Basic income -- the what and how

By Terrance Hunsley

There has been a lot of discussion about the need for a basic income of some form, in Canada as well as several other countries. Many proponents of reform call it a Basic Income Guarantee (BIG), and it seems that several governments are considering it. I have already gone on record suggesting that a pilot project would most likely serve to defer such a reform until a time when the political consensus to improve things has passed. Not that we cannot experiment and learn and adjust as we go. Just that picking out a few communities and implementing a pilot is not the way to do it. If an experiment is the best we can do, let’s at least pick out a large national random sample of low and modest income people and try it out on them.

But really, this is getting ahead of ourselves. Not only is there no consensus on what a basic income program should look like, there is none on what it should accomplish. Some see it as a way to eliminate poverty and offset income inequality; others see a way to collapse the existing social program structure into a single program and save money. The Fraser Institute has published a very useful report on all of the obstacles and pitfalls of implementing a guaranteed income program. It will serve as a good checklist of issues that a major income security reform needs to deal with. The problems that it poses are real, including its over-riding focus on the potential work-discouraging effect of guaranteed, no-stringsattached income. (In my view it would not be the discouragement of work that is the big issue as much as the potential to combine a basic income with activity in the informal or underground economy. So we need to design it with that in mind.) It is also likely that large-scale savings on administration of the existing mess of programs and rules will not be accomplished in the short term, for the reasons it cites; although integration of income-related transfers could certainly be implemented in an orderly way.

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