by Kate McFarland | Nov 20, 2016 | News
Eight, a charitable organization based in Belgium, is preparing to run a basic income pilot in Uganda (as previously announced in Basic Income News). The two-year pilot is set to launch in January 2017, and will form the basis for a documentary.
Documentary filmmaker Steven Janssens and sociologist Maarten Goethals founded the charity Eight in 2015, with the vision of reducing global inequality and allowing all people the opportunity to flourish. Eight euros per week is the amount needed to provide a basic income for one adult and two children in impoverished areas, such as parts of Uganda.
According to Janssens, the founders were inspired partially by their own experiences in work and travel, and partially by research and writing on basic income — including the writings of Philippe Van Parijs, Sarath Davala and Guy Standing’s book on the Indian basic income pilots (Basic Income: A Transformative Policy for India), Rutger Bregman’s Utopia for Realists, Eldar Shafir and Sendhil Mullainathan’s Scarcity: Why Having Too Little Means So Much, and the results of other basic income pilots, such as those in Dauphin and Namibia.
Two-Year Pilot of Village-Wide Basic Income
As a first step towards its vision, Eight is preparing to launch a pilot study in the Fort Portal region of Uganda in January 2017. The two-year pilot will involve the distribution of unconditional cash transfers to all residents of an undisclosed village of 50 households.
Eight officially registered the village for the pilot in July, and marked this accomplishment by publishing video footage (a “moodclip”) from the location:
https://vimeo.com/181199016
The amount of the basic income has been fixed at approximately 30 percent of the average income of lower-income families in Uganda (read more about the decision here), amounting to 18.25 USD per month for adults and 9.13 USD for children (small changes to adjust for inflation are possible before the pilot is launched in January). Eight is cooperating with a local bank and local telecom operator to arrange for the disbursement of payments using mobile phones.
The organization will be primarily investigating the impact of the basic income along four dimensions: education participation of girls and women, access to health care, engagement in democratic institutions, and local economic development.
Anthropologists from the University of Ghent, Belgium, are helping to develop and conduct a study of the effect of the basic income, and are presently collecting data on the state of the village prior to the initiation of the pilot. They will compare these initial data with data collected during and after the basic income intervention.
Janssens emphasizes that the study is truly a pilot — intended to inform more and larger basic income trials: “Important to mention is that it is really a pilot project. From our experiences with this pilot we will learn and adjust where necessary, because in the long term we want to scale-up to more villages as our organization grows.” He adds that, after two years, “the priority of Eight will lay in the possibilities to scale up in a good way.”
Village One: The Documentary
Eight does not only plan to publish the results of the pilot study in journals. In addition, it will create a cinematic documentary, Village One, which will trace the story of the introduction of the basic income and its effects on the community over the course of the study.
Currently, Village One is anticipated to be released in October 2018. Janssens — who describes the documentary as “like a siamese twin” to the pilot — plans to disseminate it through television, the Internet, and film festivals.
https://vimeo.com/136620874
Musician and actor Jenne Decleir has already begun composing the soundtrack to Village One. In a short video, Decleir encourages others to join the cause and donate eight euros a week (“the cost of three servings of french fries, without any sauce”):
https://vimeo.com/170170494
Eight has received a sufficient amount in contributions to fund the entire first year of the pilot and two-thirds of the second. At present, Eight is still collecting donations for the remainder of the second year and the documentary.
Visit eight.world and follow Eight on Facebook and Twitter for more information.
Thanks to Steven Janssens for input on this article and Genevieve Shanahan for review.
Images & videos used courtesy of Steven Janssens.
by Dave Clegg | Nov 16, 2016 | Opinion
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.
by Furui Cheng | Nov 10, 2016 | News
Written by Cheng Furui
In the process of Chinese industrialization and urbanization, more and more rural villagers have been transformed into urban citizens. Decades of industrialization have left China with a typical dual economic structure: people who make wages live in the cities, and peasants make a living on the land in villages around them. With the rapid expansion of city suburbs, there are always some villagers in the transition zones. As they change from crop growers to wage earners, villagers will lose their land and be accustomed to a totally new way of life. An important question is how to make these large-scale unnatural transitions as smooth and successful as possible.
China provides many examples. One of the most common and successful strategies has been the establishment of cooperatives. Huaidi, one of the many successful cooperatives in China, demonstrates the effectiveness of this approach to the challenges of urbanization.
