Guaranteed minimum income can improve lives and reduce government costs

Guaranteed Minimum Income is a concept that is being debated seriously among academics and policy makers in many parts of Canada and around the world. The fallout from the global crisis in 2008 has bred newfound support for such a program. 

The guarantee ensures that everyone has an income sufficient to meet basic needs and live with dignity, regardless of work status, and it eradicates grinding poverty. Unlike welfare, which only certain individuals qualify for, guaranteed minimum income will be open to everyone.

In 1974, Pierre Trudeau's Liberals and Manitoba's first elected New Democratic Party government gave money to every person and family in Dauphin who fell below the poverty line. Under the program called 'Mincome' about 1,000 families received monthly cheques.

In the period that ‘Mincome’ was administered, hospital visits dropped by 8.5 per cent and there were fewer emergency room visits for work related accidents, car accidents and domestic abuse. Also, there were far fewer mental health visits. Clearly, Guaranteed Minimum Income has a social benefit and an economic benefit as well.

Evelyn Forget, an economist at the University of Manitoba, has published a book ‘Basic Income for Canadians’ which talks about the Dauphin, Manitoba project and how ‘Mincome’ successfully helped people rise out of poverty and gain dignity and at the same time reduce the cost of  government assistance programs.

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The only income guarantees at present are for seniors and children. Old Age Security is an amount of money provided regularly to individual seniors aged 65 and older, regardless of family status, past or present work status or other income. In addition, the Guaranteed Income Supplement is provided to seniors with low income.  Income guarantees for seniors and children work in tandem with public services to provide a better quality of life than any of us could afford on our own.

For working-age Canadians there is little assistance or security in the event of job loss, disability, divorce, prolonged illness and economic recession.

Canada’s ‘last resort’ income is provided by welfare and it differs greatly to a basic income concept. There’s no universality because there are varying payments for various categories of people depending upon where they live. Complex rules and conditions often discourage work effort and cause stress and poor health. Generally, the financial support comes nowhere near to meeting basic needs.

Increasing rates of technological change are creating a new reality in which automation is replacing human labour, making life better in many ways, but also taking away livelihoods. Employment is increasingly insecure, the economy is shedding jobs, and much socially valuable work continues to go unrewarded.

Some people are doing very well while many are losing ground in income and wealth and the ability to raise families and other aspects of citizenship that have been dependent on stable employment. A guaranteed minimum income is a vital part of creating a future that offers security and dignity for all while ensuring a fairer distribution of work, wealth, income and participation in society.

Universal public health care has changed Canadians’ lives profoundly. Quality medical care provided on the basis of our health, not our bank accounts, makes Canada a more equitable, affordable and healthy place to live. The challenge now for Canadians is to put basic income on the public agenda, expand our vision, and create a basic income guarantee for all. It could be Canada's next great public policy legacy.

How would Guaranteed Minimum Income change the insecurity of jobs and reduce poverty.

Guaranteed Minimum Income can help a person do other work and reconsider old choices. It will enable one to retrain, safe in the knowledge that there is enough money to maintain a decent living standard during the retraining period.

With the insurance of having unconditional basic income as a safety net, workers can challenge their employers if they find their conditions of work unfair or degrading.
   
Because a basic income program is an uncomplicated concept, it will reduce all the bureaucracy surrounding the welfare state thus making it less complex and costly. Benefit fraud will largely disappear because no one needs to commit fraud to get a basic income - it is granted automatically.

With a basic income, people will have the option to reduce their working hours without sacrificing their income. They will therefore be able to spend more time doing other things they find meaningful. This will induce a better distribution of jobs because people reducing their hours will increase the job opportunities for those currently excluded from the labor market.

A huge number of unpaid activities are currently not recognized as economic contributions. Yet, our economy increasingly relies on these free contributions, for example home management and parenting.  A basic income would finally recognize and reward these critically important activities.

Some of the perceived disadvantages of guaranteed income.

Reducing the incentive to work.

No doubt some people will choose not to work, however, the likelihood is that the percentage of ‘lazy people’ will be small. In fact the Dauphin project proved that people simply looked for more suitable jobs and as a result, productivity increased.

Program becoming too costly due to rising inflation and a reduction in taxable income

In the short term Guaranteed Minimum Income may cost governments more money than the current system, but by alleviating poverty, it is argued that it can actually save more money over the long-term in areas like healthcare, public safety and social programs.

People might spend the money on temptation goods like cigarettes, cannabis and alcohol instead of nutritious food and basic income does not address some of the root causes of poverty like mental illness and addiction.

There will always be self-abusive behavior and it’s impossible to link all mental health issues with money or the lack of it.  Besides, no one is suggesting social support programs should eliminated altogether, only that they would be reduced dramatically.

It seems that the advantages outweigh the disadvantages. Is it time for our government to introduce such a program to Canada? We think so.