Canada: time for a Basic Income?

Canada: time for a Basic Income?

by | Apr 20, 2020 | News

Canada is taking measures to face the Covid-19 pandemic. The situation requires, together with radical and fast actions in medical terms, radical and fast actions in economic and social terms.

The introduction of a Basic Income has been a topic for years in Canada and with the current crisis, it is showing even more possible benefits. While one can always approach a private money lender for emergencies, having a basic income can better sort the situation.

On the 18 March the Prime Minister, Justin Trudeau, announced the federal response to the crisis: a $82 billion relief plan which allocates $27 billion in direct support and $55 billion to help businesses liquidity through tax deferrals. So far, the Opposition parties have been supportive, especially the New Democratic Party which is pushing the Government for more generous and comprehensive measures.

The Canada’s Covid-19 Economic Response Plan includes a temporary boost to Canada’s Child Benefit payments, a new emergency Care Benefit to provide income support to workers, the Canada emergency response Benefit (CERB) and other targeted measures. The CERB is a monthly payment of 2000$ a month for a period of 4 months that will go to any worker who earned at least 5000$ in the past 12 months and has suddenly lost their job as a result of the pandemic. The Government has estimated that more than 2 million Canadians will receive a temporary Basic Income through the CERB. Understandably, Basic Income advocates have stressed the desirability of a more universal approach, as opposed to the long list of targeted measures such as those above, which can represent a cost in terms of classifying the beneficiaries due to long and sometimes bureaucratic processes. They have pressed for keeping a Basic Income model which can last after the pandemic is over, because Covid-19 will probably not be the last major setback to the Canadian economy. The next time it could be the shock from climate crisis or technological unemployment.

The CERB is not the first measure something like a Basic Income that Canada has experienced. An experiment called a Basic Income pilot was introduced in April 2017 by Kathleen Wynne’s liberal Government. The program consisted in monthly payments for 4000 randomly chosen individuals living under the poverty line, without work conditions, in three communities in Ontario. The program, originally stated to be for 3 years, ended prematurely, but showed interesting effects: the majority of the people who had low wage jobs before the trial remained in the workforce. Many went back to school, and mental health improved. The payments were like a Basic income in that they were not work-tested, but because they were income-tested and based on the structure of the household, the experiment was not a Basic Income pilot experiment.

The Basic Income Canada Network has proposed some options for Canada: among them there is cash transfer based on household income for 18-64 year olds people, of $22.000 per year ($31.113 for a couple) that decrease gradually as other income increases. This would be similar to the Ontario experiment, and so not strictly a Basic Income, but the report does model a fully individual, universal basic income option.

The time for Basic Income may have come and Governments around the world are implementing measures to address the financial fallout of the Covid-19 crisis. To many, a Basic Income – regular payments to individuals that are not work-tested or means-tested – may sound radical, but it might be the most rational thing the Government can do for Canadians.

.

French Movement for a Basic Income: Basic income – the emergency for more social justice

French Movement for a Basic Income: Basic income – the emergency for more social justice

by | Apr 10, 2020 | News


In the current context of a global pandemic, the universal basic income (UBI) policy has been gaining ground all over the world. Given this sudden raise of awareness about UBI, it was important for the French Movement for a Basic Income (MFRB), as well as 40 other French civil society organizations and public figures, to highlight the importance of having a real democratic debate around its implementation.

These UBI advocates support the idea of basic income, but not at all costs. Basic income finds itself at the crossroad of two very different paths: it can either be included in a series of measures aiming at promoting a social and environmental transition, or it can be a plaster to the current neoliberal system. In the French context, where the social protection system has been strong for the past decades, but which has also been attacked in recent years, the risks of having UBI used politically to weaken established social rights are also important.

That is why the implementation of a real protective basic income must not only be about the economy, but be an outgrowth of a real democratic debate. That to make sure it will help reduce inequalities, reinforce labor rights and help create social protection systems. And to improve working conditions of the “essential jobs” that are currently underpaid and at the frontline of the sanitary crisis. It shall also be used to question the relevancy of “bullshit jobs”.

The strength of UBI has always relied on its capacity to promote debates on an extremely wide range of topics. Today, more than ever, it is crucial to debate collectively about the society we want in the aftermath of this crisis.

 

The original article [in French]:

Colective at MFRB, “Revenu de base: l’urgence d’une société plus solidaire [Basic Income: the urgence of a more supportive society]”, Politis, April 2nd 2020

Spain may issue ‘permanent’ basic income to fight COVID-19

Spain may issue ‘permanent’ basic income to fight COVID-19

by | Apr 7, 2020 | Opinion

Reports are emerging that Spain is hoping to deploy a “permanent” basic income type program in the near future. The program comes as Spain aims to respond to the economic crisis from the global coronavirus pandemic.

