The province of Quebec, in Canada, has been fostering conversations around basic income and even, at a certain point in 2016, has appointed a long-time supporter of basic income, François Blais, as Minister of Employment and Social Solidarity. Although the term “guaranteed minimum income” has been used in an indiscriminate fashion ever since 2014, there has never been an actual mandate for Blais to implement basic income in Quebec.
In fact, what is being implemented in Quebec at the moment differs considerably from a basic income, as defined by the Basic Income Earth Network (BIEN). According to Dorothée Boccanfuso, Chair of Quebec’s Expert Committee on Guaranteed Minimum Income, the new plan’s definition is presented as “any system that offers a guarantee of monetary resources for all, with the amount of those resources being related to a minimum threshold”. This expert committee has been tasked to make recommendations to François Blais, on income support, having produced a report. The proposed scheme has, therefore, kept existing social security system’s properties of means-testing and incentives to work, the latter strengthened through “a greater reward be provided for work efforts, through a major increase to the work premium”.
The enhanced economic support scheme is intended to widen its coverage, aiming at defining a “benchmark threshold”, a means-tested minimum guaranteed income to support “persons with no employment restrictions, for persons 65 and over and for people with disabilities”. There has been, clearly, an effort to cover more people with social support, trying to fill in the gaps and effectively reduce poverty levels, but still not embracing unconditionality. As the Expert Committee on Guaranteed Minimum Income puts it:
“The Committee wants a society that is free of poverty, but this wish can only be achieved by helping persons who are able to re-enter the labour market, pursue education and training or, more generally, better integrate into society. In the Committee’s view, poverty is not a status, but rather a situation and those who are in it must be helped to get out. The income support system must guarantee the minimum resources required for vulnerable persons to meet their immediate needs. Above all, it must eliminate barriers preventing these persons from escaping poverty.”
So, the social security program sought is not an unconditional basic income. However, some media sources are portraying it in misleading headlines such as “Quebec to offer basic income for 84000 people unable to work” and “Basic income to be given to 84000 people in Canada”. One the other hand, a few anti-poverty groups have clearly criticised the support scheme, calling out for a true unconditional support system. According to Serge Petitclerc, representing the group Collectif pour un Quebec sans pauvreté, the “guaranteed minimum income (…) should be unconditional and it should apply to the entire population”.
Universal Basic Income (UBI) is gaining more traction in mainstream discourse, but the academic debate has been heating up for years. One scholar with a sympathetic but critical eye towards basic income still believes it is not the best priority for activists.
Philip Harvey, a professor of law at Rutgers, wrote that a job guarantee could eliminate poverty for a fraction of the cost of UBI — $1.5 trillion less.
Harvey argued in 2006 that the focus on UBI may be crowding out more realistic policies that could achieve the same ends.
“[Basic Income Guarantee] advocates who argue that a society should provide its members the largest sustainable BIG it can afford – whether or not that guarantee would be large enough to eliminate poverty – are on shaky moral ground if the opportunity cost of providing such a BIG would be the exhaustion of society’s redistributive capacity without eliminating poverty when other foregone social welfare strategies could have been funded at far less cost that would have succeeded in achieving that goal.”
When I interviewed Harvey this month, he said his views have largely stayed the same and he still sees a fundamental difference between the advocates of UBI and job guarantee.
“The most important driver of that difference is the inherent attractiveness of the UBI idea. It really is an idea that captures the imagination and admiration of all kinds of interested parties with different kinds of agendas. The job guarantee idea, on the other hand, attracts people who are more into the weeds of policy analysis.”.
There is a big debate about which type of cost calculation is most relevant for UBI, since wealthy individuals would have most or all of the basic income taxed back.
Basic income scholars such as Karl Widerquist argue it is more accurate to calculate UBI’s “net cost” which subtracts the portion of the basic income that is taxed back, as individuals are essentially paying back the benefit.
Harvey argues that, from a political standpoint, people will not view UBI in such a way: “The problem with Karl’s argument is that he that he thinks that people will think the way he does, when there’s no evidence to support that given the way they think about other analogous government benefits.”
Harvey notes that, since the gross cost of UBI proposals is typically a high percentage of a country’s overall GDP, there are tradeoffs that must be considered when pushing for basic income.
