Councilors of the small Ontario town of Smiths Falls voted on December 19 last year to reject participation in its province’s basic income pilot, to the objection of residents and the town’s mayor. A petition requesting a re-vote is currently circulating online. The story begins, however, in 2008.
That year The Hershey Company shuttered its Canada operations, at the time based in Smiths Falls, largely for cheaper Mexico-based labor. This exit of the area’s biggest customer precipitated the same by other businesses, and although the ensuing purge of jobs merely reflected a manufacturing decline already underway in the province, the disappearance of five hundred positions at Hershey’s alone, accounting for nearly 6% of the town’s population, catalyzed especially forward-looking pain. That year the town operated at a surplus of C$11.2m, and by the town’s most recent reported fiscal year, its once budget excess had trudged through increasingly tight leverage to a deficit of C$1.3m (albeit improved since 2013). Today the town struggles with unemployment above the national rate, and a third of children live below the poverty line.
Given also an aging population and petering labor force – per census data the town’s median age increased by 2.1 years in the five years leading up to 2011, and the overall population declined by 2% – it could be in the interest of Smiths Falls’ residents to entertain a basic income system. Indeed the petition created by resident Carol Anne Knapp has so far gathered 113 supporters, with a goal of one thousand. This is despite the council’s three-two vote, with two councilors absent, against mayor Shawn Pankow advocating to Ontario’s finance minister for participation in the program. Pankow has meanwhile expressed interest in holding a public meeting on the topic this month, health officials in tow.
A prominent councilor, Dawn Quinn, cast one of three “nay” votes. According to Jordan Pearson, writing for Motherboard, her vote was at least partly informed by her credo of frugality, stating that “folks sit around in Tim Hortons all day instead of looking for jobs, and they should consider buying a tin of Tim Hortons coffee to make at home instead of buying a cup.” On that point Pearson continues, “[Quinn added] they could consider shoveling snow to earn some extra money.” Similarly conveying Quinn’s underlying sentiment, Kate Porter quotes her in CBC News: “They need to be able to learn how to take that money and stretch it […] we need more of that kind of thinking.” So it appears the belief that basic income causes squander was, at least for one decision maker, a reason for the council’s vote outcome.
There is, however, some evidence from a bordering province that suggests this perspective is dogmatic, as reflected in Knapp’s petition letter requesting that a “new vote be based on science and evidence.”
Nearly forty years ago, Dauphin, a similarly small town in the Canadian province of Manitoba, underwent a five-year minimum income (dubbed “mincome”) experiment. Mincome was also similarly basic income-lite. Rather than a true guarantee, which is regardless of preexisting income status, mincome subsidized only those poor enough and was reduced for those who earned above a threshold. Likewise, Ontario’s pilot makes whole those earning below a set threshold. Even so, the experiment provides refutation to Quinn’s apprehension of lethargic congregations at Tim Hortons.
Evelyn Forget (credit to: Ecocide Alert)
According to Evelyn Forget, an economist at the University of Manitoba and academic director of the Manitoba Research Data Centre, primary earners in Dauphin worked only marginally less within the five-year study, and much of the other reductions in labor force participation was comprised of women who extended maternity leaves and male high school students who simply stayed in school rather than work. Additionally, hospitalizations, in particular for mental health problems, dropped significantly (nearly 9% across the board) and would alleviate the burden on healthcare programs today.
Quinn acknowledges, though remains unpersuaded by, the Manitoba findings and is further dissuaded by cost – a concern currently aggravated by budget shortfalls. She protests that Smiths Falls became financially saddled after a 1970s investment in low-to-moderate income (LMI) housing, giving rise to her concern about opting into another government-borne program. A ten-year housing plan published in 2014 by Lanark County and Smiths Falls, however, notes that 74% of the county’s dwellings requiring major repairs were constructed prior to 1971. Coupling two observations then – 60% of LMI housing was developed under the program to which Quinn is referring; and renting in lieu of owning has been on the rise since Hershey’s departure – the 1970s investment appears to have provided an arguably necessary safety net.
Expenses, furthermore, reflect precarity when business output, curbed by economic disempowerment of consumers, constrains municipal revenues. In pursuing a conservative bottom line, rejecting basic income has a potentially truncating effect on the top, and budget woes thereby persist. On this, councilor Lorraine Allen, one of two “yea” votes, says the proposal would enable residents to “shop more, buy more groceries, perhaps be more involved in things that they couldn’t before.” Hence her vote for the program.
