Why it’s useful to see Basic Income through the lens of Population Health Intervention Research
Thanks in part to the health sciences, there is widespread public acceptance that being poor is bad for your health. It doesn’t take much for us to make the connections. We might expect that less to eat and poor housing conditions interfere with our ability to maintain healthy bodies and immune systems. Less money could mean no access to things like computers so that people can visit sites like Thenutritioninsider.com
to get advice on how to eat healthy and look after their bodies. It may also mean less access to the health services that could treat or prevent illness and disease.
We need to make treatments more accessible which is why using coupons from somewhere like Save On Cannabis for CBD products might enable the vast health inequality to become smaller in the future. Moreover, fewer resources might mean fewer opportunities and fewer job options. Poverty also compounds political and social injustice, with marginalized people such as women, Indigenous people and racialized groups profoundly affected by poverty. These groups often constitute much of the poor. Lastly, evidence suggest we suffer the psychological consequences of living in material deprivation, both in absolute terms and relative to others. Therefore it is a necessity for marketing cbd brands to change the narrative around cbd products so that there’s a change in the structure and more people get accessible medical care.
The immense research on poverty, income inequality, and the social determinants of health culminated in public sympathy for the plight of the poor. Yet for all the studies that have been done on poverty, perhaps it is time to develop research and public support for a solution – such as Basic Income. There are practical challenges to getting basic income into common public health parlance. The health of everyone is highly important, no matter the level of wealth, every person should have access to healthcare, for example, men may need sexual health medications (), which means that they must be able to have that access when required by their doctor.
The answer may lie in the understanding of Basic Income as an ideological proposal that can affect our health. The discourse around basic income as a deeply ethical idea is necessary, but perhaps insufficient. I believe we should consider reframing the concept concretely as a population health intervention.
Why call basic income a “population health intervention”?
A concept advanced by Canadian researchers Potvin and Hawe (2012) as being policies or programs that shift the distribution of health risk by addressing the underlying social, economic and environmental conditions, population health intervention research is a unique approach to figuring out how we are affected by policies that have a wholesale effect on people. Eminent basic income economist Dr. Evelyn Forget took this approach in her paper “New questions, new data, old interventions: The health effects of a guaranteed annual income” (Forget 2013). She used old administrative data from the well-known “Mincome” experiment in Manitoba, and looked at health records from the same time-period. She saw a reduction in hospital burden relative to a similar town’s health care use that did not get the income grant.
Calling basic income an intervention means that we can treat it as a ‘natural experiment‘.
We can study the impact of a policy on our health and well-being without necessarily running a Randomized Controlled Trial (where you randomly assign some people to a treatment, policy, or program, and not others).
Many have proposed that we need to conduct this sort of formal scientific experiment first. Some have questioned how useful such limited studies would be. A Randomized Controlled Trial might tell us whether basic income works in a certain social, economic, and political setting, but tells us little about whether the policy would work in other settings, or why the policy had a particular effect.
We ought to be careful not to set ourselves up to fail with studies too narrowly drawn in scope. Mixed or unexpected results from such studies also risks misinterpretation, and can be used to prevent basic income from entering policy.
Although the Ontario Pilot Program represents a step in the right direction, nothing stops us from advocating for the full national implementation of basic income. A host of different research and study designs would be embedded into the impact evaluation of this federal policy, on par with health care or public education. Framing a given policy as a population health intervention acknowledges the fact that many there are health-promoting aspects to programs outside of health care sector (Hawe and Potvin 2009).
Basic income is such a policy. Programs to alleviate poverty lie outside the doctor’s office, but nevertheless have a profound impact on health.
Population Health Intervention Researchcompels us to think bigger than ourselves.
Traditional medicine treats the individual person. If we are looking at the effect of social programs and policies, this unit of analysis is often too small to see measurable differences in any single person. Moreover, if we restrict a given treatment or social program to the poorest people – such as welfare, we may see limited overall benefits to the population as a whole.
