Be careful what you wish for...
Expensive plan would result in work disincentive; wouldn’t address root problem
The Guardian has on several occasions expressed its support for a basic income guarantee (e.g. editorial “Dollars over data,” July 27, 2017). Provincial government members and social advocates have also proposed a pilot project for P.E.I.
The intent for an income guarantee is laudable. We all want to see people do well, particularly the most vulnerable. But will the results be those that are intended?
To me, there is a fundamental problem with the concept. Income guarantees address the symptom of poverty, not the causes.
Perhaps a fable will illustrate this point.
Once upon a time, in a place not unlike our own, there was a medical clinic. It had many doctors and nurses but there always seemed to be unmet needs; people waiting, maladies untreated.
The administrator of the clinic took note that there was a common denominator for all the patients – they were all in pain or discomfort. So he came up with a simple, all-inclusive solution. He laid off the medical staff, provided all clients with pain relievers and sent them home.
It started off not badly. Everyone’s most immediate need was met. For some it actually worked out well. They had relief and they progressed to better and sustained health. For most, however, not so much. They needed stitching, or medications, or therapy or other services.
What’s worse, for some patients the process developed a dependence on pain relief. They never did recover.
Now, back to reality, nobody would ever run a medical clinic this way. Yet is this not the approach of an income guarantee? If people are poor, give them some income.
People fall into poverty for many reasons. It could be a lack of education or training, health problems, family issues, mental health challenges, low wages, poor economy, etc. While the guarantee would provide immediate relief, it wouldn’t address the limiting issues. Worse, it would almost definitely create dependence.
This is critical because our sense of well being often revolves around work and productivity. It is unintended by the authors, but an income guarantee would be a disincentive to work. It would serve not to enable people but to sedate them.
Advocates would respond that there is no reason a guarantee couldn’t be combined with support measures to better address these barriers. Perhaps, but this is where a critical question comes in – where will the money come from?
An income guarantee is enormously expensive. Some of the cost would have to come from new money; there is just no other way. But some of the funding would have to be taken from existing programs. Employment insurance, job creation, community development, counselling service and others would all be on the chopping block. In most cases, it would be the very services low income people most depend upon.
And what of the savings projected for reduced demand on things such as health care and the criminal justice system? Even if demand did fall, what politician would be bold enough to cut something like health care? Look to the example of education. Did fewer children in the system lead to reduced spending? This is not to say that educational spending should have been reduced (it shouldn’t) but it does say that the idea that a guarantee will result in savings is highly suspect.
Personally, I would very much love to have a simple, all embracing cure for poverty. But I think we should be directing our energies to the more complex set of tasks around economic development, income incentives, disability benefits, childcare, social assistance and support services.
A basic income guarantee would be prohibitively expensive, would result in a work disincentive and would fail to come to grips with why people fall behind. The sentiment is good but the product is in need of a rethink.