrace this change in the economy to make it such that with a basic income, there would be no monetary pressure to seek traditional employment. People would be free to indulge in culture, be creative, and broaden their knowledge. Additionally, the truly universal nature of such a scheme would, at least in theory, make it difficult for individuals to oppose the concept of societal solidarity and welfare. This would create a more solidaristic, fairer, productive, and healthier society.

    The principal challenge of a basic income is not the concept itself, but the establishment of a truly progressive tax system which a basic income is dependent upon for the huge spending such a scheme requires alongside other public expenditure and services.

  2. We are too dependent on big businesses to create jobs for us. Basic Income would give a chance to small businesses to flourish.

    Basic Income would also eliminate the costs derived from poverty, because it is the biggest cause of people going to prisons, mental illness, school failure and family problems.

    At the moment there is an European Initiative to get 1 million signatures to force the European Parliament to study the Basic Income proposal. http://www.youtube.com/watch?v=zru79jcVTt4

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