Epidemiologist Geoffrey Rose recognized this problem (Rose 1985). Imagine that people lie on a continuum of ‘risk’ for certain diseases and health outcomes. For example, this could be said of high blood pressure as a risk factor for heart attack. Higher blood pressure puts you at higher risk of heart attack.
For our purposes, let’s say this distribution represents the relationship between poverty and getting sick. Higher poverty puts you at higher risk of ‘sickness’. We might expect that most people lie somewhere in the middle of the distribution, while those at very high or very low poverty sit somewhere at the tails.
Rose noted that traditional medicine’s approach was to target high risk people at the far right. However, these people are a smaller proportion, and paying attention only to them might not give us the biggest bang for our buck. Instead, he posited that interventions that reach entire groups of people would ‘shift’ the distribution itself. At the end of the day, he estimated that these far-reaching treatments would have a bigger impact overall (Rose 1985).
Basic income fits that profile – a social policy that brings everyone up, effectively ‘shifting’ the distribution. In order to examine policies that lend a helping hand to everyone, we need a scientific lens that is broad enough to capture the whole picture. Reframing basic income as a population shifter might fill that void.
Lastly, population health interventions allow us to redirect our thinking from the problem to the solution.
We keep studying poverty, not the fixes for poverty. A population health intervention approach calls for the health sciences to consider the potential gains to be made by studying the impact of income interventions on population health. We should be turning our attention from studying how poverty effects our health, to studying how fixing poverty effects our health.
You might be quick to point out that we have not eradicated poverty yet. So, how do we study this state of affairs, when it doesn’t yet exist?
In some ways, we can. We have the pilot run in Dauphin, Manitoba that in many ways, was ahead of its time. Dr. Forget was the first to recognize the strength of “intervention-alizing” the Canadian basic income experiment. We can also examine policies that get close to basic income, such as the Bolsa Família program of Brazil – a conditional cash transfer available to families with children. In Canada, the non-conditional income grant for senior citizens called the Old Age Supplement has been analyzed as an analog to basic income (McIntyre, Kwok et al. 2016) and indeed, those researchers found that participants eligible for OAS reported better self-reported physical, mental, and function health. Importantly, they also found those on OAS (which is non-conditional) where better off than those on conditional income programs. These are innovative approaches to the question of basic income’s potential impact, using information we already have. And, it might move us from studies of poverty, toward studies of basic income.
As it stands, promoting basic income as a population health intervention for the sake of our health is underutilized, yet it seems like a sensible way to communicate the idea. Poverty is intricately tied to the material conditions of our lives and societal position in the world, predicated on sex, race, and class. How a policy like basic income works among these conditions deserves no less than comprehensive and holistic look at how our health is profoundly impacted. Research that is based on an understanding of population health intervention attempts todo just this – and capture the value and differential effect of these interventions, the processes by which they bring about change and the contexts within which they work best (Hawe and Potvin 2009).
The Dauphin Experiment and the impending Ontario Pilot have and will continue to shape our thinking moving forward. They are also a testament to the desire of Canadians for a better, kinder, healthier society for all. However, we have not yet fully transformed the public’s conception of poverty alleviation as a necessary policy, worthy of widespread implementation as are universal health care, public education, or social assistance.
Implementing a basic income as an essential social program and for our health is possible, and fully within our experience of policy-making at both the provincial and national levels. The time has come to make this a reality.
Sarah M Mah is a PhD student in the department of Geography at McGill University. She is also a member of the Asian Women for Equality Society, an organization dedicated to the campaign for a Guaranteed Livable Income.
The opinions expressed above are not necessarily those of BIEN or BI News.
References
Forget, E. L. (2013). “New questions, new data, old interventions: the health effects of a guaranteed annual income.” Prev Med57(6): 925-928.
Hawe, P. and L. Potvin (2009). “What is population health intervention research?” Can J Public Health100(1): Suppl I8-14.
