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Editorial
The
Child Poverty Action Group's recent publication Poverty:
the stats: Analysis of the latest poverty statistics in
Great Britain (April 2006) discusses definitions of poverty
and different ways of measuring it and then in relation
to these discusses the depth and persistence of income poverty,
the groups most likely to be poor, and European comparisons.
On the basis of the evidence CPAG then offers 'ten steps
to a society free of child poverty', the third of which
calls for an increase in the value of benefits for children.
'Child benefit, a near universal benefit, provides a well
functioning mechanism that does not suffer the administrative
or technical difficulties of child tax credit: it has a
vital role in tackling child poverty. The element that is
child benefit ought to be maximised and provides a key way
to build a national consensus towards increasing the value
of benefits to children' (p.18).
Contained
in the Government's White Paper Security in Retirement:
Towards a new pensions system (Department for Work and Pensions,
May 2006) are proposals to link the Basic State Pension
to earnings from 2012, to cut the number of years to qualify
to thirty, to reform credits for carers, and to ensure that
more women and new retirees receive the Basic State Pension.
Over time these proposals, if enacted, and if plans for
personal savings accounts have the hoped-for effects, then
large numbers of people over a rising pensionable age should
be removed from means-testing and the Basic State Pension
will eventually behave rather like a Citizen's Pension,
with very few people receiving less than the maximum amount
- at which point the administratively efficient thing to
do will be to turn it into a Citizen's Pension - an unconditional,
nonwithdrawable income for every individual over pensionable
age.
Policies
designed to reduce child poverty by increasing Child Benefit
and to prevent poverty in old age by turning the Basic State
Pension into a Citizen's Pension will leave only working-age
adults without a Citizen's Income.
News
Tax
credits changes: HM Revenue and Customs has announced
that the amount by which claimants' income can increase
without affecting their tax credits award during the year
has increased from £2,500 to £25,000.
The
Citizen's Income Trust's essay competition for 2006:
The assessors couldn't agree on which was the best of the
two best essays submitted and so, with the trust's officers'
permission, have awarded a prize of £300 each to two
winning authors: Laura Bambrick, for her essay Wollstonecraft's
Dilemma: Is a Citizen's Income the Answer? And Ian Orton,
for his essay Why we ought to listen to Bauman. The first
of these essays appears as the main article in this edition
of the Citizen's Income Newsletter, and the second will
appear in the final edition for this year. Our thanks for
all those who entered the competition.There
were some very good essays submitted.
A
conference on Welfare Reform and Political Theory was
held at the Department of Politics and International Relations
at the University of Oxford on Saturday 13th May 2006. Sessions
on 'Welfare reform and the liberal tradition', 'Welfare
reform and democratic citizenship' and 'Welfare reform,
care work and mutuality' were followed by discussions of
'the deeper issues for politics and political theory' and
'the future of welfare reform in Britain', during which
a Citizen's Income was discussed as an important possibility.
Speakers included Lawrence Mead (New York University and
advocate of Workfare), Julian Le Grand (London School of
Economics), David Willetts MP and Malcolm Torry (Director,
Citizen's Income Trust)
The Financial Times of the 21st April 2006 contained an
article by Samuel Brittan on current discussion of a Citizen's
Income in the USA, on Anne Miller's article in our last
Newsletter, and on Lord Turner's wish to see the eventual
shift of the Basic State Pension from a contribution-related
payment to a universal residency-based Citizen's Pension.
The
Joseph Rowntree Foundation has reported on a research
project on child poverty in large families. The researchers
found that 'the best outcome in terms of equity for large
families is achieved by increasing Child Benefit to the
same level per child and then increasing the benefit for
the third and subsequent child by £20 per week. However,
it would cost £3.39 billion. Lesser increases in Child
Benefit for larger families achieve more modest reductions
in the poverty rates but at lower costs.' The Foundaton
recognizes that 'there are choices to be made between universal
and selective policy measures. Improvements in Child Benefit
for large families are expensive because they go to every
large family whatever their income. Increasing Child Tax
Credit for large families may concentrate extra help on
those who need it most. However, Child Tax Credit suffers
from non-take-up and such measures will also increase the
poverty trap (high marginal tax rates as earnings rise).'
http://www.jrf.org.uk/knowledge/findings/socialpolicy/0326.asp
The
Joseph Rowntree Foundation has launched a new project
to develop a minimum income standard for Britain. This brings
together the expertise of the Family Budget Unit at the
University of York and the Centre for Research in Social
Policy at Loughborough University. Members of the public
(including people on low incomes) will decide what goods
and services different kinds of people need in order to
participate in British society. Whatever tax and benefits
reforms are considered in the future will clearly benefit
from thorough research in this field.
Basic Income Studies is a new international journal of Citizen's
Income research. The first issue is planned for June 2006.
The journal will provide a forum for the discussion of theoretical
issues and empirical research on the design and implementation
of Citizen's Income schemes, and also aims to address broader
questions regarding the future direction of universal welfare
policy. For details see www.bepress.com/bis.
