BASIC INCOME REPORT: ONE SIZE FITS NO ONE.

A letter-writer to this week’s economist reminds us of “the fabled moderate chant of english protesters: ‘What do we want?’ ‘Gradual change!’ ‘When do we want it?’ ‘In due course!’ ”

Moderation is not the spirit of the age, however. From the very first weeks of a pandemic whose course and ultimate impact are still unknown, many commentators have argued it “laid bare” so many unpleasant social facts that revolutionary upheaval seemed the only fitting response.

So it is encouraging to read the unrevolutionary final report of british Columbia’s expert Panel on basic Income — or at least dip into it, since it’s 529 pdf pages long, with 40 accompanying studies by some of the best public policy economists in Canada. Among its 65 recommendations, “establish a basic Income for british Columbians” is not to be found — probably because the panel applies its own recommendation 63: “rigorously evaluate major reforms.”

The challenge of any kind of guaranteed income is arithmetical. If you make the guarantee at all generous, you have to phase it out quickly as you move up the income ladder; otherwise it becomes hideously expensive. but phasing it out implicitly taxes income: earn more income, lose more benefit. Like any tax, that discourages earning. The faster the phase-out, the higher the tax. On the other hand, the slower the phase-out, the higher up the income scale you’re still paying out benefits.

The number of possible combinations of guarantee, phase-out rate and phase-out income level is basically infinite. because resources aren’t infinite, however, not even in COVID budgeting, the expert panel looked at “only” 1,640 simulations — thoroughness simply not available to previous generations of researchers. Their conclusion is that a universal basic income (where the phase-out rate is zero: i.e., everyone gets the same amount) is “orders of magnitude” more expensive than income-tested programs. And because it goes to everyone, poor or not, its poverty-reduction bang for buck is minimal.

by contrast, and as stands to reason, the greater the income-testing, the greater the poverty reduction. but greater income testing means, as the report says, “work disincentives … Any feasible basic income that also seeks to sharply reduce poverty simply would not reduce the welfare wall in the way many basic income advocates claim it would.” The welfare wall is the problem that if you reduce welfare recipients’ benefits by $1 (or something similar) for every $1 they earn on their own, that pretty much walls them into permanent welfare: their financial gain from working is minimal.

In this age of walking on eggshells, it is refreshing to read negative conclusions expressed clearly. Kudos for plainspokenness to the three experts: panel chair david Green of ubc, university of Calgary prof Lindsay Tedds and emeritus Simon Fraser university prof, Jonathan rhys Kesselman (who, as it happens, appears elsewhere on this page). Their rejection of even a pilot project on basic income is in effect “Nothing to be learned here, folks. Move along.”

but if not revolution, what? Muddle through in a focused way. (It’s not british Columbia for nothing.)

One of my favourite parts of the report is its “sunburst” diagrams of existing federal, provincial and municipal programs addressing poverty (see them at https://bcbasicincomepanel.ca/charts). There are no fewer than 177 different cash and in-kind programs in b.c. This being b.c., imagine each program is a colour-coded log. Arrange the logs in a big circle so that one end of each faces a central point and the effect is a sunburst of programs you can scroll over to find out more about. It’s not quite a video game but for academic researchers it’s pretty good.

A first reaction to there being 177 different programs already is that, as both basic income proponents and instinctive conservatives could agree, there’s got to be room for simplification. but the experts argue that a pure-rationalist start-from-scratch approach would be unwise. And the advantage of a “system” that has built up over the years as different social problems have emerged is that it targets people in specific situations with particular kinds of assistance. better to rationalize where you can and see if there’s anyone that 177 programs somehow have missed. by contrast, the one size of a basic income program would not fit all. It might fit no one.

After such a gap-seeking analysis, the panellists recommend gap-filling that would cost $3.3 to $5 billion a year but reduce poverty more than putting the same money into a basic income.

One reason the panel rejects basic income is that it is too individualistic — which, of course, many economists would see as a virtue: empower people with money and then empower them again by letting them make their own spending choices. but the panel feels that doesn’t meet its theory of justice, which is inspired by Adam Smith’s Theory of Moral Sentiments, though not his Wealth of Nations, and is very communitarian: “emphasis on individual choice often casts in-kind goods and services” like health care and education “as interventionist and paternalistic.” The aim of policy should instead be a “just society” that recognizes and builds on humans’ need for social connection and social respect.

Such obligatory chumminess doesn’t sound the least british.

in this age of Walking on eggshells, it is refreshing to read negative conclusions expressed clearly.