David A. Green, professor at University of British Columbia’s Vancouver School of Economics, and Lindsay Tedds, associate professor at University of Calgary’s Department of Economics, recently helped co-author Basic Income and a Just Society: Policy Choices for Canada’s Social Safety Net for the Institute for Research on Public Policy.
By the end of the Second World War, the thoughts of many Canadians were turning to how to build a better society. The sacrifices made and the spirit for change led to the creation of Canada’s social safety net, although its main elements – nationalized health care, public pensions, and unemployment insurance – took decades longer to fully create.
The COVID-19 pandemic and its aftermath seem eerily similar. Again, there were calls for “building back better.” Again, the hoped-for responses were muted by fiscal, inflationary and possible recessionary realities. But we believe the same desire for fundamental change exists today. The key is deciding how to move forward.
The first step is to thoroughly consider the main, transformative policy option debated during the height of the pandemic: a basic income. The idea behind a basic income is at once simple and powerful: provide all citizens with a guaranteed minimum income. This would quickly end poverty and give people the means to make autonomous choices, which would lead to improved health outcomes, better jobs, more human capital investment, and much more – or so the argument goes.
We very much agree with the spirit of what basic income proponents say. Indeed, these arguments carry a lot of weight: that the existing social support system is complex, confusing and often disrespectful of those it is intended to serve. But after careful study, we take the view that a basic income is not as simple as it seems. Delivering benefits to people through a tax system where taxes are filed once a year and a substantial number of people, particularly those most in need of a minimum income, don’t file at all is, in reality, a complex endeavour. And for each of the claims made for what a basic income can do, we found that there are better and more cost-effective alternatives.
We believe that we should assess all the options by the standard of making Canada a more just society – a society that provides the basis of self- and social respect to all. That means a focus on labour market reforms. Work provides us not only our livelihoods but also a fundamental part of our self-respect. Precarious work challenges must be addressed, barriers to work eliminated, and the steady decline in unionization rates that we have seen in recent decades needs to be reversed.
It also means a focus on the adequacy of benefits. While the overall percentage of people living below the poverty line has fallen, poverty remains prevalent among certain groups, including those with disabilities. Raising these benefits at least to the poverty line, as we do for our seniors, is a must.
It means thinking about how to create and support community, since well-functioning communities are an essential input to self-respect. The premise behind a basic income is that if you provide recipients with adequate financial assistance, they themselves can best determine what supports they need and how to acquire them. But for our most vulnerable citizens, financial support alone would fall far short of what they need, which is effective public services and strong community connections.
It means creating a policy process that involves ongoing, empirical evaluation and meaningful input from the people and communities most affected by the policies. And it means creating an approach that is politically sustainable, not one that is likely to be undone with a change in the political stripe of the government.
We believe we share many, if not all, of these goals with basic income proponents. But we believe that one policy, however bold, cannot accomplish all this. A basic income is not a magic bullet that can easily fix the shortcomings in Canada’s social safety net. It is not the best path toward a just and inclusive society.
The problems we face are multifaceted and require multifaceted responses. It would be far better to get to work overhauling the social safety net we have. It has stood the test of time and public acceptability and it should be the starting point for making meaningful change.