The contemporary tendency in our society is to base our distribution on scarcity, which has vanished, and to compress our abundance into the overfed mouths of the middle and upper classes until they gag with superfluity. If democracy is to have breadth of meaning, it is necessary to adjust this inequity. It is not only moral, but it is also intelligent. We are wasting and degrading human life by clinging to archaic thinking.
The curse of poverty has no justification in our age. It is socially as cruel and blind as the practice of cannibalism at the dawn of civilization, when men ate each other because they had not yet learned to take food from the soil or to consume the abundant animal life around them. The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.
~ Martin Luther King Jr.
A basic income is an interesting proposition. For one, it is a fundamentally American idea.
In the form of a citizen’s dividend, it goes back to Thomas Paine through his recognition of the significance of the loss of the Commons to the average person. The founders understood the value of land and having access to it, and they realized it was upon land that economies and lives were built. The early government lacked an income tax for the reason the federal government was able to gain so much money from the sale and taxation of land. Paine’s insight was that financial gain from public resources, especially when given away and privatized, should be shared to some minimal degree with the citizens that the government constitutionally represents.
Later American thinkers such as the 19th century Henry George had related ideas. Like Paine, he supported free markets and the private use of land. Also, like Paine, he saw land taxes as a way of dealing with the social problems related to the loss of access to land and its value.
All wealth originates from land. The reason for this is because everything procured and made comes from natural resources, including human lives and communities (a close, entangled relationship existing between natural capital, economic capital, and social capital). All natural resources were public before they were private. All private gains made from natural resources is at least in part wealth removed not just from the public domain but also from future generations. This a touchy issue for Americans, as our country was founded on the notion of consent of the governed, which was understood by the founders to mean that one generation of citizens shouldn’t be allowed to make decisions for and force costs upon future generations of citizens. It’s the worst form of externalization, for those future generations don’t necessarily even get any of the benefits for what they end up paying.
Americans, in particular, have ignored these realities. We could do so, for in the early centuries of our country, Americans could fool themselves into thinking that land and natural resources were practically infinite. The government’s giving away of the Commons for free or below-market value seemed like a necessary incentive for growth, not a theft from the public good. In recent generations, this privatization of gains and externalization or rather socialization of costs has become more difficult to ignore.
The implementation of a basic income is a way of evening out of the playing field that has, through past political policies (along with plutocratic maneuverings), been intentionally or unintentionally made uneven. A basic income doesn’t eliminate the faux meritocracy and rigid socioeconomic hierarchy, but it does lessen the sting of the harshest consequences. The challenge posed becomes an ever more present problem as increases are seen with the mechanization of jobs and the related rates of unemployment and underemployment. Average wages have been stagnating, median wages have been decreasing, buying power for basic goods has taken a hit, economic mobility has fallen, the middle class is shrinking, economic inequality is growing, and on and on. An entire permanent underclass is forming in this new economy.
One solution made popular came from the Progressive Era. Franklin Delano Roosevelt proposed everyone had the right to work, with government as the employer of last resort. This was understandable during a time of growing industrialization. It makes less sense under present conditions. Neither the job market or welfare is keeping up with the economic problems facing so many Americans. If real work isn’t available, creating pointless busy work doesn’t seem all that productive or inspiring of a solution, not to argue that public service can’t be a worthy form of work.
The point is: What end is work supposed to serve, if and when it no longer serves a market purpose? Real work or not, the government as an employer of last could end up being more expensive than present welfare and almost certainly would be more expensive than a basic income. How much would be willing to pay for employment for its own sake?
