24 Jan Inclusion income and citizenship income: what happens in the rest of Europe and Canada
A research of the Fondazioni Astrid and Circolo Fratelli Rosselli foundations deals with the theme of policies to combat poverty, with an analysis of the most important European-national examples of inclusion income, the reconstruction of the Italian scenario and a chapter dedicated to Canada
While in Italy the debate on the citizenship income is always more intense, research has recently been published by the Fondazioni Astrid and Circolo Fratelli Rosselli, “New (and old) poverty: what is answer? Inclusion income, citizenship income, and much more” (il Mulino).
The result of more than a year of studies and research, it is a useful volume to take a look at the European experiences in terms of income support, waiting to know the scheme that will take the so-called “citizenship income” in Italy. And it chooses Canada as the only case outside the European borders to put overseas policies under the lens.
“NEW (AND OLD) POVERTY: WHAT IS THE ANSWER?
More than 15% of US residents and more than 5 million residents in Italy today live below the absolute poverty line, and 120 million people in the EU are considered to be at risk of poverty and social exclusion. Some research estimates that at the end of the next decade almost 50% of the jobs existing today in Italy will no longer exist. These are just some of the figures inherited from the economic collapse of the two-year period 2007-2008, which has profoundly changed the global social fabric. The technological transformation fills the industry 4.0 with new opportunities, but has revolutionized and will continue to distort the labor market. The crisis of the traditional welfare state, as it was conceived in an insurance logic, concentrates the European and global reflection on the policies to adopt to combat poverty and how to find resources to extend social security institutions over subordinate employment, more and more towards the principles of progressive universalism.
The research, carried out in collaboration with the Department of Economics and Business Sciences (DISEI) of the University of Florence and with the CISA (Inter-University Center for Actuarial Science and Risk Management), the research is introduced by Tiziano Treu, with the presentation of the two Presidents of the Foundations, Franco Bassanini, and Valdo Spini, it is structured in three parts: General framework, National case studies and a third part dedicated to Italy.
The first part of Elena Granaglia focuses on the “General Premises and Critical Nodes”, with the considerable merit of first providing some indispensable reference definitions, then move on, with the contributions of Stefano Ronchi and Andrea Terlizzi, to the “European Guidelines” and to the broken promises of an inadequate European Union’s social policy. At the end of the introductory part, there is the “Analysis of risk profiles and the possibility of reintegration” by Augusto Bellieri dei Belliera, Marcello Galeotti, Marco Milano and Emanuele Vannucci of the CISA (Inter-academic Center for Actuarial Sciences and Risk Management).
DEFINITIONS: MINIMUM INCOME, CITIZENSHIP INCOME, OTHER SOCIAL SECURITY CUSHIONS
The minimum income is a “monetary transfer to combat poverty, provided at regular intervals to all those peoples with resources below a certain threshold of poverty”, a social inclusion income financed by taxation. Here it emerges the first terminological confusion, especially in the Italian proposal of minimum income proposed by the 5-Star Movement, which is improperly defined as “citizenship income”. The citizenship income is something different, in fact, it’s “a transfer provided on an individual basis, regardless of the resources held and the willingness to work”. The minimum income must also be distinguished from other social security cushions that are “contribution-based and have the function of normalization of the earned income in the life cycle”. The minimum income is instead financed by the community, when the income, even if normalized, is insufficient.
THE PLAN OF MINIMUM INCOME: ELEMENTS TO CONSIDER
It is possible to create different models of minimum income, once you define:
- how poverty must be defined;
- which beneficiaries should be considered;
- which conditionalities to provide for the granting of a minimum income, distinguishing between a socalled demanding activation (demanding) with the obligation for the beneficiary to accept any proposed work, and a more liberal activation (enabling) that takes into account the quality of the work through job promotion policies and employment support;
- what other measures can dialogue with the minimum income: transfers for specific needs, categorical transfers to poor workers (eg Tax credit), transfers financed by the employers or by the workers themselves, policies to support the cost of the children, etc;
- what effects on the labor market to expect: downward competition between those included in the income and the most disadvantaged workers who are outside the minimum income system, lower net wages, etc;
- what problems to consider: first of all financial coverage, in an economic context, as in Italy, of slow growth, the fight against abuse, the job creation and the integration of income support policies with other structural policies such as education and training policies, growth policies, infrastructure policies, and mobility.
The second part of the research is dedicated to the analysis of experiences in terms of income support in Europe and Canada.
With different times and methods, in fact, all European countries (also Greece and Italy) have adopted policies to combat poverty and social exclusion. The volume, edited by the two foundations specialized in research and reflection on public policies, focuses on the comparative analysis of what has been done in Western European countries: France and Germany (Andrea Ciarini), Spain (Alessandro Carli, Lorenzo Corsini, Giorgia Giovannetti and Elena Monticelli), Scandinavian countries (Paolo Borioni), Great Britain (Gianluca Busilacchi) and, finally, analyzing the situation in Canada (Alessandro Carli, Lorenzo Corsini, Lapo Filistrucchi, Giorgia Giovannetti and Elena Monticelli).
INCOME SUPPORT POLICIES IN CANADA
The only non-European case presented by the researchers is that of Canada, which started the first income support experiments already in the 1970s: it refers for example, to the active MINCOME in the city of Dauphin in the Province of Manitoba from 1974 to 1979.
