A Basic Income For All? | Business| Economy and finance news from a German perspective | DW | 17.03.2005
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A Basic Income For All?

Rising unemployment figures and poverty levels in Germany are begging for a solution. Some experts say the answer is doing away with welfare, and introducing a basic income for all citizens.


Rich or poor, everyone would get the same

"Working for wages is a concept that will do away with itself, it's outdated; a basic income for all is the answer," wrote Querkopf, a newspaper for the homeless, in a recent edition. The idea picked up by this alternative paper isn't really so alternative, according to Philipp Vampares. The economics professor from Belgium promotes the idea of a basic income in his books and at international conferences, including the recent World Social Forum held in Brazil.

He believes a basic income for everyone would be a good alternative to the kind of state social welfare programs seen in many European countries, Germany included.

"A universal program is a much better way of reaching all the poor," Vampares said. "When there's just a program only for poor people, it's impossible to avoid that those people on state benefit feel stigmatized. And it's also hard to avoid that people on welfare become dependent on this support, because they lose their right to this income when they accept a job, even if it's a very low-paying job. That's why such a system only serves to ostracize such people."

In contrast, a state-driven basic income would be paid out to rich and poor alike. Under the model, everyone has the right to earn as much as they can in addition. A basic income for the poor is understandable, the critics say. To them, giving money away to the rich sounds like a dubious approach to social reform. Not so, says Vampares.

"It's not as revolutionary as it sounds," he said. "All the people that currently pay taxes in our countries, even the most wealthy, are already getting a sort of gift from the state in that there is a tax exemption for a certain percentage of their income."

Under the basic income model, the wealthy would no longer have a tax-free income level. The additional taxes collected could then be used to finance the state transfers to all citizens.

Saving on administration

Rolf Künnemann of the Food First Information and Action Network (FIAN), a non-governmental organization that works to protect the basic right to food, is also in favor of the idea. Additionally, he campaigns for the abolition of old-style welfare and subsidies for the poor.

Antrag zum Arbeitslosengeld 2

A basic income system would cut back on paper work, proponents say.

"The fact that the same amount would be paid to everyone would be a huge administrative relief, and it's been suggested by many economists, even neo-liberals," Künnemann said. "In Germany, we know that social welfare is only claimed by 50 to 60 percent of those who could claim it, because it's simply too complicated. All the bureaucracy that's needed to determine whether the conditions for the transfer of welfare payments have been met -- that's very expensive. That money could be better used if it were actually included in the transfer."

One percent of gross domestic product would be enough to secure a basic income system, according to FIAN's calculations. However, the really poor countries of the world don't even have that at their disposal, nor do they have any real tax income to speak of. The same principle that applies to development aid also applies to the basic income model: without international solidarity and the readiness of the north to financially support the south in this concept, it cannot work. And not even the supporters of the basic income model can say for sure whether there would be enough political will to see through such a change.

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