This line of thought could explain why a basic income has gained support from across the political spectrum. Even many libertarians are getting on board, as they see it as an attractive and viable alternative to a growing welfare state and the bureaucracy that goes along with it. Also, many people in general see as a failure such things as the call for raising the minimum wage, either a failure on practical grounds or a failure of imagination. A minimum wage just shifts the costs around, but it doesn’t alter the fundamental conditions and solve the fundamental problem. Sometimes shifting costs around is a necessary evil, as someone has to pay the costs (both financial and social), and at least the minimum wage is an acknowledgement of the problem itself, but maybe we should look to the systemic causes that go beyond any particular segment of the economy, even if one thinks raising the minimum wage is a partial or temporary solution. Basic income can exist with or without a minimum wage, for if the basic income is high enough a minimum wage simply becomes irrelevant and so would become useless as a political football.
A basic income obviously goes much further than present mainstream solutions. It turns a probing eye toward how public resources get allocated in the first place. It pushes the debate back to first principles and it questions upon what basis should our economy be built (not just the basis of politics and markets, but also that of the social values and moral vision). Also, it puts public costs and benefits squarely in the realm of public decisions to be made, not shifting the responsibility to private employers. A basic income could be designed in many ways, but it doesn’t even require an increase of taxes or any other form of altering the cost equation in the private sphere. It could be fully financed either through a redirecting of present welfare funds or through ensuring the economic value of natural resources is used toward this public good (or a combination of the two). I’m sure that diverse other funding possibilities are available as well.
As many realize, our present economic situation isn’t stable or necessarily even sustainable. We too often forget that this arrangement of capitalist employment is only a few centuries old, feudalism having had just come to an end as the US was being founded (and slavery extending feudal-like conditions well into the capitalist era). Traditional forms of economics existed for millennia prior to modern economics. Even within recent centuries, capitalism has changed drastically. Further changes are inevitable. We will have to deal with this, one way or another. The loss of jobs through better technology and more efficient markets could be seen as a sad fate, but it could also be seen as an opportunity to build a new kind of society.
Anyway, there is never a lack of work that could be done. Most of the work people already do is unofficial and unpaid, from raising children to community-building, from church activities to volunteerism, along with endless other wanted and unwanted activities that whittle away one’s time. Having more freedom and leisure could mean more time spent with family, community, and church; more time growing fresh fruits and vegetables and cooking healthy meals; more time building social capital, participating in democracy, and implementing social innovations; even more time to seek education and training to find better and more satisfying employment.
The problem for Americans has never been laziness. If anything, we’ve been obsessed with work to an unhealthy degree. America is the land of the Protestant work ethic. The question is how do we turn this drive to work toward ends that are economically sustainable, socially beneficial, personally satisfying, and politically liberating. How do we increase opportunities and access for people to have better lives, for themselves, their families, and their communities? Even during this time of increasing unemployment/underemployment and economic inequality, the economy is growing. The problem is obviously not a lack of resources and productivity. Rather, it is an issue of what kind of society we want to live in, not just for some of us but for all of us.
Don’t forget the alternative. We could always choose to live in a society with a mass population of a permanent underclass. Instead of something like a basic income, we could have increasing rates of poverty, welfare, ghettoization, crime, gangs, black markets, and imprisonment. That is the choice we are making at present by default. There is no indication that these problems are going to inevitably lessen through natural forces, market mechanisms, or somehow otherwise solve themselves.
Whether or not we do so consciously and intentionally, we are always making choices. Changing conditions means both new problems and new opportunities, and hence new potential choices.
* * * *
Related previous posts:
* * * *
However, in his book, author Charles Murray concedes that a mincome-like plan may not be realistic… yet. “I began this thought experiment by asking you to ignore that the Plan was politically impossible today,” he wrote. “I end proposing that something like the Plan is politically inevitable — not next year, but sometime.”
How to pay for such an outlandish idea? Tax the rich, particularly the truly rich. Our current tax brackets often fail to distinguish between someone who makes, say, $500,000 and $5 million. But this difference matters, as does the difference between $5 million and $50 million. To simplify things, let the Google and Nike and Narrative Sciences executives eliminate all the jobs they please, as long as their taxes support a guaranteed minimum income.