The
tax and benefits models used by the OECD to calculate
taxes, benefits and net incomes for a range of earnings
levels and family situations are now available on their
website:
http://www.oecd.org/document/0/0,2340,en_2649_33933_34053248_1_1_1_1,00.html#models
Barriers
to claiming Pension Credit are the subject of a research
project reported by the Department for Work and Pensions
on the 12th April 2006: 'The most common primary barrier
was perceived ineligibility. Another primary barrier was
concern among some people who thought they would be worse
off if they claimed Pension Credit in addition to existing
benefits. Assumptions about process related barriers, identified
in previous research, dissuaded older people from making
'speculative' applications but most admitted that they would
be prepared go through the application process if they knew
they were eligible. Indeed those who had claimed had found
the process to be more straightforward than they had anticipated
before they claimed.'
Press
On
the 1st June the Financial Times reported:
'The tax credits system came under renewed attack after
fresh figures showed that for a second year running low-income
families were overpaid by almost £2bn. Revenue &
Customs revealed yesterday that almost 2m families received
£1.8bn more than they were entitled to in 2004-05.
Campaigners warned many would face hardship as they were
forced to repay the money.
'The
chancellor's £15bn-a-year scheme to top up the wages
of the low-paid is intended to encourage the unemployed
back into work and has been credited with reducing child
poverty, but it has been plagued with computer problems,
causing delays and errors in payment, and by a lack of communication
between staff and claimants, many of whom find the system
bewilderingly complex. Last year the parliamentary ombudsman
condemned the automatic recovery of overpayments by reducing
a claimant's tax credit with little or no notice as "systemic
maladministration".
'Yesterday's
data showed 44 per cent of the awards were either too low
or too high, with the thousands of complaints flooding in
to advice centres and MPs' surgeries suggesting the Revenue
was struggling to cope. Although the Treasury welcomed a
20 per cent drop in the value of overpayments in 2004-05,
the figures also showed that overpayments in 2003-04 were
higher than previously recorded at £2.2bn rather than
£1.9bn. The government assumes it will be unable to
recover £1bn of the overpaid credits from 2003-04,
with 150,000 payments written off by September 2005 due
to official error.
'Critics
say the fundamental problem is one of design rather than
implementation. The child tax credit and working tax credit
introduced in 2003 were conceived by the Treasury to rise
and fall according to income, either month-by-month if claimants
kept the Revenue informed of each change of circumstance,
or at the end of the tax year. The Treasury argues that
a flexible system is better able to help those whose incomes
deteriorate during the year. But from the outset experts
warned that it would impose a big administrative burden
on the Revenue, with potentially large corrections to awards.
'Stephen
Timms, chief secretary to the Treasury, said flexibility
was a "great strength" of the current system,
but added that the government would keep it "under
review". However, David Laws, the Liberal Democrat
work and pensions spokesman, said the system was "in
chaos". Teething problems could not account for a second
year of big overpayments, since the Revenue should be using
more reliable income estimates than in 2003 and claimants
should be more familiar with the system, he said.'
Main
Article
Wollstonecraft's
Dilemma: Is a Citizen's Income the Answer?
By
Laura Bambrick
Abstract
How
should the state incorporate women into its policies? Should
it recognise them as being different from men? Or should
it treat them the same as men? This is Wollstonecraft's
Dilemma. The male breadwinner welfare state encourages gender
differences whereas the adult worker model adopts a gender-neutral
approach. Relying on women's position in either the family
or in the workforce as a conduit for promoting female welfare
has had mixed results. Could a Citizen's Income (CI) improve
on this? Commentators are divided. This paper presents these
critiques in an attempt to ascertain the potential of a
CI to resolve Wollstonecraft's Dilemma. It accepts that
welfare models are designed to secure more than the right
to work in the home or labour market. Accordingly, it considers
the impact of a CI on each of the six normative reasons
for providing welfare - to promote autonomy, social equality,
social integration, social stability, and economic efficiency,
as well as to prevent poverty - focusing on how this interplay
might affect women's welfare in particular.
Introduction
Historical
accounts of the role different social groups played in paving
the way for the emergence of modern welfare states were
slow to acknowledge women's contribution (see Bock and Thane
1991). Irrespective of this late start, a substantial body
of work now exists documenting how women were instrumental
in bringing about its existence. Despite their activism,
when the battle to make the welfare state a reality was
won women became the indirect recipients of its largesse
while men were the primary beneficiaries. This was neither
an accident nor a conspiracy. Instead, it stemmed from the
division in opinion over women's position in society, with
the split not neatly divided along gendered lines. That
is, just as men lacked consensus on many aspects of the
welfare state's nature, women too did not hold common views.
On no other issue was this more evident than in how they
wanted to be recognised by the state - as workers or as
mothers, in other words the same as or different from men.
A predicament Carol Pateman subsequently coined as Wollstonecraft's
Dilemma (1992). For a host of reasons, it was the supporters
of the latter stance who were victorious. Accordingly, welfare
institutions came to view women to be primarily wives and
mothers engaged in domestic duties and in contrast to men,
who assumed the role of financial provider for their family.
