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Poverty and Homelessness

Basic Income Part IV: Recommendations & a Commitment to British Columbians

Introduction

Over the fall, we have explored the concept of basic income in a series of posts on my website, asking for your feedback on each post. The responses I have received, through comments on the website and my Facebook page, as well as in calls and emails to my office, have shown me that there is significant interest in the idea. The reaction has included high levels of support and enthusiasm, as well as a number of concerns and questions.

Your comments and our research have informed our proposal for moving forward with exploring how basic income could contribute to building a better future in BC. In this final post I will summarize what our series has explored so far, and why we should consider basic income as a tool to help us rectify some of the problems that we face today in BC, and those that we may face tomorrow.

The status quo in BC

After a general introduction to the concept of basic income, our second post in the series discussed what poverty looks like in BC, the social assistance programs available and how they can fail to help those most in need. It also explored how basic income could help to alleviate poverty in our province. We know that BC has higher rates of poverty and child poverty than the national average: poverty stands at 11-16% and child poverty is even higher, at 16-20%, depending on the measure used. We also know that poverty is not spread evenly across population groups and regions in BC. Amongst lone parent families, for example, 50% of children live in poverty; aboriginal people, immigrants, and people with disabilities are also more vulnerable. Some regions are disproportionately affected: on the Central Coast, for example, the child poverty rate is above 50%.

After looking at poverty and social assistance in BC, we focussed on the trends we are seeing in the world of work: the rise in precarious employment and the trend towards increasing automation of jobs. Our third post outlined the shift we are experiencing as a population away from long-term, full-time work with benefits, toward short-term, part-time, and contract-based work. Federal Finance Minister Bill Morneau said recently that Canadians must get used to “job churn”, and this is a national trend that BC has not escaped: 75% of jobs created in the last year have been part-time. This situation has left many with significant financial insecurity,  juggling part-time jobs, struggling to make ends meet, and worrying about an uncertain future.

We also examined the increasing automation of jobs. Many studies predict that automation will eliminate a huge number of jobs across a range of sectors: one study, for example, predicts 47% of jobs are at high risk of computerization over the next 20 years. Jobs in manufacturing, transportation and warehousing, and office and administrative support are widely cited as the most susceptible (see here and here, for example). The impact on BC of job losses in these sectors would be very significant: the transportation and warehousing sector employs 140,000 people, while manufacturing employs 168,000, down 12,000 from a year ago. Already BC is one of the most unequal provinces in Canada, a problem that automation would exacerbate as it replaces mostly moderate-paying jobs and concentrates the benefits in the hands of a few beneficiaries.

Automation is an issue that those in the technology industry are taking very seriously: Amazon’s chairman, Jeff Bezos, has said “It’s probably hard to overstate how big of an impact it’s going to have on society over the next twenty years.” Yet despite widespread acknowledgement that automation poses a serious threat to our workforce and could have widespread social implications, it does not seem that our government is considering the seriousness of the issue. As politicians we have an obligation to take the threat of automation seriously and prepare for the possibility of a future in which the world of work as we know it is fundamentally altered. We cannot be left playing catch-up, merely reacting to the moves of industry and the development of technology, and rushing to create policies to mitigate the adverse consequences after they have already taken hold.

Recommendations

Already, the economy in BC is not working for many. Despite our wealth as a province, and the many resources on which we can draw, many people in our province face substantial financial insecurity. While we have seen economic growth and the Province projects a budget surplus of $2.24 billion, we have poverty levels that have remained unchanged for years, welfare rates that haven’t increased since 2007 and that leave recipients well below the poverty line, cities that are increasingly unaffordable, and unprecedented rates of food bank use. This is a reality that we have the opportunity, and the obligation, to change.

Moreover, simply raising the minimum wage is not an adequate answer, given the changing conditions in the world of work. A higher minimum wage alone fails to provide financial security to those affected by the rise in precarious employment, as you only benefit to the extent that you maintain stable employment with sufficient hours, something that is becoming unattainable for more and more people. Furthermore, it does not respond to the threat of automation. You need to have a job in order to benefit from a higher minimum wage, so it does not help people made redundant due to automation. Combined with the increasing ability of companies to automate, a higher minimum wage alone also runs the risk of accelerating the drive toward automation, by making humans relatively more expensive than their robotic counterparts.