Why trucking matters: The country was built on transportation. According to the Bureau of Labor Statistics, 1.6 million long-haul truckers and 2.8 million truckers are in the workforce. The American Trucking Association estimates an additional 5.2 million people are employed by the trucking industry who aren’t drivers. That includes operations managers, sales personnel, repair staff and instructors.
Trucking creates an ecosystem of towns and businesses fed by the steady flow of human drivers who stop along their route for basic necessities. Scott Santens, a blogger about basic income and automation, wrote on Medium:
“Those working in these restaurants and motels along truck-driving routes are also consumers within their own local economies. Think about what a server spends her paycheck and tips on in her own community, and what a motel maid spends from her earnings into the same community. That spending creates other paychecks in turn. So now we’re not only talking about millions more who depend on those who depend on truck drivers, but we’re also talking about entire small town communities full of people who depend on all of the above in more rural areas. With any amount of reduced consumer spending, these local economies will shrink.”
Those truckers are like nutrients moving along the roots and outer branches of the middle American tree — and when robots don’t need to pull over to spend their money at rest stops, each of those secondary services loses its viability. According to independent research reports as recent as May, the truck stop and convenience store business alone is a $450 billion industry.
If self-driving trucks take over the roads, that puts 70% of the nation’s freight shipping in the hands of capable robots. That is, if the trucks of the future are all they’re cracked up to be.
Will self-driving trucks actually take over the industry? Detractors say the change toward automation will happen so gradually that the industry won’t be irreparably disrupted. Bloomberg economy columnist Megan McArdle argues:
“Overall, I think Santens is right that eventually, we’ll solve the problems and self-driving trucks will displace a lot of drivers. That will be good news, because truck accidents are extremely deadly. But I expect the number of jobs lost will be smaller than he thinks, and the change will be slower. So while eventually a set of former drivers will have to figure out what to do with their freed time, that’s likely to be a problem for the next generation of truckers, not this one.”
Martin Ford, author of a recent book on automation called Rise of the Robots, told Mic a number of other factors will prevent self-driving trucks from taking over. To start: They’re extraordinarily heavy objects to be moving around populated roads without drivers, and that any computer system is likely to have its security issues. “The technology might be there, but it’s going to take some time,” he said.
Another argument against the rapid loss of jobs is the concept that, like dozens of industrial transformations in human history, this change will create other kinds of jobs, like maintaining the automated trucks.
But Santens disagrees. “When we mechanized farming, we transitioned to services — but now we’ve hit this part where instead of automating muscle power, we’re automating brain power,” Santens told Mic. “Suddenly, all this work we’ve been shifted to is automatable. There’s a belief there will be all these new jobs. And yes, there will be some, but not the millions on millions that will be lost.”
Trucking in the U.S. was a stable, reliable source of income for millions of Americans. But now, as the sector explodes with new job opportunities in the short term, driver pay is also at a decadelong low.
But self-driving trucks are arriving soon. Even if, as McArdle argues, this is far enough off in the future that only the next generation of truckers will be affected, we’ll need to find many of those drivers new job opportunities. Jobs that can’t be immediately automated — a classification of career that’s becoming smaller and smaller in scope.
The main conclusion is that a basic income can be transformative. It had four effects, most accentuated by the presence of the collective body.
First, it had strong welfare, or “capability”, effects. There were improvements in child nutrition, child and adult health, schooling attendance and performance, sanitation, economic activity and earned incomes, and the socio-economic status of women, the elderly and the disabled.
Second, it had strong equity effects. It resulted in bigger improvements for scheduled caste and tribal households, and for all vulnerable groups, notably those with disabilities and frailties. This was partly because the basic income was paid to each individual, strengthening their bargaining position in the household and community.
Third, it had growth effects. Contrary to what sceptics predicted (including Sonia Gandhi), the basic incomes resulted in more economic activity and work.