Spain has one of the worst coronavirus outbreaks in the world with over 13,000 deaths.

Spain’s push for establishing basic income as a “permanent instrument” that “stays forever” will help reduce financial anxieties for many families worried about their jobs. Sending cash to families rather than corporations will better ensure economic security for the most vulnerable.

However, questions remain about the nature of the program and whether it will be truly universal and unconditional.

If Spain successfully implements basic income, it will become the first European country to implement the program on a national scale and one of the only places in the world to do so.

Finland famously experimented with a basic income pilot program. The experiment made recipients happier and healthier. Nonetheless, some government officials were upset the basic income pilot did not significantly affect employment status within a year for recipients.

Nadia Calviño, Spain’s minister for economic affairs, said the payments will be targeted to families and will differentiate based on their “circumstances.” In practice, differentiating based on circumstances will result in means tests that fall on the poor. If there are strict criteria, then some families who need assistance may be unnecessarily excluded or have their assistance delayed.

A better system is presuming each individual qualifies and allowing wealthier individuals to opt-out. If an individual who received basic income has a large income by the end of 2020, the government can phase out their basic income through the income tax system the following year.

Universality helps the poor, not the rich. It ensures all those who need assistance can receive it immediately. The true costs of universality are lower because it requires less administration and bureaucracy to implement the program.

Common Arguments Against Basic Income Don’t apply to the Emergency BI

by | Mar 27, 2020 | Opinion, The Indepentarian

‘Most economists will agree that the economy needs injections of cash right now.’

The economy needs injections of cash right now

The Guardian newspaper asked me to write an opinion piece about the Emergency Universal Basic Income (UBI). They changed my headline but otherwise, printed it as I wrote it.

America is in crisis. We need universal basic income now. By Karl Widerquist, the Guardian, 20 Mar 2020

I’m reprinting it here in full:

A few members of Congress recently have suggested that the United States government institute an emergency Universal Basic Income (UBI) in response to the twin crises of coronavirus and the stock market collapse, which many economists believe could signal the start of a significant recession. UBI provides an unconditional sum of money from the government for permanent residents whether or not they work. Proposals for an emergency UBI vary. One common suggestion from lawmakers is $1,000 a month for adults and $500 a month for children for four months or more if the coronavirus persists. This amount would be an enormous help in this crisis.

 

I’ve studied UBI for more than 20 years, and I find that opposition to it usually comes down to two main arguments: that everyone should work or that we simply can’t afford it. Whether these are valid or invalid arguments against UBI in normal times has been debated for decades, but they simply don’t apply to the emergency UBI during the current situation.

 

Right now, we don’t need everyone to work. In fact, we need a lot of people to stop working. We don’t want food service and healthcare workers who might be sick to go into work and infect people because they can’t afford to stay home. In an economy where millions of people live paycheck-to-paycheck, an emergency UBI would give non-essential employees the opportunity to stay home during the coronavirus outbreak, slowing the spread of the disease. The more people we have who can afford to stay home the better off we’ll be, at least for the duration of the outbreak.

 

Most economists will agree that the economy needs injections of cash right now. When economies slide into recession, there is a “multiplier effect” as people lose their jobs and businesses contract, they spend less. Other people then lose their jobs or contract their businesses, and this multiplier effect continues. The economy shrinks, income declines, and money literally disappears from circulation.

 

Governments can help stop this process by creating money and injecting it into circulation. After the 2008-2009 economic meltdown, the United States government and governments around the world created trillions of dollars worth of currency out of thin air and injected it into the economy, usually by buying back their own debt, in an effort to stimulate demand and reverse the multiplier effect. Buying back government debt isn’t necessarily the best way to stimulate the economy, however. The money goes mostly to people who are already rich, and they have very little incentive to invest that money when everyone else is losing income.

 

An emergency UBI is just about the best economic stimulator that exists in modern times because it gets money in the hands of everyone. No one’s income would go to zero due to stock market-related layoffs or corona-related precautions. That income helps people maintain some of their spending, which helps prevent others from losing their jobs through the multiplier effect.

 

Congress should act now. An emergency UBI, providing $1,000 per adult and $500 per child, per month, for four months or as long as the outbreak lasts, can help everyone get through this critical time. The sooner our government acts, the sooner we start to recover. We don’t know how bad coronavirus will get. We shouldn’t have to worry about how we will be able to buy food and pay rent as well.

 

 

The economy needs more money and less labor.