Still, the short-lived nature of the pilot is consistent with another of Quinn’s concerns: that a pilot implemented, then taken away, could prove negligibly meaningful. In the town’s 2015 operations approximately C$2.4m was spent on social and family services. Tucked inside these costs were, in addition to unspecified uses, assistance to the elderly, childcare and the social housing expenses which Quinn resents of the 1970s. If the Ontario program follows the recommendation by former senator Hugh Segal (a monthly allowance of C$1,320), the combined cost to eligible individuals could perhaps exceed the town’s existing social and family services expenditures. This mainly reinforces the need for cooperation between municipality and province-level governments to realize success from basic income. Eating the full burden, what Ontario offers is more generous than that. But in order for such a program to live past a test phase, the council of Smiths Falls would first have to heed the needs of its residents – and try.
Thanks to Genevieve Shanahan for reviewing this article.
Rudy Karsan, co-founder and former CEO of the former human resource software company Kenexa (sold to IBM in 2012) recently held a TEDx talk in Calgary where he advocated a universal basic income as a means of stimulating innovation.
“We are in the golden age of our species,” Karsan begins his talk. He argues that we already have multiple solutions for the lack of food, water, and energy, and even for global warming; thus, our number one risk is none of these. Instead, he argues, “Meaningful work is about our choice of who we are,” and the lack of it is going to be the number one risk.
Karsan continues by explaining that this problem will not be solved by jobs:
“Jobs are getting decimated in an accelerating pace and they are not coming back.” […]
“We have to break the mental construct that jobs equal work.”
“No!” Karsan continues firmly. Jobs do not equal work. “Meaningful work has been with us forever and will be with us forever. It is not jobs. Jobs are simply a subset of work.” Jobs have created money for us since they came into our lives at the beginning of the Industrial Revolution, 250 years ago. “But work can exist without jobs.”
The second mental construct we have to break, according to Karsan, is about entitlement:
“We need to discard all forms of social programs and replace it with one: Universal Basic Income, which is the individual right for every citizen to unconditionally get an income from the state on a regular basis.”
“UBI is not about creating dependence; it is about the Maslow’s hierarchy of needs at the lowest level. […] The notion that this entitlement to a UBI makes us smaller and weaker is absolutely untrue”, Karsan states. It is also not a new idea, and the data that came out of Manitoba in the seventies already showed that minimal income had many positive effects.
Karsan even takes it further and states that a UBI is not only something we can afford, but it will also make us greater. “Innovation did not start with homeless people.”
Karsan encourages his public to demand a UBI from their leaders, because he is convinced that our species in the golden age can move a lot further and he hopes and dreams that “we may find a way, not only to find meaning in our lives, but meaning in the universe itself.”
In a unanimous decision on Tuesday, December 7, the Legislative Assembly of Prince Edward Island (PEI), Canada, agreed to “pursue a partnership with the federal government for the establishment of a universal basic income pilot project” on PEI.
Peter Bevan-Baker CC BY-SA 3.0
The motion was originally proposed by Green Party Leader Peter Bevan-Baker, and received the support of all four political parties in the province, which have been united for well over a year in their support for investigating a basic income guarantee (BIG).
Bevan-Baker drew inspiration from past experiments in Manitoba (the Mincome trial of the late 1970s) as well as the pilot scheduled to begin next year in Ontario. He believes that PEI’s small size — the island has only about 150,000 residents — would make it an ideal setting for an additional pilot study. Hugh Segal, adviser for the Ontario pilot, has also encouraged other provinces, such as PEI, to run their own trials of basic income.
According to Bevan-Baker, a pilot project is necessary “so we can evaluate whether the benefits outweigh the costs” — as quoted in a CBC News report about the successful motion — where the costs, in his view, might include a work disincentive effect as well as financial costs to the government. The main benefit specified in the motion is the reduction or elimination of poverty. However, the motion also mentions many other possible positive effects, including “local economic growth, supporting entrepreneurship, reducing administrative complexity and costs, improving working conditions, reducing crime, improving health, and helping to build vibrant rural communities.” CBC News quotes Bevan-Baker as saying, “A universal basic income could enable the greatest unleashing of human potential ever seen.”
The full text of the motion is as follows:
WHEREAS implementing a universal basic income in Prince Edward Island would significantly reduce or potentially eliminate poverty in the province;
AND WHEREAS a universal basic income would likely have many other positive effects,
including local economic growth, supporting entrepreneurship, reducing administrative
complexity and costs, improving working conditions, reducing crime, improving health, and helping to build vibrant rural communities;
AND WHEREAS all four Prince Edward Island political parties have indicated their support for exploring a universal basic income;
AND WHEREAS the federal government has indicated an interest in exploring a universal basic income;
THEREFORE BE IT RESOLVED that the Legislative Assembly urge government to pursue a partnership with the federal government for the establishment of a universal basic income pilot project in Prince Edward Island;
THEREFORE BE IT FURTHER RESOLVED that Government shall provide an update on the progress of this initiative in every session of this assembly.