Basic income could be an effective tool to tackle the persistent, intergenerational poverty we see in BC, and the shortcomings of our current social assistance programs. It could also help those who are suffering from the rise in precarious employment by providing some measure of financial security, and preventing those on the edge from slipping into poverty due to inadequate hours or job transitions. It could also provide a means to make up for the structural unemployment and inequality created by automation, and keep the economy going by providing people with purchasing power. Moreover, basic income has more visionary potential: it could provide people a stable base on which they can take entrepreneurial risks, pursue further education or retraining, or spend more time doing work that is essential to our society but is not financially rewarding, such as taking care of family members in need. It could therefore improve our wellbeing as individuals, and our resilience as a society.

To achieve these goals, a basic income would need to be high enough to raise individuals and families across the Province above the poverty line. To be affordable, it would likely need to be conditional on income (i.e. not a universal basic income to all individuals regardless of income, but rather a targeted payment to those who fall below a determined threshold). It would also need to take into account the differences in the cost of living across BC,  to ensure that people are not consigned to poverty in our cities.

Basic income holds exciting prospects for improving the lives of many in our Province and securing us against an uncertain future. However, it is important to recognize some of the uncertainties inherent in the idea and respond to the concerns raised by a number of people who have commented on previous posts.

The most common question is whether basic income would provide a disincentive for people to work. Would basic income encourage people to leave the workforce, or discourage them from joining in the first place? Or, on the other hand, would it provide a safety net, and a level of autonomy necessary to encourage entrepreneurship, retraining, and the pursuit of educational goals? What would be the overall balance in a community? Would there be an effect on young people specifically? The question of how basic income would affect people’s choices about working is difficult to answer in the abstract, and we have limited real-world experience from which to draw. The Dauphin, Manitoba pilot found that the negative effect on people’s willingness to work was negligible for the general population, but more pronounced for mothers with young children, as well as school aged teenagers from low income families, who completed high school instead of leaving to join the workforce.  The question of cost has been the second-most discussed issue. What would be the net cost of basic income? Would basic income create an inflationary effect? How would the social benefits translate into cost savings? Which social programs could be streamlined or eliminated, and which supports would need to be maintained, perhaps in an altered form?

Pilot Projects

The need to answer these questions, and others, leads me to conclude that pilot projects are a necessary step in considering implementing basic income in BC. A policy change of this magnitude has significant associated opportunities and risks, many of which cannot be quantified in the absence of real world results. Pilot projects would allow us to test how such a policy could be rolled out effectively, calculate the net costs, and measure the outcomes on families, individuals, and communities in BC.

A number of other jurisdictions are undertaking pilot projects. Finland and the Netherlands are both staging pilots in 2017, while the charity GiveDirectly is staging a pilot in Kenya. In Canada, Ontario is currently undertaking community consultations to inform their roll out of pilot projects in 2017: they are designing their pilots to determine whether basic income would be more effective than their current social programs in lifting people out of poverty and improving health, housing and employment outcomes. Quebec has also shown considerable interest in basic income. And earlier this month, MLAs in PEI voted unanimously to approve a motion calling for developing a basic income pilot project in partnership with the Federal Government. There is no reason why BC should be left behind in the move to test this idea.

To be effective in tracking the effects of basic income on some of the most pressing problems facing BC, including poverty, inequality, and economic change, the places selected for pilots should be particularly affected by these issues. Places such as Port Alberni and Prince Rupert provide examples of potentially appropriate sites for a pilot. One pilot site should be a relatively small town, to enable saturation in order to measure the effects on the community as a whole, as well as on individuals and families within that community. The project would likely need to be at least five years long, in order to enable us to measure the poverty, health, education and employment outcomes, and to calculate the net cost of such a program, taking into account the social benefits that accrue over time. We would seek the partnership of the Federal Government in testing basic income, as PEI has decided to do. We would also need to create residency requirements to avoid a large influx of people into the pilot site.

