Basic Income has been in the news lately, with Elon Musk, CEO and founder of Tesla and SpaceX back in November 2016, predicting that the rise of machines in the workplace could soon mean job displacement and a ‘universal basic income’ for humans. Finland is one of the first countries in 2017 to pilot which started on January 1.
What exactly is basic income?
According to the Basic Income Earth Network, a basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-testing or work requirement.
Many reasons have all been invoked in Basic Income’s favour, including liberty and equality, efficiency and community, common ownership of the Earth and equal sharing in the benefits of technical progress, the flexibility of the labour market and the dignity of the poor, the fight against inhumane working conditions, against the desertification of the countryside and against interregional inequalities, the viability of cooperatives and the promotion of adult education, autonomy from bosses, husbands and bureaucrats.
The inability to tackle unemployment with conventional means has, in the last decade or so, become a major reason for the idea being taken seriously throughout Europe by a growing number of scholars and organisations. Social policy and economic policy can no longer be conceived separately, and Basic Income is increasingly viewed as the only viable way of reconciling two of their respective central objectives: poverty relief and full employment.
What is happening in Ontario?
In June 2016, the Ontario government asked the Honourable Hugh Segal for advice on the design of a Basic Income Pilot. As a result, Mr Segal has submitted a discussion paper, Finding a Better Way: A Basic Income Pilot for Ontario. Which the government is using as the platform for the pilot.
What excites me most is that the recommendations of the Ontario Basic Income pilot would replace Ontario Works and Ontario Disability Support Program (ODSP), which removes many of the restrictions of those two existing programs on current recipients. As noted in the discussion paper:
In answer to this set of questions, it is recommended that the pilot focuses on testing a Basic Income in the form of a NIT (what some would call a refundable tax credit) that would replace Ontario Works and ODSP, and for which Ontarians aged 18 to 65 living in poverty would be eligible. Unlike the support provided under the current Ontario Works and ODSP, the financial support provided would not impose restrictions, limits or interdictions related to financial assets, work-based earnings, or labour force participation.
Individuals would be guaranteed an income equivalent to a determined proportion of the LIM (that proportion differing across experimental groups), which would not be taxed. Additional earnings beyond the Basic Income would be encouraged and taxed at varying rates. These tax rates would apply until an individual has paid, in taxes on earned income, the exact equivalent of the Basic Income, with a threshold (or break-even point) after which earned incomes would be subject to the normal income tax schedule by which all working Ontarians are governed. The taxation mechanisms applied to earned incomes in the context of the NIT would provide incentives for individuals whose incomes are currently below the poverty line to join or remain in the workforce. They would also reduce the costs to the province of implementing a Basic Income, should it choose to do so after studying the results of the pilot.
As you can see in the table above, a single adult would see an increase of $787.75 to $1915.75 per month, and for a couple $814.25 to $2502.25 per month on basic income compared to ODSP, and you would still be able to earn on top of that without same restrictions. The only thing that the paper doesn’t address is whether the other programs within ODSP such as health or disability-related benefits would be cut.
It is of course not full proof and with concerns such as how would we pay for the basic income programs? However, I am optimistic with Ontario piloting this program, and unlike the Mincome experiment in Manitoba back in the 1970s, to have concrete results and to truly address poverty relief and full employment for all.
Be sure to participate in the Ontario Basic Income Pilot public survey before January 31, 2017.