The
Scandinavian countries, in general, moved first and furthest
away from this male breadwinner (MB) arrangement towards
an adult worker (AW) model. In this approach to welfare
delivery, both women and men are expected to participate
in the labour market, and the institutional framework is
structured to achieve this end. For instance, universal
state-subsided child and eldercare services remove the obligation
to care from the individual, while a large public sector
provides employment opportunities, and, at the same time,
tax individualisation increases the cost for a spouse to
abstain from paid work. Hence, the dogma of differences
in gender roles was replaced by one of sameness. Scandinavian
welfare states are often considered to be the most female
friendly regime, in part because of their own successes
in improving women's social standing, but also as an outcome
from the plethora of research that has since exposed the
inadequacies of the MB system for women. That is, these
studies have uncovered the hidden poverty of women in households
where income is withheld from the family by the wage-earner
(Daly 1992) and highlighted how a lack of access to resources
keeps them trapped in abusive relationships (Charles 2000).
They also found the gender division of labour ideology to
limit the earning potential, career progression, and political
advancement of those women who participated in paid work
instead of or along with motherhood (Daly and Rake 2003).
Furthermore, they show caring to be less valued than employment,
in terms of either money or respect (Lister 2003), to name
but a few of the adverse effects of the MB arrangement.
Indeed, such are the achievements of the AW model, and compounded
with changes in family compositions and labour market structures,
that increasing the numbers of women in the workforce has
become a priority of European social policy.
Nonetheless,
caution is required before breathing a sigh of relief that
applying an emphasis on female employment in the policies
of member states will correct the unequal position of women
across the EU. A large part of the Scandinavian success
rests on the state's role as an employer and deliverer of
services, in that it can ensure that standards are met -
well-paid, flexible, permanent jobs as well as available,
affordable, quality care provision. Many countries oppose
this degree of state involvement, believing instead that
the market or the family are more appropriate providers
of these functions. When this position and the AW ideology
are combined - the United States being the classic example
- the risk of poverty for women, on average, intensifies.
Expected to be both employee and carer pushes large numbers
of them into part-time jobs, which are typically low-paid
and insecure. In addition, although women in the Scandinavian
AW system score higher on wellbeing indicators - representation
in key areas of political and economic life, share of earned
income, and level of employment - than women in other welfare
state types, their ratings nevertheless remain lower than
those of Scandinavian men (Human Development Index). Furthermore,
research has shown that paid work, no matter how useless
the enterprise, continues to be held in higher regard than
unpaid care labour, however useful (Leira 2000).
The
limitations with the role specialisation (i.e. women different
to men) MB arrangement and the gender-neutral (i.e. women
the same as men) AW model are, for some commentators, grounds
for implementing a Citizen's Income (CI) - a regular, unconditional,
flat payment, sufficient to cover basic needs, paid directly
to each citizen, in place of current social security transfers
and tax relief. As will be detailed below, not everyone
is convinced of a CI's potential to safeguard women's welfare.
Regardless of whether a CI would afford women the opportunity
to be either an employee or carer, autonomy is just one
goal of welfare states, which according to Robert Goodin
(1988) has six commonly cited functions. Namely, promoting
autonomy, social equality, social integration, social stability,
and economic efficiency, as well as preventing poverty.
Much has been written on the likely consequences of a CI,
with many discussions addressing its impact on one or more
of these objectives. This paper draws together these observations,
presenting in the following six sections the critiques of
CI's expected influence on each of the welfare state's priorities.
More specifically, it focuses on the possible affect this
interplay might have on women's welfare, in an effort to
ascertain the ability of a CI to answer Wollstonecraft's
Dilemma.
Promoting
Autonomy
Autonomous
individuals are those who are able to act in accordance
with their own goals and interests. When people do not possess
the resources to provide for their basic needs their actions
will be driven by a need to 'secure the preconditions for
their own continued survival' (Goodin et al 1999: 34). Consequently,
they are not autonomous but are instead dependent on those
who control their access to resources, and this dependency
makes them susceptible to exploitation (Goodin 1988: 21).
The
guaranteed income stream from a CI would mean that:
[E]ach
individual would have an independent income as the basis
for negotiating a paid and unpaid work role - that no
one could be coerced into a job or a domestic responsibility
out of dependence on another for his or her basic resources
(Jordan 1987: 160).
Women could choose to be primary caregivers while retaining
financial independence and the protection this entails.
Indeed, the benefit of a cash transfer free of a work-test
would not be confined to women. All wage-labourers would
be empowered to exit the labour market completely or to
reduce the time they spend participating in it, according
to their preference (Ackerman and Alstott 1999: 211).
But, some argued that, because it is paid irrespective
of a willingness to work, a CI would substitute one form
of exploitation with another - it is 'a recipe for exploitation
of the industrious by the lazy' (Elster 1987: 719). In
response, it is proposed that the concept of work be broadened
to include more than just wage labour, given that the
majority of the voluntary unemployed are active in socially
useful tasks (McKay 2001: 104-109) and that a small minority
of 'free-riders' will exist with or without eligibility
rules (Van Parijs 2000).
Conversely,
a CI could be used to purchase services by women who want
to move from caring into paid employment, thus liberating
them to follow their ambitions (Walter 1989: 120). Elizabeth
Anderson (2000) is unconvinced. Its flat-rate payments,
she notes, fails to acknowledge that citizens with a disability
and/or caring responsibilities require more assets to achieve
the equivalent level of freedom enjoyed by those who have
neither a disability nor dependents. Although children will
be entitled to a CI, this observation does highlight the
importance of the CI child-rate being sufficient to cover
caring costs if mothers are to given a 'real choice between
work inside or outside their home' (Robeyns 2000: 131).
