Reality check: does social assistance disincentivize people from working?
When Ontario Social Services Minister Lisa MacLeod announced the government will renege on a campaign promise to preserve the basic income pilot project, she repeated a familiar refrain.
“It really is a disincentive to get people back on track,” MacLeod said.
It’s an argument Evelyn Forget has heard many people across the country make over the last four decades.
“It’s an idea that’s been around forever,” says Forget, a professor at the University of Manitoba. “It keeps re-emerging and it seems obvious to people. It seems obvious to economists that if you give people money for nothing nobody will work.”
The problem? That argument doesn’t hold up if you look at previous pilot projects, like the one Forget spearheaded in Manitoba in the 1970s.
What her work revealed then is being borne out now, she says, in the interviews with people across the province who are speaking out about what the loss of the program will mean for their lives.
Jody Dean said the money had made it possible for her to go back to school on a part-time basis and to buy parking passes to the Hamilton hospital where one of her three children receives care.
Nobody she knows stopped contributing to the economy, as MacLeod alluded to, because of the supplement.
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“I know several girls that are working poor who have walked to work because they couldn’t afford the bus. Did they quit their jobs because they got basic income? Hell no,” she said.
That’s what Forget found in 1970s Manitoba, as well.
In that experiment, called “Mincome,” there was no real change to the job status of primary earners. The only groups for whom there was a change were married women and young, unattached men. The former, predominantly used the funds to buy more maternity leave to spend with their newborns. If you dig into the data for the latter group, Forget said, you realize many of them were young men whose low-income families pressured them into getting jobs at young ages to ease the family’s financial burdens.
“When Mincome came along, some of the families decided they could support their sons in school a little bit longer,” she said. “There was a nice little increase in high school completion rates.”
But if we knew the benefits of basic income then, why does the idea that it disincentivizes people from working persist?
“It’s a concerted effort by, I would say, certain groups and people in society to do that because they don’t want to see investment in supporting lower income people,” said Stephen Gaetz, director of the Canadian Observatory on Homelessness.
North America has long taken a “curious view,” Gaetz said.
“[We think] if we give poor people money it makes them lazy,” he said, but “if you give rich people money they become more industrious.”
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Neither is exactly true, Gaetz said, which is why he sees statements like Minister MacLeod’s as ideologically driven.
“It reflects the direction they’re going in,” he said. “They’re not going to take an evidence-based approach.”
In scrapping the project, MacLeod said the government had heard from ministry staff about how the program wasn’t helping people become “independent contributors to the economy.”
However, a source involved in the pilot told The Canadian Press that it hadn’t been active long enough to generate the data required to gauge its success.
But even if the program lived long enough for that evidence to be produced, Gaetz said that likely wouldn’t change the minds of those who oppose it.
Even though people seem to be genuinely concerned about basic incomes, and even though the evidence indicates it’s not a disincentive to work, Forget said the guaranteed income is still a tricky thing for some people to accept.
“They really are worried that everybody else will slack off,” she said. “They know they themselves won’t work less if they’re offered a basic income but all their neighbours and friends will, they believe.”
— with files from The Canadian Press