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| Brazilian town embraces universal income experiment |
Does being
handed money every month -- no strings attached -- sound attractive? The
residents of a small town in Brazil are finding out.
Governments
and think-tanks around the world are increasingly fascinated by the idea of a
universal basic income, where citizens are given cash to spend as they want.
In Marica,
a seaside town of about 150,000 people near Rio de Janeiro, the left-wing
municipal government has spent the last year finding out how it works.
"We
are a laboratory for the Brazilian left," says Washington Quaqua, who
introduced the experiment as mayor in December 2015 before stepping down. He
was replaced by another candidate from the leftist Workers' Party, Fabiano
Horta.
The idea of
a universal basic income isn't new, but long-considered as a potential tool for
social equality and redistribution of wealth.
The concept
has gained traction more recently among high-powered business thinkers,
especially in Silicon Valley, as they ponder how society will cope with the
ever-expanding role of automation -- a trend some futurists believe may create
mass unemployment.
In Marica
-- a surviving Workers' Party bastion in increasingly right-leaning Brazil --
the basic income idea fits in well with the leadership's socialist fervor.
Just about
every public building is decorated in socialist red and Quaqua's office sports
portraits of communist revolutionary Che Guevara, whose name is also soon to be
given to a new hospital.
"The
world lacks creativity and Marica is giving the example of a town that knows
how to redistribute its riches," Quaqua says with pride about his pet
project.
Modest
reality
Despite his
claims, Marica is only taking baby steps.
Inconclusively
tried around the world for decades, the experiment is currently getting a
high-profile rollout in Finland. The left-wing French presidential candidate
Benoit Hamon, backed by the star economist Thomas Piketty, has also made the
basic income part of his platform.
However, if
Finland is handing out payments of about $590 a month -- and only to a test
group of unemployed people for now -- the amount in Marica is a measly 10
reais, or about $3.20. The new mayor hopes to raise the amount to $32 in 2017.
Only the
town's 14,000 poorest families are currently being given the income, which is
denominated in Mumbucas, a virtual currency created to pay welfare under Quaqua
three years ago.
The 10
reais is added to the 85 reais ($27) monthly welfare check for families whose
income doesn't top three times the minimum wage. The extra money is also given
to poorer people aged between 14 and 29 and pregnant women already receiving
other benefits.
There's
another limitation: only 131 local businesses -- less than 10 percent of the
total -- accept payment in Mumbucas, the mayor's office says.
The
currency, which physically exists only on specially issued red magnetic cards,
is unpopular with business owners because they must wait more than a month
after purchases are completed for the government to convert payments into
reals.
Feasible
or fantasy?
Opposition
politician Filippe Poubel denounces what he calls an attempt to addict the
people of Marica to welfare. Handing out an income, he says, will backfire.
"People
want to work, they want to earn their income with dignity. They would be a lot
happier if the mayor would create jobs and offer them decent hospital
care."
Horta
dismisses such criticism saying a basic income will in fact create jobs,
"stimulating the local economy."
And he says
that the town, which draws revenues from offshore oil exploitation, can afford
to boost the program "in an exponential way over the next 10 years."
"The
rich love it when they get millions in tax breaks," Quaqua says of his project's
opponents. "But they are furious when we give a few hundred reais to the
poor."
Brazilian town experiments with a universal basic income, whereby residents are given cash to spend as they want https://t.co/n8F2zkigjB pic.twitter.com/i8bnxj2Wo8— AFP news agency (@AFP) February 14, 2017
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