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Hugo Rajão // Could the need for housing challenge UBI’s effectiveness as an exit option for workers?

Fevereiro 28, 2024 @ 11:30 - 13:00

Centro de Ética, Política e Sociedade (CEPS), Universidade do Minho

Sessão do Seminário CEPS, Quarta-feira, 28 de fevereiro às 11h (GMT) – híbrido 

Hugo Rajão (CEPS), “Could the need for housing challenge UBI’s effectiveness as an exit option for workers?”

Abstract: It is widely claimed that Unconditional Basic Income (UBI) has the potential to enhance economic freedom and fairness in labor relations, contributing to the de-commodification of labor, by reducing workers’ exit costs associated with leaving their jobs. These exit costs are influenced by the quality of alternative options available to individuals.

A significant proportion of workers, particularly the most vulnerable, depend solely on their work wages to fulfil their material needs, leaving them with no viable alternative but to accept prevailing working conditions. In essence, they are compelled to sell their labor power under conditions they might reject if presented with reasonable alternatives. Consider a scenario where everyone receives a UBI that covers at least a threshold for the most basic needs. The prerequisites for subsistence are often the primary reasons people are most willing to compromise on other aspects of their lives. With these needs assured by the UBI, affected workers would genuinely have the option, especially in extreme situations, to escape from undesirable workplaces. Establishing a universally agreed-upon definition of the basic needs threshold is challenging. However, certain basic needs, such as the need for housing, are less controversial indicators of poverty. Housing is widely accepted as a crucial factor, and very few would consider someone without access to housing as non-poor. More importantly, few would be willing to forgo employment if it meant losing their housing. So, for UBI to serve as a viable exit option, it must adequately cover the need for housing. Otherwise, people would not be willing to give up their jobs and live solely on UBI. However, proposed UBI amounts are often modest, falling below the minimum wage for full-time employment (as seen in the case of Portugal).  Assuming people adjust their expenditures to their expected income, the gap between UBI and wages may require a significant readjustment of expenditures to the budget, potentially hindering the decision to leave a job. While this expenditure adjustment applies to all basic needs, some are more adaptable to budget constraints than others.

As explored in this paper, the need for housing poses a particular challenge. Housing costs, including credit and rent, exert more pressure on the budget compared to other basic needs (like food). Due to the gap between UBI and wages, living solely on UBI would intensify this budgetary strain. Additionally, housing involves other kinds of burdens that make readjustment between expenditures and income more difficult, compared to other basic needs, such as fixed prices, contractual obligations, limited consumption alternatives, search and seek efforts, logistics costs, community ties, identity considerations, relational costs, and hurdles associated with returning to a prior living situation. Therefore, due to the imperative need for housing, UBI alone may prove insufficient to meet individuals’ most basic needs, thereby limiting its effectiveness as a genuine exit option for workers.

Evento

Data
Fevereiro 28, 2024
Hora:
11:30 - 13:00
Categorias de Evento:
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Local

CEPS Room (ELACH) + Online
Rua da Universidade
Braga, Portugal

Organizador

CEPS
Email
ceps@elach.uminho.pt