by Yannick Vanderborght | Oct 3, 2011 | Opinion
Almost a half year has passed after the Great Earth Quake and Tsunami on March 11 in East Japan which jointly victimized nearly 16,000 people’s lives, made around 4,600 people missing, destroyed a large number of houses and facilities, and induced the nuclear power-plant accidents in Fukushima. The 3 prefectures (Iwate, Miyagi and Fukushima) in the Pacific coast district of Tohoku [North East] Japan were severely double-devastated by the earth quake and tsunami. In addition, people living in areas surrounding the nuclear-power plant were forced to evacuate from the caution zones. For families which lost their members and houses, a lot of funds were raised by the private sector domestically and internationally, and the funds have been concentrated to the Red Cross Japan and others and distributed to the prefectures in the disaster districts. However, the distribution of consolation money to the sufferers is slumbering because many municipal governments have lost their offices and staff members. Prefecture governments in the disaster districts have built about 100,000 provisional housings (free of rent), accommodating many evacuees. Although many households intend to rebuild their own houses, they cannot get refinance of mortgages unless they refund their previous mortgage on the block. Still today, more than 6000 people are living in shelters.
What is the most serious problem is that most sufferers lost their income sources.
Employed workers lost their jobs because their work places were destroyed or swept away, and even survived firms are in difficulty to purchase parts and materials and to restore customers, and many of the firms suspended their businesses and eventually got into bankrupt. Thus a lot of workers lost their employment.
According to Asahi Shimbun [newspaper] (2011.9.6), 63,352 people in the 3 prefectures (Iwate, Miyagi and Fukushima) were registered as disaster-affected job seekers at public employment security offices from March to July. Among them only 13,017 people (20.5 %) got jobs by the end of July. It is estimated that 30 % of job seekers got jobs through public employment secure offices nationwide in the same period. The lowliness of re-employment rate of job seekers in the devastated zones is notable. Asahi said “It is sure that more than a half of the disaster-affected job seekers have not been reemployed yet.” Among the job seekers 60,221 people were provided unemployment allowance from April to July (the first period of payment). For most of them the covering period of the insurance is 2 months. They can get an extension period of 2 months under the existing scheme, and 2 months under the extra rule for the disaster-affected job seekers. In any case, there will be a sharply increasing number of job seekers outside of the unemployment insurance starting in coming October.
The Pacific coast of Tohoku Japan has an industrial concentration of fishery and fish processing. However, many of the fishing boats were destroyed or swept away, fishing harbors and fish markets lost their function, and many of the processing factories were destroyed. Fishermen and fishery-related employees lost their job. Farmland in this area (mainly rice fields) was flooded by seawater and the soil got a high level of saline. It may need a couple of years to resume rice cultivation. Shipping regulations on and consumer avoidance of the agriculture, meat and fishery products from these areas in the concern about the radioactivity contamination due to the diffusion of radio-active matters caused by the nuclear power plant accidents are giving further sufferings to the farmers and fishermen.
In response to this situation, the government is trying to expand financing and subsidizing for reconstruction of these industries respectively. However, these programs are operated within the framework of existing schemes; therefore, they entail minute conditions and cumbersome procedures. They are not easily available for the people in hurry. Under the circumstances, it will take a long time to recover production and employment. Therefore, it is desirable to ensure income for the sufferers, i.e. paying basic income by the government on a temporary basis.
The activists and researchers concerned, centering on BIJP (Basic Income Japan Pursuers), have been campaigning for establishment of a Basic Income scheme for the sufferers. They organized 2 meetings in the Parliament House (to impress politicians) after April. They insist as follows:
1) The government should pay 150,000 JPY (2,700 USD) per month to all of the sufferers unconditionally and individually for 5 years.
The un-conditionality and individuality can enable the beneficiaries to flexibly plan living and get through situations responding to each condition of work, production and living.
Along with the basic income, the government and local municipal governments should enhance in-kind services such as care for elderly citizens, disabled citizens and children, job training, employment placement and so on.
2) If the scheme is targeted within people in the 3 Tohoku prefectures (Iwate, Miyagi and Fukushima), the estimated number of beneficiaries are 5,670,000. The necessary budget is around 10 trillion JPY (180 billion USD) per year.
