Why a guaranteed annual income won’t work

Canadian cities and European countries support it. All political parties support it but a guaranteed annual income won’t be coming to Canada anytime soon. It’s our North American hangup.

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Kingston city council is the first elected body in Canada to endorse the concept reports Paul Schliesmann in Kingston Whig-Standard. Mayors Naheed Nenshi of Calgary and Don Iveson of Edmonton support it as well.

All federal political parties support it. Justin Trudeau’s Liberals endorsed a guaranteed basic income at a 2014 policy conference. Progressive Conservative Hugh Segal has advocated a guaranteed annual income for fifty years. NDP Leader Mike Redmond of Prince Edward Island supported a pilot project for a guaranteed income in 2013.

Progressive Conservative Premier of Ontario Bill Davis introduced a guaranteed annual supplement for seniors. The result was that poverty for seniors dropped from 35 per cent to just three per cent and their health and quality of life improved.

Finland is about to become the first country in the world to put the concept into practice reports Barrie McKenna in the Globe and Mail. The government’s plan would see every adult citizen paid €800 ($1,201) a month, with the cost partly offset by scrapping unemployment insurance and other benefits.

Right-wing economists such as Friedrich Hayek and Milton Friedman support it because it reduces bureaucracy. Finland’s centre-right Prime Minister is drawn to the simplicity of replacing costly and bureaucratic means-tested social programs with a single payment. “For me, a basic income means simplifying the social security system,” said Prime Minister Juha Sipila.

The Dutch city of Utrecht recently began an experiment that will pay welfare recipients a basic living income.

It has been tried and tested in Canada. Dauphin, Manitoba, tested a guaranteed annual income in the 1970s. A recession and changes of government in Ottawa and Manitoba eventually killed the project, but its findings were impressive.

For five years, poverty virtually disappeared in Dauphin. Contrary to conventional wisdom, giving money to the poor with no strings attached did not undermine the will to work. And there were other potentially huge economic spinoffs. Boosting the income of the poor sharply reduced hospital visits and encouraged more young people to finish high school, according to research by health economist Evelyn Forget, a professor at the University of Manitoba.

“[The Dauphin experiment] ended in disarray because of political and economic upheaval,” Prof. Forget wrote in a recent paper in Public Sector Digest. “It is, perhaps, fitting that the success that it had in improving quality of life is being re-examined in the context of equally troubled times.”

Despite all the benefits, a guaranteed annual income will not be coming to Canada anytime soon. The hang-ups have nothing to do with politics or economics. It has to do with the North American Protestant work ethic.

The attitude of settlers in this continent was that handouts weaken moral fibre. Work builds character. Any disincentive to work robs us of the will to succeed. You see, if everyone received a basic annual income our strength of character would be sapped; we would become hollow shells of our industrious selves.

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1 Comment

  1. Pingback: Annual income by stealth | Eye View

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