Alberta mayors stick back guaranteed minimum income
Posted on June 5, 2015 in Social Security Policy Context
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TheStar.com – News/Canada – Calgary and Edmonton mayors support basic guaranteed income in principle
Jun 05 2015. By: Robin Levinson King, Staff Reporter
Mayors from both Edmonton and Calgary came out in support of some kind of basic income guarantee — or mincome, as it’s sometimes called.
In light of the NDP’s sweeping victory in Alberta, Calgary mayor Naheed Nenshi told reporters that he’s interested to see if the province’s new finance minister, anti-poverty activist Joe Ceci, supports guaranteed minimum income in the form of a “negative income tax.”
“I am really, really interested if he will bring that to bear in terms of some really significant changes to the taxation system that would really help us manage poverty in a brand new way,” Nenshi told reporters in Alberta.
A negative income tax does exactly the opposite of what you expect a tax to do: it pays workers who make below a certain amount a stipend to help “top up” their income.
It’s just one of ways that economists and policy analysts have discussed implementing some sort of minimum guaranteed income. Currently, low-income Canadians get assistance from a host of programs and agencies managed across levels of government, such as minimum wage, community housing, child benefits and Ontario Works.
But what if governments got rid of all these programs? What if the poor were just promised a basic income?
Don Iveson, the mayor of Edmonton, thinks it’s not such a bad idea. He told anti-poverty blog Leaders and Legacies that he hopes Calgary and Edmonton become testing grounds for mincome policies. “We (Edmonton and Calgary) may be in a position to pilot some different solutions,” he told the blog.
Edmonton and Calgary wouldn’t be the first two Canadian cities to pilot such radical policies. Between 1974 and 1978, Winnipeg and Dauphin, Manitoba became the testing grounds for mincome experiments backed by the Trudeau Liberals and the NDP-led provincial government.
Along with similar tests in the United States, the goal was to see if mincome could be a viable policy solution to give people living below the poverty line a better life. But when funding ran out, the data went unused for decades.
It wasn’t until a few years ago that Evelyn Forget, a professor at the University of Manitoba, revisited the long-forgotten experiment. After analyzing data from the province, Forget found that hospital visits in Dauphin, where everyone who was eligible could enroll, declined by 8.5 per cent — mostly because of fewer mental health issues.
Forget said her findings show that while a guaranteed minimum income can be costly for governments, it can also lead to savings down the line. “I think there are a good deal of benefits,” she said. She thinks the idea is especially salient today, when many find themselves working part-time, low-paying jobs. The program in Manitoba was structured so that people enrolled could work without totally decimating their benefits, thus allowing them to both hold a job and receive support. “It can give people an opportunity to string together jobs and still make a reasonable income and support families,” she said.
But Miles Corak, an economist at the University of Ottawa who specializes in anti-poverty policies, said finding the right balance between work and welfare can be tricky. “The trouble around annual income has always been around work incentive issues, and so while I think the principle is right, the devil is always in the details,” he said. Corak said policies which tie benefits to employment are better for the economy, and people’s morale. If not, people may be dissuaded from working.
Another way to reduce inequality, much discussed, would be to increase the minimum wage. But Corak advises that this doesn’t always address the core cause of poverty, which is sustained, unstable, low-wage work. Increasing the minimum wage would benefit teens living at home and single moms alike. “You’re targeting people who need it most,” he said.
Some conservatives, like American libertarian Charles Murray, have come out in favour of guaranteed income, because it simplifies social assistance. Instead of paying for multiple government welfare departments, a guaranteed income system would be much easier to operate.
With files from Metro
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Tags: featured, ideology, poverty, standard of living
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