The government estimates the funds necessary for rehabilitation as a whole at between 20 to 30 trillion JPY. In addition, 10 trillion JPY may necessary for compensation for damages by the nuclear plant accidents. It is impossible to cover such a huge budget by usual measures such as tax increasing, budge cut down and issue of usual government bonds. A simple and effective measure is that the government issues extra government bonds and the Bank of Japan (the central bank of Japan) buys all of the bonds. The fund from the bank of Japan will be all used by the government. This means in effect that the government itself issues currency on security of its financial credibility. It may be a sort of government-issue note. This financial measure will not increase governmental debt at all.
by Yannick Vanderborght | Sep 19, 2011 | Opinion
Japan’s social security system until now has been dependent on support from corporations and employers. Due to Japan’s present economic circumstances, however, they have become unable to endure such burdens any more. Basically, the aim of private corporations is to earn profits from their businesses and pay taxes from the profits. They are not intended to play the role of financiers for community welfare systems. Such expectations to them are, by the nature, unreasonable. Alternatively, I would argue that it may be reasonable for the government to directly secure people’s lives.
The causes of poverty are joblessness, inability to work due to illness or other conditions, low wages even in employment, and other reasons. Although Japan’s unemployment rate has been increasing during the recent economic stagnation, it has stayed at around 5 %, low when compared with those of other developed countries whose unemployment rates are around 10 %. Meanwhile, Japan’s poverty rate, as often pointed out, is close to that of the United States among the developed countries. This means that there are many “working poor” (low-paid employees) in Japan. This phenomenon has been supposedly impermissible in developed countries, because evidence of capitalism’s advantage when compared with socialism is that people willing to work are employed and paid enough to enjoy decent lives. One may be poor because he/she is lazy or ill. The former is deemed as an example of self-responsibility. The latter can be easily remedied with measures by the government. Thus capitalism functions well. This has been the basic justification for capitalism.
Costs of useless works
Let’s think the matter through simply. To be poor is to have little or no income. If so, the government should directly provide cash aid to the poor, i.e. the government pays basic incomes at a certain level to everyone. This is the most assured way to eliminate poverty in a country.
One may argue against this by saying that everyone would quit working to earn money, or that because working creates one’s self-respect and discipline, such a scheme would ruin the mechanism forming society.
Such abstract discussions are not useful. Let’s look at what the government has been doing. It has been promoting public works projects in order to maintain local employment. Let’s take the Yamba Dam project for example. When one looks at the huge bridge footings built near to the dam-building site, one may suppose that a large number of jobs have been created during the building of the bridge. As a matter of fact, the total amount of budget for this project is 460 billion JPY [around 5.4 billion USD](*), expended appropriation of 320 billion JPY [around 3.8 billion USD] and backlogged of 140 billion JPY [around 1.7 billion USD]. Further more, additional budget of 100 billion JPY [around 1.2 billion USD] is needed to continue its construction. In reality, however, almost all of the budgets have been spent on steel and concrete. In spite of this huge amount of budget, the dam’s utility or necessity is still a focus of discussion. Even in such a large construction project, local construction businesses have little involvement. Complex jobs can only be performed by talented persons. Such talents should have been utilized for other more necessary projects. The costs of useless projects performed by talented persons are much higher than not having them work at all.
(*) Translator Note: The conversion rate is set at 1 USD=85 JPY.
Or, let’s track back to China during the Great Cultural Revolution. It took superior capability for people on both sides: people who survived the rough time in the fear of being purged as anti-revolutionaries; and on the other hand, people who tried to move up the ladders in the oppressing force. Their talents were spent on useless activities and contributed to nothing to increase the wealth of the country. It becomes clear by comparison between the poverty of China during the Cultural Revolution and the great increase in wealth produced after the Cultural Revolution. Useless works are more sinful than doing nothing.
One may argue against me, saying that I am trying to convince readers of a general issue by presenting extreme examples. When you examine the public works projects throughout the nation, however, you will admit that I am not presenting the case of the Yamba dam project as an extreme example. The state would be much better off directly providing people with incomes rather than designing and implementing useless works projects expending excessive budgets.