“On a practical level, that’s the biggest problem that UBI advocates face is that they don’t have a good answer to why it’s worth spending that much money on this kind of benefit as opposed to spending that much money or a far lesser amount of money on other benefits that would serve the same purpose.”
Many basic income proponents have argued that the job guarantee would have much higher administrative costs than the basic income, and thus say it is a less attractive proposal.
Interestingly, Harvey argues the high administrative costs actually serve the purpose of the guarantee because the administration of the program also creates new jobs: “The goal of the job guarantee is to provide jobs and as long as the jobs you provide are helping to achieve your goal, it doesn’t matter whether if they’re administrative jobs or non-administrative jobs, they still count.”
The plan he proposes is for the government to offer grants to nonprofits and government agencies to create jobs that fulfill their mission to help the community. For example, installing rooftop solar panels and advocacy work.
“Why not give not-for-profit organizations the opportunity to compete head-on with government agencies to see who can do the most good with the resources made available to them through the program?”
Allowing for this competition would avoid the criticism that the government cannot create productive work.
“You can design a job guarantee program to avoid the relative incapacity or possible incapacity of governments to create meaningful jobs.”
Harvey has designed the ‘Jobs for All’ congressional bill with former Congressman John Conyers, who recently resigned amid sexual harassment allegations.
When pushing for basic income, Harvey believes the opportunity cost, both in the time spent advocating UBI and then financing it, may be too great.
“Unless you can argue that you are prepared to provide a UBI that is really adequate to eliminate poverty, you’ve no business advocating a program that would leave people in poverty because it was inadequate.”
Author’s editorial note: I plan to write a follow-up article to discuss and analyze some of the points made by Dr. Harvey.
This essay was originally published in the USBIG NewsFlash in August 2005.
Jay Hammond, the governor of Alaska from 1975 to 1982, who led the fight to create the Alaska Permanent Fund, was found dead at his Homestead about 185 miles southwest of Anchorage, on Tuesday, August 2, 2005. He led an amazing life. Hammond was a laborer, a fur trapper (by dogsled), a World War II fighter pilot, an Alaskan bush pilot, a husband, a father of three, a wildlife biologist, a backwoods guide, a hunter, a fisher with the U.S. Fish and Wildlife Service, and a homesteader. Hammond was one of the last people to take advantage of the Civil-War-ear U.S. law giving away land. Other than a requirement to build a house and farm the land for five years, it was given away free—no strings attached.
Hammond was also a hero to everyone who believes that no one should be barred from the resources they need to meet their basic needs—no strings attached.
Hammond got the idea for a resource dividend when he was mayor of a small town on Bristol Bay, Alaska in the 1960s. He realized that salmon were being taken out of the area without necessarily helping the town’s poor. He proposed a three percent tax on all fish caught in the area to be redistributed to all residents of the town. By an enormous stroke of luck, the man who had that idea (and saw it work in Bristol Bay) would be elected governor of Alaska just as the state was beginning construction of the Trans-Alaska oil pipeline. Oil companies stood to make billions of dollars, and of course, they argued that Alaskans would benefit through new job opportunities, but Hammond knew one way to make sure that every single Alaskan would benefit from the pipeline.
And so the Alaskan Permanent Fund was born. For the last 20 years, every Alaskan has received income from state oil revenues. A portion of the state’s taxes on Alaskan oil goes into an investment fund, which pays dividends from the interest on those investments—hence the permanent fund. Dividends vary, but they are usually more than $1,000 per year for every man, woman, and child living in the state.
The system is not perfect. Hammond told Tim Bradner, of the Anchorage Daily News, that his biggest regret was to let the legislature eliminate the state’s income tax. Without the citizens’ responsibility to pay taxes to support state services the fund will be vulnerable, and the legislature has been trying to raid the fund ever since. So far, the enormous popularity of the fund has protected it fairly well. Hammond also regretted that the fund was too small. Only one-eighth of the state’s oil tax revenues go into the fund. If half of oil tax revenues went into the fund, as Hammond envisioned, every Alaska family of four could expect to receive more than $16,000 this year. Hammond died campaigning to increase the size of the fund.
But the most important thing about the fund is that it exists. It’s simple, it works, and everyone in the state benefits from it every year. How many elected officials can say they did that? According to Sean Butler in Dissent Magazine, Nobel Prize-winning economist Vernon Smith, called the Permanent Fund, “a model governments all over the world would be wise to copy.” It is a pilot program for resource taxes and basic income plans all over the world. Economists have recommended the Alaska solution for resource-rich, poverty-ridden countries from Nigeria to Iraq. Just this summer the government of Azerbaijan sent a delegation to Alaska to study the Permanent Fund. You can’t keep a good idea down.