The motion is still only an early step toward a basic income pilot in PEI. If the province is to actually implement a pilot, it will require cooperation and support from the federal government. The PEI Department of Family and Human Services has previously issued the following statement:
The Province supports the concept of the Basic Income Guarantee. We have been consistent in our response that any pilot project in this area would require active and committed federal participation. We are always open to partnerships with the federal government to improve the financial well being of the residents in our province.
No specific model for the basic income has been proposed for the (possible) pilot. The Working Group for a Liveable Income — an advocacy group that has been instrumental in promoting BIG in PEI for over a decade — explicitly supports a negative income tax (NIT), in which “if the person receiving BIG gets other personal income, the maximum level benefit will be affected by a reduction rate”. Segal has also recommended an NIT for the Ontario pilot. While ‘universal basic income’ is often used to refer to a universal cash grant with no reduction based on other earnings, in contrast to a NIT (cf. “What is the Basic Income Guarantee?”), it is not certain whether the PEI motion intends the phrase in this sense (which would entail that PEI is pursuing a form of BIG less commonly discussed in Canada).
References
Motion No. 83, Legislative Assembly of Prince Edward Island.
The Icelandic Pirate Party — which has proposed to launch an investigation into ways to implement an unconditional basic income in Iceland — has been granted the authority to form the country’s next government.
Iceland’s Pirate Party (Píratar) gained 10 seats in Iceland’s parliament (Alþingi) in the October 2016 general election (which was held a year early, after the Prime Minister resigned in the wake of the Panama Papers leaks). This put the party in third place in parliamentary representation, behind the center-right Independence Party and the Left-Green Movement.
Birgitta Jónsdóttir CC BY-SA 2.0 Pirátská strana
In Iceland’s political system, the president invites the leader of the winning political party to negotiate with the other parties to select new members of the government. If the party does not succeed, the president passes the mandate to the second most dominant party, and so on. In this case, neither the Independence Party nor the Left-Green Movement succeeded in negotiations; thus, on December 2, President Guðni Jóhannesson handed the mandate to form the government to Pirate Party leader MP Birgitta Jónsdóttir.
This marks the first time — in any country — that the authority to form a government has been handed to a party officially committed to investigate the possibility of basic income.
Píratar does not officially endorse any specific form, amount, or funding mechanism for a basic income guarantee, and the party believes that more research is necessary before moving forward with any such policy. Moreover, neither implementing nor researching a basic income appears on the party’s manifesto for the October 2016 parliamentary elections.
However, Píratar has actively promoted research into a basic income guarantee for Iceland, and plans to continue to do so with the new government. MP Halldóra Mogensen drafted a proposal calling on the Ministry of Welfare and Ministry of Finance to form a working group tasked with “looking for ways to ensure every citizen unconditional basic income” (“skilyrðislausa grunnframfærslu”), which she submitted to parliament in November 2015 along with the other two Pirate MPs, Ásta Guðrún Helgadóttir and Birgitta Jónsdóttir. In setting out the case that Iceland should investigate the possibility of a BIG, the proposal reviews the results of past basic income trials, especially in Manitoba (the Mincome experiment) and Namibia, and the Alaska Permanent Fund Dividend. It also outlines philosophical arguments for basic income, discusses the potential for a basic income to simplify the welfare system, and presents new concerns surrounding automation and the future of work.
Halldóra Mogensen
Mogensen tells Basic Income News that she will “definitely” put forth the basic income proposal again during the new parliamentary session and “look[s] forward to continuing the conversation in parliament and warming the new MP’s up to the subject.”
Overall, she says, “the conversation [about basic income] is ongoing but no concrete plans have been made regarding implementation or testing.”
Meanwhile, the immediate objective of the Píratar, after forming the government, is to ratify its new constitution.
BIEN Iceland — which is non-partisan but founded by another Pirate, Albert Svan Sigurdsson (Statistics Iceland) — will launch officially on Saturday, December 10 (Human Rights Day).
The London-based Apolitical website’s article on basic income (BI) opens with “Money for nothing – it sounds like a utopia” and then looks at some examples of BI concepts that have already been applied around the world.