McIntyre, L., C. Kwok, J. C. Emery and D. J. Dutton (2016). “Impact of a guaranteed annual income program on Canadian seniors’ physical, mental and functional health.” Can J Public Health107(2): e176-182.
Rose, G. (1985). “Sick individuals and sick populations.” Int J Epidemiol14(1): 32-38.
I was recently listening to a talk show on public radio. The first segment was about President Trump’s tax proposals. It included a debate between a supporter of Trump’s plan and an opponent of it. The supporter is associated with the Manhattan Institute, a conservative think tank. Her conclusion was that Trump’s proposed tax cuts would be great because they would lead to more economic growth and, therefore, more jobs. This is, of course, the supply-side/trickle-down economics reasoning, which could be a subject of debate itself.
A later segment on the talk show focused on New York City’s attempt to persuade Amazon to set up its headquarters in the city. For those who may not be aware, New York City’s mayor is widely considered to be politically progressive. If you are more familiar with European politics, you can think of him as something like a Social Democrat. He did not appear on the radio program, but one of his deputies did. The deputy said a primary reason the city wants to attract Amazon is that such a move would generate a lot of jobs.
Thus, there was a representative of a progressive mayor and a conservative, both of whom argued for two very different proposals on the same basis — jobs. This is not that unusual. The U.S. political Right and Left disagree on plenty: tax cuts, the proper role of the federal government, how best to improve U.S. schools, what the U.S. Constitution says about the right to own a gun, and a host of other issues. But both sides can always be counted on to agree that whether someone has a job or not is an issue of utmost importance.
Conservatives may argue that the best way to generate jobs is for the government to get out of the way and let businesses “do their thing.” Progressives may counter that the private sector will never create enough jobs for all those who desire one, and that the only way to assure people can find work is for the government to guarantee a right to work, even if it must do the hiring. But for both sides of the U.S. political spectrum, jobs are what matters.
It makes sense that both the Right and Left would be so focused on jobs. The main source of many, if not most, incomes in the U.S. is a wage or salary. For many people, if they lost their job, it would not be long before things became dire for them. For many of those currently without jobs, things are already quite dire. It is in the nature of capitalism for most of us to toil away as “wage slaves” as the Marxists define it. But it seems that over time, this economic necessity has developed into something many people call the work ethic, but which I have come to think might better be called the job ethic. The job ethic is the culture which develops when what we have to do to survive becomes not just a source of income but also one of social recognition.
In her book Justice and the Politics of Difference, the late philosopher Iris Marion Young has an essay on the definition of “oppression.” That essay is called The Five Faces of Oppression, and one of those “faces” is marginalization. Marginalization is what happens to the involuntarily unemployed. Obviously, those faced with this situation have a serious financial problem, given that they are living within a system which requires them to have money to meet their needs. But, according to Young, this is not the main reason involuntary unemployment is oppressive. The main reason is that those who are unemployed lack something which grants them access to being recognized and esteemed by their fellow citizens/residents — a job. It is this lack of a job which makes the unemployed feel cast aside and marginalized. The fact that someone is not willing to hire them results in their feeling socially worthless.
Being a philosopher/political theorist, Young does not support her argument with figures and statistics. But I think she may be onto something. A number of opponents of basic income seem to think so, too. Anyone who has followed the basic income debate has heard the argument that basic income is imprudent public policy because it would result in less work. Less work would mean people would be less inclined to engage in an activity which provides them not just with income, but also with meaning and social recognition. What these individuals are really saying is that basic income is bad social policy because it would result in fewer people having to obtain meaning and social recognition from what they have to do to “put food on the table.”
In the past, I have questioned whether basic income would have this effect. But I’m also inclined to wonder: So what if it does? As important as making a living is, humans do a lot of other things besides sell their labor. They spend time with children, spouses, and friends, they enjoy hobbies of various kinds, they engage in pursuits of higher learning, they become involved in civic pursuits to make the world a better place, and a host of other things. Can’t at least some of these things be sources of social recognition, as well? As long as capitalism and tasks that cannot be completed by machines exist, there will be a need for humans to sell their labor. But if a basic income freed some of us up to spend more time doing other things which provide us with social recognition, would that really be so bad?