In my view, because the Japanese constitution in its article 25, in fact, provides that “All people shall have the right to maintain the minimum standards of wholesome and cultured living”, people’s incomes should be ensured unconditionally. Although article 25 requires ensuring a subsistent level of life, it does not require doing so by increasing other people’s burdens.
Japan Has Sufficient Revenue for Direct Payment of Basic Incomes.
Whether for or against Basic Income idea, it is natural for people to question if we at present have the revenues to directly provide basic incomes. Therefore, I will answer this question first. The Japanese government used use to try to ensure people’s living by forcibly creating public works programs, providing aid for agriculture and small businesses and so on. There are, of course, policies to ensure the right to a living, such as welfare public assistance and others. How much budget is allocated to these policies? If such budget were allocated to direct provision of incomes to people, how much could we benefit? (My following estimation is based on the budget for the FY 2009 unless otherwise noted.)
The central government’s budget for public works within the general account was 7 trillion JPY [around 82.6 billion USD]. When including budgets for the same purpose within the special account and municipal governments, i.e. on the basis of National Economic Accounting, the total budget amounts to 19.6 trillion [around 231 billion USD] (FY 2008). The budget for agriculture aid within the general account amounts to 2.6 trillion JPY [around 30.7 billion USD]. Municipal governments had agriculture expenditure of 3.9 trillion JPY [around 46 billion USD], according to a survey by the Ministry of Internal Affairs and Communications published in 2007 (the budgets referred to hereafter are derived from the same source). Because most of the central government’s agriculture budget is allocated to subsidies for municipal governments’ agriculture aid, it is natural to assume that the total budget for agricultural aid in Japan amounts to around 3.9 trillion JPY [around 46 billion USD]. The budget within the general account for small business sheltering amounted to 200 billion JPY [around 2.36 billion USD], along with the municipal governments’ budgets for the same purpose of 4.9 trillion JPY [around 57.8 billion USD]. The welfare-public-assistance budget of the central government amounted to 2.1 trillion JPY [around 24.8 billion USD] along with 18.7 trillion JPY [around 220.7 billion USD] for social welfare expenses. These budgets of 47.1 trillion JPY [around 555.8 billion USD] were expended, in effect, to help the poor. Let’s suppose that we cut the budget by half and allocate the half, 23.6 trillion JPY [around 27.8 billion USD] for financing basic incomes for people. Furthermore, 2.4 trillion JPY [around 28.3 billion USD] of the public expenditure for unemployment insurance can be added to the revenue. Thus, 26 trillion JPY [around 306.8 billion USD] in total, could be used to directly ensure basic incomes for people.
Setting the level of a basic income and its grounds
According to the Comprehensive Survey of Living Conditions (2007), the number of households with annual incomes under 1 million JPY [around 11,800 USD] is 2,980 thousand; 5,620 thousand under 2 million JPY [around 23,600 USD]. The per capita income in average of the households under 1 million JPY was 380,000 JPY per month; 870,000 JPY [around 10,300 USD] under 2 million JPY [around 23,600 USD]. Based on an estimated average head-count in a household, there were 3.9 million people with an annual income of 380,000 JPY [around 4,484 USD]; 9.65 million people with 870,000 JPY [around 10,266 USD]. When we assume that a half of 9.65 million people had an annual income less than 870,000 JPY, the number of people with an annual income under 870,000 JPY was 8.73 millions. (9.65 million/2 + 3.9 millions = 8.73 millions).
The 8.73 million people might have an annual income over 380,000 JPY [around 4,484 USD]. Therefore, we need to pay 8.73 million people 490,000 JPY [around 5,782 USD]. It is the gap between 870,000 JPY and 380,000 JPY. Its total cost is only 4.3 million JPY [around 50.7 billion USD].
To counter the criticism that any basic income would damage people’s work incentive, we would be better to design a system in which people who are paid subsistence basic incomes may earn additional income through their jobs. In my sample system, if a person who is paid a basic income of 70,000 JPY [around 826 USD] a month earns 50,000 JPY [around 590 USD] a month through his/her job, he/she is taxed on only the earning of 50,000 JPY [around 590 USD] at the rate of 30 %, leaving 35,000 JPY [around 413 USD] other than 70,000 JPY [around 826 USD] at their hand as a net income. Let me proceed to a more detailed design of the system and an estimation of the cost.