Huaidi [1] is one of the urban villages in Shijiazhuang, the capital of Hebei province in China. It has a population of around 6000. Unlike most villages around the city, Huaidi villagers initiated a deep “one-villager-one-share” cooperative from the beginning of the urbanization process. In China’s countryside, land is collective owned and privately used by villagers, in an equal fashion, as long as their households are registered in that village. In the process of urbanization, local government compensates villagers for the land which has been taken from them, paying them a single value and a specific transition fee for several years. The value partly depends on the market, and partly on the bargaining power of villagers. Under the leadership of Chen Yuxin [2], Huaidi villagers received very good compensations for their lost land in 1996, 1998 and 1999.
The success of the cooperative has come from these big compensations. In a weak organization, as is common in surrounding villages, villagers will get their money individually and make their living in the city on their own, abandoning the collective at that point. But Chen Yuxin persuaded the villagers to give up the first cash compensation, and bought back the land development rights in the future. In 1996, the Huaidi villagers collected a total of 10 million yuan [US $1,475,797] [3] compensation to build a new shopping mall. In 1998 and 1999, according to the urban plan, Huaidi land was taken by the government to build a road and a big park, respectively. In 1998, they got future development rights on both sides of the road. In 1999, they gave up a land compensation of 200,000 yuan [US $29,516] per mu (equivalent to US $44.3/m2, which is much lower than current land price) and bargained for a 33,350 m2 land patch, for their own future development. Most local governments are happy to accept this kind of exchange because of fiscal implications.
In this way, Huaidi villagers pursue their own urbanization pattern: self-demolition, self-transformation, and self-development. Under this process, villagers get more autonomy and create their own future city life, not becoming the sorrowful victims of social policy. Their core ideal is serving the city, influencing its development, and assuring a smooth transition between city and countryside. With these development rights, Huaidi villagers have amassed billions in assets, including famous and prosperous shopping centers, a decorative empire, food street, private schools, a cultural center, and other attractions. The current annual profit is about 100 million yuan [US $14.76 million]. As shareholders, Huaidi citizens now benefit from a very good welfare system.
First, every family gets identical, well decorated houses. In rural China, besides the arable land each person tends, every family has a house on a separate patch of land. In remote areas, there is also forest land per person. After the land is taken away, families get the transition fee [4] for several years, which is mainly used to rent the house they just lost, before moving into the new one. But many people have no ability to buy their own houses in the city in their lifetime. So after the transition period, every Huaidi family is placed into three or four houses, with a total area of 330 m2. They are given two choices. Under the first choice, they have three houses of 140 m2, 110 m2, and 80 m2 respectively. Under the second, they have four houses of 82.5 m2 each. All the 6000 citizens are very happy to own new houses in the city. These houses are more than enough for the whole family to live, and most can rent one apartment for several thousand yuan [more than US $400] per month. [5]
Second, every child is free to enjoy education. Huaidi villagers have built a famous private school [6], which has facilities from kindergarten to high school. The high quality of this school attracts students from outside of Huaidi, who are accepted in exchange for high fees. Every year, the school organizes various kinds of activities and interaction with other famous schools throughout the world. Teachers are proud of working there. Across the country, China has nine years of compulsory education, from primary to middle school, but Huaidi offers 15 years of free, high-quality education. This private school is one part of the villagers’ collective assets, and all their own children are exempt from tuition fees.
Third, every person benefits from healthcare. Huaidi has had a universal healthcare system since 1996. China, on the other hand, has employee healthcare only since 1998, and universal healthcare just since 2008. Nowadays, Huaidi citizens have double protection. All people are expected to participate in the national healthcare system, and the community pays the medical insurance premium for all collectively. Additionally, everybody can benefit from community healthcare if they choose. It only costs 10 yuan [US $1.48] per year, and supports the beneficiary with another 60% compensation for the money paid by oneself above 1000 yuan [US $148], up to 60,000 yuan [US $8,855], after national medical insurance reimbursement.
Huaidi citizens discussing their new apartments
Fourth, every person of age has a pension. Since 1996, every woman in Huaidi older than 50, and every man older than 60 years, have benefitted from pensions of at least 2000 yuan [US $296] per month—with larger pensions for older people. Currently, the Chinese pension system requires a minimum 15 years of contribution, whether a person is employed or not. Huaidi integrated its own pension system with the national one in 2010. People who are employed participate in the pension system via their employers. For those who are not employed, the community pays three quarters of the total annual contribution, and citizens only pay one quarter. The minimum contribution is 20% of the local per capita income in the previous year.