 

We need people to spend money.

 

And we don’t need them to work for it.

 

 

CNBC Interview of Karl Widerquist on Emergency Basic Income

by | Mar 24, 2020 | News, Opinion, The Indepentarian

Annie Nova, “How the Trump cash infusion would help millions of Americans: Interview with Karl Widerquist.” CNBC, Mar 18 2020

Coronavirus precautions in California

Empty streets in California

Annie Nova, of CNBC, recently interviewed Karl Widerquist to ask about proposals for an Emergency Universal Basic Income during the twin crises of the coronavirus and the stock market meltdown. Some people have seen the latter as a positive thing, however, with intrepid sorts jumping onto the market after reading some robinhood app reviews and learning the way it works.

To prevent millions of Americans from running out of money amid the coronavirus, the government has announced plans to send out checks to them soon.

When Treasury Secretary Steven Mnuchin made the announcement about the cash infusion on Tuesday, universal basic income proponents felt validated. Now, the group of those calling for such a policy, if only in a temporary rendition, is quickly growing. Already some 1 in 2 Americans say they support a program in which the federal government sends out regular checks to everyone, regardless of their earnings or employment.

Tech entrepreneur and former candidate for president Andrew Yang centered his campaign on a $1,000 universal basic income. He dropped out of the Democratic primary last month, but now the hashtag #YangWasRight is taking off on Twitter.

As the pandemic forces schools and businesses to empty, Democratic senators, including Cory Booker of New Jersey and Sherrod Brown of Ohio, have called for immediate $2,000 payments to adults and children below a certain income threshold. Meanwhile, Sen. Mitt Romney, R-Utah, proposed giving every American adult $1,000.

CNBC spoke with Karl Widerquist, an associate professor at Georgetown University-Qatar and a founding editor of the journal, Basic Income Studies, about how a cash infusion could help Americans. (The interview has been edited and condensed for clarity.)

Annie Nova: Why do you think the Trump administration is considering sending cash directly to Americans?

Karl Widerquist: Some people have no other choice but to go to work, whether they’re sick or whether their child is sick, and it’s really not good to keep this threat over the heads of our entire working class. But the economy needs money and it needs money to go into the hands of people who will spend that money.

AN: Why is this policy preferable to the payroll tax cut the administration was also considering?

KW: The payroll tax is slower to take affect and it only effects formal workers. Informal workers, contract workers, the self-employed, single parents, children and the homeless need this money more than anyone else, but they’ll be left out by the rebate.

AN: How would a cash infusion make this less of a crisis?

KW: In very important ways. You’ve got a bunch of people who’ve been told, ‘Don’t go to work. Stay home. We don’t need you to wait tables and cook meals.’ And these people need to eat. That’s the first line. But it also has ripple effects across the entire economy. The stock markets are tanking, in such an enormous and rapid rate, that it implies we’re going into a very steep recession right now. During a recession, not everyone can find work, but we need them to keep up their spending because when they don’t spend, then the businesses where they buy stuff, they lose money and they go out of business. That increases unemployment. It’s what we call in economics a multiplier effect. So a universal basic income is going to keep people working by keeping people spending.

Annie Nova

Annie Nova, CNBC

AN: These proposals often call for giving children money, too. Why?

KW: We give money for children because that’s why parents work. Parents have to go into work because their children need food, shelter and clothing. They need to pay the rent for the rooms in which their children live. If a bunch of people are having to stay home from their jobs, if they’re unable to pay their rent and if they’re unable to buy food, their children are going to suffer.

AN: Sen. Romney recommended a $1,000 payment. Some Democrats up to $4,500. How much is enough?

KW: Replacing people’s entire income is not necessarily what you want to do. That preserves existing inequality. If I’m staying home from my $100,000 a year job as a university professor, and the person next to me is staying home from their job as a minimum-wage dish washer, I shouldn’t get any more than they do. What you want to do is stop income from collapsing, and the best way to keep it from collapsing is to make sure everybody has a minimum amount.

AN: What could go wrong with the payments?

KW: I’m a little worried about the conditions. When you put conditions on at a time like this, when we’re in an emergency, there are problems. You waste money on figuring out who’s eligible and who isn’t and then you make mistakes. You’re going to give it to some people who don’t deserve it, and you’re going to deny it to some people who do.

AN: You have politicians on the left and right getting behind this cash infusion. Does that surprise you?

KW: The increasing polarization in this country is really sad to see. Hopefully, once in a while, we still can pull together. Both sides of the aisle are recognizing this is really a double crisis, with coronavirus and the stock market collapse happening all at the same time.