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Guaranteed basic income? Why Switzerland said 'No thanks' (+video)

A majority of Swiss voters rejected a basic income initiative Sunday, which would have provided a monthly income of 2,500 Swiss francs ($2,563) of all citizens, regardless of employment.

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    People cast their ballots during a vote on whether to give every adult citizen a basic guaranteed monthly income of 2,500 Swiss francs ($2,560), in a school in Bern, Switzerland, June 5, 2016.
    Ruben Sprich/Reuters
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Almost 80 percent of Swiss voters rejected a guaranteed monthly income Sunday.

Under the proposal, Swiss adults would receive a government check of 2,500 Swiss francs ($2,563) each month, and children under the age of 18 would receive a check worth 625 francs. Although the proposal had almost no political support, it gathered more than 100,000 signatures, so it was put to a public vote under Switzerland’s popular initiative political system.

A the idea of providing a basic income guarantee, or BIG, has held currency on the political left for decades. More recently, some libertarians have also embraced the idea, seeing it as a cheaper, more efficient alternative to the current welfare state. 

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“Wouldn’t it be better just to scrap the whole system and write the poor a check?” Matt Zwolinski, an associate professor of philosophy at the University of San Diego, writes in an essay for the Cato Institute. “Unlike other welfare programs which encourage or require recipients to consume certain specific kinds of good – such as medical care, housing, or food – a BIG simply gives people cash, and leaves them free to spend it, or save it, in whatever way they choose.”

Proponents also say a BIG would ensure a passionate workforce, innovation, and suitable working conditions.  

“An entrepreneur can now be sure that people will come to her because they actually want to work with her. Motivation will become a prerequisite for a job application,” write Enno Schmidt and Che Wagner, co-designers of the Swiss referendum initiative for an unconditional basic income, on their site Basic Income 2016. “The applicant can also say no to unappealing job offers more easily. The threat of taking away a person’s livelihood can no longer be used as a means to force employees to work under bad conditions.”

But the majority of Switzerland doesn’t buy this argument and are instead wary of the idea, believing it would cripple the Swiss economy by eliminating all motivation to work.

“If you pay people to do nothing, they will do nothing,” Charles Wyplosz, an economics professor at the Geneva Graduate Institute, told AFP.

And other opponents say a guaranteed basic income would cause international implications.

“Theoretically, if Switzerland were an island, the answer is yes,” Luzi Stamm, who opposes the idea as a member of parliament for the right-wing Swiss People’s Party, tells the BBC. “But with open borders, it’s a total impossibility, especially for Switzerland, with a high living standard.

"If you would offer every individual a Swiss amount of money," he said, "you would have billions of people who would try to move into Switzerland.”

Compared to its European counterparts, Switzerland’s economy is faring well. Switzerland had an unemployment rate of 3.5 percent as of April, far below the Eurozone average of 10.2 percent.

Finland and the Netherlands, with current unemployment rates of 9.8 and 6.4 percent respectively, are launching similar trial programs in the near future. Switzerland is the first country to put the concept up for popular vote.

The Finnish experiment will take place in 2017, with 180,000 Fins receiving a basic income of 500 to 700 euros a month. This may seem like a generous right for Finnish citizens to assume, but it is actually far less than the current average income of 2,700 euros in Finland. And under the Netherlands’ experiment set to take place starting January 1, 2017, four varieties of a basic income system will be tested among thousands of citizens and later compared to the current system.

But campaigners of Switzerland’s basic income system said they anticipated defeat. 

“For centuries this has been considered a utopia, but today it has not only become possible, but indispensable,” Ralph Kundig, a lead campaigner, told AFP. And while the initiatives slim chances were obvious, “just getting a broad public debate started on this important issue is a victory.” 

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