Fifth, every person gets a whole set of benefits in kind. Everything from rice, flour, edible oil, beans, salt, eggs, beef, pork, vinegar, soy sauce, chicken powder, milk, mineral water, to all kinds of vegetables, tooth paste, toothbrush, tea, sugar, washing powder, soap, toilet paper, cleanser, towel, etc. are distributed regularly in specific quantities, enough for everybody’s consumption, all with good quality.
Finally, all Huaidi citizens have had a basic income of 1500 yuan [US $221] per year since 1995, which is directly transferred to their bank accounts in shares of 125 yuan [US $18.5] per month. For children under 18, this money is kept in parents’ accounts. This amount money was significant in 1995 (Chinese cities’ nominal per capita annual income was about 5000 yuan [US $738] in 1995), but not as much now, due to the rapid rise of GDP in the last 20 years (in 2015, the nominal per capita annual income in Chinese cities was about 50,000 yuan [US $7,379]).
One might wonder why the people of Huaidi get some cash regularly, and unconditionally, after receiving so many benefits in kind. The answer is that the basic income gives people more freedom, especially for those who are unemployed, even though they get enough distributed food and very good social security system. Additionally, this basic income acts as prevention of social ills, reducing crimes, fights and other hurtful behaviors.
Huaidi’s welfare system is much higher than Chinese average social security level, so nobody in the community applies for social assistance. Moreover, there are a lot of other benefits, such as free newspaper, free cable, public utility subsidy, university subsidy, and so on. These welfare benefits come from their original rural collective assets, especially land. Land reform is the biggest achievement from the Mao era. This kind of basic income–often called a social dividend–comes from assets, not tax. It is more likely to be universal for a highly populous country like China.
Notes:
[1] Baidu map, “Location of Huaidi“, 2016
[2] Chen Yuxin, “Leader of Hebei Huaite Group“, 2016
[3] At October 2016 exchange rates.
[4] The transition fee and the compensation for the land, are both paid by the government to the villagers, but the real land taker (future developer) should pay to the government first. Huaidi only keeps one part of this land development rights, and the other part is sold to the developer, who is the real payer of the compensation and transition fee. It is very difficult for single individuals to make good bargains during the land taking process.
[5] It is not very common for urban families to own multiple houses. So Huaidi citizens are richer than most of their neighbours.
[6] The Private School, “Shijiazhuang Foreign Language Education Group“, 2016
More information at:
(in Chinese)
Ge Jizhong, “People’s trust“, YanZhao Evening News, February 6th, 2015
Jiang Hongjie, “An interview with Chen Yuxin“, Hall of Fame Home Online, August 14th, 2012
Other information in this article comes from the author’s field research.
Article reviewed by André Coelho and Kate McFarland
by Kate McFarland | Nov 6, 2016 | News
In the last week of September 2016, the website Ideas for India published a symposium on universal basic income, featuring essays by six well-known Indian economists.
The e-symposium was conducted by Parikshit Ghosh, Professor at the Delhi School of Economics. Contributions are as follows:
• Pranab Bardhan (University of California, Berkeley) “Basic income in a poor country“
In his contribution, Bardhan allows that a universal basic income might be unaffordable in rich countries like the US and UK. But he argues that, nevertheless, a UBI is both feasible and desirable in India. Specifically, he considers a basic income set at about 75 percent of the poverty line, which would replace some but not all welfare programs. (Bardhan mentions public education, healthcare, childhood nutrition programs, and public works employment guarantee programs as ones that are important to retain.)
In addition to countering the argument that basic income would not be affordable, Bardhan responds to the objections that the policy would undermine the value of work and that poor individuals would squander their money. He admits, however, that gaining political support poses a struggle.
Bardhan’s article is an updated and extended version of a piece written for Project Syndicate in June.
• Abhijit Banerjee (Massachusetts Institute of Technology and GiveDirectly) “Universal basic income: The best way to welfare“
Banerjee’s essay is a reprint of a piece initially published on the Indian Express in June, framed in the context of the defeat of the Swiss referendum on basic income. Banerjee argues that, despite the failure of the Swiss referendum, the debate on basic income is not over–and, specifically, India should consider UBI as a way to reduce bureaucracy and make the welfare system more efficient.