Basically, the annual income of every person will be {(his/her earning×0.7) + (given basic income of 840,000 JPY)} a year. People without their own earnings will be paid a basic income of 840,000 JPY. Every one will be taxed on their own earnings at the rate of 30 %. If their own earnings reach 2.8 million JPY [around 33,000 USD], they will have to pay a tax of 840,000 JPY. This equals the amount of their given basic income of 840,000 JPY [around 99,100 USD].
Here, I set the level of the basic income at 70,000 JPY [around 826 USD] a month (840,000 JPY a year [around 9,900 USD]). Let’s compare this amount with the existing cash payment for welfare. Under the present public assistance system, a married couple living in Tokyo receives 190,000 JPY [around 2,220 USD] a month including housing allowance. Wiping out this benefit to substitute it with a basic income will greatly reduce the amount of their benefits.
This reduction can be justified by the following reasons. First one is the relatively high level of current Japanese welfare public assistance. It is higher than the equivalent benefits in UK, France and Germany by 20 % to 30 %. (See my “Why is Japan poor?” Tokyo, Shinchosha Publishing, 2009, p.92). The present level of welfare public assistance is 120,000 JPY [around 2,160 USD] for a single person, 190,000 [around 2,242 USD] for a married couple. If these benefits are replaced with basic incomes of 70,000 JPY a month, single persons’ income will be reduce to 60%, married couples to 70 %, of the present level. The reduced levels of benefits are almost the same as the above exemplified countries. Secondly, the real coverage rate of the welfare public assistance scheme in Japan is much lower to stay at only 0.7 % of the total population. Professor Toshiaki TACHIBANAKI at the Doshisha University estimates that 13 % of the Japanese population lives with incomes below the criteria of the welfare public assistance system. (See his “The Gap Society,” Tokyo, Iwanami Shoten Publishers, 2006, p.18.) Even at the modest level, it is an urgent task to institute a basic income scheme to cover as many people as possible in need. Thirdly, it is evidence of the high level of Japan’s welfare public assistance that the so-called “Hinkon [povery] Business” is now thriving in Japan, in which criminal groups provide small rooms for poor people, mostly homeless people, and facilitate them to apply to and obtain welfare public assistance, and then poach large portion of the benefit as a commission and room rent.
A Concrete Framework of a Basic Income scheme
Here, I present a basic income scheme which the government would directly deposit 840,000 JPY [around 9,912 USD] as a basic income every year in the account of every adult regardless of marital status or number of nonworking dependents. In return, almost all tax credits under the present income tax systems, including basic allowance, and others for spouses and dependents would be cancelled. The existing “Children Allowance” scheme would continue, however the Dependent Children Allowance would be cancelled. As for those over 65, the existing pension systems would continue to cover them. (The basic proportions of the existing pension systems, the integration of which is now being debated, should be financed by tax revenues. But this issue is to be discussed elsewhere.) Thus, all Japanese adults between 20 and 64 (74.76 millions of the Japanese population of 127.5 millions as of 2009) would be given basic incomes and it would resolve the poverty problem of Japan. The total budget for this scheme to rescue people from poverty would be 63 trillion JPY [around 743.4 billion USD]. Next we will look at a national income survey.
According to the “National Economic Accounting 2008” published by the Cabinet Office, the total employment income in 2008 was 262 trillion JPY [around 3.09 trillion USD], and the total mixed income was 17 trillion JPY [around 200 billion USD]. (Mixed incomes consist of fruits from self-employed workers’ assets and their own work.) If the government taxes on this 262 trillion JPY at the rate of 30 %, 79 trillion JPY [around 932.2 billion USD] will come into its revenue. The gap between 79 trillion JPY and 63 trillion JPY needed for the basic income provision is 16 trillion JPY [around 188 billion USD]. This 16 trillion JPY equals the total revenue of the government from the individual income taxes at the present level. In the case of a household formed by a husband with an annual income of 5.6 million JPY [around 66,080 USD] and a wife with no earnings, they would be paid 1.68 million JPY [around 19,800 USD] in total per year as a basic income, and would pay the same amount of income tax (at the rate of 30 %). Their income tax would be zero in effect. Under the present tax system, however, the same husband is entitled to a deduction for employment income, spouse, dependents, and a basic deduction. Thus, his tax burden is only 100,000 JPY [around 118 USD] or more. As I mentioned earlier, we already have 26 trillion JPY [around 307 billion USD] coming from cutting expenditures for the public works projects and subsidies for agriculture and small businesses, welfare public assistance, and the public burden for unemployment insurance. With this revenue, a basic income scheme is affordable enough in today’s Japan.
