National income floor for troubled times
Posted on March 9, 2015 in Social Security Debates
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TheStar.com – Opinion/Commentary – Canadians take a fresh look at an old idea: a guaranteed annual income for everyone
Mar 08 2015. By: Carol Goar Star Columnist
Since the recession, citizens’ groups have been springing up across the country to push for a guaranteed annual income.
There are six in Ontario. Five more are starting up. Other provinces have a few apiece. Last year, a national coalition, the Basic Income Canada Network, was formed.
The core of the movement is still academics and social activists, but they’ve been joined by growing numbers of middle-income Canadians who have grudgingly concluded a universal income floor is the only way to keep their country livable.
The social landscape is deteriorating in ways they feel powerless to reverse. Inequality is rising; full-time jobs are being replaced with precarious, part-time work; highly trained young people are being sidelined; globalization is accelerating; outsourcing is increasing; living standards are declining for all but the rich minority; and public attitudes toward the poor and disabled are hardening. This is not the future they envisaged for their children.
They tried to give their sons and daughters the tools to succeed – a good education, a strong work ethic, family support – but their efforts were no match for market forces. They looked to governments for help, but they were retrenching. Unions had lost their clout. Non-profit agencies were overwhelmed.
Their last hope is a guaranteed annual income (also known as a basic income guarantee, negative income tax, national income floor and minimum adequate income). They know it would be costly. They know taxpayers will balk. They aren’t satisfied with any of the existing models. But they can’t abandon Canada’s next generation.
“This is the first step back to a compassionate Canada,” says Elaine Power, a professor of sociocultural studies at Queen’s University. She has advocated a guaranteed annual income for more than a decade. But the impetus is no longer coming from people like her, she insists. “The appeal is increasing as people see their kids not doing okay.”
Power and three of her colleagues from Kingston – economics professor Robin Boadway, business professor William Cooper and postal worker Pamela Cornell – visited the Star last week, hoping to win support of the newspaper’s editorial board. They had already approached the New Democrats (who said no) and the Liberals who sounded interested but made no commitment.
Unlike previous proponents of a guaranteed annual income (GAI), this delegation was willing to attach clear numbers to its plan. It would provide every adult with an annual income of $20,000 and children with an income guarantee of $6,000. “The idea is to make sure everybody has a livable income,” Boadway said.
The cost of replacing social assistance (which includes welfare and disability support) and old age security (which includes a top-up for low-income seniors) with a single stigma-free benefit would be $40 billion. The group would not touch employment insurance, the Canada Pension Plan, child care subsidies, social housing, drug benefits or dental care. It would raise the minimum wage to $14 an hour (Current rates range from $10.20 an hour in Alberta to $11 an hour in Ontario.)
The plan’s proponents contend a basic income guarantee is affordable. Although it would require a substantial tax increase, the payback would be huge, Power argues. It would eliminate poverty and hunger, allow workers trapped in miserable, low-wage jobs to use their talent in more rewarding pursuits – art, writing, performing, volunteering, taking care of aging parents, creating healthy, sustainable communities – and alleviate the fears of middle-class parents who see the caring Canada they built slipping away.
There is lot to like about this proposition. Politically, however, there are three formidable obstacles.
The $40-billion cost, distributed over 19.3 million taxpayers, would mean an average personal tax hike of $2,000. That’s a lot to ask people who are working hard to support their families.
There would be more losers than winners. Canadians with incomes below $20,000 (approximately a third of the population) would benefit; the rest would give more than they gained.
It would let the private sector off the hook. While citizens pooled their resources to take care of each other, employers could continue to drive down wages and eliminate jobs.
Any party leader would have to think long and hard about endorsing this policy.
Liberal Leader Justin Trudeau has said nothing publicly. His father delivered his verdict 42 years ago. “It’s a good theory,” Pierre Trudeau said. “But we cannot bring everyone over the poverty line by giving them part of the taxpayer’s pocket.”
< http://www.thestar.com/opinion/commentary/2015/03/08/national-income-floor-for-troubled-times-goar.html
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Tags: economy, featured, ideology, participation, standard of living, youth
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