• Maitreesh Ghatak (London School of Economics) “Is India ready for a universal basic income scheme?“
In his article, originally published on NDTV, Ghatak argues that India can afford a basic income–specifically, one sufficient to bring every Indian above the poverty line–by cutting subsidies, reducing wasteful spending, and reforming the tax code. He maintains, additionally, that a basic income is not a silver bullet to eliminate poverty, and would need to be introduced in addition to (rather than in place of) other anti-poverty programs and strategies.
• Debraj Ray (New York University) “The universal basic share“
Ray develops a proposal for what he calls a universal basic share in India: a policy in which a fixed percentage of the country’s GDP is set aside to distribute to residents in the form of individual cash transfers. He admits that he has “no clue whether we have the political will to pull something like this off” but is hopeful that the ability to start with small shares might make the policy more tractable politically.
• Kalle Moene (University of Oslo) with Debraj Ray “The universal basic share and social incentives“
In a jointly authored piece with Moene, Ray expands upon the projected benefits of a universal basic share (UBS)–for social cohesion, economic growth, and even possibly sustainable development. They argue, moreover, that UBS can accomplish some of these goals more effectively than UBI.
• T.N. Srinivasan (Yale University) “Minimum standard of living for all Indians“
Srinivasan revisits a minimum income policy that was debated in India during the 1960s.
Reviewed by Robert Gordon
Photo CC BY-NC 2.0 Rishi Bandopadhay
by Kate McFarland | Nov 4, 2016 | News
The latest step to Ontario’s basic income pilot occurred on Thursday, November 3, 2016, when the Ministry of Community and Social Services released a call for public input on the design and objectives of the study and published a new comprehensive report from Project Adviser Hugh Segal.
In February 2016, the provincial government of Ontario, Canada announced a budgetary commitment to finance a pilot study of a basic income guarantee. In June, the government appointed former senator Hugh Segal — who has been promoting basic income in Canada for more than a decade — as the project’s Special Adviser. (For some of Segal’s past writings on basic income, see here.)
Segal has now released a detailed and comprehensive discussion paper in which he lays out his recommendations for the design and administration of the pilot. The government is soliciting input from the public before it makes its final decision.
This release of this proposal for Ontario’s basic income study closely follows the publication of details about the upcoming pilots in Finland and the Netherlands, as well as the charity GiveDirectly’s study in Kenya.
A Negative Income Tax Model
If the provincial government of Ontario decides to adopt Segal’s newly announced proposal, it will test a basic income guarantee (BIG) — wherein cash payments are disbursed automatically and unconditionally to individuals whose income falls below a certain threshold — as a replacement to its Ontario Works program and Ontario Disability Support Program.
Segal recommends that participants in the pilot be guaranteed a monthly income of at least $1320, or 75 percent of the province’s Low Income Measure, with an additional $500 supplement to those with disabilities.
In Segal’s proposal, the BIG is to be structured as a negative income tax (NIT), in which the amount of the subsidy is tapered off for higher earners, in contrast to a “demogrant” model wherein all participants would receive a fixed monthly payment regardless of other earnings. That is, the government would “top up” the earnings of pilot participants whose incomes fall beneath $1320 (or other level chosen for the basic income guarantee). Those who earn more than $1320 per month would receive smaller benefits or, depending on earnings, none at all.
Eligibility is to extend to all residents of the selected communities between the ages of 18 and 65, regardless of current income. All participants will be guaranteed a minimum income, as per the NIT model summarized above. However, depending on their initial and subsequent earned income, some participants may not receive any payment during the course of the experiment. As Segal’s discussion paper notes, “even though the program is based on a principle of universal access, not all participants will receive symmetric payments or any payment at all.”
Segal offers two reasons for his recommendation that the pilot test a negative income tax rather than a universal demogrant. First, this makes the design unique: no other planned trial of a basic income guarantee will employ the NIT model; thus, outside of Ontario’s pilot, no data on the impact of this specific model will be collected. Second, Segal believes that a demogrant, unlike an NIT, is not realistically affordable in Canada (nor in other developed nations).
Experimental Design
Segal recommends two types of studies:
(1) A randomized control trial, to be conducted in an urban center, in which different treatment groups receive different levels of guaranteed income and/or pay different rates of taxes on additional earned income. Subjects will be randomly sampled from all residents (of at least one year) between the ages of 18 to 65, with participation in the experiment being voluntary. Participants would then be randomly assigned to one of four groups, including a control.
