Tuesday, February 23, 2016

Star Readers On The Guaranteed Annual Income

I write periodically in this blog on the concept of the guaranteed annual income; it seems it would be an effective way of helping to address many of the socio-economic problems we face. As you will see in the first of four letters on the subject from Star readers, not everyone sees it as a desirable measure.

Responding to a recent editorial exploring the notion of a GAI, Steen Petersen of Nanaimo, B.C. writes:
A guaranteed annual income (GAI) sounds like a good idea but when Denmark tried providing it many people were quite happy not having to work. To stop the hemorrhaging of government funds, they had to implement a rule that if you refused three job offers, all benefits were cut off.

Sadly, when you have a GAI, a lot of people feel the fruits of their labour is the difference between the GAI and their working paycheque and often that difference isn’t worth the effort. Also, if the government uses the GAI to subsidize low-paying jobs, the result will be more low-paying jobs.

Due to human nature, of both employers and workers, a GAI for everybody for life is simply unsustainable, as Denmark discovered. To make matters worse, since any earnings are deducted from the GAI people receive, the underground economy becomes even more attractive, which further drains government coffers.
While I cannot speak to the Danish experience Petersen describes, despite being an advocate of the GAI I must admit that I have worried that its implementation might simply amount to another subsidy for business, in that there would hardly be the same pressures on governments to raise minimum wages if everyone enjoyed a minimum guaranteed income.

Regarding his other point about it being a disincentive to work, that would surely depend on the form the GAI took. For example, a recent article in The Globe by Noralou Roos, director of EvidenceNetwork.ca and professor in the University of Manitoba’s Department of Community Health Sciences, Faculty of Medicine, posits one version that would perhaps mitigate that likelihood:
One version works like a refundable tax credit. If an individual has no income from any source at all, they receive a basic entitlement. As earned income increases, the benefit declines, but less than proportionately. As a result, low-income earners receive partial benefits so that they aren’t worse off than they would have been if they had quit their jobs and relied solely on income assistance.

This means that there is always an incentive to work, and people who work are always better off than they would be if they didn’t work.
Here are the other three Star letters for your consideration:
The idea of a guaranteed annual income in Canada — where the necessities of life are a citizen’s right and where it is no longer necessary to step over the homeless on the way to work — has been around for decades. However, it has rested in the realms of dreams, of aspirations and wishful thinking — as an idea too complex to be realized.

Now there is plenty of evidence that a guaranteed annual income can give legs to the possibility of a Canada where there are no poor people.

Ottawa has a responsibility to prioritize the implementation of a GAI. Canada without poverty, just think of it. It would be like a rising sun to thaw a frozen land.

Bill Endress, Toronto

Of course a basic income will backfire on the dwindling percentage who still create wealth and pay fresh taxes. Why would anyone with low skills or low job prospects seek work if the basics are covered adequately? Recirculating taxes in the social net does not create any new public income.

We need to tread with caution as it is so hard to undo errors due by the pride, ambition and egos of the politicians.

Nick Bird, Richmond Hill

No matter how governments act or whether they are conservative or socialist, there will always be people who are unable to work due to lack of jobs, lack of physical or mental ability, lack of training, etc. Jobs that were common two generations ago do not exist in today’s world — jobs that allowed people to make a minimum wage and some that allowed workers to own a home and raise a family.

These jobs are gone and will never be again in the industrialized world unless the captains of industry and the shareholders are willing to take a little less, and do away with much of the automation that has made thousands of jobs redundant.

A national minimum wage for every citizen of the age of majority will not be in the platform of any party in the near future. I and many others have benefited from the days of dishwashers, service station attendants, car washers and many other service jobs that have disappeared and are continuing to disappear.

When the mass of the unemployed grows to an unmanageable problem, what then?

Allan McPherson, Newmarket

No comments:

Post a Comment