The crisis of waged work and the option of a universal basic income grant for South Africa

ABSTRACT

Waged work is widely seen as a sufficient basis for meeting basic needs, achieving social inclusion and realizing essential social rights. Yet waged work that provides a livable income on reasonably secure terms is rare in ‘developing’ economies and increasingly scarce in ‘developed’ economies. This trend is likely to persist and worsen as the disruptive impacts of economic volatility and climate change intensify and labour market restructuring continues. Aggravating the impact is the diminishing access to livelihood options outside the wage economy. South Africa is an extreme example of this trend, with a very large proportion of the working age population superfluous to the formal economy, high levels of poverty and severe inequality. This paper describes this crisis at the global level and then specifically in South Africa, before considering the option of a universal basic income grant (UBIG). It examines the critiques and the potential merits and risks of such an intervention. To realize its transformative potential, a UBIG would have to be deployed as part of a broad transformation strategy that is led by an active state and driven by a mobilized civil society.     

The impact of AIDS on income and human capital

This paper studies the impact of HIV/AIDS on per capita income and education. It explores two channels on how HIV/AIDS affects income that have not been sufficiently stressed by previous literature: the reduction of the incentives to stay in school due to shorter expected longevity and the reduction in productivity of experienced workers. In the model, individuals live for three periods, may get infected in the second period, and with some probability die of AIDS before reaching the third period of their lives. Parents care for the welfare of the future generations so that they will maximize lifetime utility of their dynasty. The simulations predict that the most affected countries in Sub-Saharan Africa in the future will be, on average, 30% poorer than they would be without AIDS. Schooling will decline in some cases by 40%. These figures are dramatically reduced with widespread medical treatment, as it increases the survival probability and productivity of infected individuals.     

The impact of income inequality on values and attitudes

Scholars in several social science disciplines scholars have argued from their respective disciplinary perspectives that income inequality has a considerable impact on economic and social performance of a nation. This essay investigates the possible impact of income inequality on 290 values and attitudes in forty industrial nations from an economic perspective. The results show that inequality has a significant impact on values and attitudes especially concerning religion and the family.     

The impact of macroeconomic conditions on income inequality

This paper analyzes the relationship between macroeconomic factors and the income distribution using data on equivalized disposable household income from the United Kingdom for 1961–99. We argue in favour of fitting a parametric functional form to the income distribution for each year, and then modeling the time series of model parameters in terms of the macroeconomic factors, as this better allows us to take into account non-stationarity in the time series. Estimates from models that relate income distribution parameters to cyclical variables in first differences (to account for non-stationarity) suggest that neither inflation nor unemployment have significant effects on income inequality. Compared to the commonly-used method of modelling the income shares directly, our approach indicates that there was no clear cut relationship between macroeconomic factors and the UK income distribution during the last third of the twentieth century.     

Mechanics of replacing benefit systems with a basic income: comparative results from a microsimulation approach

Recent debates of basic income (BI) proposals shine a useful spotlight on the challenges that traditional forms of income support are increasingly facing, and highlight gaps in social provisions that largely depend on income or employment status. A universal “no questions asked” public transfer would be simple and have the advantage that no-one would be left without support. But an unconditional payment to everyone at meaningful but fiscally realistic levels would likely require tax rises as well as reductions in existing benefits. We develop a comprehensive BI scenario that facilitates an assessment of the resulting fiscal and distributional effects in a comparative context, undertake a microsimulation study to quantify them, and propose a simple decomposition to identify the mechanisms that drive effects in different country contexts. Results illustrate the challenges, but also the strengths, of existing social protection systems. A BI would fix benefit coverage gaps that exist in many countries, but would require very substantial tax rises if it were to be set at a meaningful level. As support would not be targeted on those most in need, it would not be a cost-effective way of directly reducing income poverty.     

The impact of the family on home-based work

This article reports on a study of 899 families with at least one member engaged in home-based work. Six work characteristics are examined in relation to family structure and gender of the home-based worker: business ownership, occupation of the home-based work, amount of income generated, location of the work space, number of hours worked, and availability of help with the work. Women in single-parent and full-nest families are found to do the most restructuring of work time and space and women home-based workers generate less income from the work than do men. Male home-based workers experience less conflict between family and work scheduling, are more likely to have an exclusive work space, and tend to have help with the home-based work.This article reports results from the Cooperative Regional Research Project, NE-167, entitled, At-Home Income Generation: Impact on Management, Productivity and Stability in Rural and Urban Families, partially supported by Cooperative States Research Service, U.S. Department of Agriculture and the Experiment Stations at the University of Hawaii, Iowa State University, Lincoln University (Missouri), Michigan State University, Cornell University (New York), The Ohio State University, The Pennsylvania State University, Utah State University and University of Vermont.Her research interests include divorce, work and family, and the economic well-being of women and children. She received her Ph.D. from Oregon State University.He has extensive experience in research, consulting, and training for small business owners and operators, including single parents, disabled veterans, Hispanics, rural and home-based. He received his Ph.D. from New York University.     

