One of the most controversial ideas being considered in the SRD’s Poverty Reduction Plan is advocating for a Universal Basic Income (UBI). (A higher level of government would need to implement this.) There are numerous examples showing that UBI is an effective way to raise people out of poverty. The problem is too much of the financial impact may fall on the diminishing middle class ($50,000-$135,000 per anno in BC) rather than the rich who appear to be increasingly growing richer.
Many Cortes Island residents would benefit from a Universal Basic Income. The recent Housing Needs Report states that our median wage was about $15,000 lower than the District’s norm.(1) According to data from the 2021 census, only 27% of the labour force have full time employment. The remainder work part time.(2)
Quadra Island is only marginally better off than Cortes. The median wage was $14,000 lower than the District’s norm and 36% of the labour force had full time jobs.(3)
Both islands also have residents whose take-home income would most likely shrink if a Universal Basic Income were introduced. (Someone has to pay the taxes needed to support such a system!)
There have been numerous experiments with disbursements within specific target areas.
Manitoba’s experiment with Mincome targeted 2,128 low income people in Winnipeg, Dauphin and select rural areas. They received $1,600 a month between 1974-79. The results were not made public until 2011, when the University of Manitoba published ‘The Town with no poverty, The Health Effects of a Canadian Guaranteed Annual Income Experiment.’ Some of the specific results that the author, Evelyn L Forget, identified were:
- Dauphin’s hospitalization rate dropped 19% during the study period.
- The number of patients diagnosed with mental health disorders declined.
- Students in grade 11 were more likely to graduate than their urban counterparts, while the reverse was true both before and after the study ended.
However ‘the original budget proved very inadequate’ and midway through Manitoba’s program ‘new governments at the provincial and federal level turned their attention to what they perceived as more pressing issues.’
The New York Times proclaimed, “Universal Basic Income Has Been Tested Repeatedly. It Works. Will America Ever Embrace It?” For example, 125 randomly picked residents of Stockton California were given $500 a month. In the case of a Department of Defense logistics specialist who had recently lost her job, the extra $6,000 a year enabled to meet her car and rent payments.
The author claims, “A growing body of research based on the experiments shows that guaranteed income works — that it pulls people out of poverty, improves health outcomes, and makes it easier for people to find jobs and take care of their children.”
Similar findings have been reported in other nations:
Twelve to 18 month trials in India resulted in a “decrease in illness, improved school attendance and financial stability, and higher employment, with no corresponding increase in alcohol consumption.”
A three year project in two Namibian villages reported, “Significantly reduced child malnutrition, increased school attendance, boosted community income, decreased theft.”
The SRD’s Poverty Reduction Plan cites a comprehensive study that estimated the cost of reducing poverty in BC was around $3 to $4 billion dollars every year (in 2011 dollars), but the cost of doing nothing was more than double that.
“By addressing poverty, we can create healthier, more educated, and economically stable communities. This, in turn, benefits everyone by reducing social costs and promoting a more inclusive and prosperous society.”
The opposition to a UBA appears to come from the people who will have to pay for it.
Brandon Mayer of the ‘North Grenville Times’ described the UBA plan as an unfair redistribution of wealth. While its true everyone would receive payments, he argues that people with larger than average wages would have to pay substantially more in taxes than they receive.
“I work 60 hours a week, and I don’t do it so that someone who works 20 hours a week can take my money when it’s confiscated as taxes and redistributed as basic income.”
So who pays the bulk of Canada’s taxes?
According to data from Statistics Canada, 10% of the population paid 54.4% of the income taxes in 2021.
Some people believe this is unfair, but our richest citizens are still continuing to get richer at a time when most of the nation is getting poorer.
Stats Canada reports, “Considering income including capital gains, average income for the top 1% was $811,800 in 2021, up 20.5% from 2020. In 2021, the average income for the top 0.1% was $3,230,000, up 27.6%, and that for the top 0.01% was $12,542,100, up 30.0%.”
That same year the average wage for half of the filers in Canada was only $21,100.
When asked why they were homeless, the #1 response in 2023 Point inTime counts throughout North Vancouver Island was insufficient income to pay rent or mortgages. A quarter of the respondents in Campbell River and 30% of those in Port Alberni said they had homes only 6 months earlier.
More than 2/3 of the respondants to a recent Pollara Strategic Insights survey stated they believe Canada’s middle class is shrinking.
Pew Research reports this is definitely true in the United States, where the middle class shrank from 61% of the population in 1971, to 51% in 2023.
It seems clear that a Universal Basic Income system is needed, the question is who is going to pay for it?
Links of Interest:
- First Draft of the SRD Poverty Reduction Plan – Cortes Currents (JUly 1, 2024)
- SRD Draft Poverty Reduction Plan – SRD website (June 2024)
- The Town with no poverty, The Health Effects of a Canadian Guaranteed Annual Income Experiment – University of Manitoba (2011)
Footnotes:
- The Housing Needs Report used 2015 statistics
- Only 140 out of Cortes Island’s labour force of 535 told 2021 Census takers they had full time jobs.
- Only 425 of Area C’s labour force of 1190 reported they had full time jobs.
Top image credit: Canadian money – Photo by PiggyBank on Unsplash