Handling Socio-economic Risks – An Economy That Works for the People

Can we safeguard ourselves from socioeconomic crises? From job guarantees to UBI & UBS, many proposals circulate promising to make the economy work for the people. But do they have potential?

 

Climate crisis, financial instability, high turnover in the labor market, health crisis, and rising rates of inequality – societies are exposed to a variety of socio-economic risks. Different proposals circulate that promise to mitigate and minimize some of these risks. Their nature, potential and shortfalls were subject of debate at the final session of our symposium “Prosperity in the 21st Century”, organized in cooperation with The New Institute.

@ Florian Schuh

One of the more recent proposals promising to shield people from socio-economic risks was presented by Anna Coote (New Economics Foundation), one of the leading scholars on Universal Basic Services (UBS) research. The goal of UBS: to achieve planetary boundaries while respecting human dignity. This is supposed to be achieved by granting everyone access to basic universal services in accordance with their needs. This ‘social guarantee’ is intended to act as the social pillar of the EU Green Deal. According to Coote, a UBS scheme would leave more room for fiscal manoeuvre compared to the competing idea of a Universal Basic Income (UBI).

Jannik Landwehr then introduced insights from an upcoming Forum New Economy working paper on the effect of  job guarantee programs.  At its heart, job guarantee programs argue that the government should provide a job to everyone who is able and willing to work for a living wage. Pilot projects in countries like France and Argentina, but also in Berlin, showed improved levels of social inclusion, motivation and mental health among the affected, Landwehr argued.

The perhaps most famous proposal is the one of a UBI, where all citizens of a given population receive a regular financial grant by the government, irrespective of their circumstances. Marcel Fratzscher from DIW Berlin shared first insights from a pilot project in Germany where a monthly stipend of 1200 euro is paid to 120 randomly selected people for three years. Fratzscher in particular emphasized the enabling rather than sanctioning effect of a UBI.

Discussants were Achim Truger from the German Council of Economic Experts, Dirk Ehnts (TU Chemnitz) and Jens Suedekum (DICE), who among other things commented on the lack of practical relevance of the selected proposals, their possible adverse effects and financing opportunities.

The whole session can be rewatched here:

 

We use cookies to provide you with the best possible service. When you continue browsing the site, you consent to the use of cookies. More info.