Basic Income Guarantee (BIG)

What would the world be like if all low income people were given a guaranteed cash income for survival (c.$17,000) with no strings attached? How about if this plan included an incentive to work to increase their minimum income? What would they do with this money? What would be the social consequences of this? This concept will soon have some trial runs in Ontario, Canada. It is called the Basic Income Guarantee (BIG).

- BIG is a transformative concept. This is especially important when financial inequality is growing in most industrialized societies. Technology and other factors will radically change the nature of the labour force. Programs such as BIG may be necessary as large portions of society are thrown out of work (maybe permanently).

It is true that we have had major technological changes in society before. The Luddites resisted change during the industrial revolution, fearing the loss of jobs that would ensue. However, today’s coming changes may be dramatically different. Robotization, coupled with artificial intelligence (AI), has the potential to eliminate a wide swath of jobs, and not just repetitive manual tasks. To get ready for something like this, BIG may be mandatory.

- Present welfare systems are complicated, inefficient and costly. BIG can be simpler, more efficient and less costly. People working in the welfare system agree that the present system is very unwieldly. By contrast BIG is incredibly simple. A payout cheque is distributed regularly. No questions asked. In the past, BIG payments have been largely directed into the local economy to pay for basic living needs. When BIG has been tried on a trial basis, medical expenses and other social costs generally have been shown to decrease.

- A well planned BIG system can motivate people to work Their increase in earned income can lead to an increase in overall income. Inspired by an earlier BIG program in Dauphin, Manitoba, Canada (Mincome project, 1974-79), for every dollar earned by a participant, one’s basic guaranteed income would only be reduced by $0.50. Using this logic, wage earners would be motivated to increase their income until they reach $34,000/year. At this income their BIG income would be reduced to zero.

- This idea has already been tried on a trial basis in some European countries, most notably in Finland. In Finland a pilot project is under way targeting 2000 unemployed people. Participants can keep their basic income even if they find remunerative work. The Netherlands and Scotland are conducting similar trial run projects.

As we move ahead, these trial experiments, including Canada’s Mincom model in Manitoba in the 1970s should be studied. Results from Ontario’s experience with 4,000 people in four proposed communities (Thunder bay, Hamilton, Lindsey and one aboriginal community) need to be carefully watched. These trial runs could provide valuable information to enable us to make intelligent decisions in the future.

Finally, as an important post-script, let us not forget the growing financial inequality divide. BIG helps those at the bottom. The larger question remains; how to tackle the larger question of the massing of wealth at the top?

Rebellious Seeker

Ottawa. June 15, 2017