Should we talk about a guaranteed basic income program?

The concept of a guaranteed basic income (or better known as Universal Basic Income, UBI) is simple: figure out how much money a family needs for essentials, and if the household income is not enough, top it up. But putting this idea into practice hasn’t been so easy.

Many experts believe that a UBI would be significantly beneficial. The Government of Spain is considering moving to a permanent basic income as a result of the COVID-19 pandemic. UBI programs have been discussed and piloted all around the world (including here in Canada) for years…. to no avail. There are a lot of concerns as to how a program like this could work… or if it even should be considered.

I’m neutral in the debate on universal/guaranteed income, but I got curious. I asked my Canadian money group “Black is the New Red” (with 7000+ members) what they thought of introducing a UBI in Canada, to hear directly from the mouths of the people. I also dug up some opinions from the experts, with points on both sides of the discussion. I found three main themes came up in discussion:

1. More Equality & Empowerment for Woman?

“It seems it would be especially good for women. I think of how it’s still mainly women who comprise the ‘sandwich’ generation of looking after both kids and parents. With UBI they would be compensated and have more independence.”

“If we could afford to take time off or just work part time until our kids started school, I think that would be really beneficial for both the children and the parents.”

– Members of Black is the New Red

There was a lot of thoughtful conversation about how women carry the brunt of the responsibility for care-giving, whether it be for children or elderly/ill family members… even if they are also employed. Many suggested that a universal basic income could alleviate women from being overworked as they balance employment, care-giving, and household responsibilities. Many woman would like to stay home (even part-time) with their child until they are school-age, but cannot because they simply cannot afford to. Alternatively, some women would prefer the opportunity to work and are crippled by the high cost of childcare.

What the experts say:

“Women are more likely to take on roles caring for the elderly and children — both career paths that typically pay poorly. If we believe that care for our aging population and for the next generation are central to a healthy society, then we should also promote and enable care work. UBI, it is hoped, would give workers the ability to dedicate more time to this important work. Moreover, under most welfare systems, the dependent of a rich-enough spouse is not eligible for cash benefits of their own. This has proved disastrous for those in abusive households with financial dependency. Once again, women have been historically more likely to find themselves excluded from existing safety nets. UBI would help remedy this problem.”

Juliana Bidadanure – Faculty Director, Stanford Basic Income Lab and Assistant Professor in Philosophy, Stanford University
*read Juliana’s report here

“The implementation of a basic income would be gender-neutral and so, in theory, fathers and mothers would have the same support. In practice, however, and especially given the likely low level of basic income, this policy might have the (unintended) consequence of encouraging a return to the breadwinner model of parenting, with one parent better able to stay at home, but another parent still needing to remain firmly attached to the labour market.”

Alison Koslowski – Professor of Social Policy and Research Methods at the School of Social and Political
Science, University of Edinburgh.
Ann-Zofie Duvander – is Professor of Demography at the Department of Sociology at Stockholm
University and one of the coordinators of the International Network on Leave Policies and Research.
*read the paper here

“Combined with an adequate child benefit, a basic guaranteed income would at long last make freedom from domestic abuse and exploitation truly possible for victimized women and their children.”

Josephine Gray – Canadian Women’s Studies
*read the article here

2. HOW would it be possible to pay for this? Would it come out of my pocket?

“If this money is more money I’ll be taxed, then that makes things harder for me. Things are already hard enough.”

“I would gladly pay more taxes if it meant a more equal life for everyone. Less domestic violence and poverty = less spent on law enforcement. Less mental health issues = less spent on extended health care. An ounce of prevention is worth a pound of cure.”

“Get rid of all the other benefits. No more child tax, no more GST. Tax rates will be a lot more affordable than people think. Plus the savings on administration for one program instead of many would be substantial too.”

– Members of Black is the New Red

How a Universal Basic Income would be paid for is a big concern for a lot of people. Many of the members believe that the expense will come right out of their wallets in the form of taxes, and others believe there will be alternate ways to find funding. Many of the members were totally okay with paying higher taxes, and others were NOT okay with this idea at all.

What the experts say:
Experts have proposed a variety of ways to pay for a program including:
– Carbon tax
– Revenue from natural resources
– Wealth tax on the highest income earners
– Tax on luxury goods
– Taxing companies that choose to rely heavily on automation (rather than human jobs)

Others insist that many existing programs would become redundant with UBI, and thus the funding from those programs could be repurposed.

