Job guarantees and free money: 'Utopian' ideas tested in Europe as the pandemic gives governments a new role

London(CNN Business) Christine Jardine, a Scottish politician who represents Edinburgh in the UK parliament, was not a fan of universal basic income before the pandemic hit.

"It was regarded in some quarters as a kind of socialist idea," said Jardine, a member of the centrist Liberal Democrats party.

But not long after the government shut schools, shops, restaurants and pubs in March with little warning, she started to reconsider her position.

"Covid-19 has been [a] game changer," Jardine said. "It has meant that we've seen the suggestion of a universal basic income in a completely different light." In her view, the idea — sending cash regularly to all residents, no strings attached — now looks more "pragmatic" than outlandish.

She isn't the only one to change her mind. As the economic crisis sparked by the coronavirus drags on, support in Europe is growing for progressive policies once seen as pipe dreams of the political left.

In Germany, millions of people applied to join a study of universal basic income that will provide participants with €1,200 ($1,423) a month, while in the United Kingdom, more than 100 lawmakers — including Jardine — are pushing the government to start similar trials.

Austria, meanwhile, has launched a first-of-its-kind pilot program that will guarantee paying jobs to residents struggling with sustained unemployment in Marienthal, a long-suffering former industrial town about 40 miles southwest of Vienna.

Whether the spike in popularity and research will translate into a wave of action is an open question. But some, like Jardine, see reason for optimism.

The crisis catalyst

Throughout history, times of crisis have produced large changes in the role government plays in our lives. Out of the Great Depression came former President Franklin Delano Roosevelt's plan to distribute social security checks in the United States, for example, while the foundations of universal health care in Britain were laid during World War II.

Experts see the coronavirus pandemic as a world-changing event that could result in a similar tectonic shift.

"Big political changes generally do follow big upheaval events," said Daniel Nettle, a behavioral scientist at Newcastle University.

Universal basic income, in its purest form, means giving money to everyone, regardless of how much they earn, so they can have greater freedom to move between jobs, train for new positions, provide care or engage in creative pursuits. Interest in the concept has risen in recent years, driven by concerns that automation and the climate crisis would lead to a mass displacement of workers.

Job insecurity caused by the pandemic, however, appears to have generated new levels of support for the policy. One study conducted by Oxford University in March found that 71% of Europeans now favor the introduction of a universal basic income.

"For an idea that has often been dismissed as wildly unrealistic and utopian, this is a remarkable figure," researchers Timothy Garton Ash and Antonia Zimmermann wrote in their report.

It probably helps that the pandemic has helped normalize cash transfers from the government, said Nettle, who has also conducted his own polling. According to data compiled by economists at UBS, nearly 39 million people in the United Kingdom, Germany, France, Spain and Italy were being paid by governments to work part time, or not at all, as of early May.

Though the numbers have come down, millions are still receiving this kind of support, and a fresh wave of restrictions in Europe has triggered an extension of benefits. The United Kingdom, for example, has extended its furlough program — which pays as much as 80% of lost wages, up to £2,500 ($3,321) a month — through March.

The rapid blow to the economy dealt by the pandemic has also left policymakers scrambling for quick solutions, said Yannick Vanderborght, a professor at Université Saint-Louis in Brussels, who specializes in universal basic income. The broad distribution of aid therefore has greater appeal, since it can theoretically be rolled out faster than more targeted measures.

"The problem is we need urgent economic support" for large groups of workers, Vanderborght said.

Pilot projects begin

As enthusiasm grows for such policies, researchers are taking new steps to study their effectiveness.

The trial of universal basic income in Germany — run by the German Institute for Economic Research in Berlin (DIW) in partnership with the nonprofit Mein Grundeinkommen — is now sorting through millions of applicants. Financed by roughly 150,000 private donors, experimenters aim to begin distributing money to 120 individuals starting in spring 2021.

The study will last for three years. It will also track 1,380 people who do not receive the extra cash as a point of comparison.

Participants will be asked to complete regular questionnaires during the study. Questions will range from how many hours they're working to inquiries about mental wellbeing, values and trust in institutions, according to Jürgen Schupp, a senior DIW research fellow who is managing the project. Those who receive €1,200 each month will be asked to disclose how they're using the money.

Unlike an experiment conducted in Finland between 2017 and 2018, which targeted people who were unemployed, the German project is looking to distribute cash to a representative sample of the population regardless of employment status.

There's no guarantee, of course, that the study will show that universal basic income has broad benefits, even though it's generated significant attention from supporters of the concept.

"We want to convert this engagement into basic scientific knowledge," Schupp said.

The job guarantee pilot in Austria, meanwhile, kicked off in October. It will also last for three years.

The program, which is funded by a regional division of Austria's public employment service, aims to provide paid, long-term jobs to roughly 150 residents of Marienthal — the subject of a seminal study on the effects of long-term unemployment in the 1930s — who have been unemployed for at least a year. Those who opt in will enroll in a two-month training course before starting a job that matches their skillset, from gardening to child care or home renovations.

"The primary goal is to provide social inclusion, meaning and a source of income to the participants," said University of Oxford professor Maximilian Kasy, who co-designed the study. Participants will also be asked to fill out regular assessments on their daily routine, personal health and involvement in the local community.

Sven Hergovich, managing director of the employment service, started pitching a job guarantee program for Marienthal before the pandemic hit. But the employment crisis sparked by Covid-19 has made it even more crucial, he said.

"It is time to find new ways [to fight] long-term unemployment," Hergovich said.

Will there be action?

As researchers gather data from the pilot programs, political momentum for overhauling social safety nets is building.

In September, the UK Liberal Democrats — Jardine's party — voted to make universal basic income a part of their platform, joining members of the left-wing Labour Party in calling for trials. A petition demanding that Germany implement a universal basic income was debated by a committee of national lawmakers late last month.

But experts note that the loose coalition of universal basic income supporters still contains major divisions.

There's huge dissent, for example, on whether such programs should stem from deficit spending or higher taxes on the wealthy, as well as whether payments should only go to those in need — which would mean they wouldn't be truly universal.

Jardine, for example, thinks universal basic income should replace the current UK welfare system, while also providing people such as caretakers and gig economy workers with regular infusions of cash. But she isn't convinced that payments should be made to those above a certain income threshold.

"When you have to turn it from an interest to a program, you start to see some inconsistencies," said Tim Vlandas, a University of Oxford professor of comparative social policy.

And such ideas still have plenty of opponents. The Conservative government under Boris Johnson in the United Kingdom maintains that universal basic income would be too expensive and reduce incentives to work, while failing to reach those who most need help. Chancellor Angela Merkel's coalition government has also expressed concerns it could lead to a decline in employment.

Critics also raise fears about the broader economic ramifications of such policies. Some worry, for example, that providing a universal basic income could lead to a spike in inflation.

Jardine, for her part, acknowledges the uphill battle in convincing colleagues that universal basic income is the way forward. But in her view, the pandemic presents an opportunity.

"Governments do change — and they change their minds," she said.