“Basic Income” Trial Ontario

So, Wynn’s government has released some details on what their “basic income” pilot is going to look like, and I’m very unhappy with how it has been set-up.

I feel like they didn’t take the time to read up on what basic income is supposed to be and how it is supposed to work. It really feels more like a pilot project for what could really be called “unrestricted welfare”.

The pilot project will select 4,000 people. One-half will be in the control group and get nothing, and the other half will be selected as pilot project candidates and potentially receive money from the government.

A single person could receive as much as $16,989 per year while a couple could receive as much as $24,027 annually. There are many caveats though, and you’d really only get that much from the government if you aren’t working at all.

Basic Needs

What does it cost to maintain a reasonable quality of life in Ontario?

Let’s ignore the GTA for a moment, as the income and costs there are so skewed and would need its own unique system to be workable.

If you worked a minimum wage job, full time, all year with no vacations, you could make $23,712 ($11.40/hr x 40 hours per week x 52 weeks in a year).

Sounds like you are doing pretty well if you get a minimum wage job, right? Did you know that you are below the Low-Income Cut-Off (LICO)? The 2015 LICO number is $23,861. That means a minimum wage worker makes $149 less per year than the low-income cut-off number.

What is LICO? – LICO is an income threshold below which a family will likely devote a larger share of its income on the necessities of food, shelter, and clothing than the average family.

Well, what if you had that minimum wage job and got selected for the Basic Income pilot project, how much would you get from the government?

You would qualify for $5,133 for the year.

So now you have a pre-tax income of $28,845 per year. You would now be above the LICO cut-off, but are you going to feel financially safe and secure? Are you going to feel less stressed about your quality of life? Are you going to feel like if a challenge, roadblock, or issue enters your life that you won’t be in a situation that would cause you to decide between eating and resolving that issue?

Basic Income Goals

Basic Income is supposed to provide enough money that all of your basic needs are taken care of. Food, housing, clothing, and healthcare should all be covered by the income received from a basic income system. It should set you up to at least feel like you can take risks such as starting your own business, or allow you the opportunity to raise your child or children to be their best selves.

The “basic income” pilot program in Ontario will be held in Hamilton (Median household income in 2014: $84,980), Thunder Bay ($84,350), and Lindsay ($69,465). Even if you made the median household income or above in any of these cities and were still a candidate for the pilot, you would receive nothing from the government program.

Basic income should lift up everyone and have funds be recouped through a sane and simple tax system. This makes it faster to react and lower in oversight than current employment insurance systems that we have. If I lose my job tomorrow, I know that without doing anything on my part, that a deposit will come in that will help keep a roof over my head, food in my belly and provide me some quality of life while I look for something else. We shouldn’t be made to fill out endless paperwork to prove our current situation, waiting weeks to receive funds to help us until we find that next opportunity for employment.

No Money, But Still in the Pilot?

The main tenant of a basic income system is that it is for everyone. The initial pilot will select those without means to test the system, but I think they are missing something important about Basic Income by doing so. Part of the appeal of basic income is the knowledge that it provides you a floor with which your income won’t be below. This, as I mentioned above, allows for opportunities that might not currently be available. If the person loses their job while on the pilot project, they might wait and take the right job for their skills and abilities rather than just the first one that they can get.

But, on the other hand, it could feel like they are taking a spot from someone that could better use the program today, someone already in a situation where their food, shelter, clothing or healthcare are at risk. It is a complicated situation, but again, I think it separates it from the basic income systems I’ve read about.

Concerns

In the end, my biggest concern is that they are labeling this a “basic income” pilot project, but aren’t really holding the values of basic income. They’ll likely run this for three years and will show at the end how it was more expensive than current systems and shut it down saying that Basic Income failed. But I believe it isn’t really being given a true chance. I hope I’m wrong.

We are still early in the pilot and new details are coming out all of the time, but if you want to see how lacking in thought and planning this “Basic Income” pilot is, all you need do is read a professional article on the subject, such as Ontario to roll out basic income in three cities by the Globe and Mail.

The Wynne government did not say how it came up with the basic income amount and said it was “something we want to test.”

If you want to learn more about Basic Income, I suggest you check out Reddit where two great subreddits continually talk about the opportunities that world governments have to them to create a society where no one is left behind.

/r/basicincome
/r/basicincomecanada

5 comments

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  1. Andrea Popiez

    As always David well thought out and well presented. In my experience things like this done by government don’t really work because they don’t understand the real situation and challenges of being lower or even middle class. They have to be looking at real long-term change, change that means something, and government initiatives don’t seem to do that anymore.

    • David Peralty

      Thanks, Andrea. I would like to believe that the government can be taught. I would love to see government officials earn a median income in the district that they represent. I think it would really change who wants the job, and what they do when they have it.

      Also, long-term thinking is something that most people seem to lack, and the design of our society definitely doesn’t make it easy to execute long-term change.

      • Andrea Popiez

        I agree with the median income. A long time ago I thought wouldn’t it be cool if a requirement of being elected was to spend time each year living with a family – 2 weeks in their own riding, 2 weeks in another (ie. urban in rural, north in south ) to see first hand the concerns of day to day living, what’s working and what isn’t. They would be chosen at random so it could be seniors, single parents, young couples, anyone. This would apply to provincial and federal politicians. Sort of a ‘job shadowing/walk a mile in their shoes’ kind of thing.

        Imagine a politician from Oshawa living in Paisley in February with a couple of seniors or one from Windsor spending time in Kapuskasing in July with a young family. (I would have loved to host the finance minister and show them how to raise 7 kids on a single income LOL) Do you think that would help them ‘get in touch’ so they could make better decisions that really change lives for the better?

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