The article is meant to challenge Canadians and others to consider what precisely a basic income is and what goals it can accomplish. For BIEN’s official definition of basic income, click here.
By: Reza Hajivandi
Both as a concept and policy, basic income (BI) has been around for some time, losing and re-gaining traction at different points in history. However, the vague manner in which the term is sometimes used, and the lack of effort in providing any clear demarcations, has led to its obscurity.
To give the term clarity, first the question must be asked: What is basic income? Asking the question is not intended to provide a concrete and singular definition, nor is it a good idea to do so. The purpose is clarity, which could be achieved by first, asking the question; What is basic income? And second, journeying through the process of finding answers. The journey therefore takes priority here, by helping to provide clarity.
How can we approach the question in a way that provides answers and clarity? One possibility could be researching academic articles or the worldwide web to see how basic income is defined. However, as aforementioned, if the purpose is clarity, then skipping past the ‘journey process’ and jumping straight to the finish line will not be helpful. A more in-depth approach involves asking the ‘why’ question: Why Basic Income in the first place? By asking this question we will be forcing ourselves to embark on a journey of discovery, through which we may encounter difficult questions and decisions.
Why basic income?
Immediately we can respond by suggesting that the goal is to advocate for a policy that will effectively tackle obstacles such as precarity and poverty, which are preventing people from living with freedom and dignity. Such a response, however, immediately yields a new question: Do we not already have existing social security policies with the same purpose? And don’t some of those policies already possess elements that closely resemble the idea of basic income?
First, we have a social assistance program that is offered by each province. This is known as Ontario Works (OW) in Ontario, and British Columbia Employment and Assistance (BCEA) in British Columbia. Yet these services are quite distinct from basic income in that they are neither universal nor guaranteed, but targeted, means-tested, and subject to heavy claw backs and other conditions. The rates that are provided are also insufficient in the face of rising and already staggering living costs (rent, food, and other basic needs). It is for all these reasons that social assistance tends to perpetuate existing poverty, rather than helping people escape it. In addition, targeted assistance programs are known to be shouldered by government taxes that primarily target the middle class. This squeezes both the government and a shrinking middle class for scant funding. It also leads to class divisions by creating the popular perception that the lazy poor/refugee/immigrant etc on welfare are responsible for societal and economic problems, while wealthier segments stay off the tax and social radar and continue with their unfair and extensive accumulation of wealth.
Coming closer to the idea of basic income are other existing social security measures such as Old Age Security (OAS) and Canada Child Benefit (CCB). OAS is guaranteed to recipients aged 65 years or older almost regardless of income and other conditions. This might move us a little closer to what we want: A basic income that is the opposite of existing income security programs like OW and BCEA and more like guaranteed income ones like OAS.
This is perhaps where basic income takes its own character. It has to be universal, because if it isn’t, then it’s going to closely resemble what we already have in place, and prone to falling victim to the same problems that have historically plagued the social security system. Therefore, unless we are after a simple re-branding or name change, basic income has to be radically different from (and perhaps the opposite) of existing social assistance. Even the term ‘basic income’ seems to orient itself towards something that’s universal and guaranteed, because that’s what income is, anyway – a form of earning that is guaranteed. And if something is universal it needs to be guaranteed and come with almost no conditions, otherwise it cannot really be called universal. Not to play with semantics, a responsible BI program must therefore be universal, and tax the rich in ways that sufficiently redistribute the wealth in society [1]. By doing so it will be able to effectively reduce poverty, and strengthen class solidarity and people’s position against austerity and neoliberalism.
Now that we have a clearer idea of what BI could be, we have to be mindful of a piece of the puzzle that is not quite making sense: the government, and in our case, the current provincial and federal governments. We have to ask ourselves why the government is suddenly so interested in providing people with a new form of welfare? Let’s be honest, governments are almost never excited about spending on social security and welfare services. Instead, it tends to be the case that persistent and consistent mobilization from grassroots are necessary to secure even minor social gains. Yet absent is precisely this strong push from below, while instead the government seems to have filled the vacuum by acting as both the ‘activist’ and ‘saint’[2]. This is indeed a strange development. But what’s even odder is its occurrence in an era of neoliberalism and austerity, where the pressure is to cut services and spend less, not more. The goal here is not to undermine the groups that have been courageously fighting the government to pass a good BI policy [3]. But there is no doubt that the government has played a significant leadership role in advocating for BI as well.
