Basic income is not just about work, it’s about health

Posted on November 8, 2016 in Health Debates

TheGlobeandMail.com – Opinion
Nov. 08, 2016.   ANDRÉ PICARD

The way we deal with adults living in poverty is a mess. Whether you believe in a handout or a hand-up approach, what those in need tend to get these days is the back of the hand. The social-welfare system is parsimonious, judgmental, demeaning, complex and bureaucratic. Worst of all, it tends to perpetuate, rather than alleviate, poverty.

So is there a better way? That is the basic question that Ontario hopes to answer with its much-anticipated pilot project, testing a “basic income” approach. That research has taken a big step forward with the release of a discussion paper by special adviser Hugh Segal entitled Finding a Better Way: A Basic Income Pilot Project for Ontario.

On the surface, basic income (or guaranteed annual income) is a concept that is attractive across the political spectrum. But the devil is in the details: Where do you set the basic income level? Does it supplement or replace existing social programs? Can recipients supplement their basic income, or will it be clawed back? Should it be cost-neutral? Is the goal to boost income or improve health?

Mr. Segal answers some of those questions – at least for the pilot project and, in his 101-page report, sets out some all-important parameters for testing the concept. He recommends that the basic income be set at a minimum of $1,320 a month (plus an additional $500 if the recipient has a disability), non-taxable and that it replace two large programs, Ontario Works and the Ontario Disability Support Program. Those two cornerstone social-welfare programs cost the Ontario treasury about $9-billion a year. That’s because almost 16 per cent of Ontarians between the ages of 18 and 64 live in poverty. Currently, a single man gets as little as $700 a month in social assistance from Ontario Works, while the ODSP floor is about $1,130.

The big difference between the current welfare payments and a basic income – at least for the recipient – would be that basic income would be paid automatically, rather than requiring a whole bunch of paperwork and constant monitoring to prove eligibility.

Over all, what the proposed basic income study would do is provide individuals and families with the equivalent of 75 per cent of the income that would place them at the poverty line. (A technical calculation known as the low-income measure, or LIM.) The LIM is about $22,000 for a single individual and $44,000 for a family of four. The big unknown about basic income is whether it discourages workforce participation. In other words, will people not bother trying to find work if they’re going to get a monthly cheque, no questions asked?

What a pilot project needs to test is if the ability to keep a part of income is an incentive to work, or whether a better approach is a “negative income tax” – providing workers with a top-up to their pay to ensure they get to the LIM (or 75 per cent of the LIM). Some think of basic income as a carrot, others as a stick.

But basic income is not just an employment issue, it’s about health. Will a guaranteed income improve the health of the poor or lessen use of the health-care system? To answer these questions, you need pretty sophisticated research and it has to be done over a long period – and Mr. Segal recommends a minimum of three years.

There are also some really important and thoughtful cautions in the report. A “Big Bang” approach, in which you replace all social supports with a single cheque, is not the way to go. While a basic income will likely be helpful, it does not obviate the need for housing support, job training, education, subsidies for prescription drugs and so on.

One of the unstated assumptions is that a basic-income approach would be revenue-neutral. But that is delusional. If benefit levels are too low – and all the evidence suggests they are – we need to raise them. If the system is too bureaucratic, then we need to make it less so. If too many people are falling through the cracks – such as fiftysomethings who lose their jobs and need a bridge to seniors’ benefits – then we have to patch the cracks. We should not presume that basic income is the way to go without waiting for the evidence.

The ultimate goal of this exercise should be to make the social-welfare system more just and fair for the poor and ensure that “fair” is not a four-letter word.

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This entry was posted on Tuesday, November 8th, 2016 at 8:41 pm and is filed under Health Debates. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

One Response to “Basic income is not just about work, it’s about health”

  1. The best thing about this article is that it is able to explain what basic income is, how it is supposed to work and the potential pros and cons and flaws of it, in a short and concise way so that anyone could understand it. Picard discusses how basic income is also a health issue and how further research needs to be done in order to fully know whether basic income could lower the reliance on the health care system. While research does need to be done, some predictions could be made. If the overall health of people improved, especially children, or people that are going to school, this would allow them to receive a better education, be more invested in their education and therefore be able to contribute to the community better, both while they are in school as well as when they leave school and look for a job. This is important to discuss because it would help deal with the issues that Picard calls thoughtful cautions towards the end of the article.
    One very important aspect that the author brings up is using basic income as a way to make the social-welfare system more fair and just for the poor. If this is what basic income would be able to do, by having the starting point in someones life more level with others, then I believe people would still have the incentive to work and better their own lives. Another dimension that Picard does not discuss is how if more people were not just living day to day, I believe they would help others that were struggling and help to bring everyone up together so that everyone is able to contribute to the community.

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