Mike the Psych's Blog

What if psychologists ruled the world? In real life?

A universal basic income for everyone – could it work?

money_stairs_stick_figure_chinese_5753Finland has already started by selecting 2,000 people at random who will receive just under £500 a month tax free in a two-year pilot scheme, the first in Europe.

The idea is to relieve long-term unemployment at a time when jobs are increasingly being automated or carried out in cheaper countries due to technological developments. In Finland employment stands at almost 9% with long-term unemployment is increasing forcing the government to rethink its approach to the problem.

So the payment of the universal basic income (UBI) should help people to adjust to the insecurity of the current labour market with its part-time jobs and zero-hour contracts. It will also mean that all the complicated rules about welfare or unemployment benefits can be cut.

For example an unemployed worker in Finland might get €667 a month after tax but any money earned would be deducted from that. Now that person will received €560 a month with no strings attached and no red tape.

The government also hopes that more people will become self-employed. A senior official said “People are afraid to take on temporary jobs or start small businesses because they would lose their benefits; they prefer safe but low income to the risk of failing”.

If the experiment is a success the UBI would be available to every employable Finn although better paid ones would lose the benefit through taxation. This would cost €10-15 billion and some critics doubt it would be possible without increasing the already high rates of tax.

This is a test of human nature. Will people want to work and strive or just sit back and take the money. Theory X or theory Y in management speak.

Other countries are also considering the idea e.g. the Netherlands, France, Canada, India, and the state of California. Switzerland decided against it last year after a referendum in which voters were told it would double welfare spending.

Here in the UK trials are also being planned for Fife and Glasgow in Scotland, but not in England where the Citizens Income Trust and the Green Party support the idea. The Royal Society of Arts has also pitched in suggested we would need a basic income of £,3692 a year (2013)

Professor Guy Standing, from the School of Oriental and African Studies, recently presented the idea to the World Economic Forum in Davos. He talked about the “precariat” – people who live a precarious existence in temporary jobs, zero-hour contracts, and shuffling between employment agencies without any assurance of state benefits.

And if futurist are right and up to 50% of jobs could be automated over the next two decades then UBI could be the answer, certainly Elon Musk, the technology entrepreneur behind Tesla cars thinks so.

The idea was first proposed by Karl Marx’s son-in-law Paul Lafargue over a hundred years ago. He proposed that as technological advances would put humans out of work so everyone had a right to be lazy and should be paid  basic income whether or not they had a job.

As mentioned above France is one of the countries considering adopting UBI and it is a central plank of the Socialist Worker’s Party. They foresee automation replacing 10% of all jobs in France over the next 8 years and the end of France’s jobs-for-life culture. So everyone should receive €9,000 a year (watered down in the face of criticism to people aged 18-25 initially with others included by 2022).

Could it happen? Should it happen?

Will it only encourage those who don’t want to work to not bother looking for work (and there are probably 15-20% of the population who fall into that category)?



From Bombay to Burnley

Santander recently announced that the call centres set up in Mumbai (formerly Bombay) by building societies, which are now part of Santander, were all closed down on July 1 and since then all their call centres have been in the UK, in Glasgow, Leicester, and Liverpool.

This is in response to Santander consistently being rated the worst bank for customer service. It is now ranked second worst after Barclays (which still has one call centre in India).

Indian call centres are a source of frustration to UK callers. Sometimes you can’t understand the accent and their adoption of English names, presumably to make you believe you are speaking to someone in England, is farcical. Also as problems have become more complex scripted responses don’t work so well.

The reasons for returning to the UK may not be totally altruistic as labour turnover has increased amongst the graduates who work in Indian call centres and wage costs have risen. Competition from the Philippines has also reduced India’s market share which has grown significantly in recent years.

Santander weren’t the first to make this decision. A lancashire telecom company, New Call Telecom, earlier announced that they were setting up a call centre in Burnley rather than in Mumbai. They said that staff in lancashire were hard-working and loyal and customers preferred dealing with people in this country.

Some banks such as the RBS, including NatWest, have always had UK call centres. NatWest however seems determined to force people to use automatic paying-in machines. The branch in Burnley closed down two cashier positions over a weekend earlier this year and rebuilt the wall so you couldn’t tell they were ever there.

This means the queues are getting even longer yet they have staff walking around asking if you want to pay in automatically despite customer complaints that they want to deal with a person. And how annoying is it when, after you have actually got a cashier to deal with your task, they ask if there is anything else they can do for you?

I’ve suggested they might wash my car or carry my shopping but to no avail. Now if I said I wanted to buy an insurance policy or see a financial advisor I bet I’d get a cup of coffee!

And I found out today that Santander only does business banking with automatic paying-in. So give them credit for the call centres but not for their automation – which means fewer jobs in the long run.