Saturday, February 28, 2015

Tomas Hirst — The Greek government is calling for a radical new 'basic income' welfare policy

Well, not a universal BIG.
In the case of Greece it looks like such a scheme would initially be targeted at those nearing pension age in order to prevent them from taking early retirement — providing them with an income that they would otherwise draw from the state pension fund.
What Greece obviously needs with its depression level unemployment and forced austerity is a job guarantee and safety net for those unable to work.

Business Insider
The Greek government is calling for a radical new 'basic income' welfare policy
Tomas Hirst


Dan Lynch said...

I doubt it will actually happen for political reasons, but that's another story.

It's not clear whether the Greek proposal would be means-tested or universal, but I'm betting it would be means-tested, because math.

It's not clear to me how letting unemployed oldsters draw a BIG would save money compared to letting them retire early?

Greece's problems aside, old people especially need a safety net of some sort because 1) age discrimination in hiring and 2) health problems make it more difficult to work and more difficult to get hired.

Dan Lynch said...

Re: the Cyprus BI.

"Included in the categories exempt from the law are the voluntarily unemployed"

That's a huge exemption. Sounds like workfare by any other name.

"resources include income, immovable property, bank deposits, stocks, bonds, securities, insurance policies, accounts receivable

So they means-test assets in addition to income. More people will fall through the cracks because many low income people own a home or have modest retirement savings.

"monthly housing benefit, either as a rent allowance or as an allowance to cover interest on housing loans."

Interesting way to deal with the cost of housing, which varies from area to area.

"The amount of monetary benefit, set at a minimum of €480 a month for adults living alone, is enough to live on but not to live well on"

So it's a poverty threshold BI, which is what I advocate as a real-world compromise.

"may lead to distortions in the labour market, driving down the wages of vulnerable categories of wage earners, such as third-country nationals and the low paid"

If the minimum wage is higher than the means-tested BI, then labor disincentives will be limited to part time low wage workers -- typically housewives and teenagers, who probably wouldn't qualify for a BI in the first place. But the catch is you must have a minimum wage, not all countries do.

"The procedure for submission of applications was judged by delegates to be complex and bureaucratic,"

Prolly complex because assets must be reported. If means testing were based solely on last week's income, and if income is already being reported for payroll tax purposes, then the application process could be simple and quick.

"53,500 applications had been received: 22,150 pensioners, 18,000 recipients of public welfare, 10,500 unemployed people,

Note that the unemployed people who apply for BI are in the minority. It's mostly the old, the sick, and the single parents.

The Cyprus BIG is not exactly how I would do it, but it's interesting because, unlike many BI proposals, Cyprus has actually worked out the details.

A said...

Greek job guarantee?:

mike norman said...

They're calling for all this stuff with no ability to pay for it. Total fools.

Dan Lynch said...

That's what politicians do, @Michael Norman. :-)