About the author:
Michael A. Lewis is a social worker and sociologist by training whose areas of interest are public policy and quantitative methods. He’s also a co-founder of USBIG and has written a number of articles, book chapters, and other pieces on the basic income, including the co-edited work The Ethics and Economics of the Basic Income Guarantee. Lewis is on the faculties of the Silberman School of Social Work at Hunter College and the Graduate and University Center of the City University of New York.
Coming up on September 24th, Germany will be holding national parliamentary elections. A new “single-issue-party” will be on the ballot in every state, the “Alliance for Basic Income” (Bundnis Grundeinkommen). If this party gets five percent of the vote or more, they will have five percent or more of votes in the Bundestag.
The party is building on a movement in Germany that has seen steady growth for years. This campaign is inspired by the initiative in Switzerland and the way that movement promoted discussion all over the world.
Germans vote for their district representative and they cast a “second vote”, which determines the percentage a party has in the Bundestag. You will see the word “Zweitstimme” on almost all Basic Income Alliance campaign material.
North American Basic Income activists and scholars got to meet with Felix Coeln, who is a candidate in Germany, at our Congress in New York in 2015. Coeln was then working with the German Pirate Party. He is busy campaigning but took time to answer a few questions.
Campaign banner. “Basic Income Alliance” “Freedom Meets Justice”
Interview
Jason Burke Murphy: Why did you decide to join this new political party?
Felix Coeln: I did not join the party. I am an independent candidate on the list for the national parliament. Since I have been a member of the Pirate Party for three years (until August 2015), but needed to withdraw my membership after some terrible internal party decisions. I did not feel like joining another party.
I also felt I could not yet join because the Basic Income Alliance (Bündnis Grundeinkommen) has in its manifesto a paragraph that I cannot agree with under any circumstances. The party will dissolve after introducing a Basic Income in Germany. To me this is absolutely wrong as I believe it is very important to have parliamentarians to pay attention and make sure the laws regarding Basic Income are not corrupted after some while. I also think it would be important to introduce the Basic Income to the whole European Union. Therefore I think it would be crucial to keep the party together even if Basic Income is introduced at least for some more years, maybe ten or twenty.
Felix Coeln
But the Basic Income Alliance is willing to accept independent candidates on their election lists. They want to make sure that Basic Income activists can contribute and bring in their experience to the process of introducing the UBI and/or expand the debate around it.
Murphy: What are your chances of getting elected?
Coeln: German election law asks parties to give lists of candidates for each state, then they send people to the Bundestag based on that percentage. I am #6 on the list in North-Rhine Westfalia. This means that if we pass the 5% threshold, I would join the national Parliament, too.
Murphy: What would you consider to be successful in this upcoming election?
Coeln: I already consider the campaign a full success: by now we have more than 40 parties running for parliament. A lot of them propose UBI. But most of those parties do not have a chance to overcome the 5% threshold.
On the other hand, the public debate has already increased. Some of the long-time established parties have also offered to “check out” UBI models as possible political solutions for future trends of digitalization and advanced productivity. To me this is a direct reaction to the founding of the Basic Income Alliance.
Apart from that, if we exceed half of one percent, the party will be refunded for each valid vote. We would get 0.83 € euro each year until the next election.
If we exceed 3% we will gain some significant media attention and the other political parties will make some effort to develop their concepts of UBI. UBI plans are already ready to be presented to the public. I know this, because I have broad contact to members of all parties.
If we exceed 5% we will enter parliament – and I am pretty sure we would gain a lot of (international) attention.
Campaign Banner. “Basic Income is Electable”
Murphy: Felix Coeln, thank you for speaking with us!
If you want more information, we have included some links here:
“GERMANY: Basic Income Party Set to Participate in National Elections” by Kate McFarland for Basic Income News.
