[Peace-discuss] An experiment in guaranteed income

[C. G. ESTABROOK]

[I've written about guaranteed income in "'Taxed Enough Already': A  
Case for the Tea Partiers" http://newsfromneptune.com/index.php?s=taxed+enough 
  --CGE]

A Town Without Poverty?
Canada's only experiment in guaranteed income finally gets reckoning
by VIVIAN BELIK

WHITEHORSE, YK—Try to imagine a town where the government paid each of  
the residents a living income, regardless of who they were and what  
they did, and a Soviet hamlet in the early 1980s may come to mind.
But this experiment happened much closer to home. For a four-year  
period in the '70s, the poorest families in Dauphin, Manitoba, were  
granted a guaranteed minimum income by the federal and provincial  
governments. Thirty-five years later all that remains of the  
experiment are 2,000 boxes of documents that have gathered dust in the  
Canadian archives building in Winnipeg.

Until now little has been known about what unfolded over those four  
years in the small rural town, since the government locked away the  
data that had been collected and prevented it from being analyzed.

But after a five year struggle, Evelyn Forget, a professor of health  
sciences at the University of Manitoba, secured access to those boxes  
in 2009. Until the data is computerized, any systematic analysis is  
impossible. Undeterred, Forget has begun to piece together the story  
by using the census, health records, and the testimony of the  
program's participants. What is now emerging reveals that the program  
could have counted many successes.

Beginning in 1974, Pierre Trudeau's Liberals and Manitoba's first  
elected New Democratic Party government gave money to every person and  
family in Dauphin who fell below the poverty line. Under the program— 
called “Mincome”—about 1,000 families received monthly cheques.

Unlike welfare, which only certain individuals qualified for, the  
guaranteed minimum income project was open to everyone. It was the  
first—and to this day, only—time that Canada has ever experimented  
with such an open-door social assistance program.

In today’s conservative political climate, with constant government  
and media rhetoric about the inefficiency and wastefulness of the  
welfare state, the Mincome project sounds like nothing short of a  
fairy tale.

For four years Dauphin was a place where anyone living below the  
poverty line could receive monthly cheques to boost their income, no  
questions asked. Single mothers could afford to put their kids through  
school and low-income families weren't scrambling to pay the rent each  
month.

For Amy Richardson, it meant she could afford to buy her children  
books for school. Richardson joined the program in 1977, just after  
her husband had gone on disability leave from his job. At the time,  
she was struggling to raise her three youngest children on $1.50  
haircuts she gave in her living room beauty parlour.

The $1,200 per year she received in monthly increments was a welcome  
supplement, in a time when the poverty line was $2,100 a year.

“The extra money meant that I was also able to give my kids something  
I wouldn't ordinarily be able to, like taking them to a show or some  
small luxury like that,” said Richardson, now 84, who spoke to The  
Dominion by phone from Dauphin.

As part of the experiment, an army of researchers were sent to Dauphin  
to interview the Mincome families. Residents in nearby rural towns who  
didn't receive Mincome were also surveyed so their statistics could be  
compared against those from Dauphin. But after the government cut the  
program in 1978, they simply warehoused the data and never bothered to  
analyze it.

“When the government introduced the program they really thought it  
would be a pilot project and that by the end of the decade they would  
roll this out and everybody would participate,” said Forget. “They  
thought it would become a universal program. But of course, the idea  
eventually just died off.”

During the Mincome program, the federal and provincial governments  
collectively spent $17 million, though it was initially supposed to  
have cost only a few million.

Meant to last several more years, the program came to a quick halt in  
1978 when an economic recession hit Canada. The recession had caused  
prices to increase 10 per cent each year, so payouts to families under  
Mincome had increased accordingly.

Trudeau's Liberals, already on the defensive for an overhaul of  
Canada's employment insurance system, killed the program and withheld  
any additional money to analyze the data that had been amassed.

“It's hugely unfortunate and typical of the strange ways in which  
government works that the data was never analyzed,” says Ron Hikel who  
coordinated the Mincome program. Hikel now works in the United States  
to promote universal healthcare reform.

“Government officials opposed [to Mincome] didn't want to spend more  
money to analyze the data and show what they already thought: that it  
didn't work,” says Hikel, who remains a strong proponent of guaranteed  
income programs.

“And the people who were in favour of Mincome were worried because if  
the analysis was done and the data wasn't favourable then they would  
have just spent another million dollars on analysis and be even more  
embarrassed.”

But Forget has culled some useful info from Manitoba labour data. Her  
research confirms numerous positive consequences of the program.

Initially, the Mincome program was conceived as a labour market  
experiment. The government wanted to know what would happen if  
everybody in town received a guaranteed income, and specifically, they  
wanted to know whether people would still work.

It turns out they did.

Only two segments of Dauphin's labour force worked less as a result of  
Mincome—new mothers and teenagers. Mothers with newborns stopped  
working because they wanted to stay at home longer with their babies.  
And teenagers worked less because they weren't under as much pressure  
to support their families.

