A Dangerous Combination

As part of its march to a brave new world for Ontario, the Ford government cancelled the Basic Income Pilot Project. Catherine Mah, of Dalhousie University, writes:

The Ontario Progressive Conservative government’s decision is ignorant of the considerable thought and analysis on basic income as a promising policy solution for improving lives and strengthening the economy, ideas that come from the right and the left.

One of the best proxies that we have for understanding the effects of a basic income policy from an economic perspective in Canada is the guaranteed income received by seniors.

As part of the PROOF program of research led by Valerie Tarasuk at the University of Toronto, we have been studying the effect of policies and public programs to address food insecurity and its detrimental effects on health.

At the University of Calgary, Herb Emery and Lynn McIntyre studied the effect of a basic income guarantee on seniors’ food insecurity and health. Remarkably, they found that food insecurity rates drop by half at people’s 65th birthday as a result of seniors’ income supports.

The research team also compared seniors’ guaranteed income with conditional income assistance programs. They found that the income guarantee is beneficial to both physical and mental health, functioning in a way similar to wages.

Not only that, a basic income serves as an economic stabiliizer:

As Emery and McIntyre stated in their policy paper:

What is often not well understood is the efficiency case for addressing the root causes of poverty, and that poverty itself is a symptom of market failure. Symptoms of poverty, such as homelessness or household food insecurity, in this context, are not solely the product of an inadequate income level, but instead a lack of consumption insurance to address budget shocks — unexpected decreases in income or purchasing power of income. The ability to buffer against budget shocks, to maintain consumption levels when the budget is unexpectedly constrained, is a product of a surplus in the budget or the adjustable discretionary expenditure, and access to credit or assets.

In other words, people with more income don’t just have more money to spend. They can also maintain their purchasing power through hard times. They can stay their course as consumers —and keep spending, in the economy —even when unexpected household expenses arise, as they always do.

The Fordians are a number of things. But they're not bright. The economy has changed; however, their economic thinking hasn't.  “We want to get people back on track and be productive members of society where that’s possible," Minister of Children, Community and Social Services said after cancelling the project. 

It's the same kind of thinking that motivated the government to cancel Ontario's sex ed curriculum and return to the 1998 document.

There are two things that are painfully obvious: The Fordians are committed and dumb. That's a dangerous combination.

Image: Kawartha 411