NOW more than ever the people of Scotland find themselves failed by a UK economic system that they never voted for. It is a system that seeks to deteriorate our will for a better Scotland by decreasing democratic accountability, whilst dismantling our social and economic security.
Scottish independence alone is not enough to fix these problems. If we are to build a country that upholds our basic human rights and decentralises power, then progressive policies must come with it. We at Modern Money Scotland analysed the two leading policies in this discussion and how they could be implemented - a voluntary Job Guarantee and Universal Basic Income (UBI).
READ MORE: Demand for new Scottish currency would be boosted by job guarantee, report argues
A Scottish Job Guarantee brings forward many economic benefits which are key to launching independence. Public spending through the programme, with increased domestic production, would allow the government to set a stable overall price level in the economy and counter inflationary dangers. A Job Guarantee is counter-cyclical; if the private sector grows, then the Job Guarantee will shrink. However, when the private sector is declining, the affected workers will be buffered by the Job Guarantee.
An independent Scotland has the potential to create hundreds of thousands of socially inclusive jobs over the span of a decade, whilst setting an effective wage floor and new social standards for firms. Based on academic research and numerous case studies, this would only come to a small cost of between 1-3% of Scottish GDP.
Our model of a Job Guarantee stands on two key principles. First, participatory budgeting would allow communities to work with industry experts, academics, the third sector, and local councils to propose employment in the interest of local people. Secondly, these jobs would be structured and designed with a workers’ democracy model at heart. Not only will communities shape their local economy, but will also have a direct stake in how it’s run.
If the political principle of Scottish independence is democracy, then so too should its economic foundations.
Whilst no country has ever implemented a UBI, numerous localised case studies have offered key insights for policy makers to take note of. Case studies have found that UBI has led to increased mental and physical health, declining poverty, and declining crime rates. Unlike the complex and failed means-tested model in the UK, a universal model allows for a Scottish welfare state to have a more effective administration that leaves room for less human error.
Yet despite these key benefits, our findings did report numerous drawbacks.
High income families were found to be disproportionately better off than those on lower incomes. In some circumstances low-income families were hundreds of pounds worse off, due to the loss of other social security payments to reduce overall UBI costs. Because UBI is not optional, the government risks forcing some of the most vulnerable into deeper poverty. Further, high-cost UBI models, combined with high-income households using their extra income for shares and stocks, could further risk price instability in a time when inflation has reached historic records.
The challenges of UBI are substantial, but it is not a lost cause. An independent Scotland can phase in a Basic Income that specifically targets Scotland's low-income households. That would mean the key social and economic benefits found in international case studies can be replicated, whilst allowing civil servants the time to implement efficient fixes. A Basic Income prioritises Scotland's most vulnerable and allows them to live with greater dignity.
An independent Scotland with a Basic Income and Job Guarantee would allow the people living here to enjoy the benefits of greater equality, economic stability, and community empowerment. But importantly it sends a clear message to each and every person living in Scotland – you are valued and wanted.
Read Modern Money Scotland's new report in full on their website: https://www.modernmoney.scot/policy-papers
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