Basic level of income: covid crisis gives Canada a trial
Spain is the latest country to announce a basic level of income policy below which no citizen will be allowed to fall. This is not a Universal Basic Income, paid to everyone, rich and poor, with the extra taxed back; the Spanish plan will provide an income floor for the vulnerable members of society – and Spain suddenly has plenty, with the COVID disaster going crazy there. Finland earlier proposed similar plans -- and removing fees for all college and university educations. Whereas many nations, including our own, are launching temporary life-lines to those who have lost their jobs or businesses to the pandemic, Spain’s plan will become ordinary policy once the pandemic abates.
Many commentators and political leaders have proposed as much for Canada (and some Ontario municipalities have already been experimenting with income top-ups), but the Trudeau government shows no interest in making long-term policy from this emergency intervention in the economy.
Those opposed to the basic plan claim to be concerned with the overall cost and with rising government deficits. However, this anti-deficit national anthem of conservatives does not seem to bother all conservatives, especially when the bailouts are to the corporate and financial sectors, rather than to individuals. This seems a glaring inconsistency, but many of these folks bring out their second objection, a moral one, that “there is no free lunch” (unless it’s a corporate lunch) and that “free money” will sap the willpower and self-reliance of most Canadians. “Pain makes us stronger”, is their contention ... I guess.
However, social scientists claim otherwise and many of the experiments in minimum income have not had these negative effects. In fact, one such experiment (in Lindsay, Ontario) found that people qualifying for the supplement were more likely to go back to school to improve their training and job eligibility, and most recipients working at the time did not give up their jobs but used the supplement to supplement the scratch they were being paid. Lindsay, Ontario’s moral fibre remained intact.
Others calculate that a basic supplement would not cost more than the present constellation of welfare and benefit packages. Most of these programs will be rolled into the supplement, actually decreasing administration costs. They also estimate that almost 100% of these funds are put into the economy quickly via consumer spending. This gets the help to two groups quickly – the under-employed and working poor – plus the business owners serving them. The money gets into the economy quickly, as opposed to support for investors who stash their income in overseas shelters, keeping these funds out of the economy.
Dealing with the black market may be an unforeseen problem, as many already work in the underground economy – plus the gig-employed!
Let’s study the effects of supplements as the pandemic runs its course. And, in the end, why would we return to an old system which creates such huge inequalities, such widespread poverty and so many unhappy Canadians?