Jay Hammond spoke at the 2004 USBIG Congress in Washington, DC. Here is how Butler describes the event: “The father of the Brazilian basic income, Senator Eduardo Suplicy, also presented at the USBIG conference last year. During his speech, he noticed Jay Hammond sitting in the front row, and, to warm applause from the assembled crowd, descended from the stage to shake his hand. The two basic income pioneers had at last met. Hammond and Suplicy make an odd couple. The Republican Hammond, with his Hemingway-like white beard and grizzly build, wears his far north ethos of self-reliance with pride. Suplicy, a founding member of the left-wing Brazilian Workers Party and a U.S.-trained economist, has the dignified appearance of an intellectual and professional politician. Its tropical socialism meets arctic capitalism; yet somehow, when the two come together over basic income, they get along.”
I had the good fortune to attend that event and meet Governor Hammond. He was warm and engaging. He wasn’t there to bask in the glory of people who admired his past achievements but to fight to keep improving the APF. He was a genuine hero.
An article on Hammond and basic income by Sean Butler, entitled, “Life, Liberty, and a Little Bit of Cash,’ appeared in Dissent Magazine just a few weeks before he died.
There have been many good tributes to Hammond in the news and on the internet since his death. Here are just a few:
Frank Murkowski, current governor of Alaska, “Hammond’s Legacy Will Stand Out,” Alaska Daily News
Tim Bradner, “Hammond has passed; his ideas must live on,” Alaska Daily News
Douglas Martin, “Governor of Alaska Who Paid Dividends,” New York Times
The India Network for Basic Income (INBI) has released a video in order to promote unconditional basic income. The video, titled I also want to go to school, has been put out in advance of the 19th Basic Income Earth Network (BIEN) Congress, which is to be held in India and will be hosted by INBI.
The video shows a series of young children, the majority of whom are girls, looking directly at the camera. The words “I also want to go to school” are shown over the images, followed by the words “Basic income for me and my people”.
Although India does have non-fee-paying government-run schools, it can often be difficult for children of impoverished families to attend these, as they may be expected to help earn money to support themselves and their relatives, or to help with housework.
This post is one of several previewing the book I’m writing on Universal Basic Income (UBI) experiments, and it is the second of two reviewing the five Negative Income Tax (NIT) experiments conducted by the U.S. and Canadian Government in the 1970s. This post draws heavily on my earlier work, “A Failure to Communicate: What (if anything) Can We Learn from the Negative Income Tax Experiments.”
Last week I argued that the results from the NIT experiments for various quality-of-life indicators were substantial and encouraging and that the labor-market effects implied that the policy was affordable. As promising as the results were to the researchers involved the NIT experiments, they were seriously misunderstood in the public discussion at the time. But the discussion in Congress and in the popular media displayed little understanding of the complexity. The results were spun or misunderstood and used in simplistic arguments to reject NIT or any form of guaranteed income offhand.
The experiments were of most interest to Congress and the media during the period from 1970 to 1972, when President Nixon’s Family Assistance Plan (FAP), which had some elements of an NIT, was under debate in Congress. None of the experiments were ready to release final reports at the time. Congress insisted researchers produce some kind of preliminary report, and then members of Congress criticized the report for being “premature,” which was just what the researchers had initially warned.[i]
Results of the fourth and largest experiment, SIME/DIME, were released while Congress was debating a policy proposed by President Carter, which had already moved quite a way from the NIT model. Dozens of technical reports with large amounts of data were simplified down to two statements: It decreased work effort and it supposedly increased divorce. The smallness of the work disincentive effect hardly drew any attention. Although researchers going into the experiments agreed that there would be some work disincentive effect and were pleased to find it was small enough to make the program affordable, many members of Congress and popular media commentators acted as if the mere existence of a work disincentive effect was enough to disqualify the program. The public discussion displayed little, if any, understanding that the 5%-to-7.9% difference between the control and experimental groups is not a prediction of the national response. Nonacademic articles reviewed by one of the authors[ii] showed little or no understanding that the response was expected to be much smaller as a percentage of the entire population, that it could potentially be counteracted by the availability of good jobs, or that it could be the first step necessary for workers to command higher wages and better working conditions.