(2) “Saturation sites” in which all members of a community receive the basic income guarantee (and are subject to corresponding changes in the tax schedule). Ideally, according to Segal’s report, “one saturation site would be located in southern Ontario, one in northern Ontario, and one would be chosen and planned in close collaboration with First Nations communities.”
In each case, the study is to last a minimum of three years.
Measured Outcomes
According to the discussion paper, the “core question” that Ontario’s pilot endeavors to answer is, in Segal’s words, “Is there a more humane and efficient way to reduce poverty, a way that better respects the rights of those in poverty to make their own life choices, reduces stigma and growth in bureaucracy, yet produces improved outcomes in terms of work and life prospects?”
In order to answer this question, Segal lays out many variables that he urges researchers to monitor and analyze in the pilot, including the following:
- Administrative costs or savings to the government.
- Health outcomes, as measured by (for example) prescription drug use or number of visits to primary care physicians, emergency departments, and hospitals.
- “Life choices” such as career decisions, education decisions, family decisions, and choices in living arrangements.
- Education outcomes of participants and their children, including completion, attendance, and standardized test scores.
- Work behavior, including employment status, hours worked, number of jobs, and participation in job-search activities. The report mentions participation in the underground economy as another outcome of interest.
- “Food security” status as assessed through the Canadian Community Health Survey and the researchers’ own surveys or interviews.
- Subjects’ “perceptions of their place in society, their capacity to contribute, their social environment’s capacity to protect them” as collected through interviews.
- Interactions between the basic income guarantee and other welfare programs (e.g. the Canada Child Benefit).
- In saturation sites, community-level impacts such as changes in rent and prices of goods and services, crime and incarceration rates, civic participation, and the use of public services.
Thus, the Ontario pilot is likely to examine a much wider and more diverse range of outcomes than the impending basic income pilots in Finland and the Netherlands, which focus more narrowly on assessing the impact of a basic income guarantee on employment.
This difference follows in part from a deliberate decision not merely to reproduce these studies. Segal states Ontario should not duplicate research being conducted elsewhere, for the sake of “maximiz[ing] the diversity of various different data sets generated by such endeavours.”
National Context
Segal recommends that Canada’s federal government “consider partnering with any willing province on any Basic Income pilots now being considered or contemplated.”
As Segal describes in the report (links added), Ontario is not alone in Canada in its interest in pursuing a basic income pilot:
“[T]he federal government introduced an enhanced child benefit in July 2016, with the objective of constructively increasing the income of low and middle-income Canadian families with children. Moreover, the House of Commons Finance Committee recommended in its pre-budget report that the government of Canada move forward with a pilot project on Basic Income.
“In its most recent ministerial mandate letter, the government of Quebec instructed the Minister of Employment and Social Solidarity to modernize income support programs and embrace better ways of reducing poverty, including a Basic Income guarantee. The Quebec Liberal Party Youth Wing, in August 2016, summoned the government to implement a Basic Income guarantee in lieu of the province’s current welfare system. The government of Nova Scotia has initiated a comprehensive social support review looking for better ways to eliminate the welfare wall and to better support the working poor. The mayors of Calgary and Edmonton have welcomed the idea of a Basic Income guarantee and associated pilot projects, as has Alberta’s Minister of Finance. In August 2015, the Government of Saskatchewan Advisory Group on Poverty Reduction also recommended a Basic Income pilot.”
Call for Input
As announced on November 3, 2016, Ontario’s Ministry of Community and Social Services will be conducting consultations to solicit public input on the basic income trial, guided by Segal’s discussion paper. Consultations will run through January 2017.
Those who want to provide input may contribute in one of two ways: attend an in-person meeting (see the schedule here) or share feedback online (until January 31, 2017).
The first stage of the pilot study — selecting the sites, obtaining access to data sources, and selecting and obtaining consent from participants — is slated to commence before the end of March 2017.
More Information
News release from the Ontario government (Ministry of Community and Social Services): “Ontario Seeking Input on Basic Income Pilot”
Discussion paper: “Finding a Better Way: A Basic Income Pilot Project for Ontario” by Hugh Segal.
Thanks to Jenna van Draanen for proofreading a draft of this article.
Cover photo: “Terminally Invisible” CC BY-NC 2.0 Kat Northern Lights Man (taken in Toronto, Ontario).
