Hamilton showed that a universal basic income is the solution


Published September 15, 2020 at 4:08 pm

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With holes in Canada’s social safety net being exposed as businesses closed in March to help curb the spread of the COVID-19 pandemic, the appetite for a system overhaul has intensified. Now, what was once considered a radical solution to growing financial disparities, has taken centre stage—receiving support from not only social service organizations but business leaders, as well.

It’s been called many things over the years: citizen’s income, a basic living stipend, guaranteed annual income, and universal demogrant, among others. While opponents of a universal basic income (UBI) ignorantly and oftentimes methodically call it “communism” and the end of a good old fashion blue-collar society as we know it.

The reality is, what you know as “blue-collar” is on the verge of extinction and unprecedented times call for unprecedented solutions.

Even the Hamilton Chamber of Commerce is urging the Government of Canada, in unison with the Canadian Chamber, to create a federal basic income pilot program, citing this week that, “With developing technologies and increased automation, government policy needs to adapt in order to respond to potential disruptions in the labour market”.

Prime Minister Justin Trudeau said in early September that the idea of providing Canadians with a basic income is part of discussions for a late-stage or post-COVID-19 recovery plan.

A group of 50 senators called for creating a UBI program, which is essentially a no-strings-attached benefit that would replace several financial aid programs currently in place.

Hamilton is no stranger to UBI. Select residents took part in a guaranteed income pilot program, introduced by Kathleen Wynne’s Ontario Liberals in 2018.

Individual participants received $17,000 for the year, paid monthly; while low-income couples received $24,000. Whatever income participants earned was deducted from their Basic Income at 50 per cent. In other words, once someone made $34,000, they would no longer receive basic income.

The pilot was intended to be a 3-year research study, however, it did not survive the 2018 Ontario election. The $150-million program was scrapped by Doug Ford’s Progressive Conservative government in July 2019.

According to then-social services minister Lisa MacLeod, the program was failing to help people become “independent contributors to the economy”.

Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction, says the government should have waited for the data.

“I don’t think the provincial government was aware of all the benefits when they shut it down,” said Cooper, who was part of a research team that interviewed pilot program participants. “They cancelled the official evaluation so they couldn’t possibly have known how people were reacting once they were receiving a basic income.”

Fortunately, McMaster and Ryerson University, in partnership with the Hamilton Roundtable for Poverty Reduction, conducted their own evaluation. According to the study, not only did the vast majority of those employed before the pilot report that they were working while receiving a basic income, but many reported moving to higher-paying and more secure jobs.

Tom Cooper believes it’s time to put to rest the idea that people are living in poverty because they’re “lazy” and unmotivated to work.

“The participants of the basic income pilot were working two or three part-time jobs just trying to make ends meet,” he said. “And they weren’t able to pull themselves or their families out of working poverty.”

Cooper added that recipients of UBI were able to enter into new training programs, go back to school, and had the ability to look for even better jobs.

“We certainly found that was the case for more than 80% of the participants we surveyed,” he added.

Humans innately want acceptance from their community and nothing gets you shunned quicker than the perception of “freeloading” while everyone else puts in the work. The idea that someone of a healthy mind and body would quit their job to live off that $17,000 per year f—you money from the government is unfounded and frankly, impractical. Payments under the UBI pilot program equated to roughly $8.17 an hour or $326.92 per week—which is half of what’s considered a livable wage in Hamilton.

Tom Cooper pointed to one example of a UBI participant in Hamilton:

“James was working part-time for one of the big banks in town and his job was to basically teach people how to use the banking app on their mobile phone,” Cooper continued. “So eventually he was going to be downsized out of his job.”

“So when James got on Basic Income, he used his experience and his economics degree to parlay a basic income into starting an entrepreneurial venture of his own. And I think many people did that.”

The argument can be made that a basic income doesn’t incentivize employment for those who choose not to work. But that’s not a basic income problem.

Dr. Evelyn Forget is the author of Basic Income For Canadians: The Key to a Healthier, Happier, More Secure Life for All.  She says the notion that Basic Income is going to encourage people to work more is a nice idea, but unlikely as a single solution.

“If people are unemployed and unemployed for a long time in a society that has jobs, there is usually a reason for it,” said Dr. Forget, who is also a health economist at the University of Manitoba. “They’re unemployed because they lack the skills for the kind of jobs that exist or because of undiagnosed disabilities of one type or another.”

“It takes a long time to get from a position of being a long-term unemployed person to actually being productively employed”.

Depending on who you ask and what their biases are, the government cost of universal basic income in Canada has been estimated anywhere from 10 to 50 per cent more than the programs already in place. However, proponents say those additional costs would be offset by a reduction in the use of emergency workers and the healthcare system as a whole.

According to the John Howard Society of Ontario, low-income Canadians greatly outnumber wealthier Canadians in the criminal justice system. They’re more at-risk of participating in crime because of the social and economic challenges they face. Low-income Canadians are also more likely to face significant barriers once they are involved in criminal justice processes.

Meanwhile, according to research by Astrid Guttmann, a McMaster University alum and Chief Science Officer at the Institute for Clinical Evaluative Sciences, children living in low, compared with high-income households are more susceptible to:

  • rates of low birth weight (LBW),
  • infant mortality,
  • childhood mortality from accidental causes and respiratory disease,
  • hospitalization for injuries
  • psychosocial and psychiatric behavioural problems.

Now let’s get back to some of the findings on Ontario’s UBI pilot conducted by McMaster and Ryerson University, in partnership with the Hamilton Roundtable for Poverty Reduction:

  • Everyone who received Basic Income reported benefitting in some way.
  • Many recipients reported improvements in their physical and mental health, labour market participation, food security, housing stability, financial status, and social relationships.
  • Basic income also had a noticeable impact on the use of health services, with many of the survey respondents indicating less frequent visits to health practitioners and hospital emergency rooms.
  • For a significant number of participants, Basic Income purportedly proved to be transformational, fundamentally reshaping their living standards as well as their sense of self-worth and hope for a better future.
  • Those working before the pilot reported even greater improvements on some measures of well-being than those who were not working before.

It seems that what was considered a pipe dream at-best prior to the pandemic may be Canada’s only sustainable economic option going forward. This means opponents of a Universal Basic Income program may have to open their minds and check the facts.

Follow Anthony on Twitter  @anthurch

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