The estimated financial costs for each income class are shown in the table below. The indicated incomes are not those of households but individuals. Under my proposed basic income scheme, everyone from the age of 20 to 64 would be paid 70,000 JPY per month or 840,000 JPY per year in their bank account regardless of their marital status. There would be no dependents exception in the tax system any more. 12.6 trillion JPY [around 148.7 billion USD] would be paid to 14.97 million persons with no income. 5.8 trillion JPY [around 68.4 billion USD] would be overpaid to the class with incomes under 1 million JPY. This amount is the difference between the basic income (840,000 JPY) they will get and their tax duty at the rate of 30 %.
Although it entails a budgetary cost of 15.6 trillion JPY [around 184.1 billion USD], this basic income scheme would wipe out the welfare public assistance and greatly curtail the budgets for public works projects, and aid for small businesses and agriculture. The basic income scheme is affordable with expenditure of 15.6 trillion JPY, significantly lower than current 26 trillion JPY [around 306.8 billion USD] for these existing schemes and works. The basic income scheme would also prevent intervening in the labor market such as extreme increases of the minimum wage and prohibition of labor dispatch services. This is because workers’ income would be secured by the basic income scheme.
The difference of 10.4 trillion JPY [around 122.7 billion USD] between 26 trillion [around 306.8 billion USD] and 15.6 trillion JPY [182.9 billion USD] would be available for many other objectives: support for the aging population, financial rehabilitation, income tax reduction, national economic stimulus and so on.
by Yannick Vanderborght | Jul 30, 2011 | Research
In a new book, Guy Standing develops a theme that has underpinned his advocacy of a basic income since the 1980s. There are many rationales for supporting a basic income, but effective political pressure may emanate from the emergence of a new mass class, the precariat. It is a dangerous class; not yet a class-for-itself, in the Marxian sense, but a class-in-the-making, in which distinctive groups are torn politically in different directions.
Those in the precariat – and the millions who fear they could fall into it – are characterised by having insecure lives, in and out of short-term jobs, with volatile and generally low incomes. What stands out most is that they lack a secure occupational identity, and have no sense of control over their work, labour, recreation and leisure.
The relevance for basic income arises because the precariat’s economic insecurity is chronic and is mostly uninsurable. In a globalising market economy, the precariat faces systemic uncertainty and exposure to threatening hazards and shocks. Social insurance cannot provide basic economic security in such circumstances. But in any case governments have increasingly resorted to means-tested social assistance, ‘targeting’ on the so-called deserving poor. Even with tax credits, this has generated well-known poverty and unemployment traps, whereby those in the lower echelons of labour markets face marginal tax rates close to 100%, prompting moral and immoral hazards.
It has also led to a proliferation of precarity traps, whereby anybody losing a job or income must enter a debilitating process of trying to obtain state benefits, during which time they have no income and build up debts. If they do obtain benefits, they will be disinclined to take a temporary low-wage job in case they have to start the process all over again.
The precariat consists of three groups. First, there are progressives, mostly consisting of frustrated educated youth, intellectuals and others who resent the insecurity and lack of occupational opportunity. They embrace various non-conformist lifestyles. It is this group that has been filling the squares in protests against the austerity programmes that have followed the financial crisis. They reject old-style social democracy while looking for a redistributive strategy that would give people like themselves basic economic security in which to build their lives. They openly support a basic income, even if some have to be alerted to the feasibility of it.
