Beware of basic income

Wouldn’t it be great to get a cheque every month just for being you? This is the sweet, fuzzy vision the Ontario and federal Liberals, are counting on to sell their latest idea, a basic income. Just this year, the Ontario government laid the groundwork for a pilot project to test the idea. Any actual large-scale program is far off into the future, however, and that’s a good thing. We need to take a hard look at the idea, especially in Liberal clothing.

Pie-in-the-sky or slap-in-the-face?

A basic income is exactly what it sounds like: a monthly cheque provided to every person by the government with no strings attached. A recent Ontario poll suggests the idea has broad support: 41% of Ontarians support it compared with 33% who oppose. Yet when people are asked whether they think a basic income is a good idea, they are never asked what they would be prepared to lose to get it. The point isn’t that basic income is pie-in-the-sky. It’s just that it could be implemented as a slap-in-the-face.

Basic-Income-posters

Basic income is an obvious draw at first. A basic level of guaranteed subsistence for everyone sounds egalitarian and just. It could reduce poverty. It could even give workers something we lack today: bargaining power. Getting a monthly cheque could mean not having to take the first crappy job that appears if you get fired or the economy tanks.

Does basic income = bargaining power?

The question we should ask first is whether we have the bargaining power to get a worker-friendly version of basic income. Be aware: conservatives of all stripes also like the basic income. In fact, one of the idea’s biggest proponents in Canada is former Conservative senator Hugh Segal. Milton Friedman loved the idea too. It plays to the right’s utopian libertarian fantasies of “coupon capitalism.” The idea is that the government’s role is reduced to simply giving everyone a cheque or coupon to purchase goods and services plus securing property rights.

Corporations already profit off everything from toothpaste to cargo planes, why not the healthcare and education we receive as basic rights today? Those crappy jobs might be easier to resist for a while but they might also get a bit crappier if employers know the state is effectively giving them a subsidy that keeps workers out of the most desperate poverty.

Neoliberal Trojan Horse

What kind of basic income program would the Liberals create? Would it be one that adds to the standard of living we already enjoy, strengthening worker confidence? Would the party of Bay St. demand that the rich pay more so that everyone can live well? Or would they be happy to lop off some more public programs to their friends in the private sector while introducing ever more means-testing? The labour movement and the left could expend a lot of energy on a neoliberal Trojan Horse, one that entrenches the idea that social policy is there to support individuals navigating markets rather than building collective goods.

Looking at the numbers should give anyone seduced by the Liberals overtures pause. This fiscal year, Ontario will spend $15.8 billion on social programs in total and roughly $8.4 billion on income transfers for those on low incomes (welfare and similar programs). Giving every Ontarian even $15,000 annually would cost $207 billion, just over 25% of provincial GDP. Even limiting basic income to everyone over 15 years old would still come out to $172.5 billion. Increase the basic income amount and the cost rises in tandem. Even a $10,000 per person annual basic income would cost a bit more than what Ontario currently spends on everything else put together.

To implement a $15,000 basic income, while getting rid of welfare, but keeping things like education, healthcare and higher education, would still mean raising an additional $200 billion in revenues. That’s more than double the $91 billion Ontario is able to raise in taxes today (Ontario has total revenues of $130 billion).

Even an optimistic scenario would need a very strong social movement to demand higher taxes. Assume, as basic income advocates rightly point out, that a basic income would improve health and lower crime. Say we could reduce expenses on those by a third or roughly $20 billion. Assume also that the federal government gives Ontario the roughly $40 billion it would save on transfers like child benefits and low-income pensions. This still leaves an extra $140 billion, 18% of GDP, unaccounted for.

Basic income, austerity, and privatization

There is nothing wrong with increasing taxes if they pay for the things we need. In fact, we need more taxes if we don’t want to continue down the path of austerity started in Ontario by Mike Harris and continued by Dalton McGuinty and Kathleen Wynne. This path has seen tax cuts followed inevitably by hospitals closing, work inspectors being fired and urban transit crumbling. But first we need the social force that could extract this kind of progressive tax increase—one that ensures the rich pay their fair share.

