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Will the Left Kill Basic Income (again)?

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November 28, 2021

Will the Left Kill Basic Income (again)?

By Terrance Hunsley

From SocialCanada.org

When the NDP gained power in BC in 2017,  to fulfill a promise to the Green Party, they commissioned three academics as an expert group to study whether the province should adopt a Basic Income strategy and perhaps run a pilot project. In January of this year, the group, consisting of David Green of UBC, Jonathon Kesselman of Simon Fraser University, and Lindsay Tedds of the University of Calgary, released their report.

In the report they quickly nixed basic income for reasons commonly used by critics: relieving poverty could be done more cheaply by picking out individual poor groups and giving them more money; and some people might leave work to stay home and care for their children (despite the promise of $10/day child care, which did not exist at the time of other experiments on which the analysts based some of their findings).

They pointed out that basic income is not as simple an idea as it might seem: it requires decisions about the amount of the benefit, at what income level it would start to be reduced and what percentage that reduction would be. Moreover, it could not replace all of the other programs and services they identified that were designed to help people. The Basic Income advocates know that.

In their claim that poverty could be reduced at a lower cost by reformimg the existing web of 192 federal and (BC) provincial programs that they identified,  they neglected to mention that Basic Income was also intended to improve the income of the bottom third, or even half, of earners, thereby reducing inequality. So of course it would not be cheap and would need to be financed by increasing taxes on the affluent.

They also made an almost ludicrous claim that it would not be possible to use the income tax system as an efficient way to distribute income benefits because people who don’t make enough income to owe taxes are not required by law to file an income tax return. Things that make you go “duh”… Low income people who want help (like child tax benefit, workers benefit, HST and carbon tax rebates) but don’t know how to file, might learn how to file, or be helped by income assessors in the dozens of other income-tested programs.

The panel avoided any analysis or recommendations about income supports for indigenous peoples, ostensibly because COVID prevented a proper consultation with them, even though they were able to consult with everyone else.  And while they had taken two years to think about the subject and their sixty-five recommendations for improving the immense existing system,  they suggested that their report should only be a beginning of a consultation process and more research – no real hurry to do anything.

Yogi Berra would say it’s deja vu all over again

In the 1980’s, the MacDonald Royal Commission recommended that Canada enter into a free trade agreement with the US, and anticipated the proliferation of such trade agreements, as economic globalization was gathering momentum. To offset the impact on endangered workers and people at the lower end of the income scale, they also recommended a guaranteed annual income not unlike the targeted version (negative income tax or refundable tax credits) of basic income models.

At that time, the Canadian Council on Social Development (I was the Director) organized an extensive series of consultations and local workshops to discuss the proposal, as we felt that federal and provincial governments were ready to give it serious consideration.

Most of the antipoverty and equality-seeking groups liked the idea and advocated for its acceptance. So did a lot of economists and political scientists. But the labour groups and the organizations they support were either lukewarm or actively antagonistic to it.   “Giving people income would let the government off the hook of creating full employment!” they warned, as that was their current dream.

So the social organizations and the political left splintered into circular firing squads and the idea of a basic income guarantee disappeared into political obscurity. In the years that followed, social assistance and unemployment insurance were systematically scaled back by liberal and conservative governments. People without dependents or visible disabilities had their benefits chopped by as much as 50%. That successfully forced people to accept bottom feeder jobs with poverty wages, and undermined for twenty years, any effort to improve wages on the bottom half of the scale. While those incomes stagnated, the top third gained affluence and wealth from globalization. Inequality surged as the globalization winners pulled away from the manufacturing and retail industry losers. Organized labour in the private sector was decimated.  Homelessness, hardly an issue before the ’80’s, proliferated. So did food banks and emergency shelters. We created a whole industry of people shepherding the poor. So now we have in BC, 192 federal and provincial social support programs as well as countless municipal, United Way and other community programs. Add to that all the other provinces, territorial and First Nations programs, and try to imagine the morass.

Thirty years of multiplying programs to no avail – what next?

Do I think that Basic Income will cure all of our ills? Not at all. It is not a slam dunk. It needs to be implemented on a phased basis, modifying the parameters to make it work. I think it should be offered at first to adults over 25. The under-25 group can be addressed with generous student loans and phased forgiveness with each year of taxpaying. But Basic Income is an attempt to right some injustices, give low end workers some bargaining power, and hopefully cure some of the modern day Les Miserables scenes that we see played out every day with beggars at every major intersection, and sleeping bag villages under bridges.

Prince Edward Island has offered to pilot basic income on a province-wide basis, with provision to make adjustments  and fine-tune the program over time. The federal government should take them up on that and maybe other provinces would buy in when the bugs get worked out.

Terrance Hunsley is a Senior Fellow of the Pearson Centre and editor of SocialCanada.org