This phrase, “money for nothing” represents a commonly held bias that, when there is no commodity returned for the money, whether that commodity is a thing or someone’s labour, then there is no tangible value returned for the monies. This bias is widely held and promoted by many adherents of modern-day economic theories – a bias which too often dismisses, or simply ignores, the numerous personal and societal benefits that others have evaluated and documented as attributable to BI models.
The article does a fairly good job of maintaining its organizational claim of being “apolitical” in that it does not overtly favour any particular side in the issue. Yet that does not mean it has escaped the narrow-minded focus that so many politicians, their handlers, and media commentators alike have grudgingly adopted regarding the BI. In fact, the Apolitical article offers a wonderful example of the very limited ways in which the BI idea is being appraised, namely as simply a response to job automation and/or carrot-and-stick welfare programmes.
Apolitical does, occasionally make mention of the fundamental roots of a BI, roots that run far deeper than simply jobs and poverty. Yet to emphasize that a BI is simply about addressing poverty or unemployment is to overlook the very foundation of a BI – namely that such a policy is meant to be an expansion upon, and commitment to, something that should never be commodified, namely personal freedom. All other aspects of a BI flow from this fundamental premise. That is, if a nation and its people are sincerely committed to the idea of freedom itself.
The five points made by Apolitical in the above article are all legitimate and commonly discussed around the world. Yet the shallowness of these points is intricately tied to the same old penny-pinching issues that surround welfare, as well as the easy access to cheap human labour that employers have enjoyed for far too long.
Yes, a BI can help eliminate the stigma and overbearing bureaucracy associated with welfare programmes. It would also force employers to be truly competitive regarding employee wages and hours. However, the most valuable asset each and every person possesses is our time in this life. We should be the stewards of that time – not employers and not bureaucrats. It is the personal freedom provided by a BI that is truly important to everyone, not just the workforce and welfare recipients.
A BI would allow individuals to tend to family and personal concerns without the anxiety of how to survive without a “job” income during these times of personal need. For example, if a family member severely injured as the result of a car accident. The family of this person may be too young for jobs, or on very low income as they had been relying upon the injured family member for income and cannot afford a carer to help in these times. In this case, a BI would help tremendously. Some might say that they can seek a uber accident attorney Glendale or a personal injury lawyer in order to seek compensation and financial security. Indeed these cases can bring great compensation, but court cases can take time, what will the family do in the meantime? Again, a BI would allow individuals to tend to family and personal concerns should anything happen. There may be no greater freedom than to have the time and economic stability necessary to order our lives as we, ourselves, see fit, rather than as employers demand, as is becoming far too common these days.
Politicians are slowly coming to accept that individuals are the best stewards of their monies, not bean-counting governments who tend to value the beans over the people the beans are intended for.
Let us examine each of Apolitical’s five points to see how personal freedom is addressed here.
1. Governments are not thinking the same as tech optimists
Apolitical is right about this and politicians are notoriously slow to respond to social changes of any kind, never mind one of this magnitude. Yes, the tech optimists foresee an evolutionary step in human time management when robotics and automation take over the monotony and the drudgery of the repetitive and injury-prone tasks found in so many labour-intensive “jobs”. Of course, these robotic inventions will not come soon enough to stop so many of our hardworking population from getting injured. In the meantime, if you’ve been injured at work, you will likely be entitled to personal injury compensation. Hopefully, the workforce of tomorrow will mean fewer people will have to take legal action in the future. If at all an employee needs to take some legal action but do not know where to head out for the same, check for firms similar to Douglas Beam, P.A. We should create a new workforce that is far more reliable (never taking time off), disposable (without regrets or complaints), and economically more efficient than human beings.
From the technologist’s viewpoint, a BI becomes an essential aspect of employment and personal advancement because of the accelerating pace of technological advancement. Every new innovation requires that the humans who will be utilizing those innovations undergo time-consuming training and up-skilling. These advances can even lead to whole new careers for which a BI would be the springboard to pursue those educational and up-skilling goals. To tech experts, this is not “money for nothing” but instead an investment in the future of the nation, its economic infrastructure, its people and its economy.
But there is also a very real need to understand how a BI frees workers – especially those who only have labour, rather than any marketable skills or training, to sell – from the spectre of destitution and homelessness if they are unable to find work, or simply to feed and/or shelter themselves on the meager, subsistence wages offered today to unskilled labourers.
Of course, time management in this case refers only to the workplace. What is overlooked here is the personal freedom that a BI introduces into the optimist’s time management scheme. A BI would provide an individual with the economic freedom to then choose to acquire more skills or education, or to spend more time with family, or to take a much-needed break. This freedom is of great value to the individual, as well as their future prospects, but has little or no meaning to many economists.
