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March 12, 2020

The Promise of a Guaranteed Income

Reuel S. Amdur

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While the Rob Ford Tories pulled the rug on the basic income pilot project, involving some 4,000 people, researchers have been at work trying to sort out what can be learned. Of course, the unexpected termination caused distress for many of those taking part, who saw their planning for the future unexpectedly torpedoed. Before the election, Ford had promised to continue the program were he elected.

On March 4 the Toronto Star published a report on the analysis of the data, done under the direction of McMaster University economics professor Wayne Lewchuck.  The analysis found that three-quarters of those who were working at the time they entered the program continued to work.  Over a third in low-income positions were able to move up the income ladder.  Other changes were perhaps even more impressive.  Smokers and drinkers reduced or eliminated their consumption in about half the cases.  Visits to hospital emergency departments and other health providers decreased.

That same day that the article appeared, the Eastern Branch of the Ontario Association of Social Workers held a public meeting at the Ottawa City Hall on the subject of the guaranteed annual income (GAI).  There were several takeaways from the meeting.  Key was the principle that poverty means that people simply do not have enough money.  An adequate income means enough money to make it possible to cover the need for nutritious food, good shelter and clothing, and other goods and services to enable the person to take part in society.  The assurance of such a standard cannot be met by the private system but must rely on government.  We have already adopted the principle for the elderly with Old Age Security and the Guaranteed Annual Income Supplement, resulting in a major reduction in the rate of poverty among the elderly.

Two major arguments were set out at the meeting for the importance of the GAI: changes in the nature of work and increasing health costs in provincial budgets.  The increasing impact of automation and artificial intelligence is likely to mean an increased decline in jobs.  How are people without paid work to survive?

As for health costs, all of the provinces are facing budgetary crises due to increasing health costs, squeezing all other areas of expenditure. These increases relate to new and expensive equipment and treatments.  As well, there is a substantial unmet mental health care need.  In addition, our aging population means an increase in the use of health care.  The preliminary findings from the Ontario and Manitoba experiments indicate that increased income for the poor means decreased reliance on health care.

Hugh Segal, an academic responsible for designing the Ontario pilot project and former Conservative senator, commented that the impacts on health and social services found in this analysis mirror those from the Dauphin, Manitoba Mincome basic income program funded by Manitoba and federal governments.  Like the Ontario program, the Manitoba project was killed by a newly elected Conservative government.

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