Perhaps then it is useful to ask what ‘BI’ means to the government. In some sense, BI can provide the government a convenient way to increase the efficiency of social security by streamlining all or most of its existing services into one. This could save the government money through reducing the resources required to administer social security programs, and even more by keeping assistance at its current (insufficient) rates. Another way a BI program could save the government dollars – one that has community groups and organizations worried – is the implementation of BI with the aim of gradually reducing funding for existing welfare services such as health, housing, and community development. Therefore, BI can be an opportunity for the government to cut back and save resources, and this makes sense in an age of austerity and accumulation by dispossession. But it is likely that if subsidized services such as housing and food banks are scrapped and replaced with BI, social security recipients are going to be worse off than they were before, or, at best, live under the same conditions as today. It is also the case that a uniform rate under a streamlined system could actually serve to increase inequality and poverty by providing the poorer recipients with a lower rate than before [4].
In this conjecture then, BI seems to be a valuable opportunity for two parties (people and government) with nearly distinct and opposing goals. Many see the grossly insufficient social assistance rates and rapidly rising living expenses as their critical juncture to push for a BI. On the other hand, the government sees this critical juncture in other terms: one in which it can continue to make good with neoliberalism by cutting, streamlining, and creating more ‘efficient’ services. To the rest of the population the government may present this as evidence that it’s listening, ‘seeing’, and coming up with the appropriate solutions, even though it is more likely that the solution is for the benefit of the government, than for those who need it most [5]. Perhaps a question that needs to be asked is who is more likely to prevail and close this critical juncture in their own terms? The push from below is certainly strengthening, but to ensure an effective universal BI, more organizing and capacity building may be necessary. The goal then should not be to abandon BI, but to realize the risks involved and work together to build and strengthen the movement.
[1] This can be done through progressive forms of taxation, and with taxes that do not affect low-income and the poor, such as varieties of luxury and large-estate taxes.
[2] Senator Art Eggleton is starting a tour to promote Basic Income across Ontario. Also see:
https://www.huffingtonpost.ca/sen-art-eggleton/art-eggleton-basic-income_b_9331180.html
https://reviewcanada.ca/magazine/2012/12/scrapping-welfare/
[3] The Kingston BI Group in Hamilton, and others.
[4] See Commentary: Universal Basic Income May Sound Attractive But, If It Occurred, Would Likelier Increase Poverty Than Reduce It by Center on Budget and Policy Priorities
[5] This is not to pit ‘government’ and ‘people’ as two antithetical forces; such a characterization would be both simplistic and inaccurate. Instead, the current conjecture and active promotion of BI from ‘above’ and weak push from ‘below’ serve to indicate that the government has a different purpose in promoting a BI model of social security, one that is at odds with the model imagined by BI advocates.
By the official definition of Basic Income, the cost to eliminate poverty in the USA is 320mn population X $12K poverty level or $3.84 Trillion per year, not including medical goods & services, public education or the average $16k/year for 60mn recipients that contributed to social security. This figure does not include non-citizens. The US currently spends about $1.2 Trillion per year on welfare including about $430bn on medical goods & Services from Federal and State sources. That would amount to $3750/year plus out of pocket expenses for medical goods & services.
For an individual tapering citizen’s income, the cost to eliminate poverty in the USA is roughly 45mn below poverty line X $12k or 0.54 Trillion per year plus tapering plus medical goods & services plus public school. There would be no reason to raise taxes. The marginal tax rate may be eliminated with APT tax reform[1] if that is a concern and employers would be less able to lower wages across the board to coopt the government subsidy since it tapers away. Even if the poverty level doubled during recession, the cost would be around 1/4th of the cost of an officially defined basic income to keep a poverty-level floor of liquidity flowing on main street during creative destruction. As per automation, citizenship and income checks may be automatically performed plus any manual overhead for fraud detection.
[1] APT Tax | Youtube