On Monday morning, Ontario Premier Kathleen Wynne announced that the Ontario government would be running a pilot project which would provide eligible citizens in three communities with a basic income. The purpose is to see what happens when people are raised above the poverty line. This is not a new idea. Over 30 years ago a similar study was done in Manitoba. The Mincome experiment ran for five years. Reams of data were collected. But, at the end of the five years, when the study was to be analyzed, the new Conservative Premier, Sterling Lyon, had the project shelved and the data archived. It wasn’t until 2011 that a University of Manitoba researcher, Dr. Evelyn Forget, went looking for the data and began to work on teasing out significant findings.
Similar experiments have been done elsewhere around the world. Apart from Manitoba, there have been successful basic income programs in Omitara, Namibia, and Panthbadodiya, India. Experiments are in progress, in the planning stages, or being discussed in a number of western European countries.
In the experiments in Namibia and India the results were fairly dramatic. In communities receiving the basic income grants, child malnutrition decreased, school attendance increased, health improved, and economic activity increased. People were using their grant money to invest in their futures. They improved their farms, set up small businesses, and because their neighbours also now had money, markets began to be established. The most dramatic effects were on women and girls. Girls were being fed and sent to school at a much higher rate in both cases. Women were taking more control of family finances and were empowered by their own financial independence. Crime rates went down and there was no significant increase in alcohol and tobacco use.
The pilot project in Manitoba from 1974 to 1979 also saw very positive outcomes for participants. The only people who left regular employment once the program began were new mothers who decided to stay home longer with their babies, and young people who found they now had the means to further their education. The study found a reduction in accidents, domestic violence, and mental health issues.
Studies have shown that poverty causes changes in the brain’s pre-frontal cortex and limbic system which result in impaired decision-making and planning functions. Fortunately, these areas of the brain have fairly high plasticity, meaning that once the overwhelming stresses brought on by poverty are alleviated, the normal brain functioning can be re-established. This provides a neurological corollary to Maslow’s Hierarchy of Needs. In his 1943 paper, “A Theory of Human Motivation” Abraham Maslow proposed that humans cannot properly focus on, or move towards, higher needs if lower, more basic needs are not being met. So, if a person is homeless, or a loss of shelter is just one missed paycheque away, the stress of the situation not only prevents that person from focusing on advancing out of the situation, it also impairs their ability to function within the situation.
Criticism of basic income plans is sometimes based on the idea that it’s not fair that tax-payer’s money should go to people who didn’t “earn” it. Sometimes critics say that giving “handouts” just makes people dependent. But the evidence strongly suggests that not only does a guaranteed basic income spur motivation to succeed, but it also stimulates the local economy. When people are no longer living on the edge, they can buy things, and they tend to do so locally. The increase in demand for goods and services create jobs and provides income for local business owners. There are also potential savings in health care, policing, EMS, the justice system, and various social programs.
Another common response to basic income plans is that the government should simply raise the basic personal tax deduction. This benefits those who earn more than the basic deduction, but does absolutely nothing for the poorest of the poor, who are already living on less than the current deduction level. Basic income is intended to benefit those in poverty, and the trickle up of their increased buying power will benefit those in higher income brackets.
Some critics envision that these poorest citizens are unemployed because they lack ambition or just wish to freeload off society. The fact is that the working world has changed dramatically and many of those living below the poverty line are working, often more than one job. But many jobs are part-time, minimum wage, employers keep each employee’s hours low, and being given 2 shifts one week instead of the usual 3 at one job can be the difference between paying the rent and being out on the street. Those living just above this level are still faced with precarious work. Contracts, temporary positions, and hours that are at the whim of the scheduling manager, all keep capable people in a struggle to stay afloat.
The evidence supports moving forward with a pilot project. The time is now. This is truly a hand up, with a defined exit strategy once recipients’ incomes rise above a certain level. And, to be fair, traditional efforts at eradicating poverty have not been terribly successful. Medicine Hat Alberta, a traditionally very conservative community, tried something controversial and ended homelessness in that city. It’s time to try something different to end poverty.
Photo Credit: Toronto Star