In her article from Saturday's Globe and Mail, Erin Anderssen explores the following proposal: What if poverty-stricken Canadians were given cash directly in their pockets, with no conditions? It's a bold idea, and it runs counter to the paternal approach to poverty that polices what is done with "our" money and tries to strong-arm the poor into better lives. That approach has had limited success: The wage gap continues to grow, and one in 10 Canadians still struggles below the low-income line.
The idea of giving money to the poor without strings is not new. It melds altruism and libertarianism, saying both that the best way to fight poverty is to put cash in poor people's pockets and that people can make their own choices better than bureaucrats can. As a result, it can find support in theory from both left and right.
Erin Anderssen participated in a recent online discussion on the subject along with Dr. James Mulvale, the associate dean of the University of Regina's Faculty of Social Work.
Globe and Mail: Hello. Joining us now are Globe and Mail feature writer Erin Anderssen and Dr. James Mulvale, the associate dean of the University of Regina's Faculty of Social Work. They are ready to take your questions, so please feel free to send them in.
John Allan: My question is the following: By what right would $20,000 be extorted from productive citizens, who have earned their success and money, to be given to a person who has not?
Erin Anderssen: Thanks for joining us Dr. Mulvale. Addressing Mr. Allan's comment, what would be the case you might make for him for a guaranteed annual income?
Jim Mulvale: I think the article in Saturday's paper captured well many of the key issues around guaranteed income. Although the basic concept is simple - unconditional, and adequate allotment of income for all, there are lots of different ways to design the system to make it affordable and tailored to the population in question.
Catherine S.: How would you encourage people to work in lower paying jobs, or account for the fact that a person working full time at the minimum wage right now (which would amount to about $20,000.) could then receive that money without working?
Erin Anderssen: Hi Catherine. In Quebec the poverty committee proposed a figure of around $12,000 - which amounted to 80 per cent of the cost of buying necessities to live. Most advocates for a guaranteed income say a program could be calculated that would alleviate poverty while still creating an incentive to work, using a reverse income tax system.
Jim Mulvale: Existing expenditures on income transfer programs are very sizeable - some of this could be channeled into a GI programme from existing conditional measures such as social assistance. We also need to have an adult conversation about taxes in this country (to quote economist Hugh Mackenzie) to ensure just taxation of those at higher income levels (including profitable corporations).
Guest: Yes. If the top 5% of society are paying 95% of the income taxes, then absolutely. Redistribution of wealth is critical to the evolution of our otherwise "civilised" society.
Erin Anderssen: Guest, You make a good point: the wage gap continues to grow in Canada, and at a faster rate than many other countries. This certainly perpetuates poverty over generations.
Jim Mulvale: A guaranteed base of income could actually encourage people to engage in the labour market or to seek reeducation or training for a better job.
Gina: Would this actually end up saving the taxpayer money? How much does the government spend now on each poor person, for welfare, food, prison costs, drug treatment, etc.
Erin Anderssen: Hi Gina, According to Senator Hugh Segal, a long-time advocate for an annual income, StatsCan reports that Ottawa and the provinces have spent about $150-billion annually, since 2007, on transfers in a range of income security programs unrelated to education and health care.
Catherine S.: But who would work in the service industry or in unskilled labour?
Jim Mulvale: In our current system of income support, social assistance recipients meet a "welfare wall" as was explained in Erin's article -- if they leave the welfare bureaucracy to get a job, they loose related benefits and are in the end worse off. A GI can be a better bridging mechanism, if designed well.
Jim Mulvale: Maybe a base GI would encourage low-wage employers to raise what they pay their workers -- maybe this would be a more effective way to make wages liveable than gov't regulation.
Dakoda: What criteria would be used to determine whether someone is 'poverty-stricken' or not? Are people that have the capacity to become part of the workforce but choose not as deserving as those that have a disability preventing them from functioning in a way that would ensure they live comfortably?
Erin Anderssen: Dakoda, The point of a guaranteed income is that bureaucrats would not longer decide who is "deserving." Rather than treating everyone who applies for welfares with suspicion, as many people familiar with the system now suggest, the system would instead assume that the vast majority of people would not be content to sit at home, barely making ends meet and unable to provide better opportunities for their children, but would want to work and study to improve their circumstances.
frances: I don't understand why Canadians think people who don't work are lazy. That feels like lazy thinking to me. What exactlyy are they talking about, people who get paid for a job or people who do volunteer work. I volunteer in a food bank and see people out of work or on wages too low to cover enough food for their family. Most of them are trying either to get a job or get a better job. I can tell by their body language that it is very hard for them to ask for help and keep their self respect and they are entitled to respect and as much help as we can give. Most of them are grateful for a few minutes of our time and just being listened to and not judged. A number have mental healthe issues and are not getting the help they need. Everyone deserves a clean decent placr to live and good food. I guess I don't actually have a question but would like to agree with Mr. Segal and give people back their dignity and let them make choices for themselves. We should have help and councelling availabe but let them chose! How well did it work when you chose for your children?