The second group in the precariat is anomic, politically detached, including many morally defeated people, as well as migrants keen not to be noticed by the authorities, many of the so-called disabled and many who have been criminalised. This group could be mobilised to support a basic income, but would have to feel they were moving from a denizen status to citizens in order to feel it would be something for them.
The third component of the precariat is what makes it the dangerous class. It consists mainly of those falling from the old working class and the partially educated condemned to a life of insecurity. This disparate group listens to populist politicians offering variants of neo-fascism, a far-right agenda depicting government as against them and strangers, notably migrants, Muslims and ‘liberals’, as the cause of their insecurity.
The far-right is gaining ground in country after country, often at the expense of social democrats. The trouble is that the latter has not offered the precariat an attractive vision, and are paying the political price, deservedly. But here, paradoxically, there is reason for some optimism. Increasingly, we may see that those wishing to be centre-left politicians will have no alternative to offer other than a universal basic income, if they want to foster an economically secure citizenry and to reduce inequality.
That is why the book ends on a mildly optimistic note. However, it goes one stage further, which may be controversial for basic income supporters. The argument is that the commodification of politics combined with the growth of an increasingly angry and active precariat have accentuated the thinning of democracy and the erosion of deliberative democracy. In that context, it advocates a basic income in which every adult on establishing eligibility makes a moral commitment in writing – not a legally binding one – to vote in general elections and to attend at least one local public political meeting each year.
Strengthening deliberative democracy will surely be a vital part of a new progressive politics in which the precariat would feel an integral part of society. That is consistent with the values that have guided BIEN for the past twenty-five years.
Guy Standing, The Precariat – The New Dangerous Class, has just been published by Bloomsbury, and can be ordered online.
by Guest Contributor | Jul 25, 2011 | Opinion
By Kelly Ernst
Open a newspaper and you are likely to read that the Canadian economy is ramping up. Oil is up, the dollar is up, and employment is up. Yet on the streets we hear that things have not changed substantially for many people and for a very long time.
Statistics Canada data confirm that the highest-income people are earning more, while lower-income Canadians are not faring better. So where is the debate on new policy initiatives that could reverse such disparity across the income spectrum?
Growing disparity
It is easy to find reports of economic well-being but the fact remains that economic disparity is growing at a worrisome rate.
The Organisation for Economic Co-operation and Development (OECD) has pointed toward Canada as an example where “the rich have been getting richer leaving both middle and poorer income classes behind … Canada spends less on cash benefits such as unemployment benefits and family benefits … as a result, taxes and transfers do not reduce inequality by as much as in many other countries.”
Consequently, up to 14 percent of Canadians now live in poverty. Even in wealthy Calgary the working poor now number as many as 140,000 people.
The reports about how well our society is doing economically ignore the reality of the many people who are falling farther and farther away from those with wealth.
What’s wrong with income disparity?
To say that economic disparity is bad for all of us, not just the poor, is not particularly revolutionary. Richard Wilkinson and Kate Pickett, in their book The Spirit Level, bring together a wide variety of evidence showing that countries with greater disparity have lower life expectancy, higher teenage pregnancies, higher infant mortality rates, higher rates of crime and homicides, greater imprisonment rates, and lower social mobility. The conclusion seems unavoidable: we ought to be tackling growing disparity to eliminate the harm it causes to all of us.
Back to basics
One policy worth considering is a guaranteed basic income level for all citizens. Although there are many approaches, a guaranteed annual income (GAI), has been described as a promising method.
A GAI provides enough income to ensure families can pay for their basic needs, such as housing, food, clothing, and transportation, without needing expensive government supports to monitor it. Senator Hugh Segal has argued that a negative income tax program could be used to deliver the GAI. For those who file taxes and earn below a particular threshold a grant would be delivered to them. This would phase out as they begin earning self-sustaining incomes. If unconditionally applied to all citizens, it might eliminate much of the poverty in Canada as well as the discrimination in adjudicating the “deserving” and the “undeserving” poor.
Segal suggests that GAI would reduce many costly provincial and municipal support programs (such as welfare, employment insurance, food banks, homeless shelters, and many health services) that are currently used to address poverty. Because it would be universally applied through tax returns, the GAI eliminates the need for monitoring elaborate qualifying rules. It attacks core poverty without needing swarms of additional bureaucrats and may well result in a diminished bureaucracy.
