OPINION: Time ripe for basic income plan

Poverty has been an issue in London for a long time and we have done everything except eradicate it.

There’s one way to do that and it’s through a Basic Income Guarantee, which would ensure that everyone has an income sufficient to meet their basic needs for food, shelter, and clothing.

Similar to the existing Canada Child Tax Benefit, OAS/GIS, GST credit, it would operate like a negative income tax, Basic Incomewhere people earning below a certain amount receive a direct supplemental pay from the government.

It would put a floor beneath all Canadians, not letting them fall through the cracks.

Federal, provincial and municipal governments have always argued that poverty is a complex problem. Many of our local agencies and organizations will concur. But “complex” is simply a word they use because they truly do not have the will to end it. It is an argument most often used by all the status quo defenders.

It’s time to stop the danger of subtle manipulations by our governments, special-interest groups, organizations, agencies that are perpetuating the problem and not actually fixing it.

We currently spend more than $160 billion annually, combining the various federal, provincial and municipal welfare programs.

Indeed various means that we have a multiplicity of these programs — overlapping, confusing, and riddled with perverse incentives — which is a big part of the problem. The safety net is for too many people a spider’s web, in which they can remain trapped for years.

The truth is that, despite our efforts to date, one in 11 Canadians still live in poverty, as measured by the Low Income Cut Off. The poverty rate is nearly 17 percent in London alone.

Instead of the existing array of tax credits and social assistance programs, we can take the current billions of dollars that go towards it and eradicate poverty though a simple basic income.

Eliminating the bloated bureaucracy to administer these programs will also save taxes and would remove the intrusive and offensive nanny-state overregulation of the lives of the poor.

Between 1974 and 1979, the Canadian government tested the idea of a basic income in Dauphin, Manitoba, giving people enough money to survive in a way that no other place in North America did before.

Although some of the documented data has been lost, the results were intriguing.

There was no significant decrease in employment rates and economic productivity actually increased. There was an 8.5 percent reduction in hospitalization – saving taxpayers $4 billion annually. If this was extrapolated to the entire health care system then the savings could amount to over $17 billion.

Although women took longer maternity leaves, it reduced daycare costs, and there was an increase in graduation rates in school amongst youth. We know from proven studies that more education is the foundation for economic success—individually and collectively. Crime rates also dropped.

Given the magnitude of the crisis we could face by jobs lost to automation, our politicians need to begin addressing Basic Income as a legitimate idea.

We need a modern day pilot of a basic income so we can further understand the labour market effects, direct costs and benefits of the policy. Even if it turns out that a basic income is not better than the status quo, we will learn important lessons from the pilot.

The pilot should be in London because we are a tester city. A place of new ideas, new discoveries and new technologies.

Basic income is an idea that could give dignity to thousands of people and accomplish something that is overdue in our rich and wealthy countries; eradicate poverty.

Amir Farahi
Amir Farahi

Amir Farahi is the Co-Founder & Executive Director of the London Institute. He is an entrepreneur, columnist, public speaker, and is currently specializing in Economics and Political Science at Western University.

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