Beyond these fundamentals, a committee that is independent of the governing party should be established to undertake further analysis of basic income, to hold community and stakeholder consultations, and to advise on the details of how pilot projects should be designed and implemented. There are a number of specific issues that need to be investigated, such as: parameters for tax rates on earned income above the basic income threshold; interactions with other social programs and supports; how to mitigate risks to vulnerable groups; and how to incentivize the pursuit of education as well as paid and unpaid contributions to society.

Conclusion

We must address the unacceptable levels of poverty and inequality in our province, mitigate the adverse consequences of the rise in precarious work, and prepare for a future that may bring fundamental economic change through technological advance. To address these challenges we must create forward-thinking policies, informed by a commitment to a more equitable future and strong evidence on how to get there.

Basic income could be one such policy. It could help us alleviate poverty, foster healthier families and communities, encourage entrepreneurs and volunteers, enable education and retraining, and allow British Columbians dignity and autonomy while they navigate a changing world of work. With the right tools and foresight, and guided by evidence all the way, we can support a 21st century economy that is resilient, and craft a future that works better for everyone.

As premier in a BC Green government, I commit to introducing pilot projects that explore the costs and benefits of basic income.

I continue to welcome your comments, particularly if you haven’t yet had a chance to share your thoughts on basic income and the role it could play in BC.

Touring Vancouver’s downtown east side to learn more about the ongoing opioid overdose crisis

Today I visited Vancouver’s downtown east side to learn more about the overdose crisis plaguing British Columbia.

Earlier in the day, shocking statistics were released by the B.C. Coroners’ Service. Over the period January 1 to November 30 2016, there have been 755 overdose deaths in British Columbia with 128 of those fatalities occurring in November. Year-to-date statistics reveal a 70% increase from last year.

Those following my blog will know that we have written previously on this subject. On December 2 we outlined some of the steps that individuals could take if they encounter someone experiencing an opioid overdose. On December 15, we provided a more comprehensive analysis of the problem, and pointed out the need for a comprehensive, proactive approach to dealing with it.

During our tour today, Jonina Campbell, the BC Green candidate for New Westminster in the upcoming provincial election, and I were profoundly moved by what we experienced and the stories we heard. As Jonina noted in the statement we released after our tour (reproduced below), we witnessed “a grassroots effort of downtown eastside community members who have come together, because it is their friends and family who are suffering and dying.”

Thank you to Sarah Blyth, who is working with the Overdose Prevention Society, for taking the time to tour us around the downtown east side and educating us on the overdose crisis.

Later in the day I appeared on CBC’s On the Coast (starting at the 52:48 mark) in an attempt to convey what we learned from our visit.


Media Statement


Media Statement, Dec. 19, 2016
Statements from Andrew Weaver and Jonina Campbell following tour of pop-up safe injection site in downtown east side
For immediate release

VANCOUVER B.C. – B.C. Green Party leader Andrew Weaver and New Westminster candidate Jonina Campbell released the following statements after touring a pop-up safe injection site near East Hastings and Columbia streets in Vancouver:

“I have been deeply moved by the dedication and commitment of those working at Vancouver’s pop-up safe injection sites – volunteers who are working with few resources to save lives that would otherwise likely be lost,” Weaver said. “Sarah Blyth, Anne Livingston and others who have acted so selflessly are to be commended for taking action in an incredibly desperate situation.

“Today, the B.C. Coroners Service reported that a staggering 755 people died from illicit drug use from January 1 to November 30 this year. The opioid crisis is out of control. Federal Health Minister Jane Philpott needs to immediately declare a national health emergency, which would give chief medical officers the power to deal with this crisis as a health issue. It is also critical that the federal government immediately repeal aspects of the Harper-era Bill C-2 that make it extremely difficult for cities to open safe-injection facilities like Vancouver’s InSite. Community members have been forced to pull together scarce resources to provide life-saving services on their own. It is unconscionable that our communities are barred from responding with the most effective, life-saving measures. The consequences are simple – the more we dither, the more people die.”