The very real risk is that instead of a progressive basic income Bay St. as well as the multinational charter school and healthcare corporations would finally get their privatized schools and day surgeries in Canada. We deserve a basic income, but we also deserve quality education, healthcare, childcare for anyone who needs it. We deserve programs that can provide more support to those who need it more, not an abstract equality. A Liberal basic income implemented today will present us with the false choice of getting rid of these universal rights for some more cash—we may well end up spending more and getting less. An extra $5,000 to pay for your child’s education or your broken leg doesn’t matter much when you’re wealthy, but it does when you’re working class.

Power from the bottom up, or gifts from the top down?

The math and the political landscape should be enough to at least get a bucket of cold water ready in case we need it. Basic income in the abstract is not up for debate today; if it was, we would be feasting. Instead, we need to be taking a hard look at what something concrete enacted by today’s Liberal Party would look like. And it looks like table scraps. The NDP, who recently passed a resolution at their convention seeking to explore a federal Guaranteed Annual Income, with next to no debate, would be wise to be very cautious about the illusory promises of basic income.

Fighting for $15 an hour may not sound as glamorous as fighting for $15,000 a year, but it is only by building our power form the ground up rather than appealing to the nice feelings of elites that we’ll truly win. The fight for a world that is less insecure, where we work less and have a greater say over what we do doesn’t start with illusory quick fixes like basic income handed down by the representatives of the elite. It starts with the hard work of organizing. Every time workers have demanded something and won, they’ve had to make credible threats. This starts with collective power built from the bottom-up and it will get us much further than a basic income handed from the top down.

Originally published at Rankandfile.ca last week.

10 thoughts on “Beware of basic income

  1. I don’t agree. First, let me say that I’m American and I support basic income – and hence, it’s challenging to address some of your Canadian-style issues. I also support single payer – which you already have in Canada, but we don’t have in the U.S., mostly because our political system is corrupted by monetary interests – in this case, the insurers and pharmaceutical industries – who keep their people in elected office, usually, and surprisingly (for some) via the (more “progressive” or “liberal”) Democratic Party (which currently has us on (at least – if ever) a 300 year quest for universal health care via the A.C.A. – not Obamacare, in my view, just CorruptedCongressCare … but we are supposed to keep voting for them on the basis of whatever meager tidbits they may or may not throw our way. (It’s pretty bad.)

    The unemployment statistics in the U.S. are notoriously inaccurate. Currently, neo-liberalism is highlighting Obama as reducing unemployment to all-low (since REAGAN, Republican) of 5 percent.

    The reality is that, at least 25-30 million Americans are unemployed or underemployed or pretending to be employed (e.g. “freelance”), statistically off all charts which are based only on those still able to collect some form of unemployment compensation, which only lasts so long. So, if you can’t collect any longer, for all Census purposes, you’re now “employed!” Hey! Ho!

    This is a bit like our current A.C.A. which has any number of people receiving health care when it’s health care in name only. On top of that “unknown statistic,” are all those who are not insured, and all those who are greatly underinsured (another “unknown statistic,” but rational analysis shows that it must be very, very, very high).

    For the U.S., single payer – meaning opening the Medicare system – and hopefully, an improved Medicare system – would be, by all non-partisan analyses (including our own Congressional Budget Office) the most cost-effective way to provide quality health care to ALL Americans. O.k. So that takes care of that. We will SAVE money.

    Onward. We have a tremendous military budget – we just sunk 1.5 TRILLION into one fighter jet, and (Nobel Peace Prize winner) Obama just signed off on a similarly astronomical figure for “refined” nuclear warfare arsenal when, our current arsenal, is probably sufficient to blow everyone to smithereens many times over in mere nanoseconds.

    In the meantime, there is so much money stuffed in offshore accounts, and the tax rates for the wealthy are obscenely low while lower income Americans are paying ridiculously high taxes on their meager earnings.

