One of the few progressive moves made by the previous Ontario Liberals was the Ontario Basic Income pilot project launched in April 2017, unfortunately the Ontario PCs scrapped it last week. Those cheering the end of this pilot project should consider why they may soon be re-visiting the idea in a few short years.
As the gig economy goes mainstream and good old-fashioned permanent jobs become harder to find, it will be fairly common for young people with skills and education not to find a steady income to qualify for loans and mortgages. Some will be forced to work for less or toil at a dream crushing dead end job just to make ends meet. And all this will happen at a time when the economy of rich nations like Canada and the US will be booming. Technology is driving this change in the way businesses operate and this in turn will make Universal Basic Income inevitable. It may just about operate much like our Universal health care system which is free for all regardless of one’s income.
Basic income, sometimes called guaranteed income or minimum income, is a fixed income that people receive from the government. Ontario’s project was not a universal basic income because it only included people below a certain income level. Theoretically, a universal basic income would go to every resident, whether they earn $0 or $100,000.
This is not the first time governments have toyed with such an idea, back in the 70s, the idea was tested in the town of Dauphin, Manitoba and the results were startling, the recipients of basic income suffered less from ill-health and mental stress. In negative income tax experiments in the US in the 1970s, children from recipient families were less likely to drop out of high school.
More recently Switzerland held a referendum on universal basic income but opponents soundly defeated it. Critics of the measure were convinced no good would come from weakening or severing the link between work done and money earned.
India is also looking at creating a version of UBI as a way to bring people out of the endless cycle of poverty. A tectonic shift is happening and technology is making more and more people redundant in the workplace, in developing countries, adopting technology makes it more appealing to labour-intensive fields and in over-populated third world countries, it could be a double-edged sword. This is why in rich and poor countries, the new wave of technology would require a different kind of safety net that would be available to all classes of people.
In rich countries many Conservatives are justifiably fearful that giving every individual a guaranteed income would diminish one’s incentive to work. But that fear could be misplaced because it is unlikely that those holding great jobs would be in a hurry to quit the workplace, for example, public sector workers, but certainly those in dead-end survival jobs would quite possibly decide to call it day and pursue another line of work. Since when is that a bad thing? A whole bunch of people currently trapped in pointless work could at least have a shot at a more satisfying line of work.
Regardless of a basic income, people would want to augment their earnings by participating in the workplace.
But then again, just because unscrupulous people abuse Canada’s refugee system, or health care system or retail return policy system doesn’t mean we scrap good policies, practices and ideas, we build in safeguards to manage abuse.
I don’t believe a majority of Canadians would abandon their careers, close shop and travel the world just because they won an equivalent of Cash For Life. A human being needs have a purpose and a sheer reason for waking up and not everyone would grab at that income which would just about take care of a few of their basic needs and give up money making opportunities. Those who enjoy living off handouts and social assistance will continue to do so, but others would keep their day jobs and use that extra income either to augment their earnings or save it for a winter day.
But I suspect that a growing proportion of the workforce would use the money to bridge the gap in their earnings while they bid for another job and tide them through while they pitch for a new gig.
The number of freelancers is growing in the developed world. For example back in 2014, the Freelancers Union calculated that about 53 million Americans had become independent workers, whether voluntarily or not. And it was further found that half a million people dropped out of the workforce altogether, disillusioned by their inability to find work. This is a real problem afflicting more and more workers at any age given the rapid change in technology and the workplace.
Thousands of millennials and a growing number of Canadians across the country now work part-time at their day jobs but supplement their income working as Uber drivers or working on projects that could take a few months or a few hours a week. Fewer jobs than ever are guaranteed for life which means many individuals are living on the edge, they could make a $1000 one week and find themselves with nothing more than time on their hands for weeks until the next gig materializes.
All this will start to matter when the ruling and business class realize that fewer people are buying houses or cars or big ticket items. That will be when business people and politicians will push the idea of a universal basic income. Not because they necessarily feel sorry for the waste of human capital, but because such a situation could threaten the economy. -CINEWS