Posted on / by Emily / in Blog

Will Universal Basic Income Be the Poverty-Reduction Strategy We Need?

Those looking to explore the latest research about the potential for a Universal Basic Income in Canada, check out the 17th annual North American Basic Income Guarantee (NABIG) Congress, May 24-27 at McMaster University.

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Conversations about Universal Basic Income (UBI) are increasingly on the rise in Canada. Prince Edward Island has passed its first motion to participate in a pilot project with the federal government while the Ontario Liberals have successfully completed the enrolment phase of their own three-year pilot project. Thus, it is becoming increasingly necessary to discuss what benefits or drawbacks a UBI could bring, particularly as it is being constructed from within the very neoliberal structures which have shaped our current economic strategies.


Employment & Welfare

Today’s employment landscape is one marred by seriously defunct socio-economic systems and an overburdened and failing welfare strategy. Since the 1970s, national economic policies have focused more on GDP growth than on full employment, with noticeable repercussions: increased disparity, lack of job security, fewer benefits and slashes to social safety nets. These factors combined with the rapid advancement of Artificial Intelligence (AI) technology in the workplace have led to what Guy Standing refers to as the “Precariat” class: those who live in a constant state of precariousness and insecurity. The Precarity Penalty”, released in 2015 by PEPSO (a joint effort between McMaster University and the United Way) found that an astounding 44% of working Canadian adults fall into this category. The research also revealed that this group was found to live in households whose overall income was less than 38% than those in “stable” employment, represented high rates of mental and physical stress, community and family tension, and difficulty securing childcare and job training.

Trying to respond to all of these market and systemic failures is an overstressed and poorly managed welfare system – one that, as a result, is invasive, rigid and all too often misses the mark.

There is ample criticism that UBI is not the solution to this dire climate. Groups like The Fraser Institute point to the high costs associated with its implementation, and claim it will actually discourage people to work. The economics indeed play a dangerous balancing act. If the basic income is set too low, no real impact can be made. Some argue that Ontario’s projected $1320/month (as reported by Hugh Segal’s “Finding Better Way”) falls into this category. If set too high, the project’s sustainability is threatened – not to mention that recipients can “coast” on the base provision and lose motivation to work. Or so the argument goes.

To engage in a debate regarding numbers that have yet to be finalized seems moot in comparison to the less discussed issue at hand: can UBI be constructed in a way that is truly progressive and enabling, or is it doomed to be a devastating capitalization of social welfare, incapable of detangling itself from its neoliberal foundation?


The Potential Benefits of UBI

Support for UBI often highlights the autonomy and agency that the model could bring. This could be an enormous, paradigm-shifting return of financial control to the individual for two important reasons:

1) It removes income from its fused relationship with work, which breaks the economic power hold that employers maintain over labour.

2) It eases a drowning welfare-system, enabling it to focus on its most necessary and efficient programming while decreasing the current model of complicated, invasive bureaucratic processes that can often exclude many of the individuals whom it was designed to help.

Higher household incomes would mean less reliance on these programs, relieving the inundated welfare system, and enabling individuals and families to spend according to their specific (and evolving) means. A basic income can grant many the luxury of choice, including all of the mental, physical and emotional benefits that come with it. Sheila Regehr of the Basic Income Canadian Network (BICN) was once told, “Security is what enables you to sleep at night, adequacy is what you deal with in the morning.” There is also considerable feminist support for UBI, given how much unpaid labour falls under the jurisdiction of women.


Neoliberalism & UBI

Yet a burning question remains – do we trust our neoliberal institutions to carry out UBI the way it promises to? John Clarke from the Ontario Coalition Against Poverty (OCAP) certainly does not, and for good reason. While he acknowledges some of the more radical aspirations of UBI (including the feminist perspective and its potential to derail coercive labour dynamics), he maintains that the model is just another cog in the neoliberal machine.

Instead, he advocates for increased funding to fundamentally improve our current welfare programming, and genuine advancements in worker rights and labour conditions. Our current political and economic paradigm not only has a spotty track record of handling social welfare, but also had a hand in creating and perpetuating its need. There is a warranted fear that UBI will be used as a reason to cut back on necessary welfare programs that will need to continue despite a basic income, such as affordable housing, childcare, healthcare and education. Let’s not forget that our previous endeavour with UBI (The Mincom Project, Dauphin Manitoba) folded prematurely with a change in government, economic downturn and lack of funding.


Moving Forward

Worries are high as UBI is heralded as the next shiny “poverty reduction” scheme – it’s popularity is gaining across the globe, from the local to institutional level – those same institutions which built the economic system in which we live.

Clearly, our current situation calls for swift action – neither our population nor our planet can handle this continued irresponsibility. UBI has the potential to bring some powerful autonomy, control and security into people’s lives, but only if it can break through the neoliberal agenda and avoid the commodification of social well-being. The base rate needs to increase to truly reflect daily survival costs, and efficient and necessary social programming must be protected from cutbacks. Both the PEI and the Ontario pilot projects should be conducted adjacent to alternative pilots such as the Clarke’s program-based suggestion, thus providing the perspective of how UBI compares to other models.

As these pilots unfold, it will be integral for the public to actively watch and vocalize the impacts. We must harness our people power to avoid another economic scheme that we are forced to work for, and rather, build one that works for us.

Join the conversation and get the cutting-edge research at the 17th annual North American Basic Income Guarantee (NABIG) Congress, May 24-27 at McMaster University.

Molly Fremes is a proud new board member of IRBE (the nonprofit behind the Toronto Tool Library). A hopeless nerd, she hopes to share her passion of social economies and community-building through her research, blog posts, and volunteering at The Toronto Tool Library. She is a Master’s student at York University studying alternative economic models in food systems. She is known for terrible puns and always mixing up her idioms. Check out her profile to get in touch.