From dream to perspective: the pandemic calls for a universal basic income

From dream to perspective: the pandemic calls for a universal basic income

As all schoolchildren know, it was the First World War that brought Canadian women to work (although, of course, they always worked). Even after the men returned from the front, the women continued to work – and what was a temporary change turned into a new social norm.

The Great War left us with another supposedly temporary measure: income tax. “I did not impose any time limit on this measure,” said Minister of Finance Sir Thomas White in 1917. “A year or two after the end of the war, the measure should be reviewed.”

We all know how this proved.

Like governments around the world, the Trudeau government has used the rhetoric of war to describe the fight against the new coronavirus. Wars and pandemics sometimes lead to economic measures that would normally be unthinkable.

For proponents of a universal basic income (or UBI), governments’ responses to the pandemic offer a moment of opportunity – and justification.

A way to save time

“I think the coronavirus has exposed some of the economic problems that have led to this movement from the start, and it will speed them up,” said Floyd Marinescu, CEO of software learning company C4Media and founder of the income lobby. basic. group UBI Works.

Marinescu said the pandemic was bringing a new wave of industrial automation as companies tried to operate without workers.

“Six million Canadians were suddenly pushed into what is actually a basic income program and they see that it works for what it is supposed to do – something to build on and give you time to understand what you’re going to do next in a more dignified way that avoids the stigma and ineffectiveness of applying for social assistance, “he said.

“I think we now have a chance with a basic income to have a shorter recession and a more inclusive recovery that helps everyone adapt to the new reality.”

A papal blessing

Tuesday, Pope Francis became the last public figure to adopt the idea of ​​a universal basic income, calling it “a change that can no longer be postponed”.

In his annual “letter to popular movements”, he addressed those “who are informal, working alone or in the basic economy, you do not have a stable income to help you get through this difficult period … the blockages become unbearable.

“Perhaps now is the time to consider a universal base salary that recognizes and honors the noble and essential tasks you perform.”

Pope Francis recently expressed support for the idea of ​​a universal basic income. (Vatican media via Reuters)

Already, a country that has suffered disproportionately from the pandemic seems to be moving in this direction.

The ruling Socialist Workers’ Party in Spain seized the pandemic to bring about changes it could only dream of, including the public takeover of private hospitals.

Some of these measures could be canceled once the viral threat has been mitigated. But Finance Minister and Deputy Prime Minister Nadia Calvino said her government was seeing its new UBI program, the ingreso minimum vital, as something “which remains forever, which becomes a structural instrument, a permanent instrument”.

Here in North America, the idea of ​​a universal basic income has been the driving force behind foreign policy maker Andrew Yang’s surprisingly strong campaign for the Democratic presidential nomination.

His proposal that the United States government send monthly checks (he called them “freedom dividends”) to all or most American adults has, because of the pandemic, temporarily become official government policy.

Yang offered checks for $ 1,000. This week, the U.S. Treasury delivered 1,200 million checks to millions of Americans – though deployment was hampered by problems and the Treasury’s decision to put President Donald J. Trump’s signature on each check.

Same solution, different problem

Yang’s proposal, of course, had nothing to do with the disease and everything to do with the decline of the American industrial base. For years, the main argument for UBI has been that automation will only accelerate the disappearance of solid blue-collar jobs and their replacement by low-wage jobs that do not provide the stability needed to raise a family. healthy or create a healthy society. .

The anger and fear that the loss of stability produces (so the argument goes) causes people to turn away from democracy and embrace demagogues – so it is in everyone’s interest to keep people from falling into the despair.

The idea has been slowly gaining ground in some circles for years. Then COVID-19 struck, wiping out more jobs in a few weeks than what had been lost through years of automation and outsourcing.

Businessman Andrew Yang became one of the main supporters of UBI politics during his candidacy for the Democratic presidential nomination. (Mary Altaffer / The Associated Press)

“What seems marginal or too ambitious for some will quickly become common sense,” predicted Yang, just weeks after the end of his own presidential campaign.

But the American proposal is only a temporary measure in a vast pandemic relief program which is also responsible for the usual lard for millionaires and billionaires – including particularly generous documents for wealthy real estate investors with a background remarkably similar to that of the president himself and his son-in-law, Jared Kushner.

The Canadian Emergency Response Service (CERB), which has become Ottawa’s main non-EI support for people affected by the pandemic, in some ways resembles a UBI. It is designed to capture people who work in the “concert economy”, so it covers a lot of people who would miss conventional employment insurance.

CERB is not really universal, however, and it should only work for four months. The hope is that at the end of the program, the country will resume its activities as usual, more or less.

