The basic income guarantee (BIG)—sometimes
called a basic minimum income, or negative income tax—is hardly a new idea, but
it is currently in vogue. National governments in Switzerland and Finland, and the
provincial administration in Quebec, are all considering proposals for a
minimum income. Most recently, Canada’s federal government invited one of the
country’s foremost experts on the subject to discuss it at a pre-budget hearing in Ottawa.
The BIG is one of those rare policy tools that
has garnered support from thinkers, activists, and policymakers all across the
ideological spectrum—from the late American neoliberal economist Milton
Friedman, to Canadian former Conservative senator Hugh Segal, to the
centre-right coalition in Finland, to typically centre-left Green parties,
feminists, self-identified progressives, even socialists.
Naturally, many people worry about the potential
work disincentive, but past studies—including the Mincome experiment in Dauphin, Manitoba in the
1970s—suggest that this disincentive is not as powerful as one might expect,
and may be partially offset by human capital gains. (For example, employees
might take time to upgrade their skills rather than work menial jobs to make
ends meet; new parents might stay home to look after their young children
rather than rush off to work.) If designed effectively, a BIG could have
beneficial effects on the labour market, the private sector, the overall
education level of society, and public health.
It could afford numerous benefits to businesses
and aspiring entrepreneurs in particular.
•
Education, skills, and innovation: By
providing time for recipients to upgrade their education and cultivate new
skills, a BIG could promote both a more dextrous workforce and a better
educated society. Visionary individuals would also enjoy more freedom to
experiment and hours to invest in long-term projects.
Think of tech pioneers
who have spent countless hours tinkering in their garages, refining the latest
game-changing breakthrough. A BIG could encourage time-intensive innovation and
research, and offer many more creative geniuses the opportunity to engage in
it.
•
New commercial opportunities: Pro-business
advocates of a BIG tend to emphasize its potential to reduce social program and
public health costs, while streamlining administration and bureaucracy. In
turn, this could allow the private sector to offer services for which the state
had previously assumed responsibility. Many existing businesses could look
forward to growth in their customer base, since more people would have
disposable income.
•
Easing of downturns: When economic
recessions occur, poverty typically rises, and consumers at all income levels
tend to cut back on their spending. Businesses watch their revenues drop due to
a lack of customers. Managers respond by laying off employees, which
exacerbates the problems of poverty and too few customers. A BIG could help to
stabilize the situation by dulling the sharp edges of the business cycle, and
mitigating various other social ills associated with hard times.
Of course, many practical questions and details
warrant policymakers’ attention. How should we finance a BIG? For the purpose
of determining who qualifies, how should we define the poverty line? Would it
be appropriate to distribute the BIG differently based on cost of living, or
could impecunious residents of inner-city Toronto, downtown Vancouver, Dawson
City, Iqaluit, Halifax, and rural Quebec all expect an equal supplement? At
what age should individuals become eligible? What about new immigrants and
asylum seekers? What about people with serious physical disabilities versus
those with able bodies—should they receive different income supplements?
Nonetheless, encouraging results from past
trials indicate that the BIG is worthy of the serious consideration some
governments are giving it.
