Canada Leads the Way to the Future By Testing a Universal Basic Income

At its heart, the broader context for the rise of populist forces in this election is economic insecurity. Even those making six-figure incomes often know that they are one job loss or cancer diagnosis away from financial uncertainty or ruin. Due to globalization, automation, and an intentional set of policies that shifted economic risk from the capital class to the wage-earning class, the ranks of the precariat have grown to encompass all sectors of the economy from the poor to the upper middle class.

The future promises to destabilize middle-class economics even further, even risking the traditional balance between labor and consumer market supply and demand. The current economic model allows for companies to manufacture products with an overseas or robotic workforce very cheaply, and then sell those goods back to American consumers at high prices. This creates profit and capital, which then chases return on investment and inflates capital bubbles–including housing, which makes it increasingly difficult for normal workers to put a roof over their head in the cities where they work. But what happens when enough of the good-paying jobs have been outsourced or mechanized that there aren’t enough domestic consumers with disposable income to buy cheaply manufactured products at inflated prices?

Many people insist that there will always be new jobs available; after all, capitalism since the Industrial Revolution has always provided them despite many predictions otherwise. But the current trends in globalization and automation suggest otherwise: it may well be that there are far too many skilled workers in developing countries to maintain the wages to which workers in developed countries have become accustomed, even as our progress in the field of online communications, automation and artificial intelligence render increasing numbers of human jobs obsolete.

Slowly but surely, activists, academics and policymakers are coming round to the realization that workers in developed countries will need a source of dignity and stability beyond that which the job market alone can provide. As larger numbers of even the employed fall through the cracks in the new lower-wage, more unstable sharing/gig economy, even responsible conservatives are becoming aware that the traditional safety net of overlapping government programs is an inefficient way to deal mass economic uncertainty.

That is the driving force behind the movement for a universal basic income: a guarantee of economic dignity and stability for a world in which traditional capitalism fails an ever larger number of people previously accustomed to good jobs with decent pay. Experiments in a basic income are being proposed in Finland, Switzerland, and now even in Canada:

A single paragraph buried in the Ontario budget could mean big changes in the lives of some of the province’s most impoverished residents by giving them a guaranteed minimum income.

Last month’s provincial budget promised a pilot project to test “that a basic income could build on the success of minimum wage policies and increases in child benefits by providing more consistent and predictable support.”

The concept is on the radar of the federal Liberals, too — a Liberal-dominated parliamentary committee called on the Trudeau government to explore the concept of guaranteeing people a minimum income in a pre-budget report tabled Friday.

Charles Sousa, Ontario’s finance minister, said the province has not decided which community will be the test site for a basic income guarantee.

“It’s something that many people seem to have an interest in us testing out, so we’re looking at something in the fall,” he said. “Other jurisdictions are using it, and I want to see if it makes sense for us, so it’s important for us to pilot, to test it out, and see what happens.”

The experiments come with variations: some are only for lower incomes as a means of sustenance, while others are truly a universal income guarantee without means testing. But in any case, the basic income is an idea whose time is coming as a means of dealing with the pressures of automation and globalization.

Many traditional liberals and conservatives alike view this as a threat: conservatives because they fear the moral hazard of real people (rather than corporations) receiving money for nothing; liberals because they worry that without being dependent on workers, economic elites will have no incentive to do right by the masses. But if the predictions and indicators are right that capitalism as we know it will no longer be able to sustain a healthy supply of jobs to maintain a consumer economy, then a more comprehensive redistributive scheme will be necessary both to maintain human happiness and avoid the pitfalls of state-run economies.

David Atkins

David Atkins is a writer, activist and research professional living in Santa Barbara. He is a contributor to the Washington Monthly's Political Animal and president of The Pollux Group, a qualitative research firm.