Oct 29, 2019

2019 Rosenbluth Lecture Recap: David Green on Basic Income

Photo by a katz Shutterstock

David Green, Professor at the Vancouver School of Economics at the University of British Columbia and Research Associate with the CCPA-BC, gave the eighth annual Rosenbluth lecture on October 3, 2019. David is heading up the BC government’s panel on basic income. His lecture was followed by three discussants who offered perspectives on David’s talk: Trish Garner from the BC Poverty Reduction Coalition, Chuka Ejeckam from the BC Federation of Labour and Margot Young from UBC’s Faculty of Law.

Basic income (aka, guaranteed annual income) is a Big Idea on both the left and the right dating back to the late 1960s. The concept represents a fundamental rethink of our relationship to the labour market and to government. At its most Utopian, basic income promises to put a floor on poverty and to give people freedom from the drudgery of crappy work.

David began his lecture with an overview of ideas of justice in relation to the economy. He argued that basic income should be evaluated in terms of whether it advances us towards a more just society; that is, whether it provides a basis for enhanced dignity and respect for all.

Canada already has a form of basic income for seniors and children and for both groups it has helped reduce the incidence of poverty. The discussion becomes more complex when thinking about the working age (18-64) population. Three defining features of a basic income are that it is universal, provided unconditionally and is paid to individuals.

Basic income represents a fundamental rethink of our relationship to the labour market and to government.  

A key argument in favour of basic income is that it provides support with dignity. There are currently 135 government transfer and support service programs in BC, many of which require sitting opposite a civil servant to access them, which can lead to a loss of dignity. A related claim is there will be administrative cost savings by delivering basic income through the tax system, but realizing those savings is challenging because many vulnerable people do not file taxes.

While some view basic income as a poverty-fighting addition to the current system, other versions of basic income are more preoccupied with notions of liberty: the ability of people to have income so as to make their own decisions about what is best for them. This vision of basic income is about reducing the size of government and the corresponding loss of public services is problematic.

The libertarian version also raises philosophical concerns that basic income may radically alter the social contract. By providing freedom without responsibility to work, it undermines the welfare state. And it may lead to underutilization of certain services like education in favour of private uses (like going surfing). Many public services and income programs are there not because we want to use them but because we hope we never have to: insurance against unemployment or against illness.

David illustrated two types of basic income: a demogrant, or equal basic income per person; and a negative income tax, which sets a minimum floor income then taxes back additional income earned up to a threshold. A demogrant approach is much more expensive relative to a negative income tax, but both are fiscally challenging in the context of the current BC Budget.

Many public services and income programs are there not because we want to use them but because we hope we never have to.

For example, a demogrant of $18,000 (the same as the maximum for the Old Age Security/Guaranteed Income Supplement program for seniors) would cost $52 billion per year, of similar magnitude to the $58 billion BC Budget. A negative income starting at that same $18,000, with a 30% taxback rate on additional income, would cost less than half as much but at $23 billion it would still be substantial relative to the BC Budget. Even a modest $5,000 annual demogrant would cost $14.5 billion per year; a negative income tax at that amount with a 30% taxback rate would cost $2.4 billion.

While the cost of a basic income program is potentially prohibitive, another critique of basic income is that it would have adverse impacts on productive labour. David argued that the evidence to date shows only small negative labour market impacts (even at the $18,000 above most households would still need paid work). The persistence of precarious work and a low labour share of national income in the face of policy initiatives and strong labour markets speaks to the need for deep, structural change.

Our three discussants added their perspectives on David’s lecture. Trish Garner, from the Poverty Reduction Coalition, flagged the current sociopolitical context of poverty with some 487,000 people in BC below the poverty line. BC’s new poverty reduction plan fails to increase income support from its current paltry levels ($760 per month for a single employable individual).

While the budget numbers for basic income can seem scary, Trish notes it would cost just over $1 billion to lift people on income and disability assistance to the poverty line. If we truly care about reducing poverty, we should improve the existing welfare system in BC. In addition to higher rates, the system could be made less bureaucratic and more unconditional to help people out of poverty.

If we truly care about reducing poverty, we should improve the existing welfare system in BC.

Trish posed two questions for policy consideration: (1) What social policy is the most sustainable? Experience with the welfare system shows that governments can simply let income transfers stagnate over time, whereas building an alternative Universal Basic Services model (as proposed here for the UK) may well be more sustainable. (2) Does it build the notion of the collective good or maintain individualism? While basic income promises more agency of decisions, it can also be seen as an approach to poverty that commodifies the response.

Chuka Ejeckam, from the BC Federation of Labour, noted there are other ways of redistributing income. Union density has not increased, so perhaps we should instead aim for better “pre-distribution” by improving collective bargaining rights and having a more balanced labour market. Society also redistributes income through provision of public services. By cutting a cheque the government may think it no longer has any further obligation to help.

Chuka posited that as we seek to provide dignity, we need to recognize that we impose shame on people experiencing need. The idea of a one-size-fits-all income goes against what we know of the different needs that people have and the many barriers for people to attain a decent standard of living. People with disabilities need more support, so would a basic income for all take away from them in order to give to others with lesser needs? In light of the huge discrepancies in society among households or individuals, equality without equity is not true equality.

Women need the freedom to participate in the paid labour market, not necessarily greater freedom from it.

Margot Young, a UBC Law professor and co-author of a 2009 CCPA research paper on guaranteed income, talked about the claims of enhanced freedoms from basic income and noted that those claims have a gendered component. Individual choice is a limited aspect of justice.

She explained there is something compelling about basic income from a feminist perspective in terms of greater autonomy from patriarchal systems—the economic means to leave abusive relationships, in particular. That said, reality is more complex and we should not ignore the constraints women face in society more broadly. Women need the freedom to participate in the paid labour market, not necessarily greater freedom from it. Basic income could thus reinforce traditional (unpaid, caregiving) homemaker roles, whereas other options like public child care are likely to be more liberating for women.

By the end of the night, the discussants’ and audience comments and questions provided valuable input into the basic income panel’s work. The panel will not be presenting its findings to the BC government until August 2020. Much of its work to date has been to commission 35 studies on various aspects of basic income, including seeking empirical evidence for claims made about basic income. For example, one paper is looking at whether people would actually spend more time volunteering in the community if they had a basic income. That research work will be published as a volume and will be an immense contribution to the literature.

Thanks to David for being our 2019 Rosenbluth lecturer and to Trish, Chuka and Margot for their stimulating thoughts.

Event Video

The following video was recorded live at the Vancouver Public Library at the 2019 Rosenbluth Lecture. Unfortunately the audio quality on the video is low, a higher quality audio file is also available below.

Event Audio

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