Hamilton, Ontario, will become a laboratory studying the effects of a universal basic income.In a move she described as necessary during an era of economic uncertainty,“from technology to Trump,” last week Ottawa Premier Kathleen Wynne announced a pilot project to gauge the effectiveness of a universal basic income.
The program, the Ontario Basic Income Pilot (OBIP), will randomly select 4,000 citizens within three regions: Hamilton, Ontario’s third-largest city and one that has seen its once-dynamic manufacturing sector struggle in recent years; Thunder Bay, a city on Lake Superior near the Minnesota border that has also seen a decline in manufacturing; and the town of Lindsay in the southeastern region of the province.
Participants will receive an income supplement for three years. Single people will receive almost $12,500 (CAD17,000) annually, while a married couple will collect approximately $17,500 (CAD24,000).
To encourage recipients to seek employment (or to keep the jobs they already may have), citizens participating in the program will see that amount decreased by only 50 cents for each dollar they earn. In other words, someone who earns CAD10,000 from a part-time job would receive CAD11,989 in basic income for a total income of CAD21,989. Anyone who happens to have a disability would receive additional income as well.
Premier Wynne expects the program to cost the province about $110 million (CAD150 million). Citizens taking part in the pilot would still be able to receive childcare and healthcare benefits in addition to this income supplement.
Canada joins Finland and Kenya as the first countries on earth to begin testing universal basic income programs. In Kenya, thousands of citizens who usually survive on about $1 a day will receive an income regardless of whether they work or not. That project, led by the NGO GiveDirectly, is expected to cost about $30 million and will last for the next 10 to 15 years. Earlier this year, 2,000 Finnish citizens who were either were collecting unemployment benefits or other types of income subsidies were enrolled in a two-year program that will supplement their incomes by $610 (560 euros) monthly – and those funds will not be taxed.
The growth of the gig economy, as well as the surge in automation, has sparked discussions over the merits of a universal basic income all across the political spectrum. Those on the left say such income plans can compensate for what has become an increasingly volatile job market and will give citizens the financial security that increasingly eludes many working families. Conservatives are increasingly warming up to the idea as, in theory, a universal basic income could eliminate government bureaucracy and many social programs. And some advocates insist a system universally applied to all citizens could also be a boon for sustainable development, as it could shift society to a more stable economic system that goes beyond consumerism.
The concept is still in its infancy, but momentum is slowly growing. Vermont recently introduced legislation that would fund such a system via a carbon tax. TriplePundit recently interviewed a libertarian candidate for California’s governorship who wants to fund a generous universal basic income by developing more of the Golden State’s coastline. And members of the European Union’s parliament have begun to suggest that the world’s largest trading bloc consider such a means to ensure economic stability.
Premier Wynne’s program has it share of critics. One Canadian professor of economics described the program as an interesting social experiment, but one that will probably just fund grown-ups who are already living with their parents. Others suggest it does not go far enough, as those recipients will still have to struggle financially in order to survive. The libertarian Cato Institute, while open to the idea, says governments should not fall into the “same traps” that it argues have bedeviled social welfare programs for decades.
But the concern shared by most critics of a universal basic income is that, since it has never been implemented widely, we are venturing into the great unknown. Pilot programs like those in Ontario, Finland and Kenya — and the data that will be mined from these studies — will help policymakers, as well as citizens, solve 21st-century problems that cannot be mended with last century’s solutions.
Image credit: Dan Zen/Wiki Commons
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