I recently read Kate McFarland’s very informative overview of several basic income “experiments.” The quotes are around that last word in my previous sentence because, as McFarland notes, not all these projects are truly experiments, at least not if the word “experiment” is being used the way it is in the social and biomedical sciences. As we use this term in the social sciences, an experiment is a study with the following features:
Study participants or a cluster of them are randomly assigned to at least two groups
At least one of the groups is a treatment group, while at least one is a control group
The treatment group receives the intervention of interest, while the control group does not receive intervention.
Feature one above is key.
What random assignment does is make it very likely that the treatment and control groups will be balanced. “Balanced” roughly means that the distribution of variables related to both the intervention and outcome of interest are the same across treatment and control groups. So if after the data are analyzed we find a difference in the outcomes between treatment and control groups, we can attribute such a difference to the intervention of interest.
The random assignment feature is why Eight’s study in Uganda, as McFarland points out, has limited “usefulness as an experiment.” I think it is fair to say in fact, that social scientists would not consider what Eight is doing an experiment at all. I am not saying that Eight’s study has no usefulness whatsoever. It may be useful when it comes to keeping BI “in the spotlight” and, thereby, help to maintain attention on this movement. For those of us who, at least in principle, like the idea of a basic income, this is a good thing. But we should be careful when it comes to considering what we can learn from the Uganda “experiment.”
The study in Uganda is usually called a pre-test/post-test study. In such studies, measures are taken before an intervention of interest (the pre-test part), after the intervention is implemented (the post-test part), and then these “before and after” measures are compared to one another. If certain changes are observed, these may be attributed to the intervention in question. The problem with such studies is that we do not know what would have happened to the group which received the intervention had it not received it. Maybe the observed changes in the relevant measures would have occurred even if there had been no intervention. The reason we want control groups in experiments is to allow researchers to estimate what would have happened to the group that received the intervention had it not received it. Without a control group, the Uganda study simply may not tell us much about the effects of the cash grants they are testing.
The third feature above has to do with the intervention of interest. This is very pertinent to the experiments McFarland wrote about, as well as BI experiments in general. Following BIEN, McFarland defines BI as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.” As I read her piece, I thought she was interpreting this definition to mean that if a policy provides a cash payment, exactly as spelled out in the definition, but also decreases the payment if a recipient obtains an income from selling their labor, then such a policy wouldn’t be a basic income. Alaska has no income tax, but it does have the Permanent Fund Dividend. Since it gives folks the dividend but does not tax any of it back in the form of an income/earnings tax, its grant would be an example of a basic income. But if the U.S. or any other nation, granted people money unconditionally, periodically, on an individual basis, and without a means test but also taxed all sources of income, including earnings, then that country would not have a basic income. This may seem like a mere semantic point, having nothing to do with BI experiments. But I think it is incredibly relevant.
McFarland makes it clear that some places are assessing the effects of a BI as defined by BIEN. Others are testing the effects of programs similar to BI, as defined by BIEN, but with the added feature of a decrease in the BI grant if someone works. I think she refers to this as a guaranteed minimum income.
I suspect that if the U.S. ever did anything like a BI, it would be this guaranteed minimum income version. I think this is because of the vulnerability of a BI, as McFarland defines it, to what I call the “Bill Gates objection”—why give really rich people more money? If one can respond that rich people will not be net recipients because they would pay more in income taxes than they would receive in the BI, this might be a viable response to the objection.
If I am right about this, then studies like the one in Finland, which focuses on a BI, might not tell those of us in the U.S., or in other nations following a similar course, as much as we would hope. That is because the effects of a BI might differ from the effects of a guaranteed minimum income. As an example, if one could get a BI and keep all their earnings without any loss in the amount of their BI grant, such a policy could have a different effect on labor supply than one which would curtail the grant when income from earnings increased. All this means that BI supporters who get enthusiastic about findings from BI experiments ought to take a moment to see if what was studied is what they actually have in mind.