The impact of taxes and transfer payments on the distribution of income: A parametric comparison

The Luxembourg Income Study data is used to explore the impact of taxes and transfer payments on the distribution of income across 13 countries for different years. The five-parameter generalized beta distribution and 10 of its special cases are considered as models for the size distribution of income. Maximum likelihood methods are used to estimate the model with corresponding measures of goodness of fit and inequality reported. These results identify the best-fitting two-, three-, and four-parameter models as well as describe the inter-temporal patterns of inequality corresponding to earnings, total income, and disposable income. A general pattern of increasing inequality is observed for almost all countries considered along with significantly different distributional impacts of taxes and transfer payments across countries.     

The impact of deferring retirement age on retirement income adequacy

UPDATE OF RSPM-POST-65 RETIREMENT AGES: The EBRI Retirement Security Projection Model (RSPM) was developed in 2003 to provide an assessment of national retirement income prospects. The 2011 version of RSPM adds a new feature that allows households to defer retirement age past age 65 in an attempt to determine whether retirement age deferral is indeed sufficiently valuable to mitigate retirement income adequacy problems for most households (assuming the worker is physically able to continue working and that there continues to be a suitable demand for his or her skills). The answer, unfortunately, is not always "yes," even if retirement age is deferred into the 80s. LOWEST-INCOME LEVELS, 50-50 CHANCE OF ADEQUACY: RSPM baseline results indicate that the lowest preretirement income quartile would need to defer retirement age to 84 before 90 percent of the households would have a 50 percent probability of success. Although a significant portion of the improvement takes place in the first four years after age 65, the improvement tends to level off in the early 70s before picking up in the late 70s and early 80s. Households in higher preretirement income quartiles start at a much higher level, and therefore have less improvement in terms of additional households reaching a 50 percent success rate as retirement age is deferred for these households. LOWEST-INCOME LEVELS, HIGHER CHANCES OF ADEQUACY: If the success rate is moved to a threshold of 70 percent, only 2 out of 5 households in the lowest-income quartile will attain retirement income adequacy even if they defer retirement age to 84. Increasing the threshold to 80 percent reduces the number of lowest preretirement income quartile households that can satisfy this standard at a retirement age of 84 to approximately 1 out of 7. IMPORTANCE OF DEFINED CONTRIBUTION RETIREMENT PLANS: One of the factors that makes a major difference in the percentage of households satisfying the retirement income adequacy thresholds at any retirement age is whether the worker is still participating in a defined contribution plan after age 65. This factor results in at least a 10 percentage point difference in the majority of the retirement age/income combinations investigated. FACTORING IN RETIREMENT HEALTH COSTS: Another factor that has a tremendous impact on the value of deferring retirement age is whether stochastic post-retirement health care costs are excluded (or the stochastic nature is ignored). For the lowest preretirement income quartile, the value of deferral (in terms of percentage of additional households that will meet the threshold by deferring retirement age from 65 to 84) decreases from 16.0 percent to 3.8 percent by excluding these costs. The highest preretirement income quartile experiences a similar decrease, from 12.8 percent to 2.6 percent.     

The impact of auto-enrollment and automatic contribution escalation on retirement income adequacy

The results in this paper demonstrate the profound influence of plan design variables, as well as assumptions of employee behavior in auto-enrollment 401(k) plans. Even with a relatively simple definition of "success," large differences in success rates can be seen, depending on which plan design factors and employee behavior assumptions are used: The probability of success for the lowest-income quartile increases from the baseline probability of 45.7 percent to 79.2 percent when all four factors are applied. The impact on the highest-income quartile is even more impressive, with an increase in the probability of success from 27.0 percent to 64.0 percent. When viewed in isolation, it is clear that the impact of increasing the limit on employee contributions is much greater than any of the other three factors. However, the importance of including one or more additional factors, along with the increase in the limit on employee contributions, can more than double the impact of increasing the limit by itself. This suggests that additional analysis of the influence of plan design variables on optimizing employee results is warranted. The next step in this project will include development of a plan-specific simulation model that will allow additional plan design variables.     

The impact of parenting education on parent and child behaviors: Moderators by income and ethnicity

Parenting education has emerged as a promising resource for supporting parents, but the relative impact of parenting education among families facing higher versus lower risk remains unclear. The present study explored the effects of participating in an evidence-based parenting education series and examined whether those effects were moderated by families' socio-demographic contexts (income level and ethnicity status). Results indicated that parenting education series serving predominantly lower-income parents resulted in greater improvements in parents' parenting skills and their children's behaviors compared to series serving higher-income parents. Attending a parenting series with a higher proportion of Latino parents also significantly predicted greater improvements in child behaviors, but not parent skills. These findings provide preliminary evidence that parenting education may be most effective when it targets underserved populations. The findings further highlight the importance of continuing to explore the influence of parenting education adapted for low-income and Latino families to inform the design of evidence-based programs.     