In addition, while purchasing power will improve with a
CI there is no guarantee that the supply of services will
meet the demand. Jane Lewis, (2004) warns that the 'neglect
of service provision is likely to constrain women's choices'
(p. 10). However, Tony Walters (1989) believes that the
private market will respond adequately but Ingrid Robeyns
(2000) recommends a complementary set of public childcare
initiatives. Nevertheless, caring does not inevitably have
to shift to either the market or the state. A CI would give
full-time employees the opportunity to buy job-free time,
thus creating a pool of potential (mostly male) carers within
families and the community, and in turn, improving the current
gender imbalance in caring.
A
CI offers all citizens a choice in how they spend their
time - caring, in employment or at leisure, without the
threat of destitution and/or exploitation. Moreover, in
placing this choice with individuals, Wollstonecraft's Dilemma
becomes obsolete - women will be incorporated into the state
on the basis of their citizenship alone; thereafter their
role will be a private decision rather than a public issue.
Promoting
Social Equality
For
some an overriding benefit from a CI is that it offers recognition
for care labour and to those who provide it. The introduction
of this universal unconditional payment, Carol Pateman (2003)
explains, would 'change women's standing as citizens since
employment would be dethroned from its position as the only
work that really counts' (p. 141). Others are less enthused.
Caring, they claim, is not especially valued by a CI, since
it is paid to all regardless of whether the recipient is
caring or not (Lister 2003: 189). Nonetheless, an alternative
caregiver allowance while specifically rewarding informal
work is, as parental leave schemes internationally show,
more likely to be claimed by females in heterosexual couples.
A major contributory factor for this higher female take-up
rate is that these allowances are not usually indexed to
earnings - it costs more for men to abstain from paid work,
because of their greater earning potential. Hence, caregiver
allowances 'reinforces the view of such work as women's
work and consolidates the gender division of domestic labour'
(Fraser 1997: 58). Whereas a CI payment, albeit set at a
flat-rate, is paid to each member of the family, and would
cushion a drop in the total household income, thus allowing
the main breadwinners (mostly male) to reduce their employment
hours. The opportunity for men to spend more time caring
and for women to pursue their career will be greater than
is currently the case.
This
optimistic assessment is questioned by Judith Carlson (1997)
who concurs that a CI would allow shorter employment hours
for men, but reasons that there is no guarantee that they
will in turn use this job-free time to contribute to the
unpaid labour in the household and community (p.8). And
so, caring would be no less feminised under a CI than with
a caregiver's allowance. In a similar vein, it is suggested
that the option a CI offers to refuse employment is likely
to be embraced more by women than men (Fitzpatrick 1999:
167). Ingrid Robeyns' (2000) warns against the negative
consequences a weakening of women's attachment to the labour
market would have for those women who retain a commitment
to employment. Individual women, she concludes, will find
it difficult to get hired, trained, or promoted because
employers will be conscious of their propensity to withdraw
from the workforce (p. 132). There is then the possibility
that this would exacerbate the present gender imbalance
in positions of authority, to the detriment of all women
- advocates of women being more like men consider female
participation in the public sphere to be instrumental in
getting and keeping their concerns on the agenda. These
arguments run counter to the emerging 'men-studies' literature,
which suggest that men's work-centred behaviour is the result
of the current work environment culture, fiscal considerations,
social policies etc, as opposed to reflecting their preference
(see Burgess and Graeme 2003).
Paying a CI irrespective of being in the workforce or outside
of it will not in itself be enough to promote social equality.
For this, it is vital that both women and men embrace its
potential for adopting a work-care mix. While a CI does
not address the female bias in care labour directly, it
does strengthen the bargaining hand of men to care more
and work less, and for women to do the contrary. In meeting
this condition, the conundrum of how the state should incorporate
women into its policies will be resolved. That is, it will
no longer be necessary to conceptualise women according
to how their work patterns deviate from or replicate those
of men's when combining career and caring becomes the norm
for all.
Promoting Social Integration / Avoiding Social Exclusion
What
is implied by the term social exclusion is widely disputed.
Despite differences in opinion, it is generally held to
encapsulate more than just income poverty (Giddens 1998:
105). Burchardt et al. (2002) regard individuals to be socially
excluded when they cannot partake in one or more of four
'key' social activities:
- Consumption
- the capacity to purchase goods and services
- Production
- participation in economically or socially valuable activities
- Political
Engagement - involvement in local or national decision-making
- Social
Interaction - integration with family, friends and community
(p.31).
The
more people are excluded from these realms, the less integrated
a society will be, and the greater the likelihood of civil
unrest.
Tony
Atkinson (1995) notes that one of the reasons why a CI 'enjoys
support from a wide constituency' is that it is viewed as
a means of preventing social exclusion (p.75). For example,
an independent income for women is shown to be an effective
measure in alleviating child poverty, because mothers spend
a greater proportion of their income on their children,
relative to fathers (Pahl 1989: 171). Tackling child poverty
reduces the risk of children partaking in the types of behaviour
- low education attainment, crime, early parenthood, etc
that contributes to exclusion continuing into adulthood
(Kiernan 2002: 96). Furthermore, a CI would provide the
'material basis for effective political participation'.
