· 2 min read · Features

Would a minimum income guarantee create a fairer workplace? Part one

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The Scottish government is considering plans to introduce a minimum income guarantee (MIG).

Unlike a universal basic income (UBI), the MIG would be targeted at those on lower incomes rather than available to all and is intended to ensure that everyone has enough money for housing, food, essentials and covering individual circumstances like disability or caring requirements.

It would also top up Universal Credit (UC) allowances and the wages of those on reduced hours to ensure a basic standard of living. Though it sounds promising, could an MIG reduce employer responsibility for creating fairer workplaces?

 

Norman Pickavance, co-founder, Financial Inclusion Alliance

Setting a minimum acceptable standard of living for everyone is a really positive thing. We’ve seen over the last year that those people who were struggling before COVID have fallen into greater debt, there’s been greater use of food banks and greater child poverty. The need, in a modern society, to recognise that that is unacceptable is really clear.

The Scottish minimum income guarantee has three elements; it is going to be delivered through benefits, but it also talks about delivering good work, and reducing costs through collective services.

I think for this not to result in a crippling burden for the Scottish state, they’re really going to have to figure
out what they mean by good work.

One of the definitions of good work is that it provides financial security or stability, so you know what income you’re going to get.

The Scottish government should ask how we frame legislation so that employers cannot put all the risk of running their businesses on their people (with varying hours and varying pay).

They need some smart people around the table helping them to figure out how we have to have standards around work.

 

Marek Zemanik, senior public policy adviser (Scotland and Northern Ireland), CIPD

A minimum income guarantee is a bold proposal, which could make a significant difference to people’s lives. The nature of the devolution settlement, and the scale of intervention proposed, mean it will be an incredibly complex policy to put in practice.

It will also rely on the Scottish and UK governments working together to find solutions, which has not always been a straightforward process.

It is also important to emphasise that employers have a key role to play by putting fair work at the heart of the people function. Security and stability in employment, a predictable and liveable income and enabling career progression are crucial to tackling poverty.

 

Check back tomorrow for part two of this hot topic.

This piece appeared in the September/October 2021 print issue. Subscribe today to have all our latest articles delivered right to your desk.