Could a guaranteed basic income help people in B.C. escape the ‘welfare trap?’

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Ontario launches basic income experiment to tackle poverty
WATCH: Ontario launches basic income experiment to tackle poverty – Apr 24, 2017

It’s an idea that has been hotly debated by academics and policy makers for years: giving all low-income citizens a guaranteed, minimum annual income — whether they work or not.

Proponents say a guaranteed basic income (GBI) lowers social costs and helps get people off of social services; critics say it gives people an incentive not to work.

Ontario is in the midst of setting up a pilot project to test the concept, and on Tuesday one of the experts advising that study will be speaking in Vancouver.

On Monday, Kwame McKenzie, CEO of the Wellesley Institute special adviser to the Ontario Basic Income Pilot joined CKNW’s The Simi Sara Show to explain what they’ll be looking at.

LISTEN: Basic income guarantee – big promise or big problem?
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The basic guaranteed income (GBI) is built on the concept that poverty and income inequality can be better addressed by through a minimum income than existing welfare benefits that come with strings attached and that don’t help the working poor.

Under Ontario’s pilot, McKenzie said researchers are testing the idea in three communities: Hamilton, Lindsay and Thunder Bay. Participants need to earn under $34,000 for singles and $48,000 for families. He said so far they’ve enrolled about two-thirds of the 6,000 people that will participate.

“If you are actually earning nothing at all and you’re a single person, the basic income you get will be about $17,000… And anything you earn above that, you lose about 50 per cent,” he said. For families, the payout would be about $24,000.

The province will be measuring a variety of outcomes, including food security, stress and anxiety, mental health, health and healthcare usage, housing stability, education and employment.

McKenzie said the GBI forms a floor to keep people out of poverty, but that researchers believe few people would be satisfied with the kind of life one could manage on that kind of money alone.

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“Most people actually don’t want to live their whole lives on $17,000 a year, they want a bit more than that. And they want a bit more comfort, a bit more luxury than [it] will give them.”

In fact, he said, they’ll be testing the theory that the GBI could actually encourage people who are currently on social assistance to find work. That’s because under traditional welfare rules, if you do start working and bringing home extra income, that money is clawed back by the government.

“That actually stopped people going out to work,” McKenzie said. “There’s a welfare trap at the moment, and that the basic income may release people from the welfare trap.”

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Researchers will also be testing to see what other kinds of unintended consequences a GBI could have — such as leading to an increase in precarious work. The concern there being that if everyone is guaranteed a minimum income from the government, employers could lose an incentive to pay a living wage or offer stable, secure jobs.

McKenzie said the potential changes to Ontario’s social safety net would be far-reaching, which is why it is crucial to have a well managed scientific study to explore such questions before looking at legislation.

If you’re looking to learn more about Ontario’s pilot project, you can hear McKenzie and a panel of experts speak on Tuesday at the Vancouver Public Library Central Branch.

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