    The Walton family – of Walmart – currently owns close to 50% of American resources. That’s just the Waltons. Thinks of the others. Income disparity is climbing to terrifying levels; currently, about 47 million Americans are living in poverty, whether they have found work or not. While Hillary Clinton and Bill enjoy any number of multi-million dollar estates they call “home,” and she opposes a FEDERALLY mandated minimum wage of 15/hour, a Pennsylvania mom, for example, could be struggling long hours in poverty making 7.50/hour.

    Meanwhile .. remember NAFTA and what it did to American jobs? Now we have the TPP – NAFTA on steroids – which Hillary Clinton wrote parts of and pushed for in Congress while she was telling the American public something altogether different about her position (i.e. she had “changed her mind” yet again).

    Canada similarly has a student debt problem, though most developed nations do not – and ours is far, far worse than Canadians – as serious as your own problem already is, as it exists. We’re well over a triliion in student debt, and these students are graduating without real job prospects beyond menial positions that don’t require college degrees, in the first place. Even if they’re working in pink collar positions (remodeled as “white collar”).

    Our own Census Bureau reported a few years back already that “extreme” poverty is literally “soaring” among elderly American women. We have not heard of any action on this horrifying statistic from anyone in our government, even Bernie Sanders (who, at least, speaks about senior poverty on the rise – and the need to expand social security to include a liveable minimum).

    Here’s where I get into basic income. We don’t need studies on basic income – although they’ve already been done – including a study in Canada – the most westernized example – where it was quite successful. They only thing it did was relieve poverty and put more money into the economic system.

    The reason I say we don’t need a study, however, is because we already have, in the U.S., a highly successful example of basic income. That example is SOCIAL SECURITY which relieved poverty for millions of senior citizens when first implemented, and over the years, has done nothing more damaging than improve the quality of life for millions, while adding to and improving the economy for everyone.

    Meanwhile, millions are struggling with the most backwards of social service programs. We waste so much money simply making people go through the motions of proving they are poor, and, deserving – humiliating and degrading – wasting time that could be spent on far more productive endeavors – when we could simply be issueing checks to all, including the people doing nothing else with their day, but being paid to make others miserable.

    It’s kind of like our so-called solution to health care. People who were formerly in Medicaid (the poor people’s program) – now expanded – will tell you that the difference, for them, personally, is that access and bureaucracy is worse. Before, they saw doctors. Now, they spend inordinate amounts of time and effort just trying to get an address change through, or a form approved. Never mind EVER seeing a doctor.

    One of the reasons we can’t get out of this system is not only because our political system is so corrupted by the money – but because there’s a certain percentage of populace EMPLOYED in the business of making health care access more difficult for others – just as there’s a certain percentage EMPLOYED in the business of making poverty services quite an ordeal to go through.

    This becomes especially disturbing not only when you need to transition into a REAL universal health care system like single payer Medicare for all – but also when you need to transition industries like FOSSIL FUELS to Green, but you can’t – not only because the lobbyists have taken over government – but because a certain percentage of the populace wonders where they’re going to work if fossil fuels go.

    We are moving into a different kind of future. We need to curb the amount of wealth some are currently allowed to acquire, and we need to make it possible – feasible for societies – to transition industries without cruel upsets that could, in essence, even prevent such transitions.

    But mostly – it is wrong, in the 21st century, for developed societies to have people living on the street, uanble to afford groceries because of housing costs, struggling with debt (another industry we need to transition OUT of) , or having – in the U.S. – well over 2 million Americans incarcerated, often for decades, and for petty offenses – thanks to Clinton-era crime policies – while those incarcerated are used as a source of cheap (euphemism) labor (up to 1/hour).

    I know you’re Canada, not America, but in the long run, we’re all in the same boat. Canadians, for example, are affected by our health care system – which threatens their own, as are other nations which similarly enjoy sane medical care. The same is true for everything else – including these disastrous trade policies which are destroying jobs at home, along with many other aspects related to our quality of life and human rights everywhere.

