Why free money is a hard sell in tough times

Posted on April 27, 2017 in Social Security Debates

TheStar.com – News/Qunnen’s Park – If you don’t know what to make of a guaranteed basic income, you’re not alone.
April 26, 2017.   By

Free money can be a hard sell.

People in need will surely take it in. People of means, however, may not like the idea of giving it out — not at their expense.

Thursday’s budget will formalize an ambitious pilot program for 4,000 eligible volunteers to be guaranteed an annual income of $17,000 by the government over three years. If you qualify, the money flows whether or not you work, which works in your favour — in good times and bad, for better or for worse.

If you don’t know what to make of the guaranteed giveaway, you’re not alone. The concept has confounded social policy analysts, politicians, economists and ideologues of the left and right for decades.

It’s a bold idea, but not overly original. In the early 1970s, Manitoba briefly experimented with a minimum income before giving up on the idea for lack of interest and support.

But our world has changed, and Ontario’s economy along with it. The go-go growth of four decades ago was not an ideal incubator for an idealistic income support program.

Critics might have said, back then (if not now): Get a job.

People on the right or left might well have argued whether a guaranteed income could discourage people from working hard — or looking hard. All these years later, we know that economic progress can also be precarious for employment.

Today it’s possible to get a job, but harder to keep a job, because jobs for life turned out to be short-lived. Even the most energetic full-time multi-tasker of part-time jobs can only fantasize about a forever factory job in a manufacturing heartland that has rapidly de-industrialized.

Pick your poison: globalization, automation, artificial intelligence or information technology. You don’t have to be a rocket scientist to know that jobs for rocket scientists — and the rest of us (and our children) — aren’t what they once were.

Against that backdrop, the guaranteed minimum payout has been rebranded a basic income. And updated to take account of income levels and, increasingly, uneven incomes — which is to say, incomes that come and go over the years.

It is still minimal — $17,000 a year won’t buy you a life of easy survivability, let alone affordability. It is 75 per cent of Ontario’s low-income measure (a quasi-poverty line) of about $22,653 — calculated as half the median income in the province.

But it has the incalculable advantage of clarity, efficiency and humanity. It is an alternative to the dehumanizing bureaucracy of welfare, with all its necessary checks and unnecessary balances.

Not just for the poor, nor the working poor, not even the well-off working class of the past. Consider the middle class of today and tomorrow, watching their paycheques go up and down as work comes and goes from one year to the next, wondering if they’ll qualify for unemployment benefits, and marvelling at the workplace benefits their parents counted on for prescription and dental bills.

That’s why the current economic context counts for so much in any consideration of a basic income. Weighing the costs and benefits, it’s also worth waiting for the facts to come in from this three-year trial before prejudging human behaviour and economic outcomes.

The only certainty is that it is far from a sure thing. The Liberal government deserves credit for launching an experiment that could easily fail, just as its previous proposals to streamline an outdated welfare system quickly lost momentum.

In the same week that Premier Kathleen Wynne unveiled her basic income experiment, NDP Leader Andrea Horwath called for a provincial pharmacare program, trying to put the Liberals on the spot. Both proposals could prove life-saving, but they are distinctly different.

A basic income pilot is more abstract and hence harder for voters to imagine benefiting them. Universal pharmacare is easy to understand because it offers tangible benefits up front (saving money and lives through bulk-buying and a single-payer system).

First promised in last year’s budget, the basic income plan is a centrepiece of Thursday’s budget and will form a major plank in next year’s Liberal election platform. As Wynne argued this week, it goes to the core of what governments can do amid economic and employment volatility — but the same argument applies to pharmacare, which (like the basic income) attracts support from both left and right.

Free money for some versus free drugs for all? A good government would give us both.


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