In 2017 were 600,000 households involved in programs of income support in Canada, about 1.1 million people beneficiaries. According to studies, the most affected were the regions of the South (the most populated and industrialized areas), while the number of beneficiaries in the North (rural areas) was lower. However, the relationship between beneficiaries and people involved is higher in the extreme North, characterized by low population density. Another fundamental fact emerged from the research is that income from welfare have not always had an adequate amount, resulting in most cases not sufficient to reach the 50% of median income (poverty line).
QUEBÉC: THE COMMITTEE OF EXPERTS ON THE GUARANTEED MINIMUM INCOME
The analysis then leads us to Québec, the French-speaking Province of Canada. The Minister of Employment and Social Solidarity François Blais has recently appointed a Committee of Experts on guaranteed minimum income, chaired by Dorothée Boccanfuso, Professor at the Department of Economics of the School of Management at the Université de Sherbrooke, to document and analyze the functioning of Québec’s current income support system, in view of the elaboration of a new model that promotes social inclusion, takes into account other active measures, operates a simplification of procedures. The Committee has therefore formulated, on the basis of the studies conducted, a with 23 recommendations to improve income support by implementing a guaranteed minimum income, integrated with other incentives to work, reaching the conclusion that it is necessary to raise the poverty line for people aged 65 and over and for people with disabilities, and stimulate greater integration in the labor market.
ONTARIO BASIC INCOME PILOT
The Canadian experiment that showed the greatest interest was the , a pilot program started in the Province of Ontario, involving about 4000 residents.
The test group was selected among the resident population aged 18 to 64 with income of less than 34,000 Canadian dollars per year if single and 48 thousand Canadian dollars per year for couples.
The identified beneficiaries, regardless of employment status, receive an amount proportionate to their income to ensure a minimum level of income equal to 75% of the Low Income Measure. The pilot was designed so that the group is monitored during this test phase, with interviews on health, employment and housing situation and compared with another group that does not receive the basic income. Beneficiaries are not forced to work, can devote themselves to training activities and improve their education, but the amount of benefit decreases by 0.50 cents for every dollar coming from any work activity.
The pilot project in Ontario provided the parameters to estimate the cost of a Guaranteed Basic Income at national level. Funded with $ 50 million and started in 2018, it should have lasted three years. However, after the election of conservatives, the premier of Ontario Doug Ford announced the abolition of the experiment and the termination of benefits from March 31, 2019.
The decision was accepted with disappointment, so that was launched a petition that has collected more than 20,000 signatures in a few days.
THE TROUBLED HISTORY OF INCLUSION INCOME IN ITALY
The third part of the volume is entirely dedicated to Italy, where policies to combat poverty and social exclusion have always been very fragmented and the path that led to the adoption of a minimum income measure has been difficult. It was Stefano Toso to reconstruct it, in the chapter “Historical Reconstruction – Analytical”: from the Experiment of Minimum Entry Income of 1998 to the Purchasing Charter of the Berlusconi Government to the New Purchasing Card, etc.
Since 2018, before the current discussion on “citizenship income” (so improperly defined, since it is a minimum guaranteed income measure), Italy finally has a measure dedicated to fighting poverty, the last to have adopted it in Europe. This is the ReI (Inclusion Income) which, with some limitations, constitutes the first authentic sign of a long-term policy of social inclusion.
PUBLIC EMPLOYMENT CENTERS
A central theme for understanding income support policies and comparing the Italian case with European national cases is the chapter on Employment Centers (“Emilio Reyneri’s Public Employment Centers”). The Italian model reveals all its weakness on this much more advanced aspect in the countries of Western Europe and which is currently undergoing reform by the Italian Government. Italy, with Greece and Spain, is in fact the country that has less invested in the sector. According to the OECD, we dedicated a percentage of 0.01% of GDP to public employment services in 2015, the percentages of Germany, France, and the Scandinavian countries are 4 to 20 times higher. In addition, the operators of the employment centers are too few in relation to the cases treated, have a very low level of education (only 28% have a university degree, 56% have a diploma, 16% only have a middle school degree) and mainly carry out bureaucratic activities to the detriment of vocational guidance, assessment of skills, organization of training.
THE ECONOMIC ASPECTS
In conclusion, the economic indicators (the data are reported in the chapter “Economic aspects” of the study developed by Alessandro Carli, Lorenzo Corsini, Giorgia Giovannetti and Elena Monticelli) show how Italy has seen its social fabric gradually consumed. See the increase in the unemployment rate, the incidence of poverty and inequality.
Among the critical issues that may have been contrast to the introduction of measures to support the income should be mentioned the reduced spending capacity, the lack of homogeneity, the lack of coordination between the administrative levels involved, the need for a long and expensive reform of the centers for the use that guarantees the reintegration and respect of the established conditionalities. Moreover, the Italian public spending, on average higher than that of other European countries, presents the largest item in the pensions chapter. A comparison between the public expenditure on welfare in Canada, Italy and the OECD countries highlights the different composition of social spending, between allowances to finance pensions and allowances that finance other income support measures, fight poverty and social exclusion. In Canada, where social spending, if compared to the GDP, is lower than the European average, the share for pension absorbs the total amount of public social spending to a lesser extent, while more investment is being invested in other welfare programs. On the other hand, Italy diverges from the European standard, which still shows a strong imbalance in this sense. The policies of this Government and of the following ones, dealing with the design of an inclusion income, will necessarily have to orient themselves to give answers to this and to the Italian structural weakness as regards the active policies for job creation and job reintegration, and in general for a strengthening of the concept of citizenship, which addresses the issue of disincentives to the job search of those who receive an inclusion income and possible abuses.