The United Press International simply got the facts wrong, saying that the SIME/DIME study showed that “adults might abandon efforts to find work.” The UPI apparently did not understand the difference between increasing search time and completely abandoning the labor market. The Rocky Mountain News claimed that the NIT “saps the recipients’ desire to work.” The Seattle Times presented a relatively well-rounded understanding of the results, but despite this, simply concluded that the existence of a decline in work effort was enough to “cast doubt” on the plan. Others went even farther, saying that the existence of a work disincentive effect was enough to declare the experiments a failure. Headlines such as “Income Plan Linked to Less Work” and “Guaranteed Income Against Work Ethic” appeared in newspapers following the hearings. Only a few exceptions such as Carl Rowan for the Washington Star (1978) considered that it might be acceptable for people working in bad jobs to work less, but he could not figure out why the government would spend so much money to find out whether people work less when you pay them to stay home.[iii]
Senator Daniel Patrick Moynihan, who was one of the few social scientists in the Senate, wrote, “But were we wrong about a guaranteed income! Seemingly it is calamitous. It increases family dissolution by some 70 percent, decreases work, etc. Such is now the state of the science, and it seems to me we are honor bound to abide by it for the moment.” Senator Bill Armstrong of Colorado, mentioning only the existence of a work-disincentive effect, declared the NIT, “An acknowledged failure,” writing, “Let’s admit it, learn from it, and move on.”[iv]
Robert Spiegelman, one of the directors of SIME/DIME, defended the experiments, writing that they provided much-needed cost estimates that demonstrated the feasibility of the NIT. He said that the decline in work effort was not dramatic, and could not understand why so many commentators drew such different conclusions than the experimenters. Gary Burtless (1986) remarked, “Policymakers and policy analysts … seem far more impressed by our certainty that the effective price of redistribution is positive than they are by the equally persuasive evidence that the price is small.”[v]
This public discussion certainly displayed “a failure to communicate.” The experiments produced a great deal of useful evidence, but for by-far the greatest part, it failed to raise the level of debate either in Congress or in public forums. The literature review reveals neither supporter nor opponents who appeared to have a better understanding of the likely effects of the NIT and UBI in the discussions following the release of the results of the experiments in the 1970s.[vi]
Whatever the causes for it, an environment with a low understanding of complexity is highly vulnerable to spin with simplistic if nearly vacuous interpretation. All sides spin, but in the late 1970s NIT debate, only one side showed up. The guaranteed income movement that had been so active in the United States at the beginning of the decade had declined to the point that it was able to provide little or no counter-spin to the enormously negative discussion of the experimental results in the popular media.
Whether the low information content of the discussion in the media resulted more from spin, sensationalism, or honest misunderstanding is hard to determine. But whatever the reasons, the low-information discussion of the experimental results put the NIT (and, in hindsight, UBI by proxy) in an extremely unfavorable light, when the scientific results were mixed-to-favorable.
The scientists who presented the data are not entirely to blame for this misunderstanding. Neither can all of it be blamed on spin, sound bites, sensationalism, conscious desire to make an oversimplified judgment, or the failure of reports to do their homework. Nor can all of it be blamed on the people involved in political debates not paying sufficient attention. It is inherently easier to understand an oversimplification than it is to understand the genuine complexity that scientific research usually involves no matter how painstakingly it is presented. It may be impossible to communicate the complexities to most nonspecialists readers in the time a reasonable person to devote to the issue.
Nevertheless, everyone needs to try to do better next time. And we can do better. Results from experiments in conducted in Namibia and India in the early 2010s and late ’00s were much better understood, as resulted from Canada’s Mincome experiment that sadly did not come out until more than two decades after that experiment was concluded.
The book I’m working on is an effort to help reduce misunderstandings with future experiments. It is aimed at a wide audience because it focuses the problem of communication from specialists to non-specialists. I hope to help researchers involved in current and future experiments design and report their findings in ways that are more likely to raise the level of debate; to help researchers not involved in the experiments raise the level of discussion when they write about the findings of the experiment, to help journalists understand and report experimental findings more accurately; and to help interested citizens of all political predispositions see beyond any possible spin and media misinterpretations to the complexities of the results of this next round of experiments—whatever they turn out to be.
