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Friday, February 14, 2025

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Is it time to bury the idea of an adequate basic income?

There has been much ado this week about how a recently released BC report on income security has delivered the death knell to any prospect of an adequate basic income in Canada. The Toronto Star’s lead editorial on February 13th supported this view, despite a YES and NO debate on the subject the same day.  Such claims rest on the BC report’s detailed analysis, citing its 16,000 simulations and dozens of background reports.

Often lost in the din is a clear-eyed assessment of what the report actually does and doesn’t demonstrate with its analysis.  For context, it is useful to remember in reviewing the findings that nearly every progressive advocate of an adequate basic income starts from the vantage point of eliminating poverty and argues for a benefit reduction rate of between 30% and 50% to minimize work disincentives.

The BC report concludes that benefit reduction rates above 50% greatly reduce work incentives and reduction rates below 25% would make such a program very expensive by spreading benefits to many who don’t need them.  No surprise there.  Secondly, the report finds that a basic income designed to largely or completely eliminate poverty needs to be well above $15,000, likely at least $20,000. No disagreement there either.

But looking beyond facile taglines such as “solving inequality is about more than cutting a cheque” reveals that much in the BC report makes a case for an adequate basic income. As the table below drawn from the report’s own simulations reveal, a basic income of $20,000 would have a dramatic impact in reducing the numbers of people living in poverty and, equally important, the depth of poverty that they experience.  How dramatic?  A basic income of $20,000 with a benefit reduction rate of between 30% and 50% produces a drop in the poverty rate of between 83% and 87%.  For those living in deep poverty, the reduction would be 92% to 96%.   

The table also highlights that such dramatic life changing impacts come at a cost – as  much as $15 and $22 billion. That is two to four times the cost of a more incremental approach delivered as targeted programs to specific sub-groups.  But such a program mix, though cheaper, would still leave many in deep poverty and perpetuate the 19th century myths of the deserving and the undeserving poor. 

The choices made in the report are political choices.  Are these a more efficient way of spending public funds? Possibly, but this depends on your policy goals.  Are they a more effective way to end poverty? A better way to end poorly funded and punitive welfare programs?  An alternative to our fraying social safety net.  I think not.

Claims that an adequate basic income doesn’t solve the complex set of issues that make up inequality and put people at risk is a straw man.  We need more and better public services, and programs tailored to specific needs.  But that is not a defense for perpetuating poverty and forcing those deemed undeserving to live lives of misery and desperation.

Read the debate between Armine Yalnizyan ana Evelyn Forget in the Toronto Star Click here to view original web page at www.thestar.com

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