Providing Basic Income Not Best Solution for Poverty

CDHoweInst.org – Media Releases – “Even if we could afford GAI programs they aren’t a panacea,” commented Hicks.
January 24, 2017.   Peter Hicks

Providing a comprehensive, one-size-fits-all guaranteed annual income (GAI) is not the best solution to fighting poverty in Canada, according to a new report from the C.D. Howe Institute. In “Toward a New Balance in Social Policy: The Future Role of Guaranteed Annual Income within the Safety Net,” author Peter Hicks urges policymakers to address poverty by using a “bottom-up” approach and developing a new generation of social programs.

The author notes that, due to failed prior attempts to combat poverty, there has been a resurgence of interest in basic income programs; an example being Ontario’s pilot program recommended in a report by Senator Hugh Segal. However, the author warns that expanding such programs province-wide would not be the most effective approach. He notes that comprehensive GAI programs are less useful than had been previously assumed because, aside from their high cost, they do not respond well to new information about the nature of poverty.

In particular, most periods of low income are short-lived and often require solutions that are more time-sensitive and more attuned to individual circumstances than is possible in traditional GAI designs. As well, for the minority of low-income people who are persistently poor, the best solutions involve integrated mixes of income supports and, often, a variety of services.

“Even if we could afford GAI programs they aren’t a panacea,” commented Hicks. “The concept of poverty has shifted away from focusing on a lack of income towards the lack of a variety of resources that cause exclusion. The typical GAI design focus on ‘average needs’ ignores individual and family diversity.”

The author argues that the effective, and affordable, way ahead lies not in big GAI programs, but rather in the use of newly available big data and evidence-driven approaches to steadily improve three kinds of programming:

1.  Integrated services tailored to individual needs, such as skill-enhancing programs that are intended to address unique needs of those who are persistently poor;

2.  Supporting people who can save for occasional periods of low-income by allowing more flexible access to income supports over the course of one’s life; and

3.  GAI programming that extends existing measures, such as supports directed to children, seniors and those with disabilities.

Hicks concludes: “Proposals for one-size-fits-all basic income programs are not the best solution to poverty. We need improved, evidence-based programs tailored to the diverse needs of low-income Canadians.”

Click here for the full report:  < https://www.cdhowe.org/public-policy-research/toward-new-balance-social-policy-future-role-guaranteed-annual-income-within-safety-net >

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

For more information contact: Peter Hicks, policy advisor, Peter Hicks Consulting.: 416-865-1904 or email: kmurphy@cdhowe.org.

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