Basic Income, Unemployment and Job Scarcity

The main aim of this paper is to make plausible the claim that the case for a basic income (BI) is stronger, and that the level of BI should be higher, the higher the level of structural unemployment. Structural unemployment is taken here in a broad sense: it refers to the shortage of jobs vis-à-vis the labor force, or more precisely, vis-à-vis total labor supply (therefore, as indicated in the title, underemployment is a better term in this respect than unemployment). For instance, even if the official unemployment rate would be close to zero, there might still be a considerable shortage of jobs, manifested by a large number of (notably female) persons, not entitled to social benefits, but willing to do paid work. To highlight the link between BI and unemployment, the BI scheme will be compared with the Labor Rights scheme as devised by Hamminga (1992; 1995), in which shortage of jobs is the point of departure motivating the whole exercise