Guaranteed minimum income is a system of social welfare provision that guarantees that all
citizens or families have an income sufficient to live on, provided they meet certain conditions.
Eligibility is typically determined by citizenship, a means test, and either availability for
the labour market or a willingness to perform community services.
The primary goal of a guaranteed minimum income is to reduce poverty.
If citizenship is the only requirement, the system turns into a universal basic income.
Elements A system of guaranteed minimum income can
consist of several elements, most notably: a calculation of the social minimum, usually
below the minimum wage; a social safety net, to help citizens or families
without sufficient financial means survive at the social minimum.
This may be a transfer or, in some cases, a loan, and is generally conditional to availability
for work, performance of community services, some kind of social contract, or commitment
to a reintegration trajectory; child support by the state;
Student loan and grants; state pension for the elderly;
disability pension for the persons with disability.
Differences between guaranteed minimum income and basic income
Basic income means the provision of identical payments from a government to all of its citizens.
Guaranteed minimum income is a system of payments by a government to citizens who fail to meet
one or more means tests.
While most modern countries have some form of GMI, a basic income is rare.
Advocates In the First Muslim Caliph Abu Bakr introduced
a guaranteed minimum standard of income, granting each man, woman, and child ten dirhams annually;
this was later increased to twenty dirhams.
In 1795, American revolutionary Thomas Paine advocated a Citizen's Dividend to all US citizens
as compensation for "loss of his or her natural inheritance, by the introduction of the system
of landed property".
French Emperor Napoleon Bonaparte echoed Paine's sentiments and commented that 'man is entitled
by birthright to a share of the Earth's produce sufficient to fill the needs of his existence'.
In 1963, Robert Theobald published the book Free Men and Free Markets, in which he advocated
a guaranteed minimum income.
In 1966 the Cloward–Piven strategy advocated "overloading" the US welfare system to force
its collapse in the hopes that it would be replaced by "a guaranteed annual income and
thus an end to poverty".
In his final book Where Do We Go from Here: Chaos or Community?
Martin Luther King Jr. wrote
I am now convinced that the simplest approach will prove to be the most effective — the
solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed
income.
In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists
signed a document calling for the US Congress to introduce in that year a system of income
guarantees and supplements.
In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income in which he
advocated the Guaranteed Minimum Income and discussed Richard Nixon's GAI proposal.
In 1987, New Zealand's Labour Finance Minister Roger Douglas announced a Guaranteed Minimum
Family Income Scheme to accompany a new flat tax.
Both were quashed by then Prime Minister David Lange, who sacked Douglas.
In his 1994 "autobiographical dialog" Friedrich Hayek stated: "I have always said that I am
in favor of a minimum income for every person in the country".
In 2013, The Equal Life Foundation published the Living Income Guaranteed Proposal illustrating
a practical way to implement and fund a minimum guaranteed income.
Other modern advocates include Hans-Werner Sinn, Ayşe Buğra, The Green Economics Institute,
and Andrew Coyne.
Funding Tax revenues would fund the majority of any
GMI proposal.
As most GMI proposals seek to create an earnings floor close to or above poverty lines amongst
all citizens, the fiscal burden would require equally broad tax sources, such as income
taxes or VATs, in order to fund such expenditures.
To varying degrees, a GMI might be funded through the reduction or elimination of other
social security programs such as unemployment insurance.
Though neutral with respect to government finance, Milton Friedman also proposed a GMI
in the context of abolishing minimum wages, which he argued unduly distorted labor market
economics.
The extent to which a GMI is designed to reduce or supplement existing social security programs
can be seen as one of the unresolved cleavages amongst GMI advocates; more economically conservative
seeking to replace the bulk of welfare spending with a GMI while more social or egalitarian
proponents see the GMI as a component of a broader social welfare system.
Minimum income examples around the world Cyprus
In July 2013, the Cypriot government unveiled a plan to reform the welfare system in Cyprus
and create a ‘Guaranteed Minimum Income’ for all citizens, though this has been disputed.
France In 1988, France was one of the first countries
to implement a minimum income, called the Revenu minimum d'insertion.
In 2009, it was turned into Revenu de solidarité active, a new system which aimed at solving
the Poverty trap by providing low-wage workers a complementary income; thus encouraging activity.
Other countries Brazil: Bolsa Familia
Canada: each province is responsible for implementing their program, in Québec it is known as Bien
être social or social welfare Denmark: Social Bistand
Finland: Toimeentulotuki Germany, Liechtenstein, Austria: Sozialhilfe
Iceland: Félagsleg aðstoð Ireland: Supplementary Welfare Allowance
Luxembourg: revenu minimum garanti Netherlands: algemene bijstand, Wet werk en
bijstand Norway: Stønad til livsopphold
Portugal: Rendimento mínimo garantido Spain: several schemes exist depending on
the region Sweden: Socialbidrag
Switzerland: fr:revenu minimal de réinsertion UK: Income Support
See also Basic income
Constitutional economics Guaranteed Annual Income
Guaranteed Income Supplement Guaranteed Minimum Pension
Homelessness in the United States Living wage
Revenu minimum d'insertion Social credit
Social dividend Wage slavery
References
External links Basic income for all-Philipp van Parijs, Boston
Review "Social minimum" in the Stanford Encyclopedia
of Philosophy Guaranteed Basic Income Studies: How it could
be organised, Different Suggestions About a Guaranteed Basic Income: History