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  • Ofer Setty

Maybe it’s impractical, but universal basic income reflects something bigger

Updated: Aug 24, 2022

The increasing popularity of a universal basic income in the public discourse, as well as the Great Resignation, reflects people’s dissatisfaction with the reality of the labor market. It’s time for the pendulum to start swinging towards workers.

In my series of posts on universal basic income, I have thus far criticized the idea. I argued that, although it’s an interesting idea, when you calculate the cost or when you use a macroeconomic model to evaluate its impacts – the numbers simply do not add up. Still, before we move on from it, it’s worth putting the numbers aside for a moment and trying to understand what is so appealing about a universal basic income. The appeal of the idea is particularly apparent when you understand that it’s not simply a proposal to change the distribution of resources, but rather it’s an idea that reflects people’s desire for a change in the labor market – a change in working conditions, an increase in one’s sense of belonging, and a desire for self-expression.

I will begin with working conditions: The balance of power in the labor market is, to some extent, similar to a pendulum. In recent decades, it has swung in the direction of employers to such an extent that people are revolting. Indeed, one of the most interesting phenomena in the labor market in recent years is the labor shortage spurred by the Great Resignation, which is occurring for various reasons. In Israel, dissatisfaction with the workplace is particularly noticeable with regard to the number of working hours, which is high compared to the OECD average of hours worked per week. I’m fine with the idea that advancing in one’s career requires putting forth effort. But the premise that you must first toil away, and afterwards still have to prove that you’re serious about work, does bother me.

The difficulty that people experience in the labor market is not only due to the number of working hours. According to the Israeli Employment Service, the increase in the resignation rate in recent years cuts across all professions and income levels. The common thread for everyone is in their search for an alternative. In this regard, universal basic income represents a call for a change in the swing of the pendulum towards workers. In other words: If I am eligible to income that is not dependent upon my employer, I do not have to comply with every demand and my bargaining power increases.

Working conditions, however, are not the entire story. People are also looking for a sense of belonging. If, in the past, one’s sense of belonging to their workplace was based on their participation in employee organizations or affiliation to a specific workplace, nowadays, a sense of belonging has been replaced by flexible employment contracts. This flexibility gives employers an advantage, but at the same time, it creates a sense of job insecurity and erodes one’s sense of belonging, which may explain the mass resignations.

Even if this phenomenon is not relevant to many, it seems to me that it reflects people’s deep desire for belonging, security, and even community. There’s something in this widespread phenomenon that says: I muster the courage, move up the hierarchy of needs, and advance toward my need for self-expression. In her book, “A Room of One’s Own,” Virginia Woolf wrote that in order be a writer, all a woman needs is a room of her own and 500 pounds a year. Ok, so not everyone is Virginia Woolf, but everyone has the desire to create and the need for the conditions essential for fulfilling that desire. After all, with all the economic growth surrounding us – it would be good if part of that growth would be directed not only to increasing production, but also to increasing creativity. The starting point for this is a labor market that enables the provision of reasonable working conditions for as many workers as possible. And from here, we arrive to the idea of universal basic income.

As I mentioned before, it’s difficult for me to see the practical feasibility of the idea. However, I recognize that its popularity in public discourse is a reflection of people’s dissatisfaction with the labor market. This dissatisfaction leads us to search for a way to sever our dependence on the workplace or at least to disconnect income from the need to work. In order to maintain an economy that serves the people, it’s important that we are attentive to these feelings and address them with real solutions, ones that will also coincide with the numbers.

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