Guaranteed an income, citizens would have the time to be
politically active - 'from running for candidate, over working
in party offices to canvassing the streets on behalf of
political candidates' (Dowding, De Wispelaere and White
2003: 16). The same would be true for greater involvement
in family and community activities, so increasing social
interaction.
Yet,
a significant weakness with a CI as an instrument for promoting
social inclusion is that 'benefits based on citizenship
can provide the basis for exclusion of non-citizens' and
that such policies 'have been recognized as being ill-equipped
to deal with an age of large-scale and heterogeneous migratory
movements' (Kofman et al 2000: 144 and 77). The over-representation
of women entering countries through family reunions, a proviso
of which in many states is no recourse to public funds,
makes this shortcoming more pertinent for women. In addition
to issues surrounding entitlement, it is argued that 'simply
being given cash does not by itself make someone part of
mainstream society' (Hill 2002: 227). A CI provides the
means but it will be each citizen's responsibility to grasp
the opportunity their payment affords them to be socially
active.
Some
commentators contend that social exclusion will be best
countered through the integration of both women and men
into paid work, i.e. making women like men (see The Commission
for Social Justice 1994). Others regard changing work patterns,
e.g. female employment, as contributing to the demise of
social networks (see Putnam 2000). A CI offers a solution
complimentary to these diverging opinions. It allows for
greater numbers to participate in paid work and to reduce
the time they spend therein. Moreover, both women and men
will be in a position to partake in public and private,
local and national, social and economic social activities.
No realm will be the preserve of a particular sex, as has
previously been the case.
Promoting
Social Stability
Families
are considered to be an essential component for the successful
functioning of society (Davidoff et al, 1999: 20-21). The
household neutrality feature of a CI - it is paid to individuals
irrespective of their living arrangement - is regarded by
some to be family friendly (Fitzpatrick 1999: 86). That
is, unlike current welfare payments in many countries, the
CI would not cease should a lone mother cohabit with a man.
While this could assist two-adult families to form, it simultaneously
could prevent others from splitting. A CI paid at a flat-rate,
rather than proportionate to total household income, could
make it economically unfeasible for those in unsatisfactory
relationships to separate:
It
would reverse the clock to before the days when social assistance
bailed out the divorcee, and the natural financial penalty
of turning one household into two would once again operate
(Walter 1989: 125).
While
removing the ability to separate might appeal to those who
are eager to preserve the traditional family unit, it is
nevertheless questionable as to how stable a society would
be if sectors of the community feel that their living arrangements
are being forced upon them. On the contrary, Patricia Morgan
(1996) insists that by focussing on individual rights a
CI undermines the factors that bind families:
Where
the mother has her [CI], the child has its [CI], and the
man has his [CI]…there is no onus on anybody to share
or provide for anybody else. This policy therefore, undermines
mutual support and interdependence (p. 44).
Aside
from the desire to safeguard family units as a means of
maintaining social stability in the present, encouraging
women to have more children, as a way of ensuring societies
will continue in to the future, is a goal of many nations.
Since the mid 1980s, fertility has fallen below generation
replacement rates in the majority of industrialised countries
(Sleebos 2003: 13). A CI could help improve fertility rates
in a number of ways. Firstly, it offers young adults who
are unemployed, underemployed or low-paid the financial
support Gosta Esping-Andersen (1999) identifies as crucial
for enabling them to establish independent households sooner,
so that they can have longer childbearing years together
(69-70). Secondly, because a CI does not discriminate on
age - it would be paid from birth, the cost of children
would be lower. Thirdly, the reduction in the reliance on
waged work increases men's opportunity to contribute more
time to household tasks which research shows to increase
the odds of a second birth (Prince-Cooke 2005: 24). Ultimately,
a CI's potential to raise fertility is endorsed by the analysis
undertaken by Sala-i-Martin and Subramanian (2003), on behalf
of the IMF. They conclude that this effect is one reason
why a CI is unsuitable for developing countries concerned
with reducing birth rates. If so, then it might equally
reconcile the birth deficit in Western nations.
While
a CI appears to be an amenable policy for encouraging fertility
it remains uncertain what effect its household neutral feature
will have on the two-adult family - expanding the numbers
or adding to its demise. It is worth noting that families
do not have to be of the traditional variety for society
to reap the benefits. Indeed, the nuclear family is believed
by some to be detrimental to female wellbeing (see Barrett
and McIntosh 1982). With a CI, groups of individuals could
form families and enjoy the benefits of economies of scales
without anyone having to surrender their statutory payments,
as is currently the case in many states when a member of
the household is deemed to be earning sufficient funds to
support non-earning members.
Promoting
Economic Efficiency
A
healthy economy is widely held to be a prerequisite for
advancing human welfare. As such, it is imperative that
the economy is supported in ways that enable it to operate
efficiently. The concern of a high volume of the CI literature
is with its expected influence on productivity. For some,
Claus Offe (1992) observes, the preoccupation is with the
'work-shyness' they fear an unconditional CI will encourage
(p. 75). In contrast, others insist that a preference for
employment would continue, because a CI, while being sufficient
for subsistence, would be moderate (Janson 2000: 10). Also,
since it would not be withdrawn from those who accept a
job, barriers such as poverty and employment traps would
be removed. It is further proposed that, in providing for
basic needs a CI 'has a direct wage subsidizing effect'.
