Would a universal basic income solve all our problems?

Tuesday, May 01, 2018

A universal basic income is being promoted by the left and the right as a response to the increase in precarious and low-paid work in this neo-liberal era, and to the allegedly massive loss of jobs that will come from rapid technological change.

By Leslie Dyson

A universal basic income is being promoted by the left and the right as a response to the increase in precarious and low-paid work in this neo-liberal era, and to the allegedly massive loss of jobs that will come from rapid technological change. Interestingly, the Organisation for Economic Cooperation and Development (OECD) calls it an expensive and poor alternative to state welfare programs and found that it led to drastic cuts to funding for social services around the world.

But our main focus should be “decent work for all,” writes Andrew Jackson, senior policy adviser for the Broadbent Institute. The following is an excerpt from a lecture that Jackson presented last fall.

A universal basic income is undesirable for technical, philosophical, and political reasons.

That said, we should embrace the vision of a suite of targeted programs that provide a universal guarantee of well-being independent of market income.

One fundamental problem is that income support for the mainstream working-age population would require punitively high tax-back rates. A universal basic income set at a level sufficient to meet basic needs would entail transferring significant sums to working-age adults above the poverty line, and then clawing back these transfers through much higher tax rates on wages and salaries. Indeed, the Ontario basic income experiment will be based on a 50 per cent claw back on wages.

A basic income could compromise existing programs such as housing, child care, and transportation subsidies, and ancillary health and other supports for persons with disabilities and come at the cost of no funding increase for broader antipoverty strategies.

It is highly questionable if we would want to integrate spending on social programs such as Employment Insurance and the Canada Pension Plan, which have important income stabilization objectives relevant to all workers and are not just an antipoverty goal.

While advocates argue that workers might be able to hold out for higher wages and better working conditions given the leverage of a basic income, it is at least as likely that employers would decide that they no longer have to pay a living wage to attract labour.

The still greater danger is that a basic income might be taken by governments to solve the significant problem of underemployment and low-paid work, leading them to even more definitively abandon full employment policies, living-wage policies, and respect for labour rights. Many proponents of basic income, such as high-tech billionaires, have explicitly given up on the core goal of high employment at decent wages.

Low-paid and precarious work and poverty rates for working-age families are certainly on the rise, and working poverty is a serious problem, especially for youth, women, and racialized workers.

Almost 25 per cent of all workers and 33 per cent of private sector workers earn less than $15 per hour.

While it is widely argued that artificial intelligence will destroy jobs, the fact is that productivity growth has been dismal in recent years. The key problem is not pending mass unemployment, but the loss of middle class and mid-level skill jobs, partly due to technology and partly due to the loss of labour bargaining power. More workers pushed out of decent jobs are competing for even low-paid jobs, resulting in stagnant wages and widespread casual employment.

But there has also been a shift of jobs to higher paid professional employment requiring high levels of education.

The key reform needed today is to provide a non-stigmatizing and adequate income to workingage people who cannot work, usually due to disability or caring responsibilities, or who receive only low incomes from work. An obvious step is to increase the Working Income Tax Benefit for low earners.

Rather than a basic income, our goal should continue to be decent work for all through reduced working time and labour reforms, like:

  • unionization of precarious workers
  • higher minimum wages
  • a higher floor of labour standards
  • more worker control of working time
  • decent hours of work
  • full recognition of the rights of contract employees

Technological advances and greater productivity are good things if harnessed to social ends. Reduced working time in good jobs can spread those hours of work among more workers, through four-day work weeks, expanded parental and training leaves, and paid sabbaticals.

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