Has the Time Arrived for Universal Basic Income?
Canada has a complicated mix of social support systems: CPP, CPP-D, Old Age Security and Guaranteed Income Supplement, EI. Provinces overlap that with their own: wellfare, disability supports, etc. This is messy, difficult for individuals and service providers to navigate, and leaves many people behind. Each system has its own requirements, meaning you can be “disabled” under one program yet not qualify for another. Some people are left out altogether. The duplication of administration is inefficient and ineffective. Surely we can do better.
In the wake of the COVID-19 (coronavirus) pandemic, there has been a renewed interest in implementing what is known as universal basic income (UBI). To put it simply, UBI is a financial model in which a country’s citizens are provided a certain amount of money by their government, regardless of how much income they have, what resources are available to them and whether or not they are employed. If implemented effectively, UBI will be able to reduce wealth and income inequality and help people achieve financial stability and security, and it’s a model that has had a considerable amount of endorsement in recent years, especially in light of a worldwide health crisis that has increased the wealth gap and caused a massive spike in unemployment.
Despite its recent surge in popularity, universal basic income is not a new phenomenon; the idea of implementing UBI has been considered for a long time, and UBI has been experimented with in several countries, including our own. In the 1970s, an experiment called Mincome was conducted in the Manitoba city of Dauphin, with the intent of seeing whether or not a “guaranteed basic income for those below the poverty line could improve [their] quality of life.” The Mincome experiment was devised by University of Manitoba economist Derek Hum along with two civil servants named Ron Hikel and Michael Loeb, and the gist of the experiment was that the poorest residents of Dauphin were able to apply to receive cheques on a monthly basis that would “boost their existing income.” As Dauphin resident Sharon Wallace-Storm noted, it wasn’t a case of people receiving money and doing nothing, but rather people getting an increase in the amount of money they have. The experiment lasted for four years and it proved very successful, with significant decreases in hospitalization rates, improvements in mental health and more people graduating from high school.
But not all attempts at UBI have enjoyed success. Three years ago, Finland began a year-long experiment with UBI that lasted until December of 2018. Although many unemployed residents were reported to have felt “happier and healthier overall,” the experiment was considered a failure. Despite the general consensus, several experts noted that Finland’s experiment contained a number of flaws that “skewed its conclusions.” For instance, there was a perception within the country that basic income “encouraged poor work ethic” in people, which contributed to the Finnish government’s decision to only allow a budget of $22 million for the experiment. The insufficient amount of money that the researchers were offered, coupled with the limited time they were given, severely compromised the experiment; the researchers were unable to pay the participants $1,100 per month as originally planned, and they were forced to limit the participants to unemployed residents due to them already having administrative data on those people.
A pilot project in Ontario was cancelled before meaningful data could be collected, after the 2018 election.
At Bruce House, the well-being of our clients is of utmost importance and we believe that universal basic income can play a crucial role in what we are striving to do to ensure that they are helped and taken care of. The failed experiment in Finland may have cast a lot of doubt over whether or not it can succeed. But, as the Mincome experiment has shown, UBI has the potential to benefit everyone, and it is time to take a chance and give universal basic income another try.
- Bandar Osman, volunteer