Jim Mulvale: Frances's comment also raises the question of recognizing unpaid work -- volunteer work, household work, raising our children, etc.
Catherine S.: Why not focus on raising the minimum wage? I work in the social services, and although I have a strengths based perspective towards my clients, I believe if they are not encouraged strongly to become self sufficient, they easily develop an entitled and helpless attitude towards themselves, which is not empowering at all.
Erin Anderssen: Catherine, One the key arguments for a GAI is that it allows for independence and self-sufficiency: a person might for instance choose to return to school without fear that their benefits cut off.
Erin Anderssen: Dr. Mulvale, The main argument against the annual income, other than the cost, is the idea that it would create a discincentive to work. Is there research to suggest this would be the case?
Jim Mulvale: The Dauphin experiment with GI in the 70s suggested that there were not significant disincentives to paid work -- in fact, high school drop outs tended to go back to school, and women had more options about when to return to work after having a baby.
David Goodwin: I've become familiar with Dr. Evelyn Forget's study of the GAI experiment in Dauphin, Manitoba, during the 1970's. By her accounts, it was expensive to run, but there were very positive benefits accrued from it (ie. reduced health costs, and kids returning to school). Could you speak more to the 1970's experiment, and what would happen if something similar to that were applied across Canada?
Jim Mulvale: Dr. Forget analyzed health system data and reached the conclusions like the ones Mr. Goodwin cites above. The experiment was suspended mid-stream, so it is hard to reach final conclusions, and of course things have changed in 30 years. So we can't generalize too much, the results suggest positive outcomes.
Jim Mulvale: There have been more recent local 'experiments' with Basic Income in poor countries such as Namibia and Brazil that suggest very positive outcomes -- better health, more children in school, local people starting small businesses.
Gina: What about the psychological aspect. Wouldn't people feel more encouraged to succeed if they were treated as respectable, independent people? I know of a program for the homeless in the USA that used this same principle - providing housing with no conditions, no requirements. The homeless stayed in their housing and did not drop out as they had done before when they had been required to attend counseling meetings, etc.
Erin Anderssen: Gina, That's an excellent point. And it was precisely the finding of a "personalized budget program" in Britain that allowed homeless people (some who had been living on the street for decades) the right to choose how they'd spend it. As I wrote on Saturday, ( have moved into housing. Several participants said it was the first time they'd had the right to choose for themselves. The program is being continued in London.
Jim Mulvale: In today's global economy, the "male breadwinner" model of the post World War 2 era is dead (and wasn't really valid even back then -- so a GI combined with other waged and self-sustaining work might be an option for lots of people.
Erin Anderssen: Dr Mulvale, Can the success of conditional cash transfers in the Global South inform how it might work for Canada? Or is that context too different from ours?
Jim Mulvale: I think there are lessons to be learned from the South. Such models might even be useful for groups in Canada such as Aboriginal communities or poor urban neighbourhoods.
Susan: To Dr. Mulvale, you mention that a guaranteed base income would encourage people to reengage with the work force. Can you explain how this would work? Does research support this?
Jim Mulvale: There is a relatively small proportion of the population that face big challenges in engaging in the labour market, Susan. So training and support services would still be needed, even if we had an adequate and universal GI. Guaranteed income should not be seen as a panacea, or as a replacement for all other social programmes.
Chris Bolton: Has no one watched the EU countries like Greece, Italy, and most recently Ireland fail? Greece introduced a program similar to the one you are proposing. However, rather then encourage people to better improve their situation, instead they embraced the government pay to sit program. In the end only 1/3 of the Greek population was left to pay taxes to support the 2/3 that opted out of working. The result was a completely failed state. I've read the comments above and yes, the mentally ill should be cared for to ensure that they don't have to live in a box on the street and yes most people need a social safety net to get a second change but sending a $20K check every year to people who didn't properly educate themselves and didn't want to work in areas that they didn't like is not my problem as a tax payer. Keep in mind that there are "no strings attached" to the $20K and no way to accurately measure success. I've worked in the EU, in Russia and in China. If you think that giving $$ to Canadian's will help their situation you are wrongly mistaken. Canada continues to loose economic power in the world and if Canada is to remain competitive and productive it must ensure that every Canadian is pulling their own weight (that weight to be personally decided). However, if the Canadian culture is to be "let the government take care of you" as opposed to "give me the opportunity to take care of myself" then I'm out of here - taking my hard earned tax payer dollars with m
Erin Anderssen: Hi Chris, Stepping away from the specifics of the $20,000, would your feelings change if a guaranteed annual income was actually comparable in over all cost to what is currently spent on social assistance and other related benefits? Or do you object to the principle of giving the money without conditions?