“The approach of the past, to treat drug use as a criminal issue, does not work. Drug use is a public health issue. Lack of treatment facilities has been a major contributing factor, while the systematic underfunding of mental health services has had broad reaching consequences. The scale of this tragedy forces us to ask some very difficult questions, including the question of decriminalizing illicit drugs. The Portugal model, where use or possession of illicit drugs was changed from a criminal to administrative offence, has proven to dramatically reduce STIs and drug-related deaths. These deaths can happen to anyone. As a society, we must respond accordingly.”

“I would like to call on all provincial leaders to come together on this issue,” Campbell added. “Andrew is the only party leader to tour a pop-up safe-injection site. While Premier Clark and John Horgan have stated that they will not visit one, I urge them to reconsider. We must put humanity above all else. The fentanyl crisis is a community health issue and therefore, local politicians must learn firsthand about what is occurring and what can be done to stop these tragic deaths.”

“We must not forget our responsibility to support first responders, frontline workers and volunteers, who are trying to cope with insufficient resources and the trauma of being on the ground. This is a grassroots effort of downtown eastside community members who have come together, because it is their friends and family who are suffering and dying. What I witnessed today was a tragedy of epic proportions. Few British Columbians understand the scale of what is happening. We must support those who put themselves in the middle of it, hoping to save one life at a time.”

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Media contact
Mat Wright, Press Secretary, Office of Andrew Weaver, MLA
+1 250-216-3382 | mat.wright@leg.bc.ca

Statement on the need for BC poverty reduction strategy

Media Release: November 16th, 2016
Weaver statement on the need for BC poverty reduction strategy
For Immediate Release

Victoria, B.C. – The combination of a low minimum wage, high cost of living, inadequate social assistance, and lack of well-paying jobs has resulted in widespread poverty across British Columbia – the only province without a poverty reduction strategy.

Peter Fassbender, Minister of Community, Sport and Cultural Development, recently said he didn’t see the need for a poverty reduction strategy.

“It is outrageous. Comments like these show how out of touch the B.C. Liberals are with the issues facing everyday British Columbians,” said Andrew Weaver, Leader of the B.C. Green Party. “They are more interested in building an economy that  supports their corporate donors than they are in building one that supports the British Columbians that they were elected to represent.”

“The B.C. Liberals have spent 16 years claiming they need to grow the economy before they can deal with poverty. Our economy has grown, and yet British Columbia continues to have one of the highest poverty rates in Canada. Their trickle-down approach to poverty reduction is not working and they have no plan to fix it,” said Weaver, the MLA for Oak Bay-Gordon Head.

The BC Liberals’ jobs plan does not come close to addressing poverty in BC. 55,000 jobs have been created since last October, but 75% of these jobs (41,000) are part-time positions.

“The creation of part-time precarious work does not amount to a poverty reduction strategy and it does nothing to help struggling families in B.C.”

Food bank use is at an all-time high in BC: 103,400 people used food banks in March 2016, according to Food Banks Canada’s annual HungerCount report. Children made up almost a third of that number. This makes 2016 the 3rd year in a row that food bank use has increased. Charities are left with the responsibility to fill the gaps left by government inaction: people are relying on charities to meet their essential needs for food, clothing, and shelter.

“I personally know of a growing number of students who use food banks because they can’t afford to live,” said Weaver.

The unprecedented rate of food bank use in BC today speaks to the utter failure of the BC Liberals to promote economic growth in a way that serves British Columbians, and not just corporations. BC has one of the highest levels of poverty in the country, with between 11-16% of adults and 16-20% of children living in poverty, depending on the measure used.