About the author:
Michael A. Lewis is a social worker and sociologist by training whose areas of interest are public policy and quantitative methods. He’s also a co-founder of USBIG and has written a number of articles, book chapters, and other pieces on the basic income, including the co-edited work The Ethics and Economics of the Basic Income Guarantee. Lewis is on the faculties of the Silberman School of Social Work at Hunter College and the Graduate and University Center of the City University of New York.
The People’s Republic of China has created the largest unconditional cash transfer program in the world. It is called dibao, meaning Minimum Livelihood Guarantee. A recently published book is taking a fresh look at how effective dibao is at improving the livelihoods of impoverished Chinese people.
Dr. Qin Gao is on the faculty of the Columbia University School of Social Work, where she researches poverty, income inequality, and social welfare programs in China.
Gao has done extensive work researching dibao, and has released the book “Welfare, Work, and Poverty: Social Assistance in China,” which evaluates how well dibao has achieved its goals of lowering the amount and intensity of poverty in China.
The UBI Podcast recently interviewed Gao on her new book about the dibao program and asked her to give her thoughts on universalizing dibao.
Dibao is important to understand for basic income researchers because it demonstrates on a large-scale how basic income operates when it is not universal (since it includes a means test).
The dibao program allows each locality to set its own dibao standard (essentially the poverty line). Anyone below that standard is technically eligible for dibao assistance. The assistance in theory gives an individual enough money to reach the dibao standard. Eligibility for dibao is based on individual income, so one individual in a household could qualify, while another may not, Gao said.
For example, a dibao standard in Beijing, China is 900 RMB per person per month. If an individual made 700 RMB per month, dibao would provide 200 RMB in assistance to reach the dibao line of 900.
While some may worry that officials will cut off dibao assistance once an individual goes over the line, Gao said the reality is more complicated.
“In reality, many local officials are very considerate of the fluctuation in people’s incomes and other family situations. For example, education needs, health care needs. So many localities actually have initiatives to not discontinue people’s dibao benefits right away if they have income that’s higher than the local dibao line,” she said.
Some localities may allow a family to stay on dibao for three months after extra income is earned to make sure they have job security and they “do not fall back into poverty right away.”
Once a family receives the cash, it is unconditional, meaning there are no (direct) behavioral conditions to continue receiving the money.
Gao said the evidence that dibao creates a poverty trap, where families remain under the poverty line intentionally to receive assistance, is not strong.
Some localities have families update their income and wealth information every three to six months. Certain villages will even publish the names of recipients to allow for public feedback on whether a family should qualify for dibao. Based on the feedback, localities will randomly select people to verify their income information.
“So it’s a very systematic and stringent process,” Gao said.
For some villages, allowing others to comment on a family’s poverty situation may further stigmatize the dibao and other forms of welfare.
“Because the dibao is an unconditional cash transfer, so by design the policy requires applicants to tell the truth and other community members and neighbors to share the responsibility of monitoring. That is part of the design of this program,” Gao said.
While on paper, the dibao is technically an “unconditional cash transfer,” the way dibao measures wealth creates its own form of conditions.
Depending on the locality, dibao recipients may face a myriad of asset tests that prevent them from owning pets, a larger than average home, a car, or luxury items. Expensive private schools and schools abroad are off-limits. In the past, even a cellphone was a disqualifier.
“I think now, many localities are more lenient on that, especially on the cell phone. But there are certain luxury goods (so-called), that you’re not supposed to have. That also features into the feedback from the neighbors and community members. They would get critical and jealous if you have certain luxury goods that they don’t have but you are getting dibao,” Gao said.
In Gao’s book, she also analyzes the subjective well-being and social participation of dibao recipients. She found dibao recipients “tend to be more isolated, and less active in their social participation” than similar peers.
Dibao recipients may feel stigmatized from participating in these activities, such as going to the movies, since it is not a “culturally acceptable use of the dibao income,” she said.
