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Stephen Gordon considers the costs and benefits of guaranteed income.

There’s a proposal being floated around Quebec policy circles that would ensure that someone who works 16 hours per week at minimum wage would still have an income that would put her above Statistics Canada’s poverty threshold for Quebec (about $12,000). These amounts are far from lavish, but the costs are surprisingly high. In this report, some of my Laval colleagues estimate that the lower bound is on the order of $2.2b. To put this in perspective, one percentage point of the Quebec TVQ (the provincial GST) generates about $1.2b in revenues. Financing even this modest proposal would require the equivalent of at least two extra percentage points to the TVQ.

The RSS tag the Globe put on Kevin’s recent Economy Lab post says “If it’s not implemented properly, a guaranteed annual income could become a very costly program”. I think it’s better to say that if it’s not costly, then the BI isn’t being isn’t being implemented properly. There’s really not much point in arguing for a BI if you’re not prepared to argue for significantly higher taxes.


 

How to help

  1. If you tie it to work hours like that aren't you essentially subsidizing companies that employ low-wage part-time workers?

  2. My understanding has always been that such a program woudl replace other programs. While obviously still more expensive, has this been factored in?

  3. Mine too. One item, instead of all the piece-meal approaches we have now.

  4. At 16 hours per week, that's about $14 / hour. Wouldn't this discourage people making the minimum wage ($9.50) from working more than 16 hours a week? You wouldn't see any increases in income until you were above 24 hours a week.

  5. I don't think it would ever entirely replace social assistance because some people (hopelessly addicted, suddenly bereft, homeless) won't have filed their income taxes or the system won't work fast enough to catch them. In those cases social workers are useful anyway, and in a helping vs. gatekeeping role.

    Even if the savings from reducing the financial assistance bureaucracy haven't been accounted for in the plans, I'd be cautious about presenting this a spending reduction idea. We essentially did that when we deinstitutionalized mental health, but didn't have the programming/funds in place to create community supports.

    I think the goal should be to improve services for people who receive social assistance, and that the payback will be longer term as the stigma is removed, and the absurd disincentives to employment and education (punsihing clawbacks) are removed so mroe people will seek to improve their own situations.

  6. Time to re-institutionalize people that can't be helped.

  7. excellent point

  8. This is insane. First of all, the poverty threshold is usually defined as a lower proportion of the population – and you can never eliminate it, there will always be a bottom 20%, even if we were all millionaires. Second, it's time to stop stealing from Peter in order to pay Paul. The social safety net here is more than fair, and unless one is severely disabled, one should have to work to make money.

  9. Work at what?

  10. I think it's more in the vein of providing a guaranteed income at an amount based on what would be needed to put the person described over the poverty line.

    Presumably it would be indexed to income somehow, though.

  11. work at… wait for it…… A FREAKING JOB GENIUS!!!

    like you, you seem to be employed by someone for putting idiotic comments all over the macleans boards. im not sure what purpose it serves, but clearly someone is willing to put up dough to allow you to spread your hatred of anything intelligent. i suspect you're actually a paper pusher at some (clearly unsupervised) government job, unless of course you're on welfare and you're doing this from home, or maybe you're a trust-fund baby and doing this from home, in either case, get a freaking life.

  12. No it isn't fair, that's the whole point. Recipients are treated like criminals from behind bullet proof glass, every detail of their lives is open for inspection (no one on OAS/CPP, pregnancy leave, or EI is subjected to "home visits") and If you are in receipt of social assistance and you actually find part time work the claw back is so excessive that you're unlikely to actually improve your situation.

    That's not only intrusive and demeaning for recipients, it's expensive and counter productive. Peter should spend a day walking in Paul's shoes and compare it with his worst day at the motor vehicle licensing or municipal permits office. Peter might change his mind.

  13. Gosh…it's that easy for the people you step over on the sidewalk to get a job is it?

    How about those with things like cerebral palsy?

    Even leaving out the addicted, and the disabled….people with grade school educations or that are functionally illiterate….which is nearly half of Canada…..can't get jobs either.

    Now stop with the paranoid fantasies, and use your brains for something other than head-stuffing.

  14. One of my favourite things is when someone with real-life experience with a topic (as it seems you do here) is able to smack down an ideologue's musings about something they don't really know anything about.

    would that I could give you more than one thumb up :)

    cheers.

  15. every detail of their lives is open for inspection…

    You would rather they decline the opportunity to prove they need the assitance? Or would you rather have even more fraudsters preying on our social generosity?

  16. [if] you actually find part time work the claw back is so excessive that you're unlikely to actually improve your situation.

    Yes, as meagre as this support of subsidized poverty is, it is still so generous (expecially when you factor in all the social benefits reserved for those on welfare) that it makes working for a living at an "entry-level job" completely uncompetitive. I have argued in the past that all those other "benefits" should not be clawed away the moment someone finds a job — it perversely punishes the honest who find work, it perversely encourages work under the table by those who then continue to drain society by cashing undeserved welfare cheques, or, perhaps most damaging of all, it cements in place a lifetime of barely-living poverty that becomes just comfortable enough that other options look too scary to try. Because, the way we've designed our system, they are too scary to try.

  17. Ahh yes, all the massive fraudsters preying on our 'generosity'. Big business, that.

    'rolls eyes'.

  18. The poverty line is the minimum revenue needed to live. If we were all millionaires, nobody would be bellow the poverty line, even the bottom 20%.

    The point her is that there's more than enough money being made for everyone to have a living wage. There are jobs out there that will hire you for only 16 minimum wage hours per week, leaving the workers with the choice of getting overworked or doing something ilegal just to get by. Even if you manage to kill off your bottom 20%, someone has to work these jobs.

    So you can pay to pick up after the bottom feeders or you can pay to get them to work. Either way, you need to pay to get your modern society.

  19. I'm pretty sure the literacy rate in Canada is at least 97%.

  20. Sorry but Peter doesnt owe Paul anything, not even walking in his shoes. Being successful takes hard work, and as long as society allows people to move up the social ladder through hard work, nothing else is needed. If you're so concerned about the poor, you're more than welcome to give them your time and money, just not other people's time and money.

  21. you can, just delete your cookies, log out of intensedebate, and vote again.

    but he didnt smack down anything other than his own credibility. if you guys are so freaking generous, give YOUR money, not other peoples. Its pretty easy to be generous with other people's money, isnt it? But as the great Maggie Thatcher said, socialists always run out of other people's money.

  22. no that's not how the 'poverty line' is calculated. it's calculated based on the bottom 20%. and besides, even if it were calculated your way, and we just handed out more money to the poor, the prices would go up, and the 'minimum revenue needed to live' would also go up. what's needed if you want the poor to be wealthier is increased productivity and increased opportunities for investment, so that more people have jobs. so you should cut taxes, fire every bureaucrat whose job it is to redistribute money from productive members of society to non-productive members of society, and let people create wealth by working.

  23. Seems to me that capitalists make a great virtue out of using other people's money. What is it we call that again? Oh right, investment! (insert choirs of angels here)