The Berkeley Electronic Press has a new journal: Basic Income Studies. The Basic Income – also known as the Guaranteed Annual Income (GAI) in Canada – is a proposal that I’m very much favourably disposed to, even though I’m not familiar with all of the technical details. I took a look at its inaugural issue, and I’m glad I did.
One article struck me in particular: Yannick Vanderborght’s "Why trade unions oppose basic income". Why would unions – who often take pride in their commitment to progressive goals – object to a basic income policy?
Vanderborght offers some reasons for thinking that a BI would increase the bargaining power of unions:
- A BI would reduce the costs to workers of going on strike.
- Workers would have a credible exit option.
So the first question should be: do unions oppose a BI? The article discusses union attitudes in Belgium, Canada and in the Netherlands; I’ll limit myself to the Canadian case here:
According to political scientist Rodney S. Haddow, "the [Canadian] union movement has always treated the GAI with considerable caution and viewed it as potentially antithetical to its social policy goals"… But it did not always take coherent positions on the topic, Haddow argues: "Organized labor’s early response to the GAI was muted and confused… it was slow to form a coherent assessment of the implications of a negative income tax for its program… However, the publication in 1985 of a bulky and influential report by the Royal Commission on the Economic Union and Development Prospects for Canada (the so-called Macdonald Commission"), which included a scenario for the introduction of a partial basic income, triggered harsh reactions. In 1986, the convention of the Canadian Labour Congress (CLC), Canada’s largest union confederation, expressed serious doubts about the desirability of such a reform and denounced its "neo-liberal character". A BI, the CLC argued, was going to undermine the minimum wage legislation…
…
The story is quite different, though, in the province of Québec… Recent interviews with Québécois union officials have shown that they have mixed feelings about the possible introduction of a BI in Canada or Québec… Most of them actually endorse the proposal on ethical grounds, but reject it for pragmatic reasons.
[emphasis in the original]
This would an understandable position on the part of the Quebec unions if they were the only players interested in implementing a BI, and decided to focus their energies on more short-term, attainable goals. But that’s not the case in Quebec. The Pour un Québec lucide manifesto – signed by prominent members of both the PQ and the Liberals – calls for a BI. The only thing missing from a virtually unanimous consensus on the matter is union support.
Vanderborght offers some reasons for the lack of enthusiasm for a BI, such as
… wage labor would lose its central role in society. Presumably, unions might see this development as a threat to their own position…
which hardly reflects well on union leaders’ motives. Then again, I can’t come up with a more sensible explanation.
I’m not able to access the paper mentioned, so apologies beforehand if my comment is off.
Vanderborght apparently says that GAI would reduce the costs to workers of going on strike, but assuming the GAI operates like a negative income tax (NIT), it doesn’t seem likely that it would offset the workers’ losses unless the strike was expected to be quite long and expensive. Wouldn’t the strike have to take enough of a chunk out of a low-income earners’ annual earnings to allow him/her to qualify for GAI? Perhaps this isn’t enough of an incentive for union leaders.
I can’t help but think that GAI would decrease a union’s bargaining power.
Unions have strength in numbers. Assuming that a major priority of union leaders is to secure competitive wages for their upper-tenure members, they wouldn’t prefer the increased risk that GAI creates (the work disincentive of low-wage earners). If low-wage earners can cover their basic needs while living on GAI, union membership may fall and unions would lose bargaining power.
Studies on work disincentives such as the one conducted on NIT by The Stanford Research Institute (found here: http://www.econlib.org/library/Enc/NegativeIncomeTax.html)
probably won’t help win over unions. Still, I find it interesting that some economists (such as Milton Friedman) have argued that GAI holds such promise in cutting the social costs of other programmes, that the burden caused by work disincentives could actually be offset.
I have blogged about this too. I refer to it as a social wage http://www.technorati.com/search/Social%20Wage?from=http://plawiuk.blogspot.com
and sometimes a Living Wage.
http://www.technorati.com/search/Living%20Wage?from=http://plawiuk.blogspot.com
I also include the need for wages for house work.
http://www.technorati.com/search/wages%20for%20housework?from=http://plawiuk.blogspot.com
The reason unions may be opposed to this, is the same reason that unions in Australia in the 19th and in the early years of the 20th Cnetury opposed minimum wages laws. With a strong labour movement, they felt wages should be bargained directly and that state laws undermined collective bargaining.
Also you might check out Andre Gorz for his take on the social wage.
PS. good blog.