Universal minimum income, is it really the ultimate weapon against poverty?

Post by Luca Battaglia, Carlo Giannone, Bruno Salerno, Lorenzo Tropea, Founder of Political Pills –

Among the major issues that arouse the international debate among economists, philosophers, and institutions, the Universal Minimum Income (RMI) is of vital importance.

For what reason? What’s the matter? Which countries are already applying this policy?

The Universal Minimum Income is a measure that guarantees all citizens of a country a basic income in a universal and unconditional way. There are no differences between rich and poor, active and inactive workers. The aim of a policy of this kind is to guarantee a subsistence threshold for everyone, to take care of daily expenses and to try to reduce the economic and social disparities within a nation. In the last period, we have heard a lot about “universal basic income”, and that has happened because over the last 20 years, governments have been trying to use tools to deal with economic crises. It is therefore an extremely topical issue due to the significant consequences that the pandemic has left behind. Supporters of this measure believe that it is the most effective means of eradicating poverty, but it is right to conduct a careful analysis to specifically understand the pros and cons of this measure, and try to implement it in the countries to analyze who d ‘adopted.

First, the RMI would help reduce economic and social inequalities by stimulating basic consumption and enabling essential and redistributive expenditures such as education. The objection is raised that offering everyone an income, regardless of income, does not help, inequalities remain unchanged. The obligation is right, in fact, the mechanism is usually currently adopted only in favor of the disadvantaged classes, as it should be.

The RMI would also counteract the employment hemorrhage that is expected with the advent of digitalisation and the consequent aging of the work skills of a large part of the world population.

However, this measure is criticized because the general increase in world wealth can be offset by rising inflation, which cancels out the effect of this policy. However, inflation is only a problem if you have a new supply of money. The obstacle can be overcome by offering RMI in the form of tax benefits or implementing aid benefits offered by each state.

Other experts argue that the RMI disincentives to find work, but the argument can be refuted by proving that this does not have the breadth of a salary, but corresponds to a minimum amount that allows basic costs for the survival of the individual.

Since 1992, institutions in Europe have been inviting Member States to take action against social exclusion. During these thirty years, all EU Member States, albeit in a heterogeneous manner, introduced forms of support for the benefit of the most disabled families, and together with Greece, Italy was among the last to introduce such measures.

Across the EU, there are various forms of guaranteed assistance: in France, there is citizenship which aims to support those over 25 years of age and without pay or who are below the poverty line. The subsidy has no time limit and ranges from € 565.34 for one person to € 1187.21 for a couple with two children; also in Luxembourg, Cyprus and Spain there is an income for social inclusion, designed for people over 25 years, in the lower income brackets; in Germany, on the other hand, a three-year study is launched on 120 people who are guaranteed 1200 euros per month without conditions, comparing their experience with a reference control group.

Outside of Europe, the cases of Alaska and New Zealand stand out. As for Alaska, it is the first country in the world to establish pure citizenship income, which now ranges from $ 900 to $ 2000 per month; a system born in 1982, the year the state decides to distribute every dollar generated from the loyalties generated by its oil boom.

As for New Zealand, there is a minimum wage of $ 20 per hour, among the highest in the world. A growth process that underscores the importance, for the nation, of workers with minimum wages, whose role has been fundamentally defined especially after the outbreak of the COVID-19 pandemic.

The real turning point in Italy comes with the indications of the Onofri Commission (1997), set up by the then Prime Minister Romano Prodi. The objectives also include guaranteeing a minimum income, defined on universalist and standardized criteria, which do not constitute a discretionary measure, but a real subjective civil right. So far so good, but what went wrong? Among the reasons that have led to a significant delay in the application of the minimum income in Italian territory, it is certainly difficult to introduce new expenditure measures. Second, the difference between North and South is a fundamental determinant of the level of inequality in the distribution of personal income in Italy. It is therefore about managing an instrument that is addressed to a limited number of individuals in the northern regions, against the possible broad access in the south.

Only recently has a process been launched with the aim of guaranteeing individuals a minimum income, in order to combat poverty and social exclusion. Citizenship income, introduced by Law no. 26/2019, presents a non-categorical scheme of contrasting poverty and social exclusion based on the criterion of selective universalism. This tool seems to be conditional on you joining a work integration program to link the income support function, to guarantee the beneficiaries a minimum standard of living, to link to the function of the active employment policy. The long-term objective pursued in Italy must be to guarantee a form of income support which is permanently funded and which is not, as is often the case, an electoral program which has fallen into disrepair a few years after its implementation.

The growing implementation of the RMI is bound to resolve a major international debate. But in the face of the enormous economic inequalities we are seeing in the digitalisation of labor, it is becoming increasingly difficult to oppose them.

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