Basic Stupidity

One of the first things Doug Ford did when he came to office was to break a campaign promise and cancel Ontario's Basic Income Project. Laurie Monsebraaten reports:

Under the pilot project, launched by the former Liberal government in April 2017, single people such as Miller have been receiving annual payments of up to $16,989, while couples have been getting up to $24,027. Those with disabilities got a $6,000 top-up. Payments are reduced by 50 cents for every dollar earned until incomes reach $34,000 for singles and about $48,000 for couples.

Participants receive their last payment at the end of March — barely 18 months after most began receiving the extra money — and before the government was able to do any followup studies. The project’s goal was to determine whether regular, unconditional payments improve housing, health, education, employment and social outcomes for people living on social assistance or low-wage jobs in an efficient and non-stigmatizing way.

When Ford cancelled the project, the data that had been gathered was flushed. Now a survey done by The Basic Income Canada Network is trying to recover some of that data:

“Responses (from the survey) show that the pilot was working — enabling women and men to get and keep jobs, pursue education and training, overcome barriers and improve health and well-being for themselves and their families,” said  {Sheila] Regehr, whose non-profit network has been advocating for a national basic income for more than a decade.

The network identified survey participants through an online petition to save the pilot project last summer. Of 30,000 people who signed, 1,500 indicated they were getting the basic income and would be open to further advocacy.

The network’s 22-question survey asked participants how the extra money was impacting their employment, education, food security, finances, plans for the future, mobility, health and social inclusion.

When they enrolled in the project, most participants said they were experiencing stress, struggling to pay rent and having trouble affording healthy food, according to an intake survey, the only official data collected before the project was cancelled.

The network’s followup poll found basic income eased those pressures for most respondents.

For example, about 88 per cent reported experiencing less stress and 73 per cent said they suffered less depression. That compares to 81 per cent at the start of the project who told government researchers they were suffering from moderate to severe psychological stress.

But, of course, that kind of data doesn't mean anything to Doug Ford. A Guaranteed Income isn't a new idea. Like the The Canada Pension Plan and the Baby Bonus, it serves as an economic stabilizer to smooth out economic shocks.

But economic stability is beyond Doug Ford's pay grade. Does that sound like anyone else you have heard of?

Image: Twitter

Time For A Basic Income

It's time to implement Guaranteed Basic Income Programs. However, Gwynne Dyer writes, there  is surprising resistance to the idea. Conservatives argue that giving people free money is fraught with moral hazard. But the projections suggest that, in the future, large numbers of people will be unemployed:

The famous 2013 study by Carl Frey and Michael Osborne identified 47 per cent of U.S. jobs as liable to be automated in the next 20 years; a 2016 working paper from the Organization for Economic Co-operation and Development suggested that 33 per cent of Canadian jobs are highly susceptible to automation; Nicholas Eberstadt’s 2016 book Men Without Work showed that 17.5 per cent of American men of prime working age are already not working.

Unemployed workers helped put Donald Trump in the White House:

Mr. Trump blamed it on free trade and the resultant “off-shoring” of many good American manufacturing jobs to Mexico, China and other low-wage countries: Nationalism always pays good political dividends. But the real job-killer was automation, and the Rust Belt suffered first and worst because it specialized in assembly-line jobs that could easily be automated even with the dumb computers and simple robotic arms of 20 years ago.

One-third of all surviving American manufacturing jobs were eliminated in the first decade of the 21st century, and less than 15 per cent of them went overseas. Automation killed the rest. If Mr. Trump understood that fact, he never mentioned it, but he did know how neglected the victims felt and how angry they were.

He also knew that the official unemployment figures lied, because they only counted people who were actively looking for jobs, not the much larger number who have just given up. “Don’t believe those phony numbers when you hear 4.9-per-cent and 5-per-cent unemployment,” Mr. Trump said in his victory speech after the New Hampshire primary in February, 2016. “The number’s probably 28, 29, as high as 35. In fact, I even heard recently 42 per cent.”

He was exaggerating as usual, but the real number is 17.5 per cent, which is two-thirds of the way to the peak U.S. unemployment rate in the Great Depression of the 1930s. If the current level of unemployment elected Donald Trump, what would twice that level produce?

If mass unemployment elected Trump, what will happen to liberal democracies when mass unemployment becomes standard operating procedure?

That's why it's time for a Guaranteed Basic Income.

Image: Vanier College

World Of Wonders!

Over the weekend, the Swiss held a referendum in which they rejected a proposal for a guaranteed annual income. Andrew Coyne writes:

The model on which the Swiss voted was at the outer limits of what anyone has imagined a basic income could or should entail. At 2,500 Swiss francs a month (about $40,000 a year) for every man, woman and child in the country, the gross cost of such a program in Canada would come to about $1.4 trillion, or more than two-thirds of our gross domestic product. Even netting out the money not spent on the programs it replaced, the Swiss plan was reckoned to cost a quarter of GDP in additional taxes. No wonder voters rejected it. 

But that doesn't mean a guaranteed annual income is a bad idea. And, interestingly, Coyne rejects the traditional conservative argument that a GAI would increase the likelihood of "moral hazard" by encouraging people to do nothing:

One of the oddest objections to the basic income idea, in this light, is that it might reduce work incentives. Whatever minimal inducement to idleness there may be in, say, a $10,000 annual income guarantee, it is trivial compared to the benefits of cutting implicit tax rates to 20 or 25 per cent. Neither is a basic income needed as a substitute for wage labour, as some advocates contend: robots are no more likely to make humans obsolete in the 21st century than threshing machines did in the 18th.

Coyne does make the traditional conservative argument that a guaranteed annual income would streamline the cornucopia of government programs:

OK, so maybe a one-size-fits-all basic income guarantee is out of reach, at least at one go. It’s still possible to move in that direction, one piece at a time. Indeed, we already have what amount to basic income guarantees for children in the new Canada Child Benefit (combining the old Universal Child Care Benefit, the Canada Child Tax Benefit and the National Child Benefit Supplement) and the elderly, via Old Age Security and the Guaranteed Income Supplement. The federal Working Income Tax Benefit is a basic income for the working-age population, in embryonic form.

Could the WITB be merged with OAS/GIS, the basic personal exemption, other federal and provincial tax credits, and provincial social assistance programs to create a universal adult income guarantee? In principle, certainly. Would it be worth some additional cost? Again, yes: ensuring no one goes without, while restoring work incentives and granting greater choice in public services, would seem one of the best uses of public funds imaginable.

It's intriguing to see conservatives like Coyne and Hugh Segal argue for a guaranteed annual income. World of Wonders!


Image: commondream.org