The impact of unionization on labor’s share of income

This study examines the effect of unions on labor’s share of income. Because economic conditions within each industry are important in addressing this issue, this analysis incorporates a more disaggregated approach than has been previously used. Cross-sectional data for the 1950s — a period of more stable unionization — permit an examination of the long-run effect of wage increases on labor’s share. The empirical analysis suggests that higher labor prices have no long-run impact on labor’s share in manufacturing.     

The impact of globalization on social work in the UK

Since the late 1980s social work in the UK has undergone a period of unremitting change affecting its organizational structure, value-base, and service users. There has been a regrettable narrowness of scope in the social work literature on such changes, as analysis has been limited to policy and service delivery issues, which treat such changes as if they were simply new technical responses to the problems of reorganizing social services. We argue that such analyses do not engage sufficiently with the complex dynamics driving these changes and that there is a need to contextualize change in social work against the wider political and economic context. The transformative nature of the contemporary period is posited with reference to the impact of global macro-level forces and the ways that these interact with national and political variables on micro-level forms of social work practice. This paper reviews selective literature on globalization and draws linkages with changes in social services at the agency and practitioner level in the UK.     

Women's provisioning work: counting the cost for women living on low income

This paper reports on a research project that uses the concept of provisioning as a starting place in understanding the activities women in marginalized communities undertake to provide for themselves and members of their households and neighborhoods. This project explores the household and collective provisioning undertaken by women who are all part of formal community organizations in Canada. The work women do is explored from the dimension of women's relationships of responsibility. This vantage point uncovers a complex web of activity including paid employment, voluntary work, care work, exchanges of goods and services, community work, and self-provisioning. In addition, the provisioning strategies that women use when public resources are scarce are explored. In the face of significant cutbacks in public provision of goods and services, women are engaging in a complex network of activities in order to compensate through private provisioning for resources that are no longer available through public provisioning. The policy context in which these strategies are pursued is explored as well as the way in which risky policies produce risky coping strategies.     

The earned income tax credit and union formation: The impact of expected spouse earnings

Using the Survey of Income and Program Participation from 2001, 2004, and 2008 and federal and state variation in earned income tax credit generosity over time, I investigate how changes in expected household earned income tax credit benefits associated with marriage affect cohabitation and marriage behavior among low-income single mothers. I simulate a marriage market to predict potential spouse earnings for a sample of single mothers in order to estimate the potential losses or gains in earned income tax credit benefits upon marriage. Using multinomial logistic regressions, I then analyze how the anticipated loss in earned income tax credit benefits upon marriage affects the likelihood of marrying or cohabiting. Results suggest that the average earned income tax credit-eligible woman can expect to lose approximately US$1,300 in earned income tax credit benefits in the year following marriage, or about half of pre-marriage benefits. Single mothers who expect to lose earned income tax credit benefits upon marriage are 2.5 percentage points less likely to marry their partners and 2.5 percentage points more likely to cohabit compared to single mothers who expect no change or to gain earned income tax credit benefits upon marriage. Despite recent policy efforts to reduce the size of the marriage penalty embedded in the earned income tax credit structure, these results suggest that the earned income tax credit still creates distortions in marriage and cohabitation decisions among low-income single mothers.     

Adoptive pregnancy: legal and social work issues

Medicine's recent advance in aiding reproduction, "adoptive pregnancy," is spawning a host of legal, ethical, and policy questions. Policies developed to cope with problems that have arisen in more traditional adoptions, including "the right to know" and access to genetic information, may provide a starting point for finding answers to some of the new dilemmas.     

The quest for a universal social work: some issues and implications

What debates and issues are involved in moves to generalise about social work across the globe? This paper attempts to examine some of these major debates and, in so doing, to suggest some directions for a flexible approach. Crucial to these debates are several tensions around the issues of Westernisation, localisation and indigenisation in social work. It is also important to seek clarity around the complexities of international social work. The political implications involved in these movements are discussed and possible approaches to finding a flexible framework which allows for differences yet provides for accountability, responsiveness and connectivity are suggested.     

The impact of labour income risk on household saving decisions in Turkey

This paper analyses the Household Budget Surveys prepared by the Turkish Statistical Institute to reveal the empirical importance of precautionary saving in Turkey. The most difficult aspect of the empirical analysis is the approximation of labour income risk as a proxy variable for future labour income uncertainty. Individual disposable income is interacted alternately with the probability of being unemployed and with the probability of job loss in the next period to generate the labour income risk variables. The econometric results support the precautionary saving hypothesis and labour income risk emerges as one of the main determinants of household saving decisions. Moreover, households implement alternative strategies to smooth out their income streams such as holding a second job and increasing the number of income earners in the family. However, it is evident that they are still vulnerable against labour income risk, which underlines the need for an effective and efficient social security system.