My journey to becoming a basic income advocate
Helping those living in poverty helps all of society, and helps to make our economy — and environment — work better for all
I’m a somewhat retired lifelong businessperson who started in business immediately upon graduation from university.
One of the outcomes from the COVID-19 pandemic is that it has highlighted existing economic inequalities that disproportionately harm those who are already suffering from social and financial injustices.
This has led me to employ some uncharacteristically available time to try to see what lessons can be learned so that so many people never have to suffer so much again.
After wrestling with these publicly illuminated difficulties, I came across a book written by two Nobel Prize-winning MIT Economists, Abhijit V. Banerjee and Esther Duflo, entitled, “Good Economics for Hard Times.”
The thought of providing widespread help for people who need money has always been offset by my underlying belief that granting money unconditionally would help create an unhealthy dependency.
This book shows, with empirical experiments, studies, reports and research, that this bias is unfounded. As Banerjee and Duflo report, “Nothing terrible happens when one gives cash to the poor.” And the poor “don’t drink it all and they don’t stop working.”
This was a revelation — to me.
But, if giving money to help the poor doesn’t have negative consequences, and if the solution to poverty and all its adverse impacts on shelter, nutrition, mental and physical health, school, education, training, life-purpose and dignity, is clearly money, then it must be that we (in Canada) just can’t afford to take care of those in need. Statistics Canada reports that about 3.2 million Canadians live in poverty and one in six children live with food insecurity every month.
So, I began an exploration of this type of financial assistance to those in poverty in Canada. Again, the facts simply don’t justify the assumption that Canada can’t afford to provide a Basic Income Guarantee.
Facts show that over recent years the wealthy are becoming disproportionately more wealthy at a much faster rate than wealth is showing up among those in lower income levels.
Consider that it has been reported that the country’s highest paid 100 chief executive officers made, on average, $11.8 million in 2018. In 2016, the average CEO income was $10.4 million.
While average worker pay rose just 2.6 per cent between 2017 and 2018, top CEOs saw their pay rise by 18 per cent during the same period, according to the Canadian Centre for Policy Alternatives.
A June 17, 2020, Parliamentary Budget Office Report indicates:
about 20 per cent of Canada’s wealth is controlled by the richest 0.5 per cent of the population;
The top one per cent of Canada’s families hold about 25.6 per cent of the wealth — roughly $3 trillion — up from a previously estimated 13 per cent;
40 per cent of Canadian families have under $10,000 in net assets.
A 2015 study of wealth distribution from 1999 to 2012, by Uppal & LaRochelle-Cote, states, “Average wealth increased by 80 per cent among families in the top income quintile … and by 38 per cent among families in the bottom quintile …”
A 2019 Report from Basic Income Canada Network (BICN) states:
Nearly one-third of Canadians say they don’t make enough money to pay their bills and their debts;
Another 46 per cent of Canadians report that they make only $200 a month more than their monthly financial obligations;
Almost half of Canadians would not be able to manage if their paycheque were delayed by more than one week;
Nearly 40 per cent of Canadians say they have no savings for retirement;
Many jobs in the gig economy are precarious;
Many service jobs do not offer much continuity, security and/or benefits;
The stress of fluctuating income levels is felt even in middle-income families;
“Economic insecurity has a significant impact on health and well-being. Research shows that people are more likely to develop physical and mental health problems when they experience insecure employment, job loss, income volatility, uncertainty about paying bills, or anxiety about the future”;
á “Having an income floor, which they can count on regardless of what else is happening in their lives, would do a great deal to improve the economic security, and therefore the well-being, of many Canadians”;
á “The rise of right-wing populism, with its anti-immigrant, antielite sentiment has been linked to the rampant growth of economic inequality, the decline of manufacturing, and a governing ideology that suggests that the poor and middle-class should wait for wealth to trickle down, rather than receive from their governments or share in the wealth they help to create”;
á “Basic income could help to counter the current social unrest by building a sense of citizenship, civic rights, and the common good, founded on the basic principle that everyone deserves to live a life of security and dignity.”
Banerjee and Duflo also state: “The most important question we can usefully answer in rich countries is not how to make them grow even richer, but how to improve the quality of life of their average citizen.”
They demonstrate how, without impairing our enterprise economy, helping those living in poverty helps all of society, and helps to make our economy — and environment — work better for all.
I have become more convinced than ever, that making wealth serve all people more equitably is the most important issue facing governments in wealthy countries.
There are many reports on different possibilities for funding a Basic Income Plan, but what is consistent is that they indicate it is quite possible to fund such a plan. (See “Basic Income: Some Policy Options for Canada,” 2019 Report from BICN).
A Basic Income Guarantee is the most available and effective tool for governments in wealthy countries to serve the financial needs of all people equitably.
It’s not easy to learn new things at an old age.
But I have learned that a Basic Income Guarantee in Canada is desirable, doable and affordable.
So, let’s put basic income in place now.
I have become more convinced than ever, that making wealth serve all people more equitably is the most important issue facing governments in wealthy countries