What Participation Income is … and why you should care!

It appears to be difficult, if not impossible, to watch the national news on television without hearing about today’s outdated welfare systems, pension systems failing to support an ageing population, or heated debates on workfare. Similarly, who can honestly say they never woke up all sweaty at night from a nightmare as they were cut to pieces by robots taking over the world thanks to artificial intelligence in ways strangely similar to The Matrix or Terminator? Jokes aside, the impact of automation, robotisation, and digitalisation is significant and already affects how we organise society; it is time for government to address that change to better mitigate its effects. Moreover, beyond the structural shift labour markets are facing, concerns regarding the work-central nature of societies today or the narrow-minded consideration of economic development are rising.

These questions can keep one up at night. I am pretty sure they stop you from sleeping from time to time too. Whilst they are infinite ways to approach these issues, all routes lead to Rome after all, I believe I found a solution I feel comfortable sharing with the world and advocating for: Participation Income (PI). I won’t go in details on how exactly PI offers a great opportunity for States to start with problem solving, as an entire chapter of the policy paper will be dedicated to it, just know PI will be worth every minute you spare it! (Okay, I really hope I got you hooked by now because I really can’t say more and I need to go to the part where I explain PI).

Participation Income (PI), was introduced and developed by the economist Anthony Barry Atkinson since 1996. It can be defined as a universal welfare scheme conditional on individuals’ participation to their country’s economic activity. Put more simply, its similar to a universal basic income scheme, with the exception that individuals have to do something in exchange for the money they receive. That “something” is the key characteristic of PI, namely the participation criteria. In that sense, what makes PI different from most other social policies is the malleability of the criteria goes beyond traditional labour market participation. As Atkinson defines it himself, it can include all individuals that participate in the labour market in a traditional way but also “those engaging in approved forms of education or training, those caring for young, elderly or disabled, and even those undertaking approved forms of voluntary work”. This definition benefits from its broadness and gives room for multiple interpretations, particularly in the case of policy making, a point the policy paper I am working on will attempt to demonstrate.

Anthony Atkinson was a brilliant British economist whose life work was centred on the reduction of inequalities and poverty. Don’t just take my word for it, he attended and worked with some of the best universities in the field such as Cambridge, MIT, Oxford, and LSE. I apologise for the not very original name-dropping technique but who wouldn’t go for it with a resume like this one? His argumentation is both based on his beliefs universal and individual welfare measures are essential to combat poverty, and on the realistic view that unconditional schemes enjoy few supporters. Indeed, many scholars focused on projects such as Unconditional Universal Basic Income (UUBI) as an alternative to current welfare systems. However, these are usually met with skepticism, especially linked to reciprocity. In simple terms, those working for a living do not want to enable others to receive benefits and not have to do anything. Whilst those in support of UUBI claim only very few individuals will follow this path, and the majority will participate through other means to society, making free riders a small price to pay for this new policy, Atkinson anticipated the small chances it stands politically. His proposal of Participation Income therefore combines his critique of the current welfare systems as well as a realistic outlook on what reforms and proposals stand a chance in the policy making scene.

Nevertheless, PI should not be seen as a simply “more feasible alternative to UBI”, it also holds characteristics that make it a viable proposal on its own. Through its broad participation criterion, PI acknowledges activities that have been considered externalities until now in a much more explicit manner than UBI can. Indeed, as Sates can decide to include activities such as care-taking of children or charity work, it allows them to openly recognise the value of such forms of participation. UBI on the other hand, by definition, allocates money with no regard to the activities individuals might pursue. PI also promotes a more inclusive society by getting rid of the stigmas associated with traditional means-tested benefits that lead to a feeling of exclusion for recipients and a divide of society. Finally, PI also can be introduced as a complement rather than a substitute to current social assistance systems which makes it easier to implement. The many more ways PI stands out and offer viable solution to current dilemmas will be laid out and discussed in the currently work-in-progress ONE policy paper.