The Swiss Vetoed Universal Income. The Idea is Here to Stay.

Andrea Gambaro
June 22, 2016

Swiss voters recently rejected a proposal to pay a monthly living wage of 2,500 Swiss francs (£1,770) to every citizen, regardless of whether they work or not. It was a historic moment: the first time a country held a referendum on universal basic income. Although the idea was turned down, its mere consideration shows that it's gaining momentum and winning bipartisan support. For good reason: a guaranteed income could address two major challenges facing labour markets: automation and the sharing economy.

A universal basic income is generally defined as being “unconditionally granted to all on an individual basis, without means test or work requirement”. Many on the left have touted the idea as a way to end poverty and reduce inequality, while some of their conservative counterparts consider it be a superior alternative to the welfare state. But opponents highlight the cost: the policy only becomes economical when certain conditions are introduced. Yet watering it down runs the risk of it resembling existing forms of income support. Accordingly, some have labelled the concept as unrealistic or even utopian.

Framing the debate in these terms risks ignoring a key implication of the idea: a guaranteed income means paid work becomes voluntary. Although modern society revolves around people working, there’s little reason to think people would quit their jobs entirely. For example, an experiment in Canada found that people who received an unconditional income continued to work. Also, a poll conducted in Switzerland by DemoSCOPE showed that only 2% of people would stop working completely. Rather than eliminating work, a universal income could turn it from a necessity into an option.

The implications of this change are huge. Employers would have to offer better conditions or other incentives to persuade workers to do low-paid, menial jobs. Quality of life, and likely productivity, would improve as many individuals would work fewer days a week (several nations have already introduced a shorter working week). People could allocate more time to creative pursuits, taking care of family and other non-paid activities. And the security of a guaranteed income would mean workers no longer have to rely on insecure employment, face the social stigma of being on benefits or have to take the first job they can find in order to survive.

A universal basic income may still seem idealistic. But a look at how the labour market is changing suggests we might already be headed towards a re-evaluation of the entire concept of work. Self-driving cars and robotic workforces are rapidly becoming realities and, sooner or later, automation is bound to become a mass phenomenon. Indeed, researchers at the Oxford Martin School have predicted that 47% of US jobs could disappear in the next two decades, including not only menial jobs but also professions such as doctors, lawyers and architects (this NPR tool estimates the likelihood of various occupations becoming automated).

Equally significant is the growth of Uber, Airbnb and the wider 'sharing economy', which is gradually being accepted by regulators as part of the labour market. The trend has led to more people being their own bosses and monetising their cars and homes, albeit without the security and protections of conventional work.

Fewer jobs and precarious employment are deeply concerning when people must work to support themselves. A guaranteed income drastically changes the picture. It could remove the human costs of automation and the sharing economy, while allowing people to pursue their passions and achieve a better work-life balance.  

No wonder the idea is gaining momentum and becoming harder to ignore. True, there’s bound to be economic and cultural resistance – the idea of governments using taxpayers' money to pay people to do nothing is still abhorrent to some. But down the line, a universal basic income could transform work from a sacred, necessary institution into just another way to spend time.