30 Oct 2016

The "gig" economy, why we need a Universal Basic Income now, and how to pay for it

In a landmark legal decision, an employment tribunal has ruled that the UK's 40,000 Uber drivers are not self-employed. Instead they are indeed employed by Uber, and are therefore entitled to holiday pay, pensions and the other workers’ rights that apply to normal workers.

It's essentially good news. Many people are having to resort to working in a "gig" economy, where there is zero security, no unemployment protection, no pensions, no holidays. This new economy means that a large number of people are fighting to undercut each other to get the work. And while in principle, having the choice to work when you want may seem a plus, when you are forced to work 50 hours a week just to pay the the bills, the Uber economy is a total disaster for the majority of the population. The exception, of course, are the consumers who are happy to be able to get a Uber driver to take them from A to B for a great price.

But, for me, it seems that we can have the advantages of a Uber-ised gig society, and a reasonable deal for workers.


Simple. We just need to implement a Universal Basic Income so that people would have a basic level of income on which the extra "gigs" could be added if needed. Thus, noone would have to work 50 hours for Uber unless they really wanted to (to pay for that new car, or vacation). Most people would just work the amount they want to - 10 hours, 20 hours or whatever?

Uber (and it's equivalents) would be perfectly happy, because they would have access to a large and flexible work force. Customers would also be be happy, because those Uber drivers would be plentiful. But the workers who are doing the driving for Uber and its customers would be in control. If the pay rates were not good enough, they would simply not bother to work. The supply and demand mechanism would work as it should - but without the desperation that currently means that workers are obliged to take crap wages just to pay the basics.

So, why don't we do it? Well, the standard answer is that there isn't any money to hand out  to citizens in the form of an Unconditional Basic Income.

But, if you have been reading my recent posts, it will hopefully be blinding obvious where the money can be found. With at least $100 quadrillion of financial transactions over the past 10 years, it seems obvious to me that a trivial universal and automatic tax on those transactions could easily provide the money needed to fund a Universal Basic Income. And remember, that money would not be removed from the real economy. Instead, it would be going directly into stimulating the stuff that is worth stimulating.

When I think of the world that I would like my children and grandchildren to live in, it really does seem to me that a complete break with the current model would be a great advantage. Freed up from the need to go out and find a 40 hour a week job just to pay for the basics, people would be able to spend their time doing what they really want to do - volontary work, art, theatre and music, education, caring etc, and just do the amount of Uber driving (or its equivalent) necessary to pay for the extras. Sounds pretty good to me.

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