Universal Basic Income and Living Wages

New Orleans  A call from a reporter in Honolulu surprised me. He wanted to talk to me about UBI, universal basic income. It seems that the legislature in Hawaii had passed a resolution to study UBI for the islands. That was surprising news to me. It also turned out that the angel behind the online news paper, Pierre Omidiyar, was also involved in a small UBI experiment in Kenya outside of Nairobi. There’s a much touted experiment involving 2000 people in Finland where they are trying to substitute UBI payments to the unemployed for welfare payments. There’s the annual division of oil revenues in Alaska through their trust which makes annual payments to residents there every calendar year in the $1200 to $1500 range. Andy Stern, the former president of the Service Employees, wrote a book about it recently. What’s up?

Omidiyar, the former Ebay whiz, gives credence to the flurry of interest around Silicon Valley which connects some of these pieces. The spin is that the techies are finally coming to grips with the fact that automation will actually decrease jobs in the future as it has done so in the past by millions, rather than the mirage they had maintained in the past that technology would always create new jobs for the ones they replaced. Soaring cost of living has also put the wind in the sails of faster track increases in the minimum wage to $15 per hour. Seattle of course broke the ceiling several years ago and is now moving in that direction with dueling studies recently out arguing both sides of the debate on whether jobs were lost or hours cut as a result of the raise. Other cities around the Bay Area in San Francisco and around Silicon Valley are also increasingly moving forward on a drive to $15 per hour as well.

These are hopeful signs that some policy makers might finally embrace the notion of a guaranteed annual income. I would love the old slogans for the National Welfare Rights Organization that I chanted in my early days as an organizer with our members, “Adequate Income Now” and $5500 or Fight” turning into something other than nostalgia.

The Finnish experiment shows both the promise and the problems. As described in The Economist, 2000 of the 10% unemployed in the country were picked by lottery for the 2-year trial. During that period these workers are guaranteed $624 per month unconditionally. They are monitored from afar and the real results of the experiment won’t be known until the end of the trial period. Surveys “show the wider public wavering: 70% like the idea of the grant in theory, but that drops to 35% when respondents are told that income taxes…would have to rise to pay for it.”

Proponents and architects of the study worry that two years is not enough time and that the money furnished is not enough to test. Especially, because some of the researchers and advocates want to measure how the “psychology of beneficiaries changes.” Unions in Finland are skeptical because they see all of this as an effort to trim unemployment benefits and protections, and of course part of the push for this is cutting welfare benefits.

We’re a long way from a victory parade, but it is encouraging that some politicians and policy makers are at least getting these ideas out in the streets where they have a chance to find the solid ground and march forward.

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FACE to Face is Reducing Foreclosures in Hawaii

FACE community meeting

New Orleans   Given how little of any significance has been done on any governmental or financial level to stem the tide of foreclosures in the USA, I read with interest a blurb in an on-line Shelterforce alert about progress in Hawaii.  It seems the Gameliel affiliate, FACE (Faith Action for Community Equity), directed by our old friend and colleague, Drew Astolfi, had put the pieces together in the state legislature and the results are indicating that they have made a huge difference.

Looking at the fact that Hawaii had risen to 9th highest among foreclosure states, Astolfi and his team, initiated a statewide survey and recognized the mainland trend that much of the foreclosure activity was being driven by the big banks (Citi, Wells, etc) and their servicers in fact were responsible for more than 97% from their numbers.  They came to the common sense conclusion that the local banks that had to meet directly with the mortgage victims were delaying foreclosures while the big banks, often lacking loan offices in the island, were simply pulling the trigger.   One thing led to another, as these campaigns develop, and working with allies in the state legislature, FACE was instrumental in getting a bill passed that offered some relief.

The bill passed in March 2011, almost 18 months ago, required some simple steps that turned out to make a difference and a huge one at that:

The new law, called Act 48, gave owner-occupants of residential property in non-judicial foreclosure the ability to meet face-to-face with their lenders to modify their loans or work out a payment plan within three months. Banks were barred from carrying out non-judicial foreclosures without the face-to-face sit-down, and any previous foreclosure proceedings were frozen during the three-month process.

Foreclosures in Hawaii dropped by more than half from May 2011 to January 2012. “Personal bankruptcy rates plummeted, and the Council of State Governments recommended that every other state adopt a similar law,” says Rep. Herkes.

As encouraging as this is, it is depressing to find – 18 months later – that other state governments and even the federal government did not jump on this idea and implement it.

The insight of the campaign and the legislation is the power of “community” even in banking, when finance is forced to confront families.  When communities have the same voice and can be heard as clearly as Wall Street, then as Hawaii has now proven, foreclosures can actually be modified and reduced.

FACE to face has worked in Hawaii, so why not force face-to-face in finance in the mainland?

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