After China’s transition from a planned economy to a market-based economy, society’s expectations about how families earn their own living changed. Now it is expected that people “earn a living through their own work.” Although, Gao said China is currently going through a debate about who “deserves” welfare.
“Previously people had guaranteed jobs, but many people during the economic transformation were laid off so able-bodied adults couldn’t support themselves through jobs anymore. And that group is making up about half of the dibao population,” Gao said.
One area of concern for policymakers is ensuring the dibao is reaching the “proper recipients;” that is people in poverty. There are reports of targeting errors in administering dibao “because of misreporting or difficulty to capture the real income or assets situation in rural areas.”
“The targeting error is real and local officials are very aware of it, but that will stay with the program because of the variations of family conditions and income,” Gao said.
The dibao standard is often used as a criteria for other welfare as well. This means that qualifying for dibao also gives a family access to a host of other assistance (including education, housing, and medical assistance). However, this could create a “welfare cliff” issue, where if a family exceeds the standard they may lose a lot more assistance than they gain as income.
“I think this is one of the policy design features of dibao that needs to be revised right now,” Gao said of dibao acting as a “gatekeeper” for other social assistance.
Overall, dibao has only reduced the rate of poverty to a “modest degree.” It is more effective at reducing the depth and severity of poverty, Gao said.
When asked about the potential to universalize dibao and remove the means-test, effectively creating a Universal Basic Income for China, Gao said this idea has been “very much on my mind recently.”
“I think the best possibility probably would be for certain more developed localities to experiment with such a program and see how it works,” she said.
As for creating a UBI program in China in the near-term, Gao said this would be challenging for many reasons.
“To make the dibao or a similar cash transfer universal all around China, I don’t think it’s very likely in the short-term, both in terms of fiscal challenges and also political and cultural challenges,” Gao said.
In 1970, conservative Republican US President Richard Nixon introduced a health bill into the American Congress. It passed but was defeated in the Senate. He did not realize it was a health bill, nor did many of his fellow politicians. It was called the Family Assistance Plan, a guaranteed income for families with children, not adequate to bring the income up to the poverty line, but substantially more than was previously on offer.
It required the breadwinner to accept work if available. Thus it was targeted, conditional, and inadequate by itself to eliminate poverty, but it was a huge change in thinking from a conservative leader in the United States. It came with this impressive rhetoric
“Initially this new system will cost more than welfare, but unlike welfare this is designed to correct the condition it deals with and thus lessen the long range burden and cost.”
The health-income gradient and the failure of ‘welfare’
We know that health and poverty are inextricably linked, that health outcomes follow the income gradient, and that the basis for this association in wealthy countries with good health systems is not simply access to care, but poverty and its own associations. Thus the Nixon proposal was a health bill.
The famous Whitehall study of British public servants who all had similar access to the National Health Service demonstrated a clear association of income with health outcomes. Those most in control of their own lives lived longer and suffered less.
Because of concern about wasting taxes on welfare and about the so called ‘welfare trap’, we have developed a highly targeted welfare system in Australia, with a strong emphasis on mutual responsibility. Our efforts to identify any welfare ‘fraud’, accidental or intentional, have become increasingly intense.
We continue to force people to chase jobs which do not exist or which they could not do. We hound them with letters generated by computers and then make it difficult for them to question any charges against them. We demean them. We dis-empower them even further than their poverty, unemployment, mental illness, or physical illness already does.
A BIG idea
An alternative is needed. The concept of a Basic Income Guarantee (BIG) is not new. Thomas More wrote about it 400 years ago in his book Utopia. Variations of it have been advocated for centuries. Bismark’s social insurance in Germany has some elements of the concept. Nobel Laureate economist and free marketeer Milton Friedman advocated it in the form of a negative income tax (NIT).
Dr. Tim Woodruff
Four trials in the 1960-70s in the United States used Friedman’s model (p 107-109). If an individual’s tax return indicated a low or no income, a tax rebate was paid as a monthly deposit to a bank. The size of the rebate declined slowly as income was earned, ensuring earned income led to an increase in total income. The largest of these four trials involved 4,800 families, and the amount given varied from 50 to 100 percent of the poverty level. There were no work requirements.