    As for education funding, I’m fully in support of public education – I’m not into charters, though I don’t have a problem with some of these smaller progressive private schools. I also am aware of many interesting educational experiments going on in home education. My guess is that basic income would increase home schooling and parent coops in some communities, some would use their basic income to attend private schools or employ childcare .. but I strongly doubt this would destroy public education. If anything, i think it would add to dialogue and improve.

    On the job front, I think you’d see a mixture of results. For example, many people would leave jobs, opening them to others, and certain industries (for example, travel, consulting, food and entertainment, the arts) would flourish. It would be wonderful for small business owners. It would, in the U.S.,, IMO, relieve burdens on the social security system, much in the way a single payer health care system would relieve burdens on Medicare.

    If you radically reform prison incarceration (another industry transition) along with debt collection (industry transition – people pay off debts with basic income), you have more money in the system to support the basic income.

    You also have people moving around – traveling, relocating – which further stimulates the economy, not only at home, but abroad.

    Would conditions in some places deteriorate or improve? Altogether, I think it would improve because people wouldn’t stick around for crappy jobs like Walmart, for example, unless the work culture, at the very least, became more pleasant. Which would ultimately mean more worker and collectively centered.

    I’m sure any number of business would fold, as obsolete, while others would emerge. But people themselves would not go under. And the industries that are simply leeches (debt collection, mass incarceration, fossil fuels, “heath” insurance) could die a natural death without any big harm to those larger numbers doing their dirty work for a living. Whereupon a real, genuinely needs-based, and meaningfully oriented economy could emerge and flourish.

    It’s time to directly abolish poverty and dire need and pass a basic income – and in the U.S. – coupled with a Medicare for All single payer system.

  2. Postscript: Almost forgot — there are three conditions to a “real” universal basic income system. And I think this is very important to add. Especially since your basic income figure – which may surprise you – is, actually, quite low.

    In my analysis, this works when the universal basic income is HIGHER. So – for the U.S., for example, I would award a basic income relative to the cost of living as abolishing poverty for a given INDIVIDUAL adult – at 35-40k per year.

    Part of importance of the higher amount is the fact that you are TRULY abolishing poverty – and DIRECTLY, as indicated by Dr. MLK (direct abolition) – and, you are transitioning now obsolete industries. So, for example, when you let (in the U.S.) one million people out of prison with basic incomes, for starters, you are also relieving a given number of prison guards their jobs.

    Will they go happily or unhappily? I’m sure most would quite willingly hop off into the sunset with 35-40k. As would any number of social service workers doing nothing more than making people miserable trying to prove that they are poor enough and contrite enough to be worthy of the state’s assistance – and having to prove this – again and again and again and again – in a given year.

    So there’s a pragmatism here, in any number of directions. But – we have to be willing to give up our attachment to certain “moral” ideals that, fundamentally, serve a very immoral kind of societal arrangement.

  3. One last postscript – the three conditions – (1) individual (nothing to do, e.g., with marital or family status, (2) unconditional (nothing to do with employment or income), and (3) LIVEABLE.

    The formulae, IMO, doesn’t really fly unless it’s truly liveable. Nothing extravagant – but enough to maintain a modest, yet dignified existence.

    In the U.S, I wouldn’t include children – unless it was a very small amount per child (for example, MAYBE 5k per child) -simply because we don’t need to incentivize having chidlren. Maybe it’s possible in a society like Switzerland where family planning education is on a much higher level – they KNOW that people aren’t going to just start having a lot of children in order to have a basic income.

    But in the U.S. that wouldn’t work. We have a lot of other catching up to do, first. So that’s part of where I get my figure – and notice, it’s certainly not sufficient to live in New York City without a job. But then people can make choices – and ones, I’m sure, that would only benefit New York City, as a community.

  4. You’ll excuse me if I add a few more odd points that came to me later …

    With respect to the schools .. many people would like to spend more time parenting, and a basic income obviously makes that possible. Whichever parent, or a shared arrangement, and in terms of education, schools benefit greatly because you have more parental involvement, as a result. It’s no big secret that districts that perform better often have parents with more time for involvement.