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Media Contact
Mat Wright – Press Secretary, Andrew Weaver MLA
1 250 216 3382
mat.wright@leg.bc.ca

 

 

 

 

 

Basic Income Part II: The Current State of Poverty and Income Assistance in BC

This is the second post in our four-part series exploring the concept of “Basic Income”. Our first post focused on providing background information on the topic.  It prompted more than 60 comments on this site and more than 450 comments on my MLA Facebook page. As a consequence, it is apparent to us that there is broad interest in the idea.

1. Responding to your comments

Our introduction to the concept of basic income received a huge number of thoughtful responses. Many shared their own stories about challenging periods in their lives: time spent living in poverty or on the edge of it, working in precarious or underpaid positions with uncertain futures, and struggling to raise a family or achieve personal goals in this context. We are grateful to everyone who took the time to share their feedback on the idea of a basic income, for the thoughtfulness of the comments and the support and commitment that so many showed to working towards a future that is more just and equitable for all, whether through a basic income policy or other means.

The comments showcased a number of common hopes that people hold for a basic income policy, dissatisfaction with the status quo, and concerns for the risks that a basic income could involve. In this post we will elaborate on some of the themes that we found in the responses, diving deeper into the situation we are in today.

In the responses to our backgrounder, the most widely expressed sentiment was hope in the idea that a basic income policy could end the poverty cycle, eliminate the traps that keep people in poverty throughout their lifetimes and across multiple generations, and treat those in need with greater dignity. In response, in this post we want to focus more closely on the current condition of poverty in BC and our response to it, and highlight how a basic income might offer an alternative solution.

2. Poverty and Social Assistance in BC

We have already highlighted BC’s higher than average rates of poverty, with between 11-16% of adults and 16-20% of children living in poverty, depending on the measure used. Poverty disproportionately affects children and single-parent families: more than half of all children living in single-parent families were living in poverty in 2013, compared to 13% for children in couple families. Aboriginal people, recent immigrants, and people with disabilities are also more vulnerable to poverty.

Estimates of poverty levels differ according to the measure used. The low income measure, low income cut-offs, and the market-based measure are three measures commonly used in Canada.

  1. The low income measure (LIM) is a relative measure, set at 50% of median adjusted household income.
  2. The low-income cut-off  is an income threshold below which a family will likely devote a larger share of its income on the necessities of food, shelter and clothing than the average family. The average family spends 43% of their income on food, shelter, and clothing, whereas families below the low-income cut-off usually spend 63% of their income on these necessities.
  3. The market-basket measure is based on the estimated cost of purchasing a “basket” of goods and services deemed to represent the standard of consumption for a reference family of two adults and two children, including: a nutritious diet, clothing and footwear, shelter, transportation, and other necessary goods and services (such as personal care items or household supplies). The cost of the basket is compared to disposable income for each family to determine low income rates.

Each of these measures result in slightly different statistics, hence the range of numbers used.

3. Details of current social assistance programs

There are a myriad of programs that make up income assistance in BC, specific eligibility requirements, and a complex application process that may include interviews, home check-ins, and mandatory work search periods. In your comments, many of you spoke of the invasiveness, restrictiveness, and stigma of current income assistance programs.

Welfare rates in BC today are $610 per month for a single individual without a disability who is expected to look for work. The rates haven’t increased for nearly 10 years. Advocacy organizations estimate that a single individual on welfare has only $18 per week to spend on food; the organization Raise the Rates recently ran a challenge to illustrate the difficulty of eating on such a small budget. One individual who we spoke with recently shared his personal story of living on income assistance: he is disabled, and so receives income assistance for persons with disabilities, which totals just over $900/month. He wants to return to school to receive training and accreditation, but the strict limits on how much he can save have prevented him from doing so. He is seeking work, but to improve his prospects he needs to get more education, and the claw back of dollars earned has been a disincentive for him to seek out a low-paying job. Furthermore, the affordability crisis has affected him directly: he was evicted because the land on which he lived was being developed into condos, and his new rental unit requires almost all of his income, thus requiring him to rely on food banks for food. He calls being on income assistance “humiliating and constricting”. This individual’s story highlights a number of struggles that many face in trying to move their lives forward while on income assistance.