The alternative model to NIT is a cash payment. This was trialed in Canada in 1974, where 60 percent of the Low Income Cutoff (poverty level) was paid. For every dollar earned the payment was reduced by fifty cents. Analysis of results showed that even though only one third of the population ever qualified over the 4 years of the trial, high school completion results increased and hospital admissions decreased during the trial compared to the control group.
An even more simple model is one in which the cash payment goes to every individual adult and is not means tested. This eliminates any negative perception of being needy, because everyone receives it. For those who do not need it, the money can easily be recouped by changes in taxation.
Counting costs, reaping benefits
The Basic Income Earth Network established in 1986, defines a basic income guarantee (BIG) as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement”. This does not specify the level of the cash payment but the simplest and likely the most effective method would be to make the level at or slightly above the poverty line.
Concerns about the basic income guarantee relate both to the benefits and the costs. The Canadian trial mentioned above, demonstrated both health and education benefits. Analysis of the effect of increased household income in the Cherokee Indian community as a result of distribution of profits of a Cherokee owned casino showed less criminality and improved education down the track. None of this is surprising.
But does this mean people will not work as hard? The US trials referred to previously showed a decrease in hours worked particularly among women and young adults. Is that bad? It is not clear from the data what they did instead of working so much. Were women spending more time looking after their families? Were young adults looking more carefully at work options and training?
Men reduced their work hours by about six percent but it did not appear that they were permanently unemployed. Rather, it appears they were spending more time between jobs. The sky did not fall in. Most people who can earn a little more than a poverty level income will do just that.
Is it affordable?
A basic tax free income guarantee of $22,000 (the poverty line at 50% of the median income for a single person) for every adult Australian (18 million people) would cost $400 billion a year. But the idea is not to increase the net income of millionaires by $22,000. It keeps administration simple to give the basic income to everyone and recoup in taxes from the wealthy. So the real cost is much less.
Only about six million Australians currently receive income support. Another one million or so have some funding from the Federal Government. Being generous, for eight million to receive the BIG would cost $176 billion, almost completely offset by replacing the welfare budget of $150 billion. That could be abolished.
Removing the tax free threshold of $18,200 for the 12 million earning more than that would generate $41 billion. But anyone on a low income would still have a total income of more than $22,000.
Tweaking the tax rates on higher incomes would effectively remove the BIG from higher income earners. Provision for children would add to the cost. Reducing BIG for dual income households to a level which would reflect economies of scale, in the same way as pensions do currently, would reduce the cost.
Most Australians would not lose a cent. All Australians would be guaranteed a basic income, whether sacked, disabled, unable to find work, or simply unemployable. The NDIS and Medicare would continue unchanged. This is all possible. Even the Productivity Commission thinks it’s worth investigating (p69):
“While Australia’s tax and transfer system will continue to play a role in redistributing income, in the longer term, governments may need to evaluate the merits of more radical policies, including policies such as a universal basic income.”
A bold move for health
If Australia introduced BIG we would have a system that almost eliminates poverty, thus appealing to those deeply concerned about the plight of the disadvantaged. We would also have a system which gives such people the genuine capacity to make their own decisions about what they do with their lives, which should appeal to those committed to individual responsibility.
Implementing this idea would do away with the current cruel, dis-empowering, wasteful welfare system. It would improve health outcomes. It could improve productivity. It would improve the life prospects of the 13% of Australians who currently live in poverty, the 17.4 percent of kids who are being raised in poverty, and the 40 percent of children in single parent families who live in poverty.
This is a health issue. Medical groups of all types should think about how we might use our knowledge and concern about health to bring this issue to the minds and actions of our politicians.
About the author:
Dr. Tim Woodruff is president of the Doctors Reform Society, an organisation of doctors and medical students promoting measures to improve health for all, in a socially just and equitable way. On twitter @drsreform
