[Josh Martin]
Watson voices his take on the guaranteed income by citing a recent study from Laval University that evaluated the labor market effects of multiple economic proposals such as a guarantee of 100% of Statistics Canada’s “Market-basket Measure” of low income. Under this guaranteed income, this study suggests that labor market participation would significantly drop (22% for single men, 19% for single women) and that those in poverty would actually have less income than they do under the current welfare system.
William Watson, “Guaranteed income guarantees poverty,” Financial Post, January 24, 2014.
There are lots of other people who work at not very interesting jobs for not very much money. If the government guaranteed them an income, it’s possible they’d continue to grind away without change. But it’s also possible they’d at least think about cutting back on the drudgery of work and “consuming more leisure,” as we economists say. (Fotolia)
“this study suggests that … those in poverty would actually have less income than they do under the current welfare system.”
My comment: the study appears to assume that the guaranteed income scheme would replace the current welfare system. In my view, it is preferable and politically more realistic for the guaranteed income scheme to supplement existing welfare systems, with any adjustments in existing systems designed to ensure that no-one in need is worse off and everyone is protected against poverty.
I realise that there are administrative and sequencing problems, plus the danger of access requirements (compulsory work) being transferred from existing systems.
Another approach would be to, instead of introducing a new benefit, reform an existing welfare system to make it unconditional, possibly except for, at least initially, a means test.