3. Would people be lazier and just choose not to work, even if they could?

“It’s amazing how many people expect things for free. Why because you don’t want to work the government should support you? The sense of entitlement is unreal! If people lived within their means and worked hard society would be much better off. Free handouts does nothing but make people spoiled and entitled.”

“Scientists did a study on termites…because they build very intricate structures. These scientists put tiny little cameras on the termites and what they found was that there are some very gifted termites, some creative termites, some hard working termites, and some “lazy” termites who lay around watching everyone else do the work. Sound familiar? In society we take care of everyone and find what people need to be motivated…then we are all more successful. Cooperation will always surpass competition.”

“Poverty is expensive. When people live in poverty they are more likely to cycle through the ER, to require expensive medical procedures, and to require assistance from the police. When people are in poverty all of their brain power is taken up by meeting their basic needs: how will I eat today? are me and my children safe today? When someone’s brain power is taken up struggling to meet their basic needs, they have no capacity left to work on bettering themselves in ways that might allow them to get a well paying job. This is why it is shortsighted to expect people to “pull themselves up by their bootstraps”. The cycle of poverty is vicious, and it is extremely expensive. If everyone had enough money to not need to worry about their basic needs it frees up brain space to break the cycle. “

” Socialism is great until the people paying for it run out of money.”

– Members of Black is the New Red

Many of our members believe that providing a guaranteed basic income will simply allow people to stay home and play video games all day rather than work, whereas many others believe that providing for basic needs will ensure better mental health and strive to find motivation and passion. It seems this particular point is very divided.

What the experts say:

“Despite popular belief, the evidence shows that the poor do not waste resources. In fact, giving cash to those most in need seems to be an efficient way to improve their prospects and welfare. With cash in hand, individuals can fulfill their most pressing needs and pursue their unique goals. And while some individuals use cash to retrain, others buy livestock or a car, putting themselves and their families in a better position to face economic adversity.”

Juliana Bidadanure – Faculty Director, Stanford Basic Income Lab and Assistant Professor in Philosophy, Stanford University
*read Juliana’s report here

“Not everyone has a passion, and not everyone is equally talented. This is a simple fact of life. Not everyone can be an entrepreneur or an artist. Our economies need construction workers, welders, plumbers, electricians, nurses, firemen, policemen, janitors, waiters. Some people go into some of these jobs with passion, others because it pays the bills—and these jobs need to be done. UBI would send exactly that wrong-headed message, reducing people’s incentive to work. And it would get worse. Our concept of a dignified life is relative. Getting by on my guaranteed basic income, I will look at my richer, working peers and feel that my lifestyle is not quite dignified. So I will lobby politicians for an increase in UBI. As UBI rises, even fewer people will work; those who still work will have to be taxed more, and so even fewer people will work, and… If you doubt these arguments, consider that advanced economies are already littered with young people with college degrees no employer considers useful—while ancient Greek literature may be a passion, it does not guarantee a job and a living wage.”

Marco Annunziata – PHD in Economics from Princeton University
*read his article here

“One should always be wary of simple solutions to complex problems, and universal basic income is no exception. “

Daron Acemoglu, Professor of Economics at MIT
*read the article here

I couldn’t possibly cover all points of this very controversial discussion, and I am not an expert in politics or economics, but I do think that these types of discussions are important to have and these ideas are important to explore.

What I can say is that I have seen the benefit of families creating a financial plan for their day to day expenses, future plans, and dreams. I also know how important it is to have basic needs met and money set aside for self care, hobbies, interests, and experiences beyond that which we need just to survive. If my dreams came true, everyone would feel empowered, secure, and in control of their finances and their future. I know that I’ve found my place in the world when even amidst a global pandemic, the amazing students in my Pretty Money Course are calm, confident, and unafraid for their future. This is my motivation to get up and make a difference.
~Lindsay Plumb

Published by theprettymoneyblog

To all you women that are working too damn hard to feel like you’re just getting by paycheque to paycheque… To all you ladies that just don’t have the freaking time for financial jargon and complicated budget systems… ​To all you women struggling to feel in control of your money, ’cause you know you can rock it if you just had a simple map… I see you. I GET you. I'm a busy mom of two boys and a wife to my business partner. I love baseball, red wine, and our family trip to Mexico every year. After more than a decade as a licensed professional in the personal finance industry, I’ve figured out strategies that are simple, but have massive impact on your wallet. I’ve left out the jargon and fine print because I know you don't have time for that. The Pretty Money Club enrolls new members twice a year for the 8 week course that will turn your ugly budget into top model pretty money... and most of our members stay in the club after class is done to keep learning and stay in touch with all the women they built community with.

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