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The Cost of Fair Refugee Policies

We Need Universal Basic Income to End Economic Anxiety Over Refugees

Refugees, migrants and the struggling middle classes in Europe have all been harmed by neoliberal globalization, writes Behzad Yaghmaian. He makes the case for an alternative “solidarity-based globalism,” including universal basic income and an end to austerity.

Written by Behzad Yaghmaian Published on Read time Approx. 5 minutes
Greece migrants23
Greek pensioners and an Afghan family watch protesters at an anti-austerity march in central Athens, March 31, 2016. AP/Petros Giannakouris

Sharing responsibility for refugees more equitably between countries of the global North and South is a matter of urgency.

Some 84 percent of refugees live in the global South, where they face a complex web of economic, social and political insecurities. Each year, large numbers of them embark on perilous journeys north in search of security.

Meanwhile, countries in the global North have been making every effort to keep uninvited refugees and migrants out.

A fairer system is possible, but it will require economic policy changes in both hemispheres. In the global South, this includes giving refugees the right to work and access to education.

In the richer countries of the North, the main obstacle to effective, sustainable refugee protection is the public’s economic, cultural and political anxieties. We need better policies to address each of these sources of anxiety.

This article addresses the economic anxieties of the global North; subsequent articles will tackle cultural and political anxieties, as well as policies in the global South

Globalization and Inequality

The root of economic anxieties about refugees is neoliberal globalization, which has resulted in enduring inequality within rich countries.

Free markets, the ascendance of finance and the control of public policy by the economic elite created a reckless plutocracy guided by a winner-takes-all approach to economics.

Those at the top of global income distribution – mainly the economic elite in already rich countries and the middle class in emerging markets – benefited disproportionally from globalization, while people earning middle and lower incomes in rich Western counties faced stagnant or slowly declining real incomes.

Confused and disillusioned, and dismissed by the plutocrats, workers who were negatively impacted by globalization desperately sought an answer to the decline in their relatively privileged status. The answer came from the far right and nationalist political parties.

They identified refugees and migrants as the primary culprits, arguing that refugees steal jobs from the local population while draining public resources and the welfare state. It was a convenient answer to a population already suspicious of foreigners for reasons of race and religion.

There is considerable literature on the economic impact of refugees that challenges these arguments. Yet empirically verified or not, it is important to understand and evaluate the larger global trends that have made these arguments so powerful.

A Solidarity-Based Economics

The far right counters neoliberal globalism with anti-globalism and nationalism. Yet there is another way: solidarity-based globalism.

Neoliberal globalism did not just hit the middle and working classes in richer countries. It also hurt very poor communities in the global South and diminished protections for refugees.

The marginalized class in wealthy countries, refugees and those escaping poverty form a global triangle of the casualties of neoliberal globalism. Their interests coincide.

A solidarity-based globalism would reunite forces seemingly at odd with each other. It would include a universal basic income, funded by taxes on billionaires and financial speculation, and an end to austerity policies.

These policy proposals are neither new nor revolutionary. But they are more urgent than ever if we are to reverse the dangerous political path ahead for many Western countries, while making sure the world protects refugees.

The Case for Universal Basic Income

The idea of a universal basic income (UBI) is simple. Each citizen (and in some cases, resident) receives a fixed monthly income from the government regardless of her or his employment status to meet the person’s basic needs. UBI is a form of social security and an anti-poverty device.

The existing welfare system in Western Europe was created to safeguard citizens against the fluctuations and risks of the market system. Yet it can act as a trap, by disincentivizing employment for people who cannot access wages above the welfare payment.

Universal basic income corrects this problem, as its unconditional payment scheme is an incentive to work. If you’re receiving UBI and you find a job – no matter how much it pays – you will not lose your regular, fixed UBI payment.

There have been several pilot projects of UBI, including in Brazil and India, and growing interest in Europe, where UBI is now a part of public discussion and political campaigns.

We won’t have direct evidence of the effect of UBI on attitudes toward refugees until it has been implemented in refugee-hosting countries over the long term. Yet the largely positive outcomes of the pilot projects indicate that UBI can address some of the economic anxieties driving anti-immigrant politics in the global North.

If the losers of neoliberal globalism see a noticeable improvement in their well-being, in their sense of autonomy and the dignity that they had lost, this will undermine the reasons for resentment of refugees and migrants. Universal basic income weakens and eventually eliminates the economic case against refugee protection by lifting the rest of society out of poverty.

UBI should start at the national level, but will be most effective if implemented across the E.U. Even so, there is no evidence so far of “UBI-shopping” – people moving to places where UBI is implemented – in the pilot countries.

Paying for Fairer Policies

Critics often challenge UBI for its costliness and lack of financial feasibility. The scheme could be partially funded by savings made after ending some welfare payments. Yet neither the current welfare state, nor the UBI, can be sustained in the long run without making the rich pay a higher share of societies’ collective expenditures.

One way is through a billionaires’ tax. A surcharge on the income and assets of the economic elite – those who disproportionally benefited from neoliberal globalism – is not only fair, it is also good economics.

Another is through a “Tobin tax” on financial transactions, named after the American economist James Tobin, who proposed a 0.5 percent tax on currency conversions in 1972. Many have suggested different versions of the tax, which would penalize the destabilizing effects of speculative financial activities. Even a small tax could generate a substantial income for the UBI – a 0.005 percent tax on currency transactions in major economies of the world could raise at least $30 billion a year.

A Tobin tax would divert money from speculative economic activities and fuel demand by giving people on middle and lower incomes more to spend. We now have the necessary technology to make it effective, by preventing the movement of money from high- to lower-tax countries.

An End to Austerity

Ending European policymakers’ obsession with austerity is also pivotal to moving toward a solidarity-based globalism.

The rise of austerity policies in Europe has failed to deliver economic growth and other promised benefits. Austerity policies have instead increased income inequality.

In the current economic and political context, austerity inherently weakens refugee protection, through increasing inequality and drastically lowering the well-being of a large segment of the population.

The case of Greece is a perfect example of the economic damage of austerity. Austerity has exacerbated the economic woes experienced by middle and lower income earners. Meanwhile, it has fueled the fire of some of the most violent anti-immigration forces.

Throughout Europe, nationalist forces are increasingly defining refugee and migration policy around an anti-globalist agenda. Yet there is an alternative to this destructive pattern. We can foster refugee protection through addressing the economic grievances of the anti-immigrant middle and working classes with a solidarity-based globalism.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Refugees Deeply.

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