    That also brings in the issue of payment for homemakers – an issue that Selma James, I hear, has been involved in for many years. That homemakers don’t have income of their own – and they play an extremely vital role in our society. So basic income also addresses that issue.

    Of course, basic income is a major assistance for single parents, and would greatly ease tensions in many divorces over child support (I’m not saying this should supplant child support – but it would certainly take a lot of conflict out of the issue and the strain that it puts on divorced families).

    In addition, basic income protects women’s rights in terms of domestic abuse situations. If you speak with women who work in shelters for women and children fleeing these situations, often, the number one issue preventing escape is income. The women do not have the income to leave. In fact, the women’s groups that I have seen most vocal on this subject – most aware – are in Canada, even.

    So, I feel that basic income would also revolutionize women’s position in our societies. Certainly any number of marriages would end, as a result of greater financial independence, and certainly any number of marriages and families would start – that were previously impeded by the same issues. People would be freer to love and decide as they see fit for themselves.

    I think basic income would also take strain off the abortion debate in the U.S. I’m personally pro-choice, but obviously, financial issues are a major factor generating the desparation with which many women seek to have an abortion. So I would think, to those most concerned about the number of abortions, we would likely see that figure decrease, and possibly quite a bit, in a society where adults have a basic income to fall back on.

    Finally (I think!), a word about the military industrial complex. With liveable basic income, the industry does not have such a ready supply of cannon fodder for every drop-of-the-hat bloody-thirsty foreign escapade. In the U.S. that ready supply is usually among high school students who are much more poorer and have much more limited options following high school. I myself personally witnessed some of this in high school prior to Iraq and found it very disturbing that poorer disadvantaged students were preyed upon in this way by the war machine.

    And, it’s very good for people hitting eighteen – whether they’re in that situation or not – to have income to pursue education and training, small businesses, or however they’re deciding to set out. In addition to those who’d be able to more easily pay off student they currently have and begin to plan for the kind of futures that used to be an option in the U.S. – home ownership, starting families, being able to have a vacation, not having to accumulate credit card debt – which is another enormous issue currently – and I’m sure many Americans, at least, would be initially using theirs to simply get rid of that debt, as well.

    In terms of the military itself, I think this would actually upgrade the military. We used to have a much better military during the second World War, for example. The military would have to upgrade to attract people, and they’d have to have a better reason to go to war. Plus, with basic income improving everyone’s lives, I think people would be more inclined to feel that they actually had something to defend, if that ever came down to it. As some libertarians say regarding drafts, if the soldiers themselves don’t feel they have something to fight for, or worth dying for, then maybe we shouldn’t be going to war, to begin with.

    If you’ve come this far, thank you for reading my thoughts on basic income.

  5. In the U.S., I’d do it through an aggressive expansion and funding of the social security system. Let other stuff go obsolete – some things quite rapidly, and others more gradually. (Some people advocate private means – rather complex tax models – or the Alaska model – which is certainly successful – but it’s not a liveable amount – and – it’s tied into an industry we need to transition out of – fossil fuels; ergo, it creates a problem in doing so. If someone can resolve that issue, fine with me. But I don’t see why you can’t use social security since it works so well and is so well designed for easy expansion – and it’s very straightforward for unconditional distribution based on social security numbers – citizenship – and age.)

  6. Reddit tagged this Anti-UBI, maybe they didn’t read it.

    Please consider a different perspective.

    A basic income could be derived globally from the interest on sovereign debt, through Commons shares. Such a structure could be created without any changes to taxation, as the interest is currently being paid.

    Current sovereign debt would return about $10-$20/mo to each adult human on the planet. Significant in the poorest places. This is expandable, as sovereigns can increase their level of debt.

    The system would distribute the power to create money, and not redistribute money, necessarily, though sovereign debt payments would require revenue, so the taxation arguments can continue, but with a different perspective, and reduced need.

    https://en.m.wikipedia.org/wiki/User:Tralfamadoran777

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