It’s important to note that many British Columbians living in poverty are not welfare recipients. Working poverty is a growing problem across BC: Vancouver had the second-highest rate of working poverty in the country (behind Toronto), at 8.7% in 2012, although this percentage is likely higher now given the recent affordability crisis affecting the region.  The high cost of living, the low minimum wage, and the growth of precarious employment have contributed to rising levels of working poverty. The minimum wage was recently raised to $10.85/hour, whereas the estimated living wage is $20.02 in Victoria and $20.64 in metro Vancouver. The living wage is what a family needs to cover basic expenses, such as food, clothing, housing, child care, transportation, and a small savings in case of emergencies. It is calculated based on a two-parent two-child family, with both parents working full-time. The discrepancy between the minimum wage and the amount of income required to cover basic expenses leaves many families across our Province below the poverty line.

4. Basic income and poverty reduction

A basic income policy could offer a solution to poverty in BC, if the payments are constructed to ensure that all recipients, in different parts of the province, with different family sizes and different challenges, are able to live above the poverty line. If a basic income replaced our current income assistance programs, individuals in need would no longer have to prove themselves eligible or justify their need for assistance, through completing mandatory work searches, interviews, or home check-ins, for example. Simply falling below the income threshold would automatically qualify you. Replacing our invasive welfare system with a basic income that is framed as an automatic payment program, similar to the tax credits and payments many sections of our society receive today, could reduce significantly the stigma around receiving income assistance. This in itself could have a dramatic effect on the self-esteem and social inclusion of those in need of support. 

One issue that is often brought up in discussions of basic income and poverty reduction is the issue of cost. The cost of a basic income policy is potentially significant but is hard to quantify, since it depends on a wide range of factors, including the amount paid, the eligibility requirements of recipients, and which services it will complement and which it will replace. These factors will be discussed in greater detail in a future post. However, it is essential that, in considering the question of cost, we consider the cost of maintaining the status quo, including the hidden and indirect costs to society of our current levels of poverty.

The Canadian Centre for Policy Alternatives estimates that poverty in BC costs society $8.1-$9.2 billion annually. This figure stems from the direct costs of social assistance programs to the government, as well as the adverse consequences of poverty, which have significant costs borne by society as a whole. The consequences of poverty include poor health, due to high levels of obesity, alcohol, tobacco and drug use, as well as inadequate nutrition and physical inactivity), high levels of stress and mental health problems, higher than average levels of domestic abuse, low literacy rates, poor educational performance, and high crime rates. The associated costs of these consequences show up through higher usage of public health care, increased policing needs and costs to the justice system, and lost productivity and economic activity. 

As noted in our previous post, the basic income pilot project undertaken in Manitoba showed significant impacts on the healthcare system in particular: it reduced hospital visits by 8.5%. The decrease in hospital visits was attributed by researcher Evelyn Forget to the reduction of stress in low income families, which resulted in lower rates of alcohol and drug use, lower levels of domestic abuse, fewer car accidents, and lower levels of hospitalization for mental health issues. 

Homelessness, which we explored in a series last winter, is inextricably linked to inadequate income for those working and receiving assistance, a lack of affordable housing, and inadequate access to support services. Homelessness has enormous costs to the BC Government, and a number of studies have found that it costs less to directly address the problem of homelessness and invest in prevention than it does to manage homelessness (see here and here, for example). A basic income could provide an integral part of ending homelessness, but it could not completely supplant other social services, such as supportive housing and mental health and addictions services.

The story of youth in transition is similar: as noted in the previous post, a recent report by the Vancouver Foundation finds that paying all youth ages 18-24 transitioning out of foster care a “basic support fund” of between $15,000-$20,000 would result in overall savings to the Provincial Government of $165-$201 million per year, due to the adverse outcomes youth in transition currently experience and their associated costs.

