This call is the initiative of a group of researchers: Antoine Bozio (Ecole d’économie de Paris, IPP), Thomas Breda (CNRS, Ecole d’Economie de Paris), Julia Cagé (Sciences Po Paris), Lucas Chancel (Ecole d’économie de Paris et Iddri), Elise Huillery (Université Paris-Dauphine), Camille Landais (London School of Economics), Dominique Méda (Université Paris-Dauphine), Thomas Piketty (Ecole des hautes études en sciences sociales, Ecole d’économie de Paris), Emmanuel Saez (University of California, Berkeley) and Tancrède Voituriez (Iddri). It was first published in French on january 25 2017.

The goals of the candidates standing in the presidential primary elections launched by the left must be judged on the relevance of their proposals, their impact on the recovery of economic activity and employment in France, and their effect on social cohesion in the country.

The economic and fiscal policy adopted during François Hollande’s five-year term of office has prevented France from engaging in the dynamics of strong and sustainable economic recovery. The choice made in 2012 to forcibly impose an increase in taxes and reduce deficits in a period of recession killed any hope of growth. The numerous warnings launched in this respect remained unanswered. Those who bear the responsibility for this disastrous policy and who claim to have had no part in it must be held to account today.

In the ongoing debates in the primaries, discussions are crystallizing around a new issue: a basic income (in French sometime referred to as a « revenu universel » or « revenu de base »). Benoît Hamon is faced with the accusation that he is incompetent to govern because he introduced this proposal. According to his critics, the introduction of a basic income would mean bankruptcy for France. The accusation is easily made but over-hasty. Economically and socially, a basic income can be both relevant and innovative. It could be quite the reverse of the fiscal and budgetary choices made in 2012 and in particular the incredibly complex and inefficient tax credit for competitivity and employment, not to mention the exoneration of overtime which even the right wing has abandoned and Manuel Valls would like to bring back today. Properly designed and defined, the basic income can be a structuring element in a new foundation for our social model.

Young people and low wages

Some would like to circumvent the discussion by referring to the huge cost of 300 or 400 billion Euros. But this hypothetical assessment is strictly meaningless. Benoît Hamon has never said that he intended to pay 600 Euros per month to 50 million adults. On the contrary, he explicitly referred to the fact that the new system could be resource-tested and would only apply to wages below 2000 Euros, with amounts which would not be the same for all (Libération, 5 January 2017). De facto, it would not make much sense to pay 600 Euros per month to people earning 2000 Euros or 5000 Euros per month and then immediately deduct the equivalent amount by increasing their taxes. It is time to clarify this once and for all to ensure that the discussion finally focuses on the right questions.

In real terms, the question of a basic income concerns primarily young people and low wage-earners. This poses serious questions which deserve to be given sound answers. But these answers do exist. A basic income must be built stage by stage.

Its introduction at the start of the next five-year period, for those between the ages of 18 and 25, is likely to boost the autonomy of our young people and to act as a response to what today constitutes the conditions for obtaining a further qualification and starting a working life. The practical arrangements remain to be defined, in particular the age from which parental incomes are no longer taken into consideration and, of course, the counterparts in terms of study programmes and career plans. We could, for example, take the system set up in Denmark where, from the age of 18, everyone has access to sixty months of a basic income which he or she is free to use as they like to finance basic training or vocational education. Instead of denigrating a priori this question of a future, conservatives on both the left and the right would be well advised to take a look at what is going on elsewhere.

Linking the question of a basic income with fiscal reform

For low wage earners, the real issue is that of the link between a basic income with that of tax reform and a fair wage. At present, an employee earning the minimum wage is paid 1150 Euros net per month, after the deduction of 310 Euros for the CSG (Contribution sociale generalisée) and social contributions from a gross salary of 1460 Euros. If he or she makes an application, several months later they are entitled to an activity bonus of 130 Euros per month (or approximately 1550 Euros per annum for a single person). This system is absurd: it would be infinitely preferable, for a similar budgetary cost, to deduct 130 Euros less at the source and raise the net salary by an equivalent amount. In our opinion, this is how the basic income should function. For all those who are in steady employment, supplementary income should be paid in the most automatic and universal manner possible, that is, directly on their pay-slip, in the same way as social contributions, the CSG and income tax are deducted at source. The result would be an immediate rise in net minimum wage from1130 Euros net to 1280 Euros net; this could reach 1400 Euros net at the end of the five-year period. This is the genuine re-valorisation of labour which we require.

Let’s think this through together and consider the material conditions for its implementation instead of rejecting a priori the project of a minimum wage for all. A project of this sort would be economically credible and socially adventurous. Contrary to the allegations of those who confuse solidarity and farniente, the establishment of this basic income would be to the benefit of the re-valorisation of labour and low wages; it would ensure a genuine right to higher education and vocational training and an automatic increase in the net lower wages.