A “business-friendly” approach to income support

But Canada has its own advocates for a permanent UBI.

When the new government Doug Ford decided to cancel an UBI pilot project in Ontario in late 2018, Marinescu helped organize a group of 120 Canadian CEOs, presidents and business owners to ask him to reconsider.

“We see a guaranteed basic income as a business-friendly approach to deal with the growing financial insecurity of our citizens and revitalize the economy,” they wrote in a letter to the Prime Minister. Their effort was unsuccessful and the pilot program was killed.

The pandemic, however, has given wings to the idea. He has the support of a party on Parliament Hill:

Conservative Senator Hugh Segal is a longtime supporter of the UBI. He even wrote a book about it: Boot Straps Need Boots: A Conservative’s Lonely Struggle To End Poverty In Canada.

Queen’s University economist Robin Boadway said that almost all of Canada’s existing tax credits and benefits are means-tested. “These are things that come out based on your reported income last year,” he said.

A move to the UBI, he said, would require a fundamental change of approach.

“I think there is a good chance that people will see the value of universality when it comes to transfers, but the transition from an existing emergency program to a permanent funded program is a process that would take a little while, I think, “he said. said.

An incentive to work

The Trudeau government insisted on verifying resources rather than real universality in its pandemic relief programs and made a series of modifications, gradually easing the criteria for entry. But the Alberta Liberal Party adopted UBI and called on its federal counterpart to immediately start paying $ 1,500 a month to each Canadian adult and $ 500 a month to each child.

UBI has its adversaries, however. Many on the left oppose the fact that UBI money goes to the rich and the poor, while those on the right frequently attack it as a document for people who do not want to work.

Marinescu argues that an UBI would provide more incentive to work than some of the current benefits of the Trudeau government’s pandemic.

CERB, he said, is “much like large-scale well-being with the same well-being traps. In a way, it pays people to work, or forces them to choose between returning to work or staying a month or two at CERB.

“And that’s precisely what basic income is supposed to address – it’s a work incentive because you can keep the money when you return to work.”

Marinescu said that experience from previous pilot projects has shown that labor force participation does not decrease when an UBI is introduced – and that some people have been able to find better jobs with the help of an UBI “because that they could hamster wheel and recycling. “

“No other government program I have seen could affect the effectiveness of a basic income in giving people more options in life.”

Review the safety net

Marinescu said he hoped the current crisis would change the minds of many who rejected the UBI as a transfer of wealth from workers to the lazy. “Many people who now find themselves on a basic income realize:” I don’t want to work anymore. I want to go back to work, “” he said.

But Pedro Antunes, chief economist at the Conference Board of Canada, said he thought “we will have to wait and see if it really changes the social safety net we have in place.

“If we decided to go this route, I think we really need to reorganize the way we deliver the social safety net at the federal and provincial levels. And I’m not sure we’re ready to move forward right now. ”

A rider for a food delivery service makes a delivery. The growth of the so-called “concert economy” has strengthened the UBI record. (Jack Taylor / Getty Images)

Antunes said that, before the pandemic, some of the labor trends that had motivated the UBI movement – the increase in precarious jobs “in concert”, for example – softened, if not reversed.

“We have emerged from a situation in the past two years where Canada’s economy and labor markets were in fairly good shape and favored workers. In 2019, job growth was strong, labor markets were very tight and wage growth was well above inflation, “he said.

Attitudes can change

Just as the First World War produced income tax, the Second World War left Canada with the basic structure of its modern health care system.

There were those who wanted to see it dismantled with the return of peace, warned the Canadian Journal of Public Health in an editorial at the time, saying that the requests were “already out for the reduction of public spending and the reorientation of efforts”. The CPHJ did not have it.

“The gains must be consolidated. The last war has left its lessons. There can be no reduction in public expenditure, nor reduction in public efforts, for the safeguard of health”, writes the newspaper.

The nature of the post-COVID recovery is likely to affect the debate on the UBI.

A strong rebound would decrease the pressure to strengthen the safety net. But it could be politically difficult to push large numbers of people out of the basic income system if the economy remains weak after the epidemic ends.

“Once this crisis is over,” said Antunes, “I think it is inevitable that we will return to this trend where labor markets are generally tight due to the exodus of the baby boom cohort, so I don’t know that we ‘I will have to put these measures in place forever.’

But millions of workers who used to see themselves as self-employed are currently struggling and turning to governments for help. Will it change the way they see others in need in the future?

“Public attitudes may well change as a result of this pandemic and there may be more social acceptance,” said Boadway. “It is possible that this will escalate and people will realize that if universal basic income had existed before the pandemic, we would not have been faced with such a dire situation as that faced by so many. people without money. “

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