A group of 120 Germans will each receive a lump sum of €1,200 a month for three years in the country’s first systematic experiment with an unconditional basic income.
The notion of giving individuals regular cash handouts regardless of whether they have jobs has gained traction on both the right and the left of the political spectrum as a means to even out economic disparities. Advocates argue that it is the fairest way to provide a universal safety net and would free people up to lead more fulfilling private lives, but opponents have dismissed it as unaffordable and a disincentive to work.
The few studies carried out give a contradictory impression of a basic income’s effects on the labour market and the wellbeing of its recipients. The German pilot scheme, funded by up to 140,000 private donors and run by an economic institute, is an attempt to put the argument on a scientific footing.
“So far the debate has resembled a philosophical salon at best, and a religious war at worst,” Jürgen Schupp, who will lead the study at the German Institute for Economic Research (DIW), told Der Spiegel.
“On both sides it is characterised by clichés: critics claim a basic income would make people stop working and lie on the couch with fast food and streaming services. Supporters say people would carry on with meaningful work, become more creative and pro-social, and rescue democracy.”
The experiment will involve a total of 1,500 people selected randomly across Germany, 120 of whom will receive the €1,200 a month, just above the official poverty line and a little less than half of the average salary after tax. They will fill out regular questionnaires about their lives, detailing any work, what they do with their free time and how their feelings have changed.
The remaining 1,380 will receive no money but will answer the same questions. The study is paid for by a lobby group called Mein Grundeinkommen (my basic income), whose nearly 200,000 supporters have financed payments of €1,000 a month to 668 people since 2014. It says that its surveys show 90 per cent of Germans would carry on working despite the payments.
One beneficiary said it had helped her to strike out on her own rather than join the family hotel business. “I’ve asked myself: ‘What am I spending my time and my money on? Am I doing this because I have to, or because I want to? What can I achieve with it?’”
Since the start of the pandemic public opinion has swung behind the idea. A fortnight ago a survey carried out for MDR, a public broadcaster, found that 55 per cent would support an “unconditional basic income”.
Give and take
• Finland gave 2,000 unemployed people an unconditional income of €560 a month in 2017 but dropped the idea after concluding that it had no effect on their job prospects.
• Combinator, a US tech investor, is planning a $60 million study in which 1,000 people will get $50 or $1,500 a month.
• Negative tax experiments in the US in the 1960s gave low earners money from the state rather than having them pay taxes on their income. The results were mixed.