Does it make economic sense to provide a Guaranteed Income to people in Canada? Myself and others believe it does.
The idea of giving money to the poor without strings is not new. It melds altruism and libertarianism, saying both that the best way to fight poverty is to put cash in poor people’s pockets and that people can make their own choices better than bureaucrats can. As a result, it can find support in theory from both left and right.
It has been tested with success in other countries. European nations such as France and Austria, which spend slightly less than one-fifth of their gross domestic products on cash transfers to low-income citizens, have had far more success reducing poverty than Canada has.
In the only experiment of its kind in North America, every household in Dauphin, Manitoba, in the mid 1970’s, was given access to a guaranteed annual budget, subject to their income level. For a family of five, payments equalled about $18,000 a year in today’s dollars.
Politicians primarily wanted to see if people would stop working. While the project was pre-empted by a change in government, a second look by researchers has found that there was only a slight decline in work – mostly among mothers, who chose to stay home with their children, and teenaged boys, who stayed in school longer.
Evelyn Forget, a researcher in medicine at the University of Manitoba, reports that Dauphin also experienced a 10-per-cent drop in hospital admissions and fewer doctor visits, especially for mental-health issues.
This week, a House of Commons committee on poverty released a report proposing a guaranteed basic income for Canadians with disabilities, on the model already available to seniors.
Read the whole article in the Globe and Mail here.