Employers could create more jobs since work currently left
undone because it costs more to do than it is worth would
become viable (van der Veen 2003: 168). In addition, individuals
might use the income security to establish their own business
venture or as an opportunity to acquire new skills (van
der Veen 2003: 168). Thus, workers could move from work
to education and back to work many times during their working
life - a vital requirement in today's knowledge-based economy
(Van Parijs 2002: 357).
While
it is argued that the CI will not have a negative effect
on the economy overall, it is conceded that women with dependents
will be particularly susceptible should a corresponding
flat-rate tax be implemented, as is popularly recommended,
to fund a CI (Clark 2002: 20). Currently, the earnings of
many part-time workers, the majority of whom are women in
all European countries, are exempt from tax and social security
contributions. If all additional income is taxable at a
uniform rate this could possibly lead to them exiting the
labour market completely, or conspiring with employers in
not declaring their earnings to the tax authorities. In
the latter situation, the revenue pool for funding a CI
would be smaller and so the tax-rate would be higher than
necessary. Moreover, women would be unprotected by employment
legislation in the black economy and a worsening of their
employment conditions is highly probable. Nonetheless, Tony
Walter (1989) believes that the inclusion of women into
the tax system is an important component in advancing gender
equality in the workplace (p. 122). In the former scenario,
this would cause a decline in the size of the workforce,
and would subsequently inflate the price of wages. Yet,
it is reasoned that even if the fall in the female labour
supply were significant this would not damage economic efficiency,
as the majority would inevitably move into the social economy.
As Allan Sheahen (2003) points out:
[W]hat
is work? Just a Job? Or anything that's productive? Is
a volunteer at a hospital less productive than the same
person on an assembly line? Is a mother caring for her
children at home less productive than if she were flipping
burgers at McDonald's? (p.8).
Through
making caring and participation in the social sphere affordable,
society as a whole would benefit and economic efficiency
would not be constrained by a CI. But if, as a consequence
of the funding mechanism, paid work becomes an unattractive
option for women this could reinforce the sexual division
of labour - women over-represented in the social economy
and men in the market economy. Women would be different
from men. While providing a solution to Wollstonecraft's
Dilemma this, as mentioned above, will not necessarily be
good for women's overall welfare. It is therefore imperative
that taxes other than a flat-rate income tax be used as
the main source of funding (see McGuire 2006) in order to
avoid this adverse effect.
Preventing
Poverty
In
the 1970s, feminist researchers began to investigate the
gendered dimension of poverty. Along with many others, Glendinning
and Millar (1987) found that 'poverty is not gender-neutral.
Whether they are young or old, living with or without men,
caring for children or other dependants, women are more
likely than men to be poor' (p. 3).
Hermione
Parker (1993) contends that a CI 'could be reasonably expected
to redistribute income from men to women' (p. 63). For example,
a CI paid directly to spouses, rather than as an adult-dependent
benefit payment or tax credit, would 'transform the dependent
wife into a woman of independent means' (Walter 1989: 117),
which in turn reduces the risk of poverty within families
for women working fulltime in the home. Nevertheless, if
the obstacles to female employment are not addressed (the
imbalance in domestic and care labour) men could receive
their CI while continuing to engage in paid employment.
As Judith Carlson (1997) points out 'the [CI] could become
a minimum income for men (a floor on which they can build)
and a maximum income for women (a ceiling above which they
find it extremely difficult to rise)' (p. 9).
But,
even if all women were to become like men - i.e. workers
- employment is no longer as effective in combating poverty
as it once was. Full-time, life-long employment and the
income security it entails is on the decline while part-time
stop-gap jobs and precarious earnings are becoming more
common (McKay 2001: 101). As such, the working poor population
is big and growing - those whose earnings are inadequate
to meet their needs (Standing 1992: 52). It is suggested
that a CI would benefit the unemployed, underemployed and
low-paid (Van Parijs 1996: 65), in acting as a safety net
during unemployment spells and supplementing the earnings
of part-time and low-paid workers (see Widerquist and Lewis
2006). This would be particularly valuable to women since
they are the majority of part-time employees and tend to
be concentrated in jobs that are synonymous with low pay
(McKay 2001: 102). This optimism is contested. Firstly,
employers could use a CI as justification for cutting wages
- the basic needs of the workforce would be provided for
through their CI, therefore employers would no longer have
to provide a living wage (Clark 2002: 20). Although, if
this proved to be the case then minimum wage legislation
could be enforced alongside a CI. Secondly, because of its
unconditional nature 'even Bill Gates would receive his
monthly [CI] cheque'. However, the ending of tax relief
would ensure that Bill Gates and his ilk would also pay
more taxes than they currently do (Block 2000: 1).
