[Peace-discuss] An experiment in guaranteed income

[C. G. ESTABROOK]

The idea is not new, and our two business parties have to work hard to  
smother it.

Business of course opposes it furiously because of its empowerment of  
workers: they wouldn't have to take any job on offer, on any terms  
employers demand.

{From <http://en.wikipedia.org/wiki/Guaranteed_minimum_income>.}A  
basic income is granted independent of other income (including  
salaries) and wealth, with no other requirement than citizenship. This  
is a special case of GMI, based on additional ideologies and/or goals.  
While most modern countries have some form of guaranteed minimum  
income, a basic income is rare.
A basic income is a proposed system of social security, that  
periodically provides each citizen with a sum of money that is  
sufficient to live on. Except for citizenship, a basic income is  
entirely unconditional. There is no means test; the richest as well as  
the poorest citizens would receive it.

A basic income is often proposed in the form of a citizen's dividend  
(a transfer) or a negative income tax (a guarantee). A basic income  
less than the social minimum is referred to as a partial basic income.  
A worldwide basic income, typically including income redistribution  
between nations, is known as a global basic income.

The idea of guaranteed minimum income is not new...

American revolutionary Thomas Paine advocated a basic income guarantee  
to all US citizens as compensation for "loss of his or her natural  
inheritance, by the introduction of the system of landed  
property" (Agrarian Justice, 1795).

French Emperor Napoleon Bonaparte echoed Paine's sentiments and  
commented that 'man is entitled by birthright to a share of the  
Earth's produce sufficient to fill the needs of his  
existence' (Herold, 1955).

In 1963, Robert Theobald published the book Free Men and Free Markets,  
in which he advocated a guaranteed minimum income (the origin of the  
modern version of the phrase).

In his final book Where Do We Go from Here: Chaos or Community? (1967)  
Martin Luther King Jr. wrote, "I am now convinced that the simplest  
approach will prove to be the most effective — the solution to poverty  
is to abolish it directly by a now widely discussed measure: the  
guaranteed income" [from the chapter entitled "Where We Are Going"].

In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and  
another 1,200 economists signed a document calling for the US Congress  
to introduce in that year a system of income guarantees and supplements.

In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed  
Income in which he advocated for the Guaranteed Minimum Income and  
discussed Richard Nixon's GAI proposal.

[For the purposely ignored legislative history of the idea in the most  
liberal US administration since WWII, see http://millercenter.org/academic/americanpresident/nixon/essays/biography/4 
 >; see also links at <http://en.wikipedia.org/wiki/ 
Negative_income_tax>.]  --CGE


On Sep 25, 2011, at 9:10 AM, Stuart Levy wrote:

> Thank you for posting this, Carl!
>
> On Sun, Sep 25, 2011 at 03:33:44AM -0500, C. G. ESTABROOK wrote:
>> [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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