The end result was that they spent more time at school and more  
teenagers graduated. Those who continued to work were given more  
opportunities to choose what type of work they did.

“People didn't have to take the first job that came along,” says  
Hikel. “They could wait for something better that suited them.”

For some, it meant the opportunity to land a job to help them get by.

When Doreen and Hugh Henderson arrived in Dauphin in 1970 with their  
two young children they were broke. Doreen suggested moving from  
Vancouver to her hometown because she thought her husband would have  
an easier time finding work there. But when they arrived, things  
weren't any better.

“My husband didn't have a very good job and I couldn't find work,” she  
told The Dominion by phone from Dauphin.

It wasn't until 1978, after receiving Mincome payments for two years,  
that her husband finally landed janitorial work at the local school, a  
job he kept for 28 years.

“I don't know how we would have lived without [Mincome],” said  
Doreen.“I don't know if we would have stayed in Dauphin.”

Although the Mincome experiment was intended to provide a body of  
information to study labour market trends, Forget discovered that  
Mincome had a significant effect on people's well being. Two years  
ago, the professor started studying the health records of Dauphin  
residents to assess the impacts of the program.

In the period that Mincome was administered, hospital visits dropped  
8.5 per cent. Fewer people went to the hospital with work-related  
injuries and there were fewer emergency room visits from car accidents  
and domestic abuse. There were also far fewer mental health visits.

It's not hard to see why, says Forget.

“When you walk around a hospital, it's pretty clear that a lot of the  
time what we're treating are the consequences of poverty,” she says.

Give people financial independence and control over their lives and  
these accidents and illnesses tend to dissipate, says Forget. In  
today's terms, an 8.5 per cent decrease in hospital visits across  
Canada would save the government $4 billion annually, by her  
calculations. And $4 billion is the amount that the federal government  
is currently trying to save by slashing social programming and arts  
funding.

Having analyzed the health data, Forget is now working on a cost- 
benefit analysis to see what a guaranteed income program might save  
the federal government if it were implemented today. She’s already  
worked with a Senate committee investigating a guaranteed income  
program for all low-income Canadians.

The Canadian government's sudden interest in guaranteed income  
programs doesn't surprise Forget.

Every 10 or 15 years there seems to be a renewed interest in getting  
Guaranteed Income (GI) programs off the ground, according to  
Saskatchewan social work professor James Mulvale. He's researched and  
written extensively about guaranteed income programs and is also part  
the Canadian chapter of the Basic Income Earth Network, a worldwide  
organization that advocates for guaranteed income.

GI programs exist in countries like Brazil, Mexico, France and even  
the state of Alaska.

Although people may not recognize it, subtle forms of guaranteed  
income already exist in Canada, says Mulvale, pointing to the child  
benefit tax, guaranteed income for seniors and the modest GST/HST  
rebate program for low-income earners.

However, a wider-reaching guaranteed income program would go a long  
way in decreasing poverty, he says.

Mulvale is in favour of a “demo-grant” model of GI that would give  
automatic cash transfers to everybody in Canada. This kind of plan  
would also provide the option of taxing higher-income earners at the  
end of the year so poorer people receive benefits.

A model such as this has a higher chance of broad support because it  
goes out to everybody, according to Mulvale. GI can also be  
administered as a negative income tax to the poor, meaning they'd  
receive an amount of money back directly in proportion to what they  
make each year.

“GI by itself wouldn't eliminate poverty but it would go a heck of a  
long way to decrease the extent of poverty in this country,” says  
Mulvale.

Conservative senator Hugh Segal has been the biggest supporter of this  
kind of GI, claiming it would eliminate the social assistance programs  
now administered by the provinces and territories. Rather than having  
a separate office to administer child tax benefits, welfare,  
unemployment insurance and income supplement for seniors, they could  
all be rolled into one GI scheme.

It would also mean that anybody could apply for support. Many people  
fall through the cracks under the current welfare system, says Forget.  
Not everybody can access welfare and those who can are penalized for  
going to school or for working a job since the money they receive from  
welfare is then clawed back.

If a guaranteed income program can target more people and is more  
efficient than other social assistance programs, then why doesn't  
Canada have such a program in place already? Perhaps the biggest  
barrier is the prevalence of negative stereotypes about poor people.

“There's very strong feelings out there that we shouldn't give people  
money for nothing,” Mulvale says.

Guaranteed income proponents aren't holding their breaths that they'll  
see such a program here anytime soon, but they are hopeful that one  
day Canada will consider the merits of guaranteed income.

The cost would be "not nearly as prohibitive to do as people imagine  
it is," says Forget. “A guaranteed minimum income program is a  
superior way of delivering social assistance. The only thing is that  
it's of course politically difficult to implement.”

http://www.dominionpaper.ca/articles/4100
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