Canadian evidence
Recent studies by Evelyn Forget based on evidence accumulated from a basic income trial in Manitoba in the 1980s suggest that a minimum income program leads to greater levels of post-secondary education plus fewer health and other costs associated with poverty. Rather than acting as a disincentive for people to find work – a criticism often leveled against a guaranteed income – the Manitoba trial showed that the program provided opportunity for people to upgrade their education and opened new employment opportunities to them.
Canada currently offers a minimum Guaranteed Income Supplement (GIS) to seniors with low incomes. The GIS is often cited as a policy success because it keeps many seniors out of poverty who would otherwise experience extreme hardship. Similar programs have been suggested for people with disabilities, students, or single women with children pursuing educational upgrades.
Contrary to critics of a basic income policy who suggest it would be prohibitively expensive, its implementation may be quite affordable – especially in comparison to funds expended on recent economic stimulus. For example, Canada spent $47 billion in 2009-10 on stimulus infrastructure spending. This is five times more than the $8.3 billion spent in 2010 on GIS for 1.6 million seniors. We spent substantially less on direct supports for people entering the work force: $1.3 billion for approximately half a million people accessing student loans and grants.
The billions spent on infrastructure rather than expanding Canada’s existing GIS was a conscious policy decision in response to the economic downturn. The main impediment to helping the poorest Canadians climb out of poverty is not that a basic income policy would be unaffordable but that we lack the political will to consider such a solution.
Policymakers should consider basic income benefits
Consider a GAI applied to students in postsecondary education. If we supported low-income students through school, they could complete their education debt-free similar to how many higher-income Canadians now complete their education. A GAI would allow access to education for diverse groups of people who are least able to afford it, simultaneously help to reduce economic disparity by improving their employment prospects, and reduce governmental costs associated with student granting programs.
A GAI could give the opportunity to students to invest savings immediately upon entering the workforce and foster compounded wealth accumulation both individually and on a macro scale. Such early investment by young people could significantly reduce the need to pay seniors’ pensions later in life.
This is only one example of how a basic income policy might help encourage people to sustain themselves, reduce the cost of poverty to taxpayers, and simultaneously reverse the societal impacts of deepening disparity.
Without serious discussion of economic disparity, its consequences, and possible solutions, we will never determine how to mitigate poverty’s deleterious effects to all of us. If we think economic disparity ought to be addressed, then we have an ethical obligation to ask our policymakers how they plan to do it.
Kelly Ernst is Senior Program Director at the Calgary-based Sheldon Chumir Foundation for Ethics in Leadership.
by Yannick Vanderborght | Jul 8, 2011 | News
According to the article “BIG can benefit orphans and vulnerable children”, which was witten by Johanna Absalom and published on 8. July 2011 in the Namibian Economist, Dr Henry Platt, executive director of the Church Alliance for Orphans and Vulnerable Children (CAFO), said:
BIG provides an answer to the national crisis of poverty and unemployment, which in turn, affects the daily lives of orphans and vulnerable children. We call on the government and the citizens of our country, especially to people of faith, to support this initiative, seeing that poverty and unemployment are some of the social concerns that affect the future of children. This is also because poverty is the root causes of vulnerability for many of the issues surrounding children, hence, the intervention has the potential to elevate life chances of OVCs.
It is time to seriously consider the speedy implementation of BIG as a tool to alleviate the poverty trap, though we know it is not a total solution when in isolation. It offers a spread of money into the hands of all people, bringing about a deeper sense of integrity.
The current systems in place do not sufficiently address the large scale trap of poverty. This situation disadvantages children the most. Unfortunately, the wealth is in the hands of a fortunate group, while the greater part of the community is out.
The best investment in the long run is on education. Under the new Minister, great strides towards the right direction have been made. But, there are still many areas to consider on our journey to free our children for a better future, especially the root causes. We need to reach them all, through education, psychosocial support, food and nutrition, to name but a few of core critical services to OVCs.
Full article:
https://www.economist.com.na/index.php?option=com_content&view=article&id=23685:big-can-benefit-orphans-and-vulnerable-children&catid=587:community-and-culture