Conventional labour statistics would have picked that up inadequately. There was a big increase in secondary economic activities, as well as a shift from casual wage labour to own-account farming and small-scale business. Growth in village economies is often ignored. It should not be.
Fourth, it had emancipatory effects. These are unappreciated by orthodox development thinkers. The poor’s liberty has no value. But the basic income resulted in some families buying themselves out of debt bondage, others paying down exorbitant debts incurring horrendous interest rates. For many, it provided liquidity with which to respond to shocks and hazards. In effect, the basic income responded to the fact that in such villages money is a scarce commodity, and as such that has driven up its price, locking most in a perpetual cycle of debt and deprivation.
But would it actually work? The evidence from actual experiments is limited, though it’s more positive than not. A pilot in the 1970s in Manitoba, Canada, showed that a “Mincome” not only ended poverty but also reduced hospital visits and raised high-school completion rates. There seemed to be a community-affirming effect, which showed itself in people making use of free public services more responsibly.
Meanwhile, there were eight “negative income tax” trials in the U.S. in the ’70s, where people received payments and the government clawed back most of it in taxes based on your other income. The results for those trials was more mixed. They reduced poverty, but people also worked slightly less than normal. To some, this is the major drawback of basic income: it could make people lazier than they would otherwise be. That would certainly be a problem, though it’s questionable whether, in the future, there will be as much employment anyway. The age of robots and artificial intelligence seems likely to hollow out many jobs, perhaps changing how we view notions of laziness and productivity altogether.
Experiments outside the U.S. have been more encouraging. One in Namibia cut poverty from 76% to 37%, increased non-subsidized incomes, raised education and health standards, and cut crime levels. Another involving 6,000 people in India paid people $7 month—about a third of subsistence levels. It, too, proved successful.
“The important thing is to create a floor on which people can start building some security. If the economic situation allows, you can gradually increase the income to where it meets subsistence,” says Guy Standing, a professor of development studies at the School of Oriental and African Studies, in London, who was involved with the pilot. “Even that modest amount had incredible effects on people’s savings, economic status, health, in children going to school, in the acquisition of items like school shoes, so people felt in control of their lives. The amount of work people were doing increased as well.”
Given the gridlock in Congress, it’s unlikely we’ll see basic income here for a while. Though the idea has supporters in both left and right-leaning think-tanks, it’s doubtful actual politicians could agree to redesign much of the federal government if they can’t agree on much else. But the idea could take off in poorer countries that have more of a blank slate and suffer from less polarization. Perhaps we’ll re-import the concept one day once the developing world has perfected it?
This model of economic sharing recognizes that all citizens have a right to income from the commons—such as land and other resources that are either inherited or co-created by society. Although this approach is rarely part of the popular discourse on implementing a citizen’s income scheme, the idea can be traced back to the work of the American revolutionary Thomas Paine, who stated that “the earth, in its natural, cultivated state was, and ever would have continued to be, the common property of the human race.”
As explained by Peter Barnes in his book With Liberty and Dividends for All, the majority of the wealth that’s inherited or created in society is captured and extracted by the rich, rather than distributed fairly among citizens. Meanwhile, the damaging social and environmental costs of this process are largely borne by the public or the biosphere. The simple idea at the heart of most proposals for a social dividend is therefore to charge user fees on shared resources, which can then be distributed to all citizens as a basic right.
Although an agency would initially have to be set up by governments to administer the program, it would operate independently of the private and public sector as a ‘commons trust’ that could conceivably manage a range of shared resources—from land, fossil fuels and atmospheric carbon storage, to the electromagnetic spectrum and intellectual property. According to calculations by Barnes based only on a specific selection of shared assets, the program could provide every American citizen with as much as $5,000 a year.
The real advantage of a social dividend from resource rents is that it would facilitate, rather than impede, the creation of a more equal society that embodies the ethic and practice of sharing. Unlike the standard basic income proposal, this alternative approach would not compete with existing welfare budgets, and it would therefore complement solidarity-based systems of social protection.