Jim Mulvale: Some proponents of basic income see it as a "participation income" -- not a completely unconditional benefit, but one that is contingent on meaningful engagement in socially useful work, whether it's in the labour market, in entrepreneurship, or in unpaid work in the home or community. This model has its attractions, but monitoring compliance is a big question. Coming up with a programme design that blends simplicity with effectiveness is the challenge.
rwesley1: Yes I believe we should have a min. of $20,000 a year. It is hard to live on $570. a month. I am forming a group to sue the Ont. Gov. for more.
Erin Anderssen: Dr. Mulvale, How would a participation income work? Isn't one of the arguments for a basic income that it reduced all that government oversight?
Jim Mulvale: Chris raises the question of taxes -- who pays for social benefits? For many years now, the burden of taxation has been shifting from the profitable business and the wealthy to the middle and working classes.
T. Breau: The printing presses at the Royal Mint will have to work overtime to support this new social agenda as low paid workers choose the benefits of social welfare versus working for the same amount and usually without paid health benefit programs. Has the cost of this GI program been estimated?
Guest: These programs sound great and would be super if affordable. We have universal health care today which is in grave danger. What do you see as the future of our national health care program and transfer of payments to support it?
Erin Anderssen: Guest, Of course all the trickle down effects would take time, but low-income Canadians are more likely to be hospitalized, spend more time in emergency, less likely to have family doctors, and have more serious, chronic (and therefore costly) health problems. Reducing poverty would also reduce the burdens on the health care system that it causes.
Jim Mulvale: In a sense we now have a "participation income" in the Child Tax Benefit. It is a (partial and targeted) guaranteed income that recognizes the socially useful work that parents provide in raising the next generation.
deedee: I don't mind paying a bit more taxes if it guarantees that the poor won't have to pay as much as the rich.
Jeff: Arguably many poor people already use their welfare checks to pay for big screen televisions while their children are not fed properly. How is that not going to get worse with a 20 thousand dollar handout? Besides, spending that 20 000 on government programs is a more efficient use of the money. Imagine that poor people are going to spend a bunch of that money on daycare. If they spend it on private daycare, the spending is much less efficient than if it is spent by the government on state-run daycare for low-income families.
Jim Mulvale: One estimate of cost came in paper that Prof. Margot Young and I did for the Cdn Centre for Policy Alternatives. With the help of an economist, we came up with a figure of $21.5 billion. See p. 25 at http://www.policyalternatives.ca/sites/default/files/uploads/publications/reports/docs/CCPA_Guaranteed_Income
Frances L.: What jurisdictions have a GI where you would say it is working?
Jim Mulvale: Brazil has a somewhat conditional program for low income families with children called Bolsa Familia, that has assisted millions of families in escaping abject poverty.
Erin Anderssen: Jeff, Perhaps you have visited more low-income homes than I have, but in my experience interviewing poor Canadians I have not met "many" who are not deeply concerned about their children's future.
Guest: Well how will you stop a tide of refugees and other migrants coming here because $20,000 a year of free money is what rich people earn in places like somalia, africa, india and china etc? what about the attendant social problems? People with free money inflating the market?
Erin Anderssen: Guest, What social problems do you see being caused by a basic income? If anything, proponents argue it would reduce crime, health issues, mental health issues, improve education rates for children, boost innovation, and put money into the economy by allowing people to be more productive.
Jim Mulvale: There are costs in NOT addressing poverty through programs such as GI -- Erin mentioned health care, not to mention less spent of remedial education, policing and corrections, etc.
Erin Anderssen: Dr. Mulvale, How does that $21.5-billion compare to what is currently spent on income assistance?
Jim Mulvale: The $21.5 billion is the difference between what is currently spent on federal tax and transfer programmes, and what a modest GI would cost. Social assistance paid through provinces is not included in the calcuation. So presumably this prov. $ could be used as more preventative and ameliorative ways (e.g. social housing, early childhood care and education, etc.)
Globe and Mail: We are reaching the end of our time for today's discussion. Any final thoughts?
Erin Anderssen: Thanks so much for Dr. Mulvale for joining us, and for all the reader comments. It's an interesting debate, and an important one, since by 2013 the social and health funding agreements between Ottawa and the provinces will have to be renegotiated, and this is a chance to rethink how we will combat poverty in the future.
Globe and Mail: We have reached the end of our time for today's discussion. We have had a flood of responses today, and tried to get to as many as possible. Thanks so much to our readers for participating in today's discussion, and many thanks as well to Erin Anderssen and Dr. James Mulvale for taking questions.