In your comments, many of you raised concerns specifically with the idea of paying youth a basic income without a work requirement, suggesting that doing so could undermine the development of a work ethic or discourage their entry into the work force. Given the range and magnitude of adverse outcomes that youth in transition currently experience, such a concern may not be warranted, or perhaps should not take priority over helping them avoid such outcomes by whichever means possible. Beyond youth specifically, there was a hesitation expressed by a number of commenters that a basic income would provide a strong disincentive for many people to work, and would thus undermine their sense of self-worth and identity. On the other hand, many of you expressed the mirror image of this thought: that a basic income would provide freedom from the constraints and stress that currently plague those on income assistance, allowing individuals to better their lives, go after their dreams and realize their potential. Which version of this thinking we adhere to depends to a great extent on our assumptions about what factors motivate and prevent people from working, and what gives people satisfaction and fulfillment. This issue will be further explored in our next post in this series.

5. Conclusion

We would appreciate further thoughts from you on the state of poverty and assistance in BC and whether you think a basic income could offer a solution. If you’d like to share a personal story or thoughts that you would prefer not to make public, please email us at andrew.weaver.mla@leg.bc.caIn our next post, will explore the future of work, focusing on the rise of precarious employment and the effects of technological advance. We will discuss what these changes to the world of work will mean for all of us, and how a basic income policy might enable us to respond to these changes as a society.

Let’s explore the concept of basic income: Please let me know what you think

Over the next few weeks I will explore the concept of “Basic Income”. I would be most grateful if you would share your comments, suggestions and concerns with me about this topic as we unpack what it all means in a series of upcoming posts. In this first post we simply provide a backgrounder.

1. What is “Basic Income”?

A basic income is a regular payment that the Government makes to individuals or families in its jurisdiction, which is not contingent on recipients fulfilling specific criteria (e.g. proving that they are active job seekers).

Basic income comes in two basic forms: means-tested and universal. In its means-tested form, a basic income is paid only to those whose income from other sources falls below a predetermined threshold, but is not contingent on recipients’ willingness to work. It is often referred to as “guaranteed minimum income”. In its universal form, a basic income is paid to all, irrespective of income from other sources. The unconditional basic income is often referred to as “universal basic income” or a “citizen’s’ wage”.

The idea of a basic income has become more popular recently, and has garnered support from across the political spectrum. In Canada, Ontario is planning a pilot next year, and Quebec, Alberta, and PEI have also raised the possibility of running pilots in the near future. Internationally, Finland and the Netherlands are both staging large-scale pilots in 2017.

2. Background

a. Poverty and Inequality in BC

The levels of poverty and inequality in BC are high relative to the national average. BC has higher than average rates of poverty, with poverty rates up to 16% and child poverty rates up to 20%, depending on the poverty measure used. BC also has one of the highest levels of inequality in Canada, estimated to be second only to Alberta.

For those needing support, our current system of social programs has a number of shortcomings. The siloed approach, with a myriad of different programs with specific eligibility criteria, allows people to slip through the cracks in the system and leaves many unsure which benefits they are eligible for. It also has a substantial administrative cost. There is significant stigma in collecting welfare today, and many argue that the invasiveness of the current approach, with its stringent conditionality and reporting requirements, strips recipients of privacy and dignity. Additionally, the current system may provide a disincentive for many to join the workforce, due to how quickly the benefits are reduced as any income is earned.

b. A Shifting Economy

Unprecedented technological advance, of rapidly increasing pace, is set to have a significantly disruptive effect on our economy. To now, we have seen deindustrialization and the closure of industries, together with a boom and bust economy in British Columbia that almost defines much of provincial economic history. With increasing automation, forecasts suggest the potential for the rapid elimination of jobs across a wide range of sectors. Automated voice recognition software is already replacing many call centre workers, car assembly plants use more robots than people, and driverless cars and trucks are already significantly impacting the taxi and trucking industries. The effects of automation are predicted to be most strongly felt in moderate and low-paying jobs: Barack Obama’s 2016 economic report predicted that jobs paying less than USD$20/hour face an 83% likelihood of being automated, while jobs paying between $20 and $40/hour face a 33% chance. In the UK,  one third of retail jobs are forecasted to be replaced by 2025. The effects of automation are predicted to spread to higher paying professional sectors as well, particularly the medical and legal professions. Technological advance has been attributed as a cause of increasing inequality by a number of economists because of automation’s effects on jobs and technology’s role in further concentrating the accumulation of wealth in the hands of top earners.