The social dividend also acknowledges that all citizens are entitled to a fair share of co-owned wealth and resources, which is a commonsense proposal with the potential to dramatically reform economic systems and enhance social cohesion. Since the value of common resources would be shared more equitably, social dividends present an important systemic solution to poverty that can counterbalance the injustice of a global economic model in which wealth predominantly flows to the richest one per cent of the world’s population.
In line with some of the common arguments made in favor of a basic income, social dividends would also increase our sense of personal freedom, since people would no longer feel forced to do menial or difficult jobs that they would otherwise undertake reluctantly or for reasons of survival. This would leave them free to devote more time to creative, cultural and caring pursuits, sparking a much-needed debate on the nature and purpose of work at a time when the escalating environmental crisis necessitates a radically new economic model that is no longer predicated on consumption-driven economic growth.
Furthermore, social dividends could have a transformative impact on individuals and communities, which could pave the way for more extensive changes across society. The additional income received by individuals could help sustain the indispensable unpaid activities that take place in the core economy by giving people the freedom to act on their inner desires to give or be of real service to others. This includes raising children and caring for the elderly, maintaining community relationships and mutual support networks, and participating in voluntary action and civil society organizations.
According to Edgar Cahn, the core economy produces “love and caring, coming to each other’s rescue, democracy and social justice”, which is why there is a clear imperative to rebuild and strengthen this fundamental aspect of society that is increasingly under assault. The profound relationship between genuine compassion and the creation of a more equal world was also vividly expressed by Martin Luther King, who once declared that “Standing beside love is always justice.”
Embodied in these insights is the hope that strengthening the bonds of love, empathy and reciprocity within communities could spark a cultural shift in favor of social justice, and that this could eventually find expression in democratic institutions and policy debates. By helping to resuscitate a rapidly diminishing core economy, a basic income derived from the value of collectively owned resources could therefore empower citizens to take a crucial first step in the co-creation of a truly sharing society.
While Ryan’s expansion of the EITC is a good idea, it can’t address the bargaining power issue because getting the EITC is dependent on getting a job. So, like much of the rest of America’s social safety net, it can’t be used as leverage against an employer. Only a non-market wage of some sort can. By providing a little financial breathing room, a UBI would combat labor market slack and let more workers say “no” to jobs that don’t come with decent pay and sane schedules.
Unfortunately, this is also what makes reformocons nervous about a UBI, since they rightly recognize the profound human damage that’s done — to both individuals and communities — when people detach from the work force. Jim Manzi and Pascal-Emmanuel Gobry have pointed to U.S. experiments with a negative income tax (NTI) — a close policy cousin to the UBI — that showed a drop in work effort of roughly 13 percent. However, the reduction wasn’t from people giving up on finding work entirely, but from people simply waiting longer during spells before taking another job — a crucial distinction. Most of them were mothers who chose to spend more time caring for their children, or young people who spent more time accumulating an education. A similar experiment in Canada around the same time found the same result. People weren’t “listing away in socially destructive idleness” as Gobry put it; they were simply contributing to the social fabric in ways not recognized by the market.
And even when it’s not parents or teenagers waiting longer to get a job, these would-be workers could very well be holding out because they’re waiting for a better deal — enforcing exactly the kind of market discipline on employers that results in better wages and treatment. All unemployment is not created equal, and reformocons should not fear the UBI on this score.
In fact, reform conservatives should embrace the UBI’s modest reductions of work effort. One of the reformocons’ primary concerns is for the “mediating institutions” of civil society; the families, neighborhoods, churches, community groups, charities and so on that make up the fabric of American social life. Perceptive conservatives like Patrick Deneen have long realized that it’s not just the state — reformocons’ typical bête noire — that threatens civil society, but the market as well. Ross Douthat, another reformocon, recently worried that “both capitalism and the welfare state tend to weaken forms of solidarity that give meaning to life for many people, while offering nothing but money in their place.”
When we are dependent solely on the job market for our income, a tyranny of need sets in: We must go where the job market dictates, when it dictates, and do as its vagaries determine. That’s why the closing of a factory can decimate a town, and why a layoff can ruin a marriage. The time and energy we pour into work is time and energy we cannot give to our children, our spouses, our community gardens, our church bible studies, our hobbies and talents, or to our bowling leagues. The job market can poison and rend the social fabric as easily as bolster it. But by rolling back the ubiquity of the market, while minimizing the government’s bureaucratic footprint (it requires minimal administrative overhead to send people checks), a UBI would thread the needle between the market and the state.
Pethokoukis has also worried that we’re headed toward a future where automation really does begin reducing the supply of jobs, or where the economy’s ability to deliver more corporate profits while employing fewer people becomes permanent. In that case, a UBI would also shift us away from the current situation, where total dependency on the job market means the most vulnerable Americans are the last to enjoy the benefits of increased productivity, but the first ones to be squeezed out of the labor force when another threshold of efficiency is reached. If the economy is learning to do more with less, then the ideal would be a world where attachment to the labor force remains high, but everyone just works fewer hours — essentially the opposite of what we have now. By equitably distributing some of those productivity gains, a UBI would make such a world a bit more likely.
By giving all Americans at least a little income that is not dependent on the whims of the market, a UBI would allow workers more pro-active control over when and why they do or do not engage with the job market. It would open up more time and space for people to participate in those mediating institutions, becoming a de facto investment in the health of America’s civil society. In fact, the investment could very well be literal; any UBI — but especially one financed by tax deduction closures and military spending cuts — would be a massive distribution of income down the income ladder, and most social data suggests the poor and working class contribute more of their income to their churches, communities, and local charities than do the rich.
This tidy, egalitarian concept isn’t new, and its support isn’t limited to the radical political left. Dig through the Rev. Martin Luther King Jr.’s little discussed book, “Where Do We Go From Here: Chaos or Community,” published in 1967, the year before his assassination, and you’ll find an endorsement: “I am now convinced that the simplest approach will prove to be the most effective. The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Milton Friedman, the Nobel-prize winning economist who was an adviser to conservatives Ronald Reagan and Margaret Thatcher, also supported a variation of the idea.
The basic income continues to have a diverse set of supporters — left, right and libertarian. They like the concept for different reasons, said Matt Bruenig, a writer and policy analyst for Demos. Those on the left tend to like it because it’s egalitarian. It helps give everyone an equal (or more equal) shot at success in our capitalist society. Some libertarians and right-wingers support the concept, meanwhile, because they see it as a way to whittle away at government bureaucracy. Some would have the basic income replace many existing social safety net programs. There’s also a conservative philosophy underlying all of this: Give people money and they, not the government, know best how to spend it. They know what they need. The feds do not.
It might not be ideal—certainly “no libertarian would wish for a BIG as an addition to the currently existing welfare state,” writes Zwolinski. “But what about as a replacement for it?” He argues that the BIG would amount to less bureaucracy, less expense, “less rent-seeking”, and less paternalism.
One of the strangest aspects of basic income proposals, which Matthews handles at length, is that there is substantial support for it from both ideological extremes.
On the conservative side, for example, libertarian political philosopher Matt Zwolinski joined the likes of economists Milton Friedman and John Kenneth Galbraith when he argued last year that such a policy could potentially simplify the current federal bureaucracy, lower costs and provide greater protections to individual privacy.
“In Libertarian Utopia, we might not have any welfare state all, no matter how limited or efficient,” he argued. But, he continued, “the question is not whether a GBI is a perfectly libertarian policy in every way, but whether it is more libertarian than the other realistically available policy alternatives.”
On the liberal side, many have noted that Martin Luther King Jr. advocated for similar measures, as did philosopher Bertrand Russell. “In a GBI (guaranteed basic income) world, an employer has to make work somehow appealing enough to get employees even though everyone’s guaranteed a basic minimum whether they work or not,” Matthew Yglesias wrote in Slate in 2013 (Yglesias is now an editor at Vox).
“But that ‘appealing’ factor could be high wages, could be valuable skills and training, could just be a pleasant work atmosphere,” Yglesias added. “Or (it) could be some combination of the three.”
Though there have been proposals in the past for some form of a basic income, most notably from the Nixon administration, most pundits, including Matthews, aren’t optimistic that such a major change to the American welfare system could come any time soon. Still, they argue, it’s at least worth a look.
It should be fairly obvious that the other group of people who support this idea, us over on the very free market right, don’t necessarily support it for the same reasons. Yet it is true that this is where the other focus of support is. My own support comes from the incentives problem.
I’m pretty much convinced that incentives matter to people – there would be little to be said about economics if this were not true. What you get, after tax and benefits withdrawal for your labour, is obviously an incentive that affects your willingness to labour. As the Budget points out every year (it’s one of those things it is supposed to detail each year) there’s several million people who face marginal tax and benefit rates of 70 per cent or more. There’s even a couple of hundred thousand over 100 per cent.
By earning an extra pound or ten in a week they actually end up with less money in their pockets and have also had to work more to get less. You don’t have to entirely buy into a strict reading of Art Laffer’s famous Curve to believe that this is going to reduce the amount of extra work that these people are going to be willing to do. They’re thus stuck in a poverty trap; they work more and get less, therefore they won’t work harder and get over that hump into better territory.
Please note the implication of this: yes, us free market right w(h)ingers really do think that hugely high marginal tax rates affect the poor just as they do the rich and that therefore we shouldn’t have them.
So, from this point of view, just give everyone some amount of money per week, untaxed and not withdrawn as incomes rise and those poor will face hugely lower marginal tax rates. It’ll thus leave room for the incentives for people to slowly improve their situations through extra work, better work, experience, education and so on. We have, we hope, solved the poverty trap caused by the current tax and welfare system.
This is largely the argument that Charles Murray (yes, he of the Bell Curve) used in his book on the subject, “In Our Hands”. The collision between tax rates and benefit withdrawal rates is such that we’d be better off just giving everyone some cash and letting them get on with it. If that means they go to the beach all their lives so what? It’ll be a minority that do and we’ll all still be better off.
The problem really boils down to us asking, what is the definition of “basic” that we’re using here? There’s some who want to call for a universal income: something like the UK’s living wage of £15,000 a year or so. Without taxing the economy into oblivion, that’s just not going to happen. Murray’s worked out that the US, a much richer place, could afford about $10,000 a year per adult. But do note that that replaces everything else: the entire welfare state, including old age pensions (or Social Security as the colonials call it) disappears into that one $10,000 per adult payment.
The Green Party is talking about £75 a week or so, which is pretty minimalist for even the word “basic”. The assumption seems to be that we’ll all eat off our own potato patches. Despite how that they’re not very good at explaining where the money will come from, the answer is obvious: it’s folding large pieces of that welfare state into making that payment.
Dillow and I seem to think that something around the level of the pension guarantee could be done: £130 a week. But at that point you really have stripped absolutely everything out of the welfare state to pay for it. Pensions, tax credits, personal allowances for tax and so on all disappear into the gaping financial maw of said universal basic income. And we think that all would be better off in such a system.
For those on the left, basic income represents a chance to strengthen the social safety net and more evenly redistribute wealth, while some American libertarians view it as a way to cut back on bureaucracy and provide individuals with greater personal choice. There’s disagreement, however, on whether there would be accompanying tax hikes and whether other social programs would remain in place.
Karl Widerquist, an academic and vocal supporter of basic income, suggested its rising popularity in the U.S. springs from concern over income inequality spurred by the Great Recession. “It’s really incredible how much it’s grown so fast, and there’s no telling where it will go,” he said.
The Dauphin experiment, like four others in the United States around the same time, was an attempt to measure if providing extra money directly to residents below a certain household income would be effective social policy.
Dauphin was unique among those studies in that all residents of the municipality and surrounding area, with a population of about 10,000, were eligible to participate if they met the criteria.
For those who didn’t qualify for support under traditional welfare schemes, such as those for the elderly and the working poor, Mincome meant a significant increase in income. Low-wage earners had their incomes topped up.
Richardson, for instance, recalls collecting about 30 Canadian dollars some months. That’s the equivalent of about CA$145 today (US$133).
The experiment produced a trove of data, but the results were never released. After changes at the federal and provincial government levels, the program was shut down without a final report or any analysis.
Decades after the program ended, sociology professor Evelyn Forget dug up records from the period and found there were far-reaching benefits in the education and health sectors.
In a 2011 study she reported an 8.5 percent drop in hospital visits, a decrease in emergency room visits from car accidents and fewer recorded instances of domestic abuse. There was also a reduction in the number of people who sought treatment for mental health issues. And a greater proportion of high school students continued to the 12th grade.
As with U.S. experiments during the same period, there was no evidence that it led people to withdraw from the labor market, according to her research. “It’s surprising to find that it actually works, that people don’t quit their jobs,” said Forget, a University of Manitoba professor. “There’s this fear that if we have too much freedom, we might misuse it.”
In a 2010 paper, a team of researchers looked at how the payments, which started in 1997, affected children. They determined that the payments increased the likelihood that kids would graduate from high school and reduced the chances that they would get involved in criminal activity. That was particularly true for the town’s poorest children. For those kids, an extra $4,000 in annual household income added up to an additional year of education and a 22 percent reduction in the chance of committing a minor crime at ages 16 or 17.
How does giving families money help kids? The researchers found at least part of the explanation seems to be that adults who received the payments were able to be more effective parents. They were less likely to commit crimes and more likely to know where their kids were and what they were doing. Children in families receiving the payments also reported a higher number of positive interactions with their mothers (though there was no statistically significant effect here when it came to fathers).
The authors suggest that getting a bit more money reduces stress and other mental health problems related to poverty. (Parents receiving the payments didn’t work any less, so the change was not about simply spending more time with their kids.) The fact that a simple transfer of money could produce this kind of change provides an interesting corrective to the frequent focus on supposedly deep-seated cultural differences to explain class differences among children.
Two years before the Harper government shut down its operations, the National Council of Welfare released a damning report criticizing how welfare rules are trapping people in poverty.
“Canada’s welfare system is a box with a tight lid. Those in need must essentially first become destitute before they qualify for temporary assistance,” said TD Bank’s former chief economist Don Drummond after the social agency’s report was released in 2010.
“But the record shows once you become destitute you tend to stay in that state. You have no means to absorb setbacks in income or unexpected costs. You can’t afford to move to where jobs might be or upgrade your skills.”
Former Conservative senator Hugh Segal is a longtime proponent of a guaranteed annual income policy. He believes the program could save provinces millions in social assistance spending on programs like welfare.
Instead of being forced through the welfare system, people’s eligibility would be assessed and reassessed with every income tax filing. Those who don’t make above the low-income cut-off in their area would be automatically topped up, similar to Mincome in Dauphin.
[ . . . ]
“I would think it’s fair to say ideologically, the present government would eye the notion that this is some ‘kooky left-wing scheme’ without addressing the fact that really strong social and economic conservatives like Milton Friedman argued in favour of a negative income tax,” he said.
In Canada, the idea of an universal basic income was first presented at a Progressive Conservative policy convention in October of 1969. Then-leader Robert Stanfield argued the idea would consolidate overlapping security programs and reduce bureaucracy.