Paying
a CI to individuals, as a means of tackling poverty, would
provide all citizens with direct access to the resources
to meet their basic needs whatever their connection to the
labour market. Nonetheless, in western societies the concern
is less with absolute poverty - providing the essentials
for survival - and more on relative poverty - closing the
income gap between individuals and groups. How effective
a CI will be in closing the gender earnings gap will depend
on the extent to which the payments are used by men to undertake
more caring work and by women to participate more in paid
labour.
Conclusion
Both
the MB and AW models take masculine work patterns (continuous
full-time employment) as their reference point. In the MB
arrangement women are viewed as different from men - carers
as opposed to workers, while in the AW welfare state women
are encouraged to behave the same as men - workers. Fewer
women than men fit exclusively into either category, and
less so over time. Rather, large numbers combine the breadwinner
and caregiver roles. A CI extends the opportunity to make
this work-care mix the norm for men as well as women. Should
this opportunity be seized, Wollstonecraft's dilemma of
how the state should incorporate women into its policies
would be resolved. That is, no longer will it have to integrate
women according to how their behaviour relates to that of
men, since men will now be in a position to behave the same
as women. Moreover, in achieving this fusion of gender roles
into one worker-carer category, women's overall wellbeing,
as measured against Goodins six welfare functions, need
not be compromised.
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Laura
Bambrick is an O'Reilly Foundation Scholar reading for a
DPhil in the Department of Social Policy and Social Work,
at The University of Oxford. The views expressed in this
paper are those of the author and do not necessarily represent
the position of the O'Reilly Foundation.
Reviews
Ramon
Gomez-Salvador, Ana Lamo, Barbara Petrongolo, Melanie Ward
and Etienne Wasmer (eds.), Labour Supply and Incentives
to Work in Europe,
Edward Elgar Publishing, 2005, 412 pages, hb, 1 84542 129
9, £75 Order
this book
Most
of Labour Supply and Incentives to Work in Europe consists
of a collection of articles dealing with specific aspects
of labour market participation and labour market institutions.
Resulting from a workshop put together by the European Central
Bank and the Centre for Economic Policy Research, the analyses
presented in a book take (as one would expect) a mostly
neoclassical approach to these issues. The book is divided
in four parts, with the first three consisting of the aforementioned
articles on specific issues of labour supply in Europe and
the last part devoted to a panel discussion of labour markets
in the enlarged European Union.
The
theme of incentives to work is the focus of Part I. Bridgen
and Thomas put forward a matching model of the labour market
that distinguishes between high effort job searchers (which
are 'unemployed' when they do not have a job) and low effort
job searchers (which are simply 'inactive' when non-employed).
Each group of individuals is then modeled as having different
but interdependent wage rates (resulting from the assumption
that firms can identify and discriminate between the two
types of agents). Some interesting conclusions are derived
from this model, namely on the significant relevance of
unemployment and inactivity benefits. These results may
have important implications for basic income proposals,
as a substantial increase in benefits available to low effort
job searchers (not covered by unemployment benefits but
which would obviously be covered by a universal basic income)
could have a very significant impact on their labour market
participation, with the consequent macroeconomic impact.
Also
interesting is the assessment of the effects of taxation
on work activity, industry mix and shadow economy activities
carried out by Davis and Henrekson. They find a strong and
persistent relation between higher tax rates (on consumption
and labour income) and a smaller proportion of time dedicated
to market activities. They also find that higher taxes are
associated with larger shadow economies and smaller value
added and employment shares of low wage industries. The
general direction of the results is unsurprising since it
would be expected from economic theory that higher tax rates
negatively impact on participation rates and low wage industries
and provide an incentive to the growth of the underground
economy, but the magnitude of some effects is noteworthy
(e.g. 'a unit standard deviation tax hike of 12.8 percentage
points leads to (…) a 4.9 percentage point drop in
the employment-population ratio' [p. 89]). Although those
relations would possibly be harder to measure it would be
interesting to study the effects of higher capital taxes
on the same output variables. By reducing the expected after-tax
returns on investment, higher rates on capital tend to discourage
capital accumulation and, consequently, reduce the demand
for labour. Most importantly for patterns of labour market
participation, higher taxes on capital may slow down the
creation of higher-paying and more attractive jobs. This
issue is also central for active labour market policies
(ALMPs), such as the Italian tax credit analysed in Chapter
6. Unless such measures are financed by a reduction of public
expenditure in other areas they will require higher taxation
in other sectors. Consequently, even if ALMPs are considered
effective means of increasing labour participation (as Cipollone
et al argue in the Italian tax credits case study), their
overall impact also includes the (supposedly negative) effects
on the sectors where the costs are imposed. What is seen
(the increase in participation of eligible individuals)
must be balanced with that which is not seen (the negative
effects on the sectors which are subjected to increased
taxation).
The
second part of the book (where the aforementioned Chapter
6 is included) deals with several specific factors affecting
labour market participation. Two chapters are devoted to
the evolution and determinants of labour supply by women
while Chapter 5 (Genre et al) analyses labour market participation
by employing a wide range of economic and institutional
factors as variables at country-level. Of particular interest
may be the finding that labour market rigidity negatively
affects the participation rate of most groups with the significant
exception of men aged 25 to 54, who supposedly have the
greatest power in shaping those rigid institutions.