Apolitical, however, does make a very good point about welfare reform. It is true that eradicating the expensive and needlessly patronizing welfare bureaucracies would entail huge cash savings for governments at national, provincial/state and municipal levels everywhere – savings that could be utilized far more efficiently and effectively when incorporated into a BI.
2. People already get money for nothing
Actually people get money from their government because they are deemed, by their government, to be in need and it is a government’s principal responsibility to succor to its citizens in times of need. While Apolitical talks about how “money for nothing already exists in the state pension” system, it ignores a number of other social safety net programmes such as health care, welfare, student loans, disability, make-work projects, employee subsidies, food banks, and shelters, to name a just a few of the most common.
Social safety net programmes always incur infrastructure and staffing costs associated with the policing and distribution of these monies. A BI removes the stigma associated with so many of these programmes via its universality but it cannot ignore the special needs associated with people such as the disabled, seniors, and the unemployed. Their special circumstances can easily entail more than simply a “free money” infusion involving things such as in home support, accessibility of public buildings, mobility aids, wheelchair-friendly streets and curbs, and emotional and mental supports to deal with chronic and acute complications, to name just a few.
Apolitical also mentions the Alaska Fund, a decades old statewide “free money” programme that, today, is surrounded by much controversy, with some demanding the money be used, instead, to fund state social programmes while others are happy for the money to be put directly into the hands of the people themselves.
This is a very good example of how the assets of a community – its resources, both natural and human – are the heart and soul of its economy. However, the Alaska Fund’s greatest feature is that it offers good, sound support for the premise that some of the wealth flowing from a community’s resources should be returned to the people that comprise the community.
The debate here is not whether “free money” should be distributed to the citizenry, but rather how much and in what manner.
3. The schemes in the developing world aren’t really analogous
Apolitical is absolutely right to point out that the drastically modified BI programmes implemented in Namibia, India, and Brazil cannot be directly applied in more developed areas. These programmes are largely a response to severe destitution and poverty in those countries, while here in North America the BI is framed as a response to automation and welfare inequities.
However, Apolitical does recognize that there is a self-empowerment and entrepreneurial spirit that blossoms within the poorest individuals in the above-mentioned countries once they have been freed to make their own choices of how best to utilize their time and abilities to address their own needs and interests.
These observations correlate well with Canada’s own Dauphin Manitoba Mincome BI programme, which ran for five years. Mincome was well monitored and documented at a variety of levels and interests. Documentation that highlighted the many personal advantages derived from a BI. These advantages included the reduction of both individual and family stress levels, greater ability to cope with family issues and, most importantly, noticeable improvements in children’s health and growth due to better nutrition which lead to higher learning evaluations. While some people did indeed leave the workforce, they did so to upgrade their education and skills, to attend to personal and family issues, or simply to take a much needed break.
All of these findings amount to huge social and personal savings that invariably strengthen and improve communities, yet, once again, they are not benefits that economists are able to quantify or put a monetary value on and are too often deemed to be without value.
4. It actually all comes down to incentives
Here Apolitical addresses the commonly held fear that a BI would act as a disincentive to “working,” as if “paid employment” should be every person’s preoccupation rather than the management of their lives. However, Apolitical cites Hugh Segal, a Canadian senator who has been a long-time advocate for BI programmes and who laments the very real disincentives to improving one’s life that have been built into Canada’s social programmes. This is why Senator Segal has long applauded the personal empowerment that a BI could provide to all Canadians.
It is here that Apolitical acknowledges Sam Altman of Y Combinator – a US private investment firm – who sees a BI as the seed money necessary to provide the personal freedom allowing individuals to be economically empowered to address the rapidly changing education and training demands of a technologically driven economy. Of course, Altman seems far more interested in employing a BI to address the demands of technology and its impact upon production and the workforce than in actually addressing personal freedom per se.
Apolitical is absolutely right to acknowledge that BI differs from existing, welfare-style social programmes and highlights the divide as between those who insist upon “incentives” used coercively to promote job seeking and those who support the “freedom to choose” as incentive enough for anyone.
5. It’s not utopia or bust
Apolitical wisely concludes that, if supporters of a BI succeed, “…they will establish the principle that you can simply give people money and trust them to use it in a way beneficial to themselves and, indirectly, to society.” This is a sentiment long-shared by those who advocate for BI and wonderfully demonstrates that this sentiment is central to personal freedom and the creation of an empowered population. For Apolitical and the rest of us only time will tell.