We are also heading toward what is commonly termed the ‘gig’ economy. We are shifting away from the 20th century model of permanent full-time work with benefits toward precarious contract-based work, which is spreading at an increasing rate to workers at all levels of education, trade, skill and profession. Contract-based employment means employers, with an expanding labour pool, can negotiate pay, usually with few or no benefits, outside of union negotiated packages. Examples today include Uber drivers, health care assistants, and sessional lecturers at postsecondary institutions.

3. Potential Effects of a Basic Income: Opportunities and Challenges

Perhaps the most transformational promise of a basic income is its potential to raise recipients out of poverty. Living in poverty takes a significant toll, and the elevated levels of stress that it brings are associated with higher levels of alcohol and drug abuse, domestic abuse, and mental health problems. Those living in poverty are more likely to have inadequate nutrition, use tobacco, be overweight or obese, and be physically inactive. The adverse effects of growing up in poverty on a child’s ability to be successful in school and integrate into the workforce contribute to generational poverty.

The moral case for tackling poverty is self-evident: doing so would have a life-changing effect on the lives of those currently living in poverty and dealing with the problems it brings on a daily basis. The financial cost is also significant: the adverse outcomes of poverty lead to increased use of public health care, more hospitalizations, and lost economic activity, among other effects.

A pilot project undertaken in Manitoba in the 1970s suggests that a basic income policy can have significant impacts on the healthcare system: providing a basic income to residents of Dauphin, Manitoba for 3 years reduced hospital visits by 8.5%. The decrease in hospital visits was attributed to lower levels of stress in low income families, which resulted in lower rates of alcohol and drug use, lower levels of domestic abuse, fewer car accidents, and lower levels of hospitalization for mental health issues.

A basic income could also provide a means to respond proactively to the changes we are just beginning to see in the labour market. As the effects of automation are realized, providing a basic income would enable those affected to retrain for new professions, attend or return to University or College, take entrepreneurial risks, contribute to their communities or other causes through volunteering and civic engagement, and invest time in their families.

A challenge in considering a basic income scheme is predicting its effects on the labour market, specifically the extent to which it might provide a disincentive to work comparable to or stronger than the disincentive often associated with our current social assistance programs. The Dauphin, Manitoba pilot study provides some initial information on this question: it was found that the negative effect on people’s willingness to work was minimal for the general population, but more pronounced for mothers with young children, and teenagers aged 16-18 who completed high school instead of leaving to join the workforce.

A recent report by the Vancouver Foundation advocates paying all youth ages 18-24 transitioning out of foster care a “basic support fund” of between $15,000-$20,000. Doing so, they estimate, would cost $57 million per year, whereas the cost of the status quo is between $222-$268 million per year, due to the range of adverse outcomes that affect youth in transition, including intergenerational poverty, criminal activity, substance abuse, lost educational opportunities, and homelessness. Thus they estimate that establishing a basic support fund for youth in transition would result in savings to the Provincial Government of $165-$201 million per year.

The cost of a basic income program is difficult to predict, and estimates range widely according to assumptions made about the characteristics of the program and its social and economic effects. In costing a basic income it is important not to ignore the cost of the status quo: the direct costs of unemployment, poverty, and homelessness as well as the costs of managing the adverse effects. Nonetheless, the cost of a basic income program to BC is potentially significant, and costs associated with different implementation options must be fully worked out and tested.

4. So what are your thoughts?

While I recognize that I’ve only provided cursory information to initiate this conversation, I would like to hear your thoughts on the idea of a basic income. Do you think a basic income policy holds promise as a potential way forward in BC, allowing us to tackle poverty effectively and prepare for a future in which the nature of work is vastly different from what we have known in the past? What are your concerns about the policy? How would you like to see it implemented? Thank you in advance for your comments.