The
expansion of part-time, temporary and other alternative
forms of employment has been a response to changing economic,
social and technological conditions in Europe since the
mid-1970s, as well as a way to circumvent rigid regulation
of permanent contracts. The two articles in the third part
of the book deal with these new forms of employment relationships,
focusing specifically on the advantages and risks of part-time
and fixed-term contracts.
One important question that remains unaddressed is that
of arguing why the labour participation objectives set in
the Lisbon Agenda are worthy goals in the first place. Why
is it necessarily 'progress' to converge to a 70 per cent
employment rate (60 percent for women and 50 percent for
older workers)? There are of course obvious financial reasons
related to the sustainability of social security systems
and economic reasons related to growth, but the question
is a relevant one if we consider that increasing participation
rates are not the only potential solution to these problems.
Since leisure is presumably valued positively by individuals
and non-market activities can also be 'productive' in a
broader sense, it would be advisable to have some in-depth
discussion of the defensibility of the participation rate
goals that underlie most of the analyses carried out in
the book. One alternative would be simply to present the
Lisbon objectives as politically determined external goals
to which labour market policies should adjust, but that
appears to be a quite limiting perspective for a global
understanding of the issues involved.
Overall,
while competently delivered and offering useful insights
on the effects of specific factors on labour supply, the
articles are somewhat limited by the neoclassical approach
adopted. The advantages in terms of clarity for the analysis
of specific relations in given contexts are counter-balanced
by the lack of an overall perspective that goes beyond the
neoclassical labour economics approach, an issue that even
the more general discussion in the fourth part (dealing
mainly with the effects of monetary integration and EU enlargement)
also fails to address. It is perhaps unfair to point out
as a fault in a book on labour economics that it fails to
go beyond the boundaries of labour economics, but one cannot
help feeling that all the analyses conducted are left to
some extent in a vacuum due to the lack of a more comprehensive
framing in terms of political economy.
The
book contains several good exercises in neoclassical analysis
of labour markets as well as a range of useful data. However,
many important questions necessarily cannot be tackled by
this sort of approach and while the articles contain many
worthwhile insights, a more integrated and interdisciplinary
approach would appear to be required for a better overall
understanding of the issues involved.
Andre Alves
Frances
McGinnity, Welfare for the Unemployed in Britain and Germany:
Who benefits ?,
Edward Elgar, 2004, 240 pp, hardback, 1 84376 220 X, £55
Order
this book
During
the twentieth century, different nation states built very
different welfare states, and this book is an exploration
of the different provisions made for the unemployed in Germany
and Britain. The author notes persistent controversy over
whether payments should be low and short-term (in order
not to damage employment incentives) or high and long-term
(in order to prevent deprivation). 'Broadly speaking, the
German welfare state views unemployment as a risk that individuals
insure themselves against, with the state administering
the insurance and treating the unemployed according to their
employment record. In Britain, by contrast, the principle
of poverty alleviation provides the basis for compensating
the unemployed. Benefits for the unemployed are primarily
means-tested in Britain, and these are not based on contributions'
(p.2).
In
order to study the consequences of the difference the author
uses longitudinal data from large representative panel surveys
( - longitudinal data because this enables unemployment
to be studied as a process rather than as a state), and
she categorizes welfare provision using Gallie and Paugam's
work on 'the degree of coverage, including the balance,
between insurance and means-tested benefits; the level of
financial compensation; and the extent of active labour
market programmes' (p.11f), leading to four categories:
the sub-protective, the liberal/minimal, the employment-centred
and the universalistic (p.12). McGinnity also distinguishes
clearly between means-tested and insurance benefits and
discusses the pros and cons of both, and recognises that
a more rigid labour market is partly a function of the welfare
system, meaning that the welfare system might reduce welfare
by making unemployment more frequent and/or of longer duration.
There
are chapters on the labour markets and unemployment in Britain
and Germany (but only up to the mid-1990s), on the development
of benefits for the unemployed, on income poverty amongst
the unemployed, on the process of escape from unemployment,
and on the effect of a household member's unemployment on
the labour market participation of other household members.
The final chapter repeats the conclusions of the previous
chapters and concludes that 'other institutions also matter,
especially the family and the market' (p.177). Interestingly,
McGinnity finds 'a limited effect of receipt of benefit
on the duration of unemployment in Britain, and no such
effect in Germany' (p.179) - but she does find that 'in
Britain women are less likely to move into part-time work
when the husband is receiving means-tested benefits' (p.180)
- a problem which does not arise with insurance benefits.
The
author suggests that a limitation of much research, including
her own, is that it treats welfare regimes as static systems,
whereas in fact they are constantly changing. To map the
changes against the longitudinal data (and against the new
longitudinal data that would be needed) would be instructive,
for it would provide comparisons more related to a real
world in which change is ubiquitous. But for the time being,
she concludes that in Britain the 'unintended consequences
of means-testing' (p.185) - and particularly the consequence
that means-tested benefits discourage the partner of someone
unemployed from seeking part-time employment - need attention;
and she suggests that in Germany the coverage of insurance
benefits should be extended, though she also recognises
that if contributions are imputed to too many people who
are not paying contributions (such as those caring for children)
then those actually paying contributions might lose confidence
in the system.
©
Citizen's Income Trust 2006
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