A Basic Income: The case for incrementalism

Joe Foster

Although we are one of the more prosperous nations, it is widely recognized that many people continue to live below the poverty line. There is approximately 20 percent of the Canadian population that is part of the precarious segment, and this includes people across the age and gender spectrum. This has not been addressed through our social infrastructure programs, in spite of the growing costs and diversity of those programs.

While there is currently much attention being given to this subject, we should not be over-confident that a Basic Income has the degree of public support needed to drive politicians to take the necessary action. There are still many questions, real and imagined, as to the efficacy of a Basic Income as an effective and efficient key tool for combating poverty. The Government of Ontario is an exception whereas the Federal government is removing itself at the present time from any direct intervention. 

We are well aware of the local and global changes that are impacting our communities, our country and the globe. Most specifically globalization and its accompanying digital age affect us all. This is happening at a quickening rate and in an increasingly intrusive manner. While the Industrial Age caused its own adjustment problems, the digital revolution (coined the Second Machine Age) affects individuals, communities, businesses and governments alike—at a national and international level. It cannot be slowed down, let alone stopped or ignored.

Much has been written about technology advancements replacing humans as the major source of labour of all types. While one can argue numbers, this trend will not only continue but accelerate over the coming years. There is every reason to assume that the rate of technology impacts (including artificial intelligence) will outpace the creation of new jobs associated with the digital age. Also, even where new jobs are created as a consequence of technology innovations, it is highly unlikely that all job seekers will find employment in this new “machine age”.

Those advocating for the implementation of a Basic Income are most often in favour of the Big Bang approach—namely, immediately providing a grant to all recipients in need, at a level close or equal to the Low Income Cut-off (LICO), or the Low income Measure (LIM), depending on which measure is chosen to be used.

Many also recommend a Universal Basic Income (UBI) where all individuals, rich or poor, receive the same amount, along with some form of a claw-back mechanism. Each type has its merits.

Historically, past and present pilot projects in Basic Income have usually provided funds far below the poverty line. In spite of this, what is most interesting is that most of these projects have shown surprisingly positive results. Similar to micro-financing, recipients have used these funds in a variety of innovative ways to improve their economic position or the well-being and future of their families and often their communities.

Is a Basic Income doable?

Yes, but what is needed to make it a reality is strong support from the public and courageous leadership. This requires that we all have a long-term vision that recognizes the need for change which, in effect, is a radical re-engineering of the existing social welfare system.

For sustainability, it must be the national government that takes a leading role in the design and implementation of a comprehensive, guaranteed national program. Admittedly, governments at all levels have been attempting, on a piece-meal basis, to reduce poverty.  This is both good and bad. The review, modification or elimination of many of the existing programs that a Basic Income can more efficiently provide, will necessitate collaboration. This will take considerable goodwill and time.

Is a Basic Income affordable?

If we study history, what is a priority for governments usually becomes affordable. Pyramids, temples, massive prison systems are a few examples. Most impoverished developing countries also devote an unconscionable amount to military spending—North Koreas being an unfortunate case in point. Excuses and propaganda can always be found to woo citizens to support programs that are not in the best long term interests of society as a whole.

On the positive side, large amounts of money were found to fund projects for reconstruction after the Second World War, which benefitted both sides of the conflict.

A Basic Income program cannot exist in isolation. There needs to be adequate infrastructure to ensure that funds are delivered to recipients in a timely fashion and at the appropriate levels. Feedback systems must be designed such that adjustments are made quickly as and when needed to accommodate changing work situations. Also, as recognized by most advocates, other programs to remove financial barriers, such as Pharmacare and affordable housing, must complement any Basic Income plan.

One factor that has received little attention is, what is exactly the amount needed to lift an individual out of poverty? Only trial and error will define this limit which will vary widely from location to location. However, with our advanced understanding of social dynamics and the ability of computer systems to provide instant feedback, we have the necessary tools to make a Basic Income program truly effective and efficient.

We cannot guarantee that a national Basic Income program will be revenue-neutral. However, studies that have examined the total costs of poverty to society suggest it may well be. Certainly in the short run, this is probably not likely. There will be upfront capital investments required until significant benefits are realized to communities in the form of reduced health costs and other related social costs.

On the positive side, a Basic Income acts as an immediate, local and national stimulus program for the economy. Also, tax revenues increase with greater economic activity.

Why not wait until costs are more accurately known and collaboration agreements are in place? (This is an appropriate time to comment on the excellent recent proposal, “Designing a Basic Income Guarantee for Canada”, February, 2017 (Boadway et al.)

Although carefully crafted, any costed proposal such as this one requires making a number of assumptions about collaboration, costs and savings. I therefore recommend that this proposal be used as a reference, but preferably after a Federal basic income project has been initiated.

CONCLUSION

There is no reason why Canada cannot introduce a Basic Income immediately on a nation-wide basis. The increasing gap between the very rich and the very poor cannot continue indefinitely; this is now encroaching on the middle class as well.

However, there are many valid political, economic and social reasons, as described above, why governments may be hesitant to jump into a full-fledged program. In summary, there are two key factors to be considered: 1) the reality that collaboration agreements with provinces and territories will take considerable time, which would create further unacceptable delays, and related to this, 2) the need the reflect the many adjustments to the plethora of existing programs at the local, provincial/territorial and national levels. These adjustments will be more easily made through consultation and accepted by those affected it they are small, scheduled carefully, and then implemented quickly. 

One of the key advantages of starting small is that no existing program needs to be changed immediately. Instituting a Basic Income gradually allows assessment and consultation to take place at a realistic rate so that changes are planned and communicated properly. Mistakes can harm both recipient and the future of the program.

In spite of the many advantages, there is a real danger in proceeding with an incremental approach. It is essential, therefore to ensure, preferably through legislation, that the initial program comes with a documented path for reaching a final level that is a liveable income—and in a reasonable time frame. It is important at the very beginning to make it difficult if not impossible for those in power to reverse programs when there is a change in leadership. The Mincom program in Dauphin, Manitoba is an example of this possibility. We cannot afford to lock people into a new form of economic slavery.

The goal of a Basic Income program is to essentially eliminate poverty in Canada. Since a number of families have been living in perpetual poverty for generations, it will take an enlightened society and some years, if not a generation or two, to break this cycle. While income is not the only prerequisite for well being, money is the key medium of exchange and its circulation is necessary for a healthy economy. Its lack can create insurmountable barriers. A liveable Basic Income will help to restore dignity to both the individual and the community. It will reward those who presently provide countless hours of volunteering and care giving. It will provide the flexibility to advance skills training and education. Without the basic needs of all individuals being met, it is impossible to achieve social cohesion and the potential of a country so rich in human and natural resources. ,